As filed with the Securities and Exchange Commission on December 14, 2018


Registration No. 333-226489

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1/A

(AMENDMENT NO. 1) 4

to

FORM S-1

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

EUROSPORT ACTIVE WORLD CORPORATION

CORP.

 (Exact

(Exact name of registrant as specified in its charter)

Registration No. 333-207333


Florida3585 65-0913886

Florida

3585

30-0781375

(State or other jurisdiction

(Primary Standard Industrial

(I.R.S. Employer

ofincorporation)

Classification Code Number)

Identification No.)

 

2000 Ponce de Leon Blvd, 6th Floor3250 Mary St., # 303

Miami, Florida 3313433133

Tel. No.: 305 517 7330305-517-7330

 (Address,(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Copies to:Ralph Max Hofmeier
Chief Executive Officer

Clifford J. Hunt, EsquireEurosport Active World Corp.

Law Office Of Clifford J. Hunt, P.A.3250 Mary St., # 303

8200 Seminole BoulevardMiami, Florida 33133

Seminole, Florida 33772
Tel. No.: (727) 471-0444305-517-7330

(Name, address, including sip code and telephone number, including area code, of agent of service)


With copies to:

Jonathan D. Leinwand, P.A.

20900 NE 30th Ave., Eighth Floor

Aventura, FL 33180

Phone: 954-903-7856

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.


If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: þ


If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ¨

 

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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer¨

Accelerated filer

¨

Non-accelerated filer¨

Smaller reporting companyþ

Emerging growth company  þ


If an emerging growth company, indicate by checkmark if the registrant has not elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. CALCULATION OF REGISTRATION FEE¨

 

Title of Each Class of 
Securities to be Registered
 

Amount to be

Registered

  

Proposed

Maximum

Offering Price

Per Share (2)

  

Proposed

Maximum

Aggregate

Offering Price (2)

  Amount of Registration Fee 
Common stock, par value $0.001 par value per share (the “Common Stock”)(1)  21,747,348  $

1.00

  $21,747,348  $220.05 

  (1) This








The registrant hereby amends this registration statement coverson such date or dates as may be necessary to delay its effective date until the resale by our selling shareholders of up to 21,747,348 shares of Common Stock previously issued to such selling shareholders.

(2) The offering price has been estimated solely for the purpose of computing the amount of theregistrant shall file a further amendment which specifically states that this registration feestatement shall thereafter become effective in accordance with Rule 457(c) and Rule 457(o)Section 8(a) of the Securities Act.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTIONAct of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


 


 





The information in this preliminary prospectus is not complete and may be changed. WeNo selling shareholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission becomes effective. This preliminary prospectus is not an offer to sell these securities and we areis not soliciting offersa solicitation of an offer to buy these securities in any state where the offer or sale is not permitted.

  


PRELIMINARY PROSPECTUS

Subject to completion, dated ________________ December 14, 2018

EUROSPORT ACTIVE WORLD CORPORATIONCORP.


PROSPECTUS

 

PROSPECTUS

21,747,34821,747,352 Shares of Common Stock

 

The selling security holders named in thisThis prospectus are offering all(this “Prospectus”) relates to the offer and sale of theup to 21,747,352 shares of common stock offered throughof EUROSPORT ACTIVE WORLD CORP., a Florida corporation (the “Company”) by the selling shareholders named in this prospectus.Prospectus. The shares of common stock to be sold by the selling shareholders as provided in the “Selling Security Holders”Shareholders” section isare shares of our common stock, that are sharespar value $0.001 per share (the "common stock") that have already been issued to the selling shareholders and are currently outstanding. All of the shares of common stock offered through this Prospectus are owned by the selling shareholders. We will not receive any proceeds from the sale of the common stock covered by this prospectus.Prospectus. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders.

shareholders. The selling shareholders named in this prospectus are offering allresale of thesuch shares of common stock offered through this prospectus. The common stock to be sold by the selling shareholders pursuant to this Prospectus is referred to as provided in the “Selling Shareholders” section is shares of our common stock, par value $0.001 per share (the “Common Stock”), that have already been issued“Offering.”


We are not selling any securities under this Prospectus and are currently outstanding. We will not receive any of the proceeds from the sale of shares of common stock by the Common Stock covered byselling shareholders. The selling shareholders will sell their shares at a fixed price of $3.00 per share for the duration of this prospectus.Offering. See “Determination of Offering Price” and “Plan of Distribution.”

 

Our common stock is currently quoted on the OTC Pink MarketTier maintained by OTC Markets Group, Inc. under the symbol EAWD“EAWD”;however, because we do not currently file reports with the Securities and Exchange Commission (the “SEC”) or otherwise provide financial disclosures to the public, our securities are currentlyquotation on OTC Markets contains “Pink No Information” and “Dark or Defunct” labels. Upon effectiveness of the registration statement of which this Prospectus forms a part, we expect that the “Pink No Information” and “Dark or Defunct” labels will be automatically removed. The Company expects to continue to have its common stock quoted on the OTC Pink tier following effectiveness of the registration statement. Currently, our common stock is highly illiquid, and subject to large swings in trading price, and areis only traded on a sporadic and limited basis. As a result, you should not expect to be able to resell your common stock regardless of how we perform and, if you are able to sell your common stock, you may receive less than your purchase price.

 

Common Stock being registered inAny shares sold pursuant to this registration statement mayProspectus will be sold by Selling Security Holders at thea fixed price of one dollar ($1.00)$3.00 per share through the duration of the offering or privately negotiated prices or in transactions thatshare. The selling shareholders, and any participating broker-dealers, are not in the public market. Selling shareholders maydeemed to be deemed underwriters as defined under the Securities Act of 1933.1933, as amended (the “Securities Act”), and any commissions or discounts given to any such broker-dealer may be regarded as underwriting commissions or discounts under the Securities Act. The Companyselling shareholders have informed us that they do not have any agreement or understanding, directly or indirectly, with any person to distribute their common stock.


The company has no present plans to be acquired or to merge with another company nor doesdo the Company,company, or any of its shareholders, have plans to enter into a change of control or similar transaction. On February 11, 2016, December 14, 2018, the closing price of our Common Stockcommon stock was $1.38 $0.35 per share as reported on the OTC Pink Marketplace.


We are an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and are subject to reduced public company reporting requirements. See “Prospectus Summary—Emerging Growth Company Status.”


Our principal executive offices are located at 3250 Mary St., # 303, Miami, Florida 33133.


Investing in our Common Stockcommon stock involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our Common Stockcommon stock in “Risk Factors” beginning on page4 7 of this prospectus.Prospectus.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


The date of this prospectusProspectus is February 11, 2016 December __, 2018




 

Table of Contents


TABLE OF CONTENTS

 

PAGE
Prospectus Summary

1

PAGE

Industry and Market Data

ii

Prospectus Summary

1

Summary Financial Data

5

Cautionary Statement Regarding Forward Looking Statements

3

6

Risk Factors

4

7

Use of Proceeds

6

13

Determination of Offering Price

7

13

Dilution

7

13

Selling Shareholders

7

14

Plan of Distribution

9

20

Description of Securities

10

22

Transfer Agent and RegistrarShares Eligible for Future Sale

11

25

Interests of Named Experts and Counsel

12
Description of Business

12

26

Description of Property

20

36

Legal Proceedings

20

37

Market for Common Equity and Related Shareholder Matters

20

38

Holders

20
Dividend Policy21
Management Discussion and Analysis of Financial Condition and Results of Operations

21

40

Directors, Executive Officers, Promoters and Control PersonsManagement

31

51

Executive Compensation

33

53

Security Ownership of Certain Beneficial Owners and Management

34

54

Transactions with Related Persons, Promoters, and Certain Control Persons

34

55

Interests of Named Experts and Counsel

56

Experts

56

Legal Matters

56

Disclosure of Commission Position on Indemnification of Securities Act Liabilities

36

56

Where You Can Find Additional Information

36

56

Index to Financial Statements

37
SignaturesII-4

F-1

Table of Contents

Please read this prospectus carefully. It describes our business, our financial condition and results of operations. We have prepared this prospectus so that you will have the information necessary to make an informed investment decision.

 

You should rely only on the information contained in this prospectus.Prospectus. We have not authorized, any other personand the selling shareholders have not, authorized anyone to provide you with information that is different information.from that contained in this Prospectus or in any free writing prospectus that we may authorize. This prospectusProspectus is not an offer to sell northese securities and is it seekingnot soliciting an offer to buy these securities in any circumstances under which the offer or solicitation is unlawful or in any state where the offer or sale is not permitted. The information in this prospectusProspectus is complete and accurate only as of the date on the front cover butregardless of the time of delivery of this Prospectus or of any sale of our securities.


For investors outside the United States: We have not, and the selling shareholders have not, done anything that would permit this Offering or possession or distribution of this Prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this Prospectus must inform themselves, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this Prospectus outside the United States.




i




INDUSTRY AND MARKET DATA


We are responsible for the disclosure in this Prospectus. However, this Prospectus includes industry data that we obtained from internal surveys, market research, and publicly available information and industry publications. The market research, publicly available information and industry publications that we use generally state that the information may have changed since that date.contained therein has been obtained from sources believed to be reliable. The information therein represents the most recently available data from the relevant sources and publications and we believe remains reliable. We did not fund and are not otherwise affiliated with any of the sources cited in this Prospectus. Forward-looking information obtained from these sources is subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this Prospectus.



 



ii




PROSPECTUS SUMMARY

 

This summary highlights selected information contained elsewhere in this prospectus.Prospectus. This summary does not contain all the information that you should consider before investing in the Common Stock.common stock. You should carefully read the entire prospectus,Prospectus, including “Risk Factors”,Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Financial Statements, before making an investment decision. The following summary is qualified in its entirety by reference to the detailed information appearing elsewhere in this Prospectus. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from future results contemplated in the forward-looking statements as a result of factors such as those set forth in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”


In this Prospectus, the terms “EAWC,” “EAWC Technologies,” “Eurosport Active,” “Eurosport” the “Company,” “we,” “us” and“us,” “our” or “ours” refer to Eurosport Active World Corporation or any ofCorp. and its wholly owned subsidiaries.

 

Overview

 

The Company focuses oncompany is an engineering services company in the green sustainabletech industry, formed as an outsourcing services green tech platform, that can provide an all-inclusive services package to assess the feasibility of the potential technological solutions for a project that seeks to achieve the close cycle of waste to energy and water generation by exploiting renewable technologies. The green tech industry is constantly evolving due to ongoing and increasing water scarcity, as well as increased energy need. We believe that we are well positioned to offer renewable technology solutions to generatethese problems and purifyto take advantage of this rapidly growing industry with many new markets. Our company presently outsources most of the services for the engineering and technical services as well as for the promotion, selling and distribution of the identified technological solutions. We rely on third parties to manufacture their different technologies that are identified to provide the designed solution for the water or energy need, that our potential clients might present.

We seek to focus on four main aspects of the water and energy business: generation, supply, commercialization and waste to energy, seeking to assist business owners and/or municipalities to build profitable and sustainable supply/generation of water and energy as required, and selling them the required technology or technical service to enhance their productivity/operability. With its outsourced technical arm and its commission based global network of vendors, the company expects to add sustainable added value to each of the projects it takes on.

We focus on providing customized technology solutions and technical services, based upon client preference, which may include any or all of the following:

water/energy generation

waste to energy plants

technical assistance

strategic and financial partnering;

project management.


The company is presently engaged in the development and commercialization as well as the productioncontinued promotion, of these green technologies, principally in Mexico and, reproduction of energy. EAWC is already engaged in the promotion, developmentUnited States, particularly in the States of California and commercialization of green technologies, mainlyGeorgia, as well as in Mexico &South Africa. Given the State of California. The strong increased demand for water and energy around the world, the Company and itswe, with our potential partners, seek to develop, manufacture, distribute and operate water generation, water purification, and green energy production (Waste(waste to Energy)energy) technologies.http://www.eawctechnologies.com

.

Company History 

 

Eurosport Active World Corporation (the “Company”)The Company (formerly Eagle International Holdings Group Inc. or “EIH”), was incorporated under the laws of the State of Florida on August 23, 2000. EIH was2000 as a shell entity that was in the market to merge with an operating company.

 





On March 17, 2008, EIHthe Company entered into an Agreement and Plan of Acquisition (the “Merger Agreement”) with Inko Sport America, LLC (“ISA”), a Florida privately-held limited liability company. ISA was a development stage company, incorporated on February 24, 2005. In connection with the closing of the Merger Agreement, ISA merged with and into EIHthe Company effective May 7, 2008, with the filing of the Merger Agreement with the Florida Secretary of State.

 

Pursuant to the terms and conditions of the Merger Agreement:


As a precondition ofto the consummation of the merger transaction, a reverse stock split of EIH common stock was consummated on a one for 1,000 basis pursuant to which each 1,000 outstanding shares of EIH common stock was converted into one share of Eurosport Active World Corp.Corporation common stock. After giving effect to the reverse stock split, the authorized capital stock of EIH immediately prior to the closing of the Merger Agreementmerger agreement consisted of one billion shares of EIH common stock and 500 million shares of preferred stock, of which 106,214 shares (as a result of the reversecommon stock split) waswere issued and outstanding.

After the reverse stock split, ISA agreed to acquire 100% of the ownership interest in EIH,the Company, in exchange for the issuance of 20,500,000 (approximatelyor approximately 99% of the Companys issued and outstanding common stock of the Company).stock.

Concurrent with the closing of the Merger Agreement, 4,394,044 shares of common stock were issued to EIH’sthe Companys majority shareholder and officer, Michael Farkas, for the satisfaction of obligations payable to him; and

Immediately after the closing of the Merger Agreement, ISA merged with EIH,the Company, and adopted EAWC’sthe Company’s business plan and changed its name to Eurosport Active World Corp (“EAWC”).Corp. Further, upon completion of the merger, the prior officers and directors of EIH resigned, and the Company’s current officers and directors of the Company were elected or appointed to their positions.

1

Table of Contents

 

This transaction was accounted for as a recapitalization effected by a share exchange, wherein ISA was considered the acquirer for accounting and financial reporting purposes.


ISA was a development stageFrom 2012 to the present, the company incorporated on February 24, 2005. Through December 31, 2012, the Company hadhas been primarily engaged in the promotion development and commercializationdesign of green technologies. In view oftechnological solutions for the increased demandgeneration of water and energy, as well as for waste management. The company has sought to work on feasibility studies in collaboration with Swiss Water Tech SA and EAWC Tecnologias Verdes SA de CV, as well as with Siemens and Bosh, with whom the Company beganhas an understanding agreement of business collaboration.


We continue to focusbe a development stage company. We have not yet generated any revenue from our operations. But the pro-bono feasibilities studies made in regions such as Mexico, South Africa and Kingdom of Saudi Arabia, have now generated advanced ongoing negotiations for the conclusion of final contracts.


Our company presently outsources most of the services for the engineering and technical services as well as for the promotion, selling and distribution of the identified technological solutions. The identified technologies to be used on the proposed water or energy generation water purification,solutions are already commercialized and green energy production (Wastepatented by their property companies. Those might include but not limited to Energy); acquiringAtmosphere Water Generators, Plasma Gasification process systems, Gas Turbines and licensing the rights to sell and produce related technologies and securing through collaboration with Green Tech research and developments centers in Europe, the research and development, technical maintenance, education and training related to the technology.Solar systems.

 

Where You Can Find Us

 

Our principal executive offices are located at 2000 Ponce de Leon Blvd.3250 Mary St., 6th Floor,#303, Miami, Florida 33134.33133. Our telephone number is 305-517-7330. Our corporate website address is www.eawctechnologies.com. Information contained on, or accessible through, our website is not a part of, and is not incorporated by reference into, this document.


Implications of Being an Transfer Agent


The transfer agent for our common stock is Worldwide Stock Transfer, LLC, located at One University Plaza, Suite 505, Hackensack, NJ 07601, Phone: (201) 820-2008, Fax: (201) 820-2010.






Emerging Growth Company Status

 

We qualifyare an “emerging growth company” as an emerging growth companydefined in Section 2(a)(19) of the Securities Act, as that term is used inmodified by the JOBS Act. An emerging growth company mayJumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of specified reducedcertain exemptions from various reporting and other burdensrequirements that are otherwise applicable generally to other public companies. These provisions include:

A requirement to have only two years of audited financial statements and only two years of related MD&A;
Exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002;
Reduced disclosure about the emerging growth company’s executive compensation arrangements; and
No non-binding advisory votes on executive compensation or golden parachute arrangements.

companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We have already takenelected to take advantage of all of these reduced reporting burdens in this prospectus, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).exemptions.

 

In addition, Section 107 of the JOBS Act also provides that an emerging“emerging growth companycompany” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards.standards, and delay compliance with new or revised accounting standards until those standards are applicable to private companies. We have elected to usetake advantage of the benefits of this extended transition period provided above and therefore our financial statements may not be comparable to companies that comply with public company effective dates.period.

 

We could remainwill be an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in whichfollowing the fifth anniversary of our first common equity offering, although we will lose that status earlier if our annual gross revenues exceed $1$1.0 billion, (ii) the date thatif we issue more than $1.0 billion in non-convertible debt in any three-year period or if we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million1934, as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.amended (the “Exchange Act”).

 

For more details regarding this exemption, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies.”


2


THE OFFERING

 

Securities Offered (1)

21,747,348

21,747,352 shares of the Company’s Common Stockcommon stock

Offering Price per Share:

$3.00 per share (for the duration of this Offering).

Common Stockstock Outstanding Before the Offering (2)(1):

87,201,863

87,913,933

Common Stockstock Outstanding After the Offering (2)(1):

87,201,86387,913,933

 

Quotation of Common Stockstock

Our common stock is listed for quotationcurrently quoted on the OTC Pink marketTier maintained by OTC Markets Group, Inc. under the symbol “EAWD”

; however, because we do not currently file reports with the SEC or otherwise provide financial disclosures to the public, our quotation on OTC Markets contains “Pink No Information” and “Dark or Defunct” labels. Upon effectiveness of the registration statement of which this Prospectus forms a part, we expect that the “Pink No Information” and “Dark or Defunct” labels will be automatically removed. The Company expects to continue to have its common stock quoted on the OTC Pink tier following effectiveness of the registration statement.

Terms of the Offering:

 

The selling shareholders will determine when and how they will sell the Common Stock offered in this prospectus.

Termination of the Offering:

The offering will conclude upon the earliest of: (i) such time as all of the Common Stockcommon stock has been sold pursuant to the registration statement of which this prospectus forms a part (the “Registration Statement”);Prospectus; or (ii) such time as all of the Common Stockcommon stock becomes eligible for resale without volume limitations pursuant to Rule 144 under the Securities Act, or any other rule of similar effect.

Use of proceeds:Proceeds:

We are not selling any shares of the Common Stockcommon stock covered by this prospectus. As such,Prospectus. Consequently, we will not receive any of the offering proceeds from the registrationsale of the shares of Common Stockcommon stock registered and covered by this prospectus.Prospectus.

Risk Factors:

The Common Stockcommon stock offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors” beginning on page4. 7.

———————

(1)

Based on 87,913,933 shares of common stock outstanding as of December 14, 2018.

Does not include common stock underlying 2,200,000 options granted pursuant to the company’s 2012 Non-Qualified Stock Option Plan. If and when the options are exercised, the issuance of the underlying shares will cause dilution. Also, does not include 4,831,750 shares of common stock issuable upon conversion of $566,825 debt at a conversion prices ranging from $1.00 to $0.10 per share.


(1) Based on 87,201,863 shares of Common Stock outstanding as of February 10, 2016.

(2) Does not include Common Stock underlying 2,200,000 options granted pursuant to stock plan that can be dilutive.





SUMMARY FINANCIAL DATA

 

The following table presents our summary historical financial data for the periods indicated. The summary historical financial data for the years ended December 31, 2017 and 2016 and the balance sheet data as of December 31, 2017 and 2016 are derived from the audited financial statements. The summary historical financial data for the nine months ended September 30, 2018 and 2017 and the balance sheet data as of September 30, 2018 and 2017 are derived from our unaudited financial statements. The summarized financial information presented below is derived from, and should be read in conjunction with, our audited financial statements, as applicable, including the notes to those financial statements which are included elsewhere in this Prospectus, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The historical results are included for illustrative and informational purposes only and are not necessarily indicative of results to be expected for any future periods, and results of interim periods are not necessarily indicative of results for the entire year.

Statements of Operations Data


  

 

Year Ended

December 31,

 

 

NineMonths Ended

September30,

 

 

 

2017

 

 

2016

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses 

 

$

807,497

 

 

$

889,140

 

 

$

672,388

 

 

$

639,782

 

Net loss 

 

$

777,913

 

 

$

897,474

 

 

$

581,451

 

 

$

634,031

 

Basic and diluted net loss per share 

 

$

(0.01

)

 

$

(0.01

)

 

$

(0.01

)

 

$

(0.01

)

Balance Sheet Data (at period end)


 

 

December 31,

 

 

September 30,

 

 

 

2017

 

 

2016

 

 

2018

 

Cash and cash equivalents 

 

$

 

 

$

49

 

 

$

 

Total current assets 

 

 

 

 

 

49

 

 

 

 

Total current liabilities 

 

 

3,651,153

 

 

 

2,873,289

 

 

 

3,520,534

 

Working capital (deficit) 

 

 

(3,651,153

)

 

 

(2,873,240

)

 

 

(3,520,534

)

Total stockholders’ (deficit) 

 

 

(3,651,153

)

 

 

(2,873,240

)

 

 

(3,520,534

)

Accumulated deficit

 

 

(10,214,859

)

 

 

(9,436,946

)

 

 

(10,796,310

)







CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

The information contained in this prospectus,Prospectus, including in the documents incorporated by reference into this prospectus,Prospectus, includes some statements that are not purely historical and that are “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our Companycompany and management’s expectations, hopes, beliefs, intentions or strategies regarding the future, including our financial condition, results of operations, and the expected impact of the offering on the parties’ individual and combined financial performance. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

 

The forward-looking statements contained in this prospectusProspectus are based on current expectations and beliefs concerning future developments and the potential effects on the parties and the transaction. There can be no assurance that future developments actually affecting us will be those anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the parties’ control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date hereof.


3

RISK FACTORSactivity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with our financial statements and the related notes included in this Prospectus.

 





RISK FACTORS

The shares of our Common Stockcommon stock being offered by the selling stockholders are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose the entire amount invested in the Common Stock.common stock. Before purchasing any of the shares of Common Stock,common stock, you should carefully consider the following factors relating to our business and prospects. If any of the following risks actually occurs, our business, financial condition or operating results could be materially adversely affected. In such case, you may lose all or part of your investment. You should carefully consider the risks described below and the other information in this process before investing in our Common Stock.common stock. See also “Cautionary Note Regarding Forward-Looking Statements.”

 

Ricks Related to Our Business

 

OUR ABILITY TO CONTINUE AS A GOING CONCERN IS IN SUBSTANTIAL DOUBT ABSENT OBTAINING ADEQUATE NEW DEBT OR EQUITY FINANCINGS.

 

Our continued existence is dependent upon us obtaining adequate working capital to fund all of our planned operations. Working capital limitations continue to impinge on our day-to-day operations, thus contributing to continued operating losses. Thus, if we are unable to raise funds to fund the research and development of our products,technological solutions, we may not be able to continue as a going concern and you will lose your investment. We have incurred accumulated operating losses since inception have incurred operating losses in 2014 and 2013 and have working capital deficits at the end of 20142016 and 2013, respectively. 2017. If the company is able to raise the necessary funds to execute its business plan or if the company earns any revenues from its business operations, some of these funds will have to be used to pay off the outstanding judgments against the company which are discussed under the heading “Legal Proceedings” herein.


Our independent accounting firm has included in its report the qualification that these conditions raise a substantial doubt about the Company'scompany’s ability to continue as a going concern. The report also states that the consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

IF WE NEED ADDITIONAL CAPITAL TO FUND OUR GROWING OPERATIONS, AND WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR OPERATIONS.OPERATIONS OR CEASE OPERATIONS ALTOGETHER.

 

We need additional capital to fund our operations and we may not be able to obtain such capital, which would cause us to limit or cease our operations entirely. The severe recession, freezingconditions of the global credit markets may adversely affect our ability to raise capital in the future. If adequate additional financing is not available on reasonable terms or at all, we may not be able to undertake expansion, weexecute our business plans and may have to modify our business plans accordingly.them accordingly or even suspend them.

 

Even if we do find a source of additional capital, we may not be able to negotiate favorablyfavorable terms and conditions for receiving the additional capital. Any future capital investments will dilute or otherwise materially and adversely affect the holdings or rights of our existing shareholders. In addition, new equity or debt securities issued by us to obtain financing could have rights, preferences and privileges senior to our common stock. We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.

 

OUR FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED SERVICES OF RALPH HOFMEIER AND IRMA VELAZQUEZ. WITHOUT THEIR CONTINUED SERVICE,SERVICES, WE MAY BE FORCED TO INTERRUPT OR EVENTUALLY CEASE OUR OPERATIONS.

 

We are presently dependent to a great extent upon the experience, abilities and continued services of Ralph Hofmeier, our President, and Chief Executive Officer, Chairman of the Board and a significant stockholder, and Irma Velazquez, our COO.Chief Operating Officer, Vice-Chairman and a significant stockholder. The loss of any of the foregoing would harm our business and may force the company to interrupt or cease its operations all together.

 





WE EXPECT SIGNIFICANT COMPETITION FOR OUR PRODUCTS AND SERVICES.

 

Many of our competitors and potential competitors are well established and have substantially greater financial, research and development, technical, manufacturing and marketing resources than we have today. If these larger competitors decide to focus on the development of distributed power or cogeneration, they have the manufacturing, marketing and sales capabilities to complete research, development and commercialization of these products more quickly and effectively than we can. There can also be no assurance that current and future competitors will not develop new or enhanced technical services technologies or more cost-effective systems, and therefore, there can be no assurance that we will be successful in this competitive environment.

 

INTERNATIONAL REGULATION MAY ADVERSELY AFFECT OUR PLANNED PRODUCT SALES.

 

As a part of our marketing strategy, we plan to market and sell our productstechnical services and technological solutions internationally. In addition to regulation by the U.S. government, those productsour technological solutions will be subject to environmental and safety regulations in each country in which we market and sell. While we have already received regulatory approval in some countries including Mexico and India,India; we anticipate that regulations will vary from country to country and will vary from those of the United States. The difference in regulations and the laws of foreign countries may be significant and, in order to comply with the laws of these foreign countries, we our suppliersmay have to implement manufacturing changes or alter product design, or we may need to modify our marketing efforts. Any changes in our business practices or products will require response to the laws of foreign countries and will result in additional expense to the Companycompany and either reduce or delay product sales.sales.

 

4

IN THE CONDUCT OF OURbusiness, we sometimes rely upon the use of patents BUSINESS, WE WILL RELY UPON THE USE OF PATENTS AND INTELLECTUAL PROPERTY OWNED by other entities or which are not exclusively owned by our company.BY OTHER ENTITIES WHICH ARE NON-EXCLUSIVE.

 

Our business utilizes various technologies that are the subject of patents owned by other entities or for which we do not have exclusive ownership.ownership or rights to use. The use of such patented technologies is dependent upon the cooperation of such companiesthose entities and our agreements with them. There can be no assurances that any of our agreements will be extended beyond their current term or that such cooperation with the entities that control the patents will continue in the foreseeable future. Our success depends on our ability to continue to use the patented technologytechnologies identified in this prospectusour recommended technical solutions/water or energy plant designs and the ability of our business colleaguesthe patent owners to maintain patent protection for their products in the United States and in other countries and to enforce such patents. There can be no assurance that any of the patents relating to the technologytechnologies that we use will be deemed valid and enforceable against third-party infringement or that our products will not infringe any third-party patent or intellectual property. Moreover, any patent claims relating to our technologies may not be sufficiently broad to protect our products.solutions. In addition, issued patent claims may be challenged, potentially invalidated or potentially circumvented. Our patent claimsrights to use the intellectual property of others may not afford us protection against competitors with similar technologytechnologies or permit the commercialization of ourthe products and/or solutions incorporating these technologies without infringing third-party patents or other intellectual property rights.

 

THE OFFERING PRICE OF THE SHARES WAS ARBITRARILY DETERMINED, AND THEREFORE SHOULD NOT BE USED AS AN INDICATOR OF THE FUTURE MARKET PRICE OF THE SECURITIES. THEREFORE, THE OFFERING PRICE BEARS NO RELATIONSHIP TO THE ACTUAL VALUE OF THE COMPANY, AND MAY MAKE OUR SHARES DIFFICULT TO SELL.

 

Since our shares are thinly traded on the OTC Pink Markets, the offering price of $1.00$3.00 per share for the shares of common stock was arbitrarily determined. The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market.selected. The offering price bears no relationship to the book value;value, assets or earnings of our company or any other recognized criteria of value. The offering price should not be regarded as an indicator of the future market price of the securities.

 

Risks Related to Our Common Stock

 

OUR STOCK PRICE MAY BE VOLATILE, AND YOU MAY NOT BE ABLE TO SELL YOUR SHARES FOR MORE THAN WHAT YOU PAID OR AT ALL.


Our stock price may be subject to significant volatility, and you may not be able to sell shares of common stock at or above the price you paid for them or at all. The trading price of our common stock may be subject to fluctuations in in response to various factors.






WE WILL BE SUBJECT TO THE “PENNY STOCK” RULES WHICH WILL ADVERSELY AFFECT THE LIQUIDITY OF OUR COMMON STOCK.

 

The Securities and Exchange Commission, or the SEC, has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. We expect the market price of our common stock will be less than $5.00 per share and therefore we will be considered a “penny stock” according to SEC rules. This designation requires any broker-dealer selling these securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules limit the ability of broker-dealers to solicit purchases of our common stock and therefore reduce the liquidity of the public market for our shares should one develop.


OUR SECURITIES ARE TRADED ON THE OTCPINK®, WHICH MAY NOT PROVIDE AS MUCH LIQUIDITY FOR OUR INVESTORS AS MORE RECOGNIZED SENIOR EXCHANGES SUCH AS THE NASDAQ STOCK MARKET OR OTHER NATIONAL OR REGIONAL EXCHANGES.


Our common stock is currently quoted on the OTC Pink Tier maintained by OTC Markets Group, Inc. under the symbol “EAWD”; however, because we do not currently file reports with the SEC or otherwise provide financial disclosures to the public, our quotation on OTC Markets contains “Pink No Information” and “Dark or Defunct” labels. Upon effectiveness of the registration statement of which this Prospectus forms a part, we expect that the “Pink No Information” and “Dark or Defunct” labels will be automatically removed. The OTC Markets are inter-dealer, over-the-counter markets that provide significantly less liquidity than the NASDAQ Stock Market or other national or regional exchanges. Securities traded on these OTC Markets are usually thinly traded, highly volatile, have fewer market makers and are not followed by analysts. The SEC’s order handling rules, which apply to NASDAQ-listed securities, do not apply to securities quoted on the OTC Markets. Quotes for stocks included on the OTC Markets are not listed in newspapers. Therefore, prices for securities traded solely on the OTC Markets may be difficult to obtain and holders of our securities may be unable to resell their securities at or near their original acquisition price, or at any price.


FINANCIAL INDUSTRY REGULATORY AUTHORITY (“FINRA”) SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A STOCKHOLDER’S ABILITY TO BUY AND SELL OUR COMMON STOCK, WHICH COULD DEPRESS THE PRICE OF OUR COMMON STOCK.


FINRA has adopted rules that require a broker-dealer to have reasonable grounds for believing that the investment is suitable for that customer before recommending an investment to a customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. Thus, the FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our shares of common stock, have an adverse effect on the market for our shares of common stock, and thereby depress our price per share of common stock.

 

BECAUSE DIRECTORS AND OFFICERS CURRENTLY AND FOR THE FORESEEABLE FUTURE WILL CONTINUE TO CONTROL EAWC, IT IS NOT LIKELY THAT YOU WILL BE ABLE TO ELECT DIRECTORS OR HAVE ANY SAY IN THE POLICIES OF EAWC.

 

Our shareholders are not entitled to cumulative voting rights. Consequently, the election of directors and all other matters requiring shareholder approval will be decided by majority vote. The directors and officers of EAWC beneficially own approximately 57.34%64.82% of our outstanding common stock. Due to such significant ownership position held by our insiders, new investors may not be able to effect a change in our business or management, and therefore, shareholders would have no recourse as a result of decisions made by management. Mr. Hofmeier, our President, Chief Executive Officer and Chairman of the Board, and Irma Velazquez, our Chief Operating Officer and Vice-Chairman, who are married to each other, together own 64.82% of the outstanding common stock.

 

In addition, sales of significant amounts of shares held by our officerofficers and directors, or the prospect of these sales, could adversely affect the market price of our common stock. Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our shareholders from realizing a premium over our stock price.

 





SINCE WE INTEND TO RETAIN ANY EARNINGS FOR DEVELOPMENT OF OUR BUSINESS FOR THE FORESEEABLE FUTURE, YOU WILL LIKELY NOT RECEIVE ANY DIVIDENDS FOR THE FORESEEABLE FUTURE.

 

We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

 

A SIGNIFICANT NUMBER OF OUR SHARES WILL BE ELIGIBLE FOR SALE AND THEIR SALE OR POTENTIAL SALE MAY DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.

 

Sales of a significant number of shares of our common stock in the public market could harm the market price of our common stock. This prospectusProspectus relates to 21,747,348the resale by the selling stockholders of up to 21,747,352 shares of our common stock, which represents approximately [25%]25% of our current issued and outstanding shares of our common stock. As additional shares of our common stock become available for resale in the public market pursuant to this offering, and otherwise, the supply of our common stock will increase, which could decrease its price.

5

 

WE MAYWILL INCUR SIGNIFICANT COSTS TO BE A PUBLIC COMPANY TO ENSURE COMPLIANCE WITH UNITED STATES CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS AND WE MAY NOT BE ABLE TO ABSORB SUCH COSTS.

 

We maywill incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission.SEC. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. In addition, we may not be able to absorb these costs of being a public company, which will negatively affect our business operations.

 

THE LACK OF PUBLIC COMPANY EXPERIENCE OF OUR MANAGEMENT TEAM COULD ADVERSELY IMPACT OUR ABILITY TO COMPLY WITH THE REPORTING REQUIREMENTS OF U.S. SECURITIES LAWS.

 

Ourmanagement team lacks public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002.requirements. Our senior management has never had responsibility for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including the establishing and maintaining internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act, of 1934, which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company. 

 

WE ARE NOT REQUIRED TO FILE PROXY STATEMENTS PURSUANT TO THE SECURITIES EXCHANGE ACT, OF 1934, WHICH MAY IMPEDE YOUR ABILITY TO OBTAIN INFORMATION ABOUT OUR BUSINESS AND OPERATIONS.

 

Upon effectiveness of thisthe registration statement of which this Prospectus forms a part, we will be subject to Section 15(d) of the Exchange Act unless we file a Form 8A8-A to register our common stock under Section 12 of the Securities Exchange Act of 1934.Act. Pursuant to sectionSection 15(d) we are not required to file proxy statements. Proxy statements may be useful to investors in assessing corporate business decisions such as how management is paid and potential conflict-of-interest issues with auditors. Proxy statements may include but are not limited to:

 

Voting procedure and information;

Background information about the company's nominated directors including relevant history in the company or industry, positions on other corporate boards, and potential conflicts of interest;








Board compensation;

Board compensation;

Executive compensation, including salary, bonus, non-equity compensation, stock awards, options, and deferred compensation. Also,compensation; and, in addition, information is included about perks such as personal use of company transportation, travel, and tax gross-ups. Many companies will also include pre-determined payout packages if an executive leaves the company; and

Who is

Membership on the audit committee, as well as a breakdown of audit and non-audit fees paid to the auditor;auditor.

 

We are subject to section 15(d) of the Exchange Act. We may never file a Form 8A8-A to register our common stock under Section 12 of the Securities Exchange Act of 1934.  If we do notAct. A failure to file a Form 8A, we are not required to file proxy statements and it8-A may impede your ability to obtain information about our business and operations which may have a negative effect on your investment.

 

AN INVESTMENT IN THE COMPANY’S COMMON STOCK IS EXTREMELY SPECULATIVE AND THERE CAN BE NO ASSURANCE OF ANY RETURN ON ANY SUCH INVESTMENT.


Our common stock is currently quoted on the OTC Pink Tier maintained by OTC Markets Group, Inc. under the symbol “EAWD”; however, because we do not currently file reports with the SEC or otherwise provide financial disclosures to the public, our quotation on OTC Markets contains “Pink No Information” and “Dark or Defunct” labels. Upon effectiveness of the registration statement of which this Prospectus forms a part, we expect that the “Pink No Information” and “Dark or Defunct” labels will be automatically removed. However, an investment in the Company’s common stock is extremely speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment. The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market and other factors, many of which we have little or no control over. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.


AS AN “EMERGING GROWTH COMPANY” UNDER THE JOBS ACT, WE ARE PERMITTED TO RELY ON EXEMPTIONS FROM CERTAIN DISCLOSURE REQUIREMENTS.


We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:


·

Have an auditor report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;


·

Comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditors report providing additional information about the audit and the consolidated financial statements (i.e., an auditor discussion and analysis);


·

Submit certain executive compensation matters to stockholder advisory votes, such as say-on-pay and say-on-frequency; and


·

Disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officers compensation to median employee compensation.


In addition, Section 102 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.






We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.


Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and the price of our securities may be more volatile.


Other Risks


THERE ARE OTHER UNIDENTIFIED RISKS.


The risks set forth above are not a complete list of the risks facing our potential investors. We acknowledge that there may exist significant risks yet to be recognized or encountered to which we may not be able to effectively respond. There can be no assurance that we will succeed in addressing these risks or future potential risks, and any failure to do so could have a material adverse effect on our business, financial condition and results of operations.






USE OF PROCEEDS

 

We will not receive any proceeds from the sale of Common Stockstock by the selling shareholders. All of the net proceeds from the sale of our Common Stockcommon stock will go to the selling shareholders as described below in the sections entitled “Selling Security Holders”Shareholders” and “Plan of Distribution”. We have agreed to bear the expenses relating to the registration of the Common Stockcommon stock for the selling shareholders.

 

6

Table of Contents

DETERMINATION OF OFFERING PRICE

 

The shares being offered by the selling shareholders will be sold at a fixed price of $3.00 for the duration of this Offering. The offering price of the shares of our Common Stock does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value. The facts considered in determiningIt has been arbitrarily determined by the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market.selling stockholders.

 

The selling stockholders will offer common stock at the prevailing market prices or privately negotiated price. The offering price of our common stock does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value. Our common stock may not trade at market prices in excess of the offering price as prices for common stock in any public market will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity.

DILUTIONDILUTION

 

The shares of Common Stockstock to be sold by the selling shareholders as provided in the “Selling Security Holders”Shareholders” section are shares of Common Stockcommon stock that are currently issued. Accordingly, there will be no dilution to our existing shareholders.

 





SELLING SHAREHOLDERS

 

The shares of Common Stockcommon stock being offered for resale by the selling shareholders consist of 21,747,34821,747,352 shares.


The following table sets forth the names of the selling shareholders, the number of shares of Common Stockcommon stock beneficially owned by each of the selling shareholders as of October 7, 2015 December 14, 2018 and the number of shares of Common Stockcommon stock being offered by the selling shareholders. The selling shareholders received their shares of common stock from the Companycompany by purchasing such shares at various times or such shares were issued in exchange for assets acquired by the Companycompany or services rendered to the Company.company. The issuance of all shares of common stock identified in the registration statementthis Prospectus occurred pursuant to Section 4(a)(2) of the Securities Act of 1933.Act. All selling shareholders were deemed determinedby Companycompany principals to be “sophisticated investors” or “qualified institutional investors” at the time such shares of common stock were issued. The shares being offered hereby are being registered to permit public secondary trading, and the selling shareholders may offer all or part of the shares for resale from time to time. However, the selling shareholders are under no obligation to sell all or any portion of such shares nor are the selling shareholders obligated to sell any shares immediately upon effectiveness of this prospectus.Prospectus. All information with respect to share ownership has been furnished by the selling shareholders.


NAME SHARES BENEFICIALLY OWNED PRIOR TO OFFERING  SHARES TO BE OFFERED  AMOUNT BENEFICIALLY OWNED AFTER OFFERING  PERCENT BENEFICIALLY OWNED AFTER OFFERING  POSITION
OFFICE OR OTHER MATERIAL RELATIONSHIP TO THE COMPANY WITHIN LAST THREE YEARS
Linda Anderson  187,857   187,857   0   0% Outsider investor
Archstone Capital (1)  2,500,000   2,500,000   0   0% Outsider investor
Adam Brinckman  8,000   8,000   0   0% Outsider investor
Philip Carson  2,500   2,500   0   0% Outsider investor
David Chambovey  76,924   76,924   0   0% Outsider investor
Ashley Chipman  30,000   30,000   0   0% Outsider investor
Tiffany Chipman  30,000   30,000   0   0% Outsider investor
Joseph Dedek  12,500   12,500   0   0% Outsider investor
Albert Dossa  4,975   4,975   0   0% Outsider investor
Roland Feger  268,246   268,246   0   0% Outsider investor
Douglas Flaute  20,000   20,000   0   0% Outsider investor
Kathleen Forrester  1,334   1,334   0   0% Outsider investor
Rick Fuerstenau  4,000   4,000   0   0% Outsider investor
Mark George  232,500   232,500   0   0% Outsider investor
Hans V. Glattli  240,000   240,000   0   0% Outsider investor

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act. We believe, based on the information furnished to us that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.


NAME & ADDRESS

 

SHARES BENEFICIALLY OWNED PRIOR TO OFFERING

 

 

SHARES TO BE OFFERED

 

 

AMOUNT BENEFICIALLY OWNED AFTER OFFERING(9)

 

 

PERCENT BENEFICIALLY OWNED AFTER OFFERING(8)(9)

 

 

POSITION,
OFFICE OR OTHER MATERIAL RELATIONSHIP TO THE COMPANY OR ITS PREDECESSORS OR AFFILIATES WITHIN LAST THREE YEARS

 

Linda Anderson
3422N SCOTTSDALE RD 447- SCOTTSDALE - AZ- 85266-US

 

 

187,857

 

 

 

187,857

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Archstone Capital(1)
7378 W. ATLANTIC BLVD SUITE 223- MARGATE - FL 33063- US

 

 

2,500,000

 

 

 

2,500,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Adam Brinckman
PASEO MANUEL GIRONA 21- BARCELONA- 8034-SPAIN

 

 

8,000

 

 

 

8,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Philip Carson
632 BRANDTLY RIDGE DRIVE -COVINGTON -KY- 41015-US

 

 

2,500

 

 

 

2,500

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Gerlach & Co(2)
399 PARK AVENUE- LEVEL B VAULT - NEW YORK NY - 10022- US

 

 

136,928

 

 

 

136,928

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Ashley Chipman
19248 CHEYENNE ST. - PORTER RANCH- CA- 91326-US

 

 

30,000

 

 

 

30,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 




7

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Green Dimension Ltd. (2)  221,667   221,667   0   0% Outsider investor
Julian Hamburger  1,500   1,500   0   0% Outsider investor
Qaiser Hassan  5,000   5,000   0   0% Outsider investor
David Hawkins  30,683   30,683   0   0% Outsider investor
Thomas Hewitt  20,000   20,000   0   0% Outsider investor
Eugene Hunt  16,000   16,000   0   0% Outsider investor
Mark Johnson  20,000   20,000   0   0% Outsider investor
George Jordan  8,000   8,000   0   0% Outsider investor
Avi Keinan  50,000   50,000   0   0% Outsider investor
Keystone Ventures (3)  466,783   466,783   0   0% Outsider investor
Jeffrey Lagrew  10,000   10,000   0   0% Outsider investor
Christian Lherisson  1,236,669   1,236,669   0   0% Outsider investor
Timothy Meisner  25,000   25,000   0   0% Outsider investor
Mayan Metzler Leicht  23,333   23,333   0   0% Outsider investor
Guy Merezky  5,000   5,000   0   0% Outsider investor
Dominique Morand  42,345   42,345   0   0% Outsider investor
Ilona Muenzer  23,530   23,530   0   0% Outsider investor
Li San Ong  366,782   366,782   0   0% Outsider investor
Ana Beatrice Oregano  19,141   19,141   0   0% Service Provider
Clyde Parks  300,000   300,000   0   0% Outsider investor
Frank Petrusnek  7,500   7,500   0   0% Outsider investor
Jaqueline Richardson  2,500   2,500   0   0% Outsider investor
Laurent Roten  60,000   60,000   0   0% Outsider investor
Frederieke Shoute  15,000   15,000   0   0% Outsider investor
William Schrader  5,000   5,000   0   0% Outsider investor
Lloyd Telfort  25,000   25,000   0   0% Outsider investor
Michael Thieren  11,000   11,000   0   0% Outsider investor
Jean Luis Toffel  80,000   80,000   0   0% Outsider investor
John Vandenberghe  300,000   300,000   0   0% Outsider investor
Yaron Weinberg  20,000   20,000   0   0% Outsider investor
Paul Westhof  50,000   50,000   0   0% Outsider investor
Tigertail Real Estate (4)  20,000   20,000   0   0% Outsider investor
Lherisson Viridiana/ AGI Funding  5,084,468   5,084,468   0   0% Outsider investor
Andrea Hofmeier  8,000,000   8,000,000   0   0% Ralph Hofmeier’s Divorced Wife
Patricia Elias  20,000   20,000   0   0% Service Supplier
Pierre Alain Frey  14,050   14,050   0   0% Service Supplier
Ana Beatrice Dominguez  18,561   18,561   0   0% Service Supplier
Corey Hoffman  415,000   415,000   0   0% Corporate Legal Counsel
Chris Jessenberger  108,000   108,000   0   0% Service Supplier
Diego Andres Lherisson  10,000   10,000   0   0% Service Supplier
Leticia  V. de Meerettig  50,000   50,000   0   0% Service Supplier
Mike & Leticia Meerettig  25,000   25,000   0   0% Service Supplier
ORMA, S.A. Switzerland (6)  150,000   150,000   0   0% Equipment Supplier
Pillow Hog Ventures  (7)  510,000   510,000   0   0% Service Supplier
Andreas Rassmussen  76,000   76,000   0   0% Service Supplier
Tina Reine  60,000   60,000   0   0% Service Supplier
Svein Viland  100,000   100,000   0   0% License Vendor

NAME & ADDRESS

 

SHARES BENEFICIALLY OWNED PRIOR TO OFFERING

 

 

SHARES TO BE OFFERED

 

 

AMOUNT BENEFICIALLY OWNED AFTER OFFERING(9)

 

 

PERCENT BENEFICIALLY OWNED AFTER OFFERING(8)(9)

 

 

POSITION,
OFFICE OR OTHER MATERIAL RELATIONSHIP TO THE COMPANY OR ITS PREDECESSORS OR AFFILIATES WITHIN LAST THREE YEARS

 

Tiffany Chipman
19248 CHEYENNE ST. - PORTER RANCH- CA- 91326-US

 

 

30,000

 

 

 

30,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Joseph Dedek
14508 CORKWOOD DR. - TAMPA- 33626-US

 

 

12,500

 

 

 

12,500

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Albert Dossa
49 RUE DE GENEVE - FERNEY VOLTAIRE- 1210 France

 

 

4,975

 

 

 

4,975

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Roland Feger
VY D'ETRA 76- NEUCHATEL 2000- SWITZERLAND

 

 

268,246

 

 

 

268,246

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Douglas Flaute
P.O. BOX 953906 -LAKE MARY-FL- 32795-3906-US

 

 

20,000

 

 

 

20,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Kathleen Forrester
3696 BROADWAY #208 - NORTH BEND- OR- 97459-US

 

 

1,334

 

 

 

1,334

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Rick Fuerstenau
302 S. WESTERN HILLS DR- ALGONA- IA- 50511 US

 

 

4,000

 

 

 

4,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Mark George
608 PALM DR- LARGO FL 33770 US

 

 

232,500

 

 

 

232,500

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Hans V. Glattli
8B CHEMIN PONTVERRE- CONFIGNON 1232- SWITZERLAND

 

 

240,000

 

 

 

240,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Green Dimension Ltd.(3)
NUMBER 15  YAHUDA MARGOZA ST.TEL AVIV-6813611- ISRAEL

 

 

221,667

 

 

 

221,667

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Julian Hamburger
41 BENNETT AVE APT 63-NEW YORK NY- 10033 US

 

 

1,500

 

 

 

1,500

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Qaiser Hassan
HOUSE 2 STREET 40 F 7/1 -ISLAMABAD PAKISTAN

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

David Hawkins
FLAT 2 BALMORAL COURT - SOUTH NORWOOD HILL- LONDON SE25 6 BT-UK

 

 

30,683

 

 

 

30,683

 

 

 

0

 

 

 

0

%

 

Outsider investor

 







NAME & ADDRESS

 

SHARES BENEFICIALLY OWNED PRIOR TO OFFERING

 

 

SHARES TO BE OFFERED

 

 

AMOUNT BENEFICIALLY OWNED AFTER OFFERING(9)

 

 

PERCENT BENEFICIALLY OWNED AFTER OFFERING(8)(9)

 

 

POSITION,
OFFICE OR OTHER MATERIAL RELATIONSHIP TO THE COMPANY OR ITS PREDECESSORS OR AFFILIATES WITHIN LAST THREE YEARS

 

Thomas Hewitt
507 N. SPUR DR-PAYSON AZ 85541-US

 

 

20,000

 

 

 

20,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Eugene Hunt
1905 EAST MOUND- ALGONA -IA- 33626 US

 

 

16,000

 

 

 

16,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Mark Johnson
817 S. EDISON AVE- TAMPA FL -33606 US

 

 

20,000

 

 

 

20,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

George Jordan
1847 MIDDLE COUNTRY RD- CENTEREACH- NY 11720-US

 

 

8,000

 

 

 

8,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Avi Keinan
15 ARIE DOLCIN STREET - TEL AVIV- 6936048 ISRAEL

 

 

50,000

 

 

 

50,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Keystone Ventures(4)
6411 PEARKES DR.RICHMOND- BC V7C 5R2- CA

 

 

100,000

 

 

 

100,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Jeffrey Lagrew
4001 SHANNON RUN ROAD-VERSAILLES -KY 40383-US

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Christian Lherisson
1650 PANAMA - APT 612- BROSSARD QB J4W 2W4 CANADA

 

 

1,236,669

 

 

 

1,236,669

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Timothy Meisner
124 E. BAY DR. MADISON LAKE MN 56063- US

 

 

25,000

 

 

 

25,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Mayan Metzler
LEICHT 2003 BROADWAY-NEW YORK 10023 NY US

 

 

23,333

 

 

 

23,333

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Guy Mirezky
YOSEF HAGLILI 20- RAMAT GAN 5241644- ISRAEL

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Dominique Morand
LES RACHES 9 -EUSEIGNE / VS 1982 SWITZERLAND

 

 

42,345

 

 

 

42,345

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Ilona Muenzer
GOTTORP STRASSE 57 - HAMBURG 22605- GM

 

 

23,530

 

 

 

23,530

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Ana Beatrice Dominguez Organero
VIA PONTE TRESA 7B -SORENGO 6924- SWITZERLAND

 

 

19,141

 

 

 

19,141

 

 

 

0

 

 

 

0

%

 

Service Provider

 







NAME & ADDRESS

 

SHARES BENEFICIALLY OWNED PRIOR TO OFFERING

 

 

SHARES TO BE OFFERED

 

 

AMOUNT BENEFICIALLY OWNED AFTER OFFERING(9)

 

 

PERCENT BENEFICIALLY OWNED AFTER OFFERING(8)(9)

 

 

POSITION,
OFFICE OR OTHER MATERIAL RELATIONSHIP TO THE COMPANY OR ITS PREDECESSORS OR AFFILIATES WITHIN LAST THREE YEARS

 

Clyde Parks
7507 LAVENDALE AVENUE- DALLAS TX 75230-US

 

 

300,000

 

 

 

300,000

 

 

 

0

 

 

��

0

%

 

Outsider investor

 

Frank Petrusnek
2301 ARLINGTON AVE SO SUITE 300- BIRMINGHAM- AL 35205-US

 

 

7,500

 

 

 

7,500

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Jaquelynne Richardson
632 BRANDTLY RIDGE DRIVE- COVINGTON KY 41015-US

 

 

2,500

 

 

 

2,500

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Frederieke Shoute
LEIDSEPLEIN 29 -AMSTERDAM 1017 PS-NL

 

 

15,000

 

 

 

15,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

William Schrader
20082 DAIRY LANE-STERLING 20165-2536 20165-2536 US

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Lloyd Telford
SANDYS, MA BX- 19 OCEANSIDE ROAD -SOUTHAMPTON SB04 BD

 

 

25,000

 

 

 

25,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Michael Thieren
CALLE 18 CALACOTO# 8022 EDIFICIO PARQUE 18-CALACOTO LA PAZ-2504 BL

 

 

11,000

 

 

 

11,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Jean Luis Toffel
ROUTE DE PRE' - BOIS 20-GENEVA 15-1215 SWITZERLAND

 

 

80,000

 

 

 

80,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

John Vandenberghe
317 6TH ST. N - CLEVELAND- ND 58424-US

 

 

300,000

 

 

 

300,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Yaron Wainberg
2 SHOAM STREET PAZ BUILDING NO, 2- TEL AVIV ISRAEL

 

 

20,000

 

 

 

20,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Paul Westhof
LEIDSEPLEIN 29 AMSTERDAM 1017 PS- NL

 

 

50,000

 

 

 

50,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Tigertail Coconut Grove LLC(5)
6565 SANTONA ST #8 CORAL GABLES- FL 33146 US

 

 

20,000

 

 

 

20,000

 

 

 

0

 

 

 

0

%

 

Outsider investor

 







NAME & ADDRESS

 

SHARES BENEFICIALLY OWNED PRIOR TO OFFERING

 

 

SHARES TO BE OFFERED

 

 

AMOUNT BENEFICIALLY OWNED AFTER OFFERING(9)

 

 

PERCENT BENEFICIALLY OWNED AFTER OFFERING(8)(9)

 

 

POSITION,
OFFICE OR OTHER MATERIAL RELATIONSHIP TO THE COMPANY OR ITS PREDECESSORS OR AFFILIATES WITHIN LAST THREE YEARS

 

Lherisson Viridiana
AVENUE DE LUSERNA 2 GENEVA 1203 SWITZERLAND

 

 

5,084,468

 

 

 

5,084,468

 

 

 

0

 

 

 

0

%

 

Outsider investor

 

Andrea Hofmeier
3120 LUCAYA ST MIAMI FL 33133 US

 

 

8,000,000

 

 

 

8,000,000

 

 

 

0

 

 

 

0

%

 

Ralph Hofmeier’s
Divorced Wife

 

Patricia Elias
3250 MARY ST W#303 MIAMI FL-33133 US

 

 

20,000

 

 

 

20,000

 

 

 

0

 

 

 

0

%

 

Service Supplier

 

Pierre Alain Frey
18, CHEMIN DES CLAIRIERES -EPALINGES CH-1066-SWITZERLAND

 

 

14,050

 

 

 

14,050

 

 

 

0

 

 

 

0

%

 

Service Supplier

 

Ana Beatriz Dominguez
VIA PONTE TRESA 7B -SORENGO 6924- SWITZERLAND

 

 

18,561

 

 

 

18,561

 

 

 

0

 

 

 

0

%

 

Service Supplier

 

Corey Hoffman
3250 MARY ST #303 -MIAMI FL 33133 US

 

 

415,000

 

 

 

415,000

 

 

 

0

 

 

 

0

%

 

Corporate Legal
Counsel

 

Chris Jessenberger
4, RUE DU CHÂTEAU -GENEVE 1203 SWITZERLAND

 

 

108,000

 

 

 

108,000

 

 

 

0

 

 

 

0

%

 

Service Supplier

 

Diego Andres Lherisson
RUE DE L'OBSERVATOIRE 40A -NEUCHATEL 2000- SWITZERLAND

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

%

 

Service Supplier

 

Leticia V. de Meerettig
BUCHER STRASSE 79 -NURNBERG 90419-GERMANY

 

 

50,000

 

 

 

50,000

 

 

 

0

 

 

 

0

%

 

Service Supplier

 

Mike & Leticia Meerettig
BUCHER STRASSE 79 -NURNBERG 90419-GERMANY

 

 

25,000

 

 

 

25,000

 

 

 

0

 

 

 

0

%

 

Service Supplier

 

ORMA, Création De Bureau S.A.(6)
AV. DE PORTES ROUGES -NEUCHATEL 2000 SWITZERLAND

 

 

150,000

 

 

 

150,000

 

 

 

0

 

 

 

0

%

 

Equipment Supplier

 

Pillow Hog Ventures (7)
3225 MCLEOD DRIVE #110 -LAS VEGAS NV 89121-US

 

 

510,000

 

 

 

510,000

 

 

 

0

 

 

 

0

%

 

Service Supplier

 







NAME & ADDRESS

 

SHARES BENEFICIALLY OWNED PRIOR TO OFFERING

 

 

SHARES TO BE OFFERED

 

 

AMOUNT BENEFICIALLY OWNED AFTER OFFERING(9)

 

 

PERCENT BENEFICIALLY OWNED AFTER OFFERING(8)(9)

 

 

POSITION,
OFFICE OR OTHER MATERIAL RELATIONSHIP TO THE COMPANY OR ITS PREDECESSORS OR AFFILIATES WITHIN LAST THREE YEARS

 

Andreas Rassmussen
AGERFLOJEN 32- VIBY SJAELLAND 4130- DA

��

 

76,000

 

 

 

76,000

 

 

 

0

 

 

 

0

%

 

Service Supplier

 

Tina Reine

2640 DUDLEY DR, EAST - WEST PALM BEACH FL 33415- US

 

 

60,000

 

 

 

60,000

 

 

 

0

 

 

 

0

%

 

Service Supplier

 

Svein Viland
TIURVINGEN 1 -FENSTAD 2170-NORWAY

 

 

100,000

 

 

 

100,000

 

 

 

0

 

 

 

0

%

 

License Vendor

 

Jacqueline Young
707-4980 KINGSWAY BURNABY BC V5H 4K7 CANADA

 

 

733,565

 

 

 

733,565

 

 

 

0

 

 

 

0

%

 

Outside Investor

 

———————

(1)

(1)

Ibrahim Almagarby has voting and dispositive power over the shares held by Archstone Capital.

(2)

(2)Jaqueline Yung]

Mr. David Chambovey has voting and dispositive power over Keystone Ventures the shares held by Gerlach & Co.

(3)

(3)

Jaqueline Young has voting and dispositive power over the shares held by Keystone Ventures. 

(4)

Sagi Green has voting and dispositive power over the shares held by Green Dimension Ltd.

(5)

(4)

Tony Scarnavacca as voting and dispositive power over the shares held by Tigertail Real EstateCoconut Grove LLC.

(6)

(5)

Benjamin Leuenberger has voting and dispositive power over the shares held by ORMA, S.A.

(7)

(6)

Matthew Chipman has voting and dispositive power over the shares held by Pillow Hog Ventures.

(8)

(7)

Based on 87,201,86387,913,933 shares of Common Stockcommon stock issued and outstanding as of February 11, 2016. December 14, 2018.

(9)

Assumes the sale of all shares being offered pursuant to this Prospectus.


We have been advised that none of the Selling Stockholders and none of the persons identified in the footnotes to this table is a member of FINRA, or an independent broker-dealer, and that neither the Selling Stockholders nor any of their affiliates is an affiliate or an associated person of any FINRA member or independent broker-dealer.




8

Table of Contents



PLAN OF DISTRIBUTION

 

This prospectusProspectus is to be used by the Selling Security Holdersselling shareholders in connection with a potential resale by certain Seller Security Holdersselling shareholders of up to an aggregate of 21,747,34821,747,352 shares of the registrant’s Common Stock.

The common stock held by thestock. The selling stockholders and any of their respective pledges, donees, assignees and other successors-in-interest may, be sold or distributed from time to time, by the selling stockholders directly to onesell any or more purchasers or through brokers, dealers, or underwriters who may act solely as agents at market prices prevailing at the timeall of sale, at prices related to the prevailing market prices, at negotiated prices, or at fixed prices, which may be changedtheir shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions.

The saleshares being offered by the selling shareholders will be sold at a fixed price of $3.00 for the duration of this Offering.


The offering price of the shares bears no relation to book value, assets, earnings, or any other objective criteria of value. It has been arbitrarily determined by the selling stockholders’ common stock offered by this prospectusstockholders.


The selling shareholders may be affected inuse any one or more of the following methods:methods when selling shares:


ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

an exchange distribution in accordance with the rules of the applicable exchange;

privately negotiated transactions;

settlement of short sales entered into after the effective date of the Registration Statementregistration statement of which this prospectusProspectus is a part;

in transactions through broker-dealers that agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;

 

through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

a combination of any such methods of sale; or

any other method permitted pursuant to applicable law.

 

The selling shareholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.Prospectus.

 

In addition, the selling shareholders may enter into hedging transactions with broker-dealers who may engage in short sales, if short sales wereare permitted, of shares in the course of hedging the positions they assume with the selling shareholders. The selling shareholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus.Prospectus. None of the selling shareholders are broker-dealers or affiliates of broker dealers. We will advise the selling shareholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling shareholders and their affiliates. In addition, we will make copies of this prospectusProspectus (as it may be supplemented or amended from time to time) available to the selling shareholders for the purpose of satisfying the prospectusProspectus delivery requirements of the Securities ActAct.

 

The selling shareholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

 





Brokers, dealers, or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling shareholders and/or the purchasers of shares for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). Neither the selling shareholders nor we can presently estimate the amount of such compensation. We know of no existing arrangements between the selling shareholders and any other stockholder,shareholder, broker, dealer or agent relating to the sale or distribution of the shares. The selling stockholders acquired the securities offered hereby in the ordinary course of business and have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of shares of common stock by any selling stockholder. If we are notified by any selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of shares of common stock, if required, we will file a supplement to this prospectus.


If a selling stockholder uses this prospectus for any sale of the shares of common stock, it will be subject to the prospectus delivery requirements of the Securities Act.


We will not receive any proceeds from the sale of the shares of the selling shareholders pursuant to this prospectus.Prospectus. We have agreed to bear the expenses of the registration of the shares, including legal and accounting fees,fees.





DESCRIPTION OF SECURITIES

The following description of our common stock is based upon our articles of incorporation, as amended, our bylaws and such expenses are estimatedapplicable provisions of law, in each case as currently in effect. This discussion does not purport to be approximately $50,000.complete and is qualified in its entirety by reference to our articles of incorporation, as amended, and our bylaws.


Notwithstanding anything set forth herein, no FINRA member will charge commissions that exceed 8% of the total proceeds of the offering.

9

Table of Contents

DESCRIPTION OF SECURITIES

Authorized Capital and Preferred and Common Stock

 

Our authorized capital stock consists of 1,000,000,000 shares of common stock, par value $0.001 per share and 500,000,000 shares of preferred stock, par value $0.001 per share. As of February 11, 2016, December 14, 2018, there were 87,201,86387,913,933 shares of common stock outstanding.

 

Common Stock

 

The following is a summary of the material rights and restrictions associated with our common stock.

 

Each share of Common Stock shall havecommon stock has one (1) vote per share for all purposes. Our Common Stockcommon stock does not provide preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights. Holders of shares of Common Stockcommon stock are not entitled to cumulative voting for electing members of the Board. Please refer to the Company’s Articlescompany’s articles of Incorporation, Bylawsincorporation, bylaws and the applicable statutes of the State of Florida for a more complete description of the rights and liabilities of holders of the Company’scompany’s securities.

 

Preferred Stock

 

Of the 500,000,000 shares of preferred stock authorized, there are no shares issued or outstanding.

 

Dividends

 

We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our Board and depends upon our earnings, if any, our capital requirements and financial position, and general economic conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

 

Warrants

 

The Companycompany does not currently have any warrants issued or outstanding.

 

Options

 

On January 2, 2012, the Company’scompany’s Board of Directors approved the creation of the 2012 Non-Qualified Stock Option Plan (the “2012 Plan”). The 2012 Plan provides for the issuance of incentive stock options to designated employees, certain key advisors and non-employees members of the Board of Directors with the opportunity to receive grant awards to acquire, in the aggregate, up to 5,000,000 shares of the Company’scompany’s common stock.

 

A summary of information regarding the Company’scompany’s common stock options outstanding is as follows:

 

 Number
of
Shares
  Weighted
Average
Exercise
Price
  Weighted Average
Remaining Contractual
Term (Years)
 
Outstanding at December 31,2012  2,200,000  $0.10   8 

 

Number of
Shares

 

Weighted
Average
Exercise
Price

 

Weighted Average
Remaining Contractual
Term (Years)

 

Outstanding at December 31, 2015

 

 

2,200,000

 

$

0.10

 

5

 

Issued  -   -   - 

 

 

 

 

 

Exercised  -   -   - 

 

 

 

 

 

 

 

 

 

Outstanding at December 31, 2013  2,200,000   0.10   7 

Outstanding at December 31, 2016

 

 

2,200,000

 

$

0.10

 

4

 

Issued  -   -   - 

 

 

 

 

 

Exercised  -   -   - 

 

 

 

 

 

 

 

 

 

Outstanding at December 31, 2014  2,200,000  $0.10   6 
Issued  -   -   - 
Exercised  -   -   - 

Outstanding at September 30, 2015

  2,200,000  $0.10   5.3 

Outstanding at December 31, 2017

 

 

2,200,000

 

 

$

0.10

 

 

 

3

 

 



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The above outstanding options were granted on January 1, 2012 to a former Companycompany’s executive. Of theseThese options 1,240,000 sharesvested at 20,000 options per month and 2,200,000 were fully vested and exercisable at December 31, 2012.2017 and 2016. During the years ended December 31, 20142017 and 2013 and2016, the nine months ended September 30, 2015, the Companycompany recognized stock-based compensation expense of approximately $12,000, $12,000$Nil and $9,000, respectively, related to stock options.$11,998, respectively. The weighted-average grant date fair value of each option was estimated to approximate $.05$0.05 using the Black Scholes valuation methodology.As of December 31, 20142017 and September 30, 2015,2016, there was approximately $24,000 and $15,000,$0 of total unrecognized compensation costs related to non-vested stock options, which is to be recognized over the next 1.5 years.options.


The fair value of stock options granted of $0.05 per share was calculated using the Black-Scholes option pricing model based on the following assumptions; risk free interest rate of 1.89%, expected volatility of 317.38%, expected option terms of 9.08 years and no expected dividend yield.

 

Expected volatility is based on historical volatility of the Companysecurities of the company and of other comparable companies. Short Term U.S. Treasury rates were utilized. The expected term of the options was calculated using the alternative simplified method permitted by SAB 107, which defines the expected life as the average of the contractual term of the options and the weighted average vesting period for all option tranches.


Convertible Debentures


As of December 31, 2017, and currently, the Company had issued an aggregate of $566,825 in convertible debentures. The following table summarizesconvertible debentures are unsecured, have no maturity date and are generally non-interest bearing, however some bear interest of 2%. The holders of the activityconvertible debentures have the option to convert these convertible debentures into common stock ranging from $1.00 to $0.10 per share upon effectiveness of non-vested employee stock options:any registration statement on Form S-1 filed with the SEC for one year after issuance. Certain debentures also offer an option to purchase additional shares at the stipulate conversion price also upon effectiveness of any registration statement on Form S-1 filed with the SEC. Effective June 30, 2018, all options to purchase additional shares had expired.

 

  Number of
Non-Vested
Shares
  Weighted-
Average
Grant Date
Fair Value
 
Outstanding at December 31, 2012  960,000  $48,000 
Granted  -   - 
Vested  240,000   12,000 
Forfeited  -   - 
Outstanding at December 31, 2013  720,000   36,000 
Granted  -   - 
Vested  240,000   12,000 
Forfeited  -   - 
Outstanding at December 31, 2014  480,000  $24,000 
Granted  -   - 
Vested  180,000   9,000 
Forfeited  -   - 
Outstanding at September 30, 2015  300,000  $15,000 

Anti-Takeover Effects of Certain Provisions of Our Amended and Restated Articles of Incorporation, as Amended, and Our Bylaws.


Provisions of our amended and restated articles of incorporation, as amended, and our bylaws could make it more difficult to acquire us by means of a merger, tender offer, proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, which are summarized below, are expected to discourage types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because negotiation of these proposals could result in an improvement of their terms.


Calling of Special Meetings of Stockholders. Our bylaws provide that special meetings of the stockholders, unless otherwise prescribed by statute, may be called by the company’s board of directors, the chairman of the board, the president or the holders of shares entitled to cast not less than 20% of the votes at that meeting. If a special meeting is called by anyone other than the Board of Directors or the President or the Chairman of the Board, then the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by other written communication to the Chairman of the Board, the President, any Vice President or the Secretary of the corporation. The officer receiving the request forthwith shall cause notice to be given to the shareholders entitled to vote, in accordance with the provisions of the By-Laws, that a meeting will be held at the time requested by the person or persons calling the meeting, so long as that time is not less than 15 nor more than 60 days after the receipt of the request.






Removal of Directors; Vacancies. Any director may resign effective upon giving oral or written notice to the Chairman of the Board, the President, the Secretary or the Board of Directors, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation of a director is effective at a future time, the Board of Directors may elect a successor to take office when the resignation becomes effective. Vacancies on the Board of Directors may be filled by a majority of the remaining directors, or if the number of directors then in office is less than a quorum by (i) unanimous written consent of the directors then in office, (ii) the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice, or (iii) a sole remaining director; however, a vacancy created by the removal of a director by the vote or written consent of the shareholders or by court order may be filled only by the affirmative vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute at least a majority of the required quorum), or by the unanimous written consent of all shares entitled to vote thereon. Each director so elected shall hold office until the next annual meeting of the shareholders and until a successor has been elected and qualified, or until his or her death, resignation or removal. A vacancy or vacancies in the Board of Directors shall be deemed to exist (i) in the event of the death, resignation or removal of any director, (ii) if the Board of Directors by resolution declares vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony, (iii) if the authorized number of directors is increased, or (iv) if the shareholders fail, at any meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be elected at that meeting. The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors, but any such election by written consent, other than to fill a vacancy created by removal, shall require the consent of the holders of a majority of the outstanding shares entitled to vote thereon. A director may not be elected by written consent to fill a vacancy created by removal except by unanimous consent of all shares entitled to vote for the election of directors.


Amendment of Bylaws. Our Bylaws provide that new By-Laws may be adopted or the By-Laws may be amended or repealed by the vote or written consent of holders of a majority of the outstanding shares entitled to vote. Our Bylaws provide that new By-Laws may be adopted or the By-Laws may be amended or repealed by the board of directors.


Transfer Agent and Registrar


Worldwide Stock Transfer, LLC, One University Plaza, Suite 505, Hackensack, NJ 07601, Phone: (201) 820-2008, Fax: (201) 820-2010.

 

ListingQuotation of Common Stock

 

Our common stock is currently quoted on the OTC Pink Market under the symbol EAWD“EAWD”; however, because we do not currently file reports with the SEC or otherwise provide financial disclosures to the public, our quotation on OTC Markets contains “Pink No Information” and “Dark or Defunct” labels. Upon effectiveness of the registration statement of which this Prospectus forms a part, we expect that the “Pink No Information” and “Dark or Defunct” labels will be automatically removed. Our securities are currently highly illiquid, and subject to large swings in trading price, and are only traded on a sporadic and limited basis. OnOn February 11, 2016, December 14, 2018, the last reported sale price per share for our common stock as reported was $1.38.

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INTERESTS OF NAMED EXPERTS AND COUNSEL $0.35.

 

No expert



SHARES ELIGIBLE FOR FUTURE SALE


We cannot predict the effect, if any, that market sales of shares of our common stock or counsel namedthe availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time. Future sales of our common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. In addition, sales of our common stock in the public market after the restrictions lapse as described below, or the perception that those sales may occur, could cause the prevailing market price to decrease or to be lower than it might be in the absence of those sales or perceptions.

Sale of Restricted Shares

As of December 14, 2018, there were 87,913,933 shares of common stock outstanding. The shares of common stock being offered by this prospectusProspectus will be freely tradable, other than by any of our “affiliates,” as having prepareddefined in Rule 144(a) under the Securities Act, without restriction under the Securities Act. These remaining shares are “restricted securities” within the meaning of Rule 144 under the Securities Act.

Rule 144

In general, under Rule 144, as currently in effect, a person (or persons whose shares are required to be aggregated), including a person who may be deemed an “affiliate” of a company, who has beneficially owned restricted securities for at least six months may sell, within any three-month period, a number of shares that does not exceed the greater of: (1) 1% of the then-outstanding shares of common stock, or certified(2) if and when the common stock is listed on a national securities exchange, the average weekly trading volume of the common stock during the four calendar weeks preceding the date on which notice of such sale was filed under Rule 144. Sales under Rule 144 are also subject to certain requirements as to the manner of sale, notice, and availability of current public information about our Company. A person who is not deemed to have been an affiliate of us at any parttime during the 90 days preceding a sale by such person, and who has beneficially owned the restricted shares for at least one year, is entitled to sell such shares under Rule 144 without regard to any of the restrictions described above.

We cannot estimate the number of shares of our common stock that our existing stockholders will elect to sell under Rule 144.









DESCRIPTION OF BUSINESS


Overview


The company is an engineering services company in the green tech industry, formed as an outsourcing services green tech platform, that can provide an all-inclusive services package to assess the feasibility of the potential technological solutions for a project that seeks to achieve the close cycle of waste to energy and water generation by exploiting renewable technologies. The green tech industry is constantly evolving due to ongoing and increasing water scarcity, as well as increased energy need. We believe that we are well positioned to offer engineering and technical consultancy to design the most accurate renewable technology solutions to these problems and to take advantage of this prospectus or having given an opinion upon the validityrapidly growing industry with many new markets. Our company presently outsources most of the securities being registered or upon other legal matters in connection withservices for the registration or offeringengineering and technical services as well as for the promotion, selling and distribution of the Common Stock was employedidentified technological solutions. We rely on a contingency basis,third parties to manufacture their different technologies that are identified to provide the designed solution for the water or had, energy need, that our potential clients might present.


We seek to focus on four main aspects of the water and energy business opportunities: generation, supply, commercialization and waste to energy, seeking to assist business owners and/or ismunicipalities to receive, in connection withbuild profitable and sustainable supply/generation of water and energy as required, and selling them the offering, a substantial interest, directrequired technology or indirect, intechnical service to enhance their productivity/operability. With its outsourced technical arm and its commission based global network of vendors, the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

The financial statements as of December 31, 2014 and 2013 andcompany expects to add sustainable added value to each of the years then ended includedprojects it takes on.


We focus on providing customized technology solutions and technical services, based upon client preference, which may include any or all of the following:


water/energy generation

waste to energy plants

technical assistance

strategic and financial partnering;

project management.


The pro-bono feasibilities studies made in this prospectusregions such as Mexico, South Africa and the registration statementKingdom of Saudi Arabia, have been audited by Mallah Furman to the extent andnow generated advanced ongoing negotiations for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authorityconclusion of said firm as experts in auditing and accounting.

The validity of the issuance of the Common Stock hereby will be passed upon for us by Law Office of Clifford J. Hunt, P.A. 8200 Seminole Boulevard Seminole, Florida 33772. Neither Mr. Hunt nor his law firm has any direct or indirect ownership interest in any of the shares of capital stock of our Company.

DESCRIPTION OF BUSINESS

Overview

 The Company focuses on green sustainable solutions to generate and purify water, as well as the production and reproduction of energy. EAWC is primarilyfinal contracts, presently engaged in these developments and given the promotion, development and commercialization of green technologies. In light of thestrong increased demand for water and energy around the world, we, with our potential partners, seek to develop water and energy generation solutions by using the Companyexisting technologies as well as improving those to be more energy efficient and its partners develop,performant and in the future be able to, manufacture, distribute and operate water generation, water purification, and green energy production (Waste to Energy) technologies.


Our company website is: http://www.eawctechnologies.comwww.eawctechnologies.com.


Company History

 

Company History

Merger Agreement

Eurosport Active World Corporation (the “Company”)Corp. (formerly known as Eagle International Holdings Group Inc. or “EIH”), was incorporated under the laws of the State of Florida on August 23, 2000. EIHThe Company was a shell entity that was in the market to merge with an operating company.

 

On March 17, 2008, EIH entered into an Agreement and Plan of Acquisition (the “Merger Agreement”) with Inko Sport America, LLC (“ISA”), a Florida privately held Limited Liability Company.privately-held limited liability company. In connection with the closing of the Merger Agreement, ISA merged with and into EIH effective May 07,7, 2008, with the filing of the Merger Agreement with the Florida Secretary of State.

 





Pursuant to the terms and conditions of the Merger Agreement:


As a precondition ofto the consummation of the merger transaction, a reverse stock split of EIH common stock was consummated on a one for 1,000 basis pursuant to which each 1,000 outstanding shares of EIH common stock was converted into one share of EAWCEurosport Active World Corporation common stock. After giving effect to the reverse stock split, the authorized capital stock of EIH immediately prior to the closing of the Merger Agreementmerger agreement consisted of one billion shares of EIH common stock and 500 million shares of preferred stock, of which 106,214 shares (as a result of the reversecommon stock split) waswere issued and outstanding with former EIH shareholders.outstanding.

After the reverse stock split, ISA agreed to acquire 100% of the merged companies ISA &ownership interest in EIH, will operate underin exchange for the name of Eurosport Active World Corp (EAWC) and issuance of 20,500,000 (approximately(then approximately 99% of the issued and outstanding common stock of the Company)company).

Concurrent with the closing of the Merger Agreement,merger agreement, 4,394,044 shares of common stock were issued to EIH’sEIHs majority shareholder and officer, Michael Farkas, for the satisfaction of obligations payable to him; and

Immediately after the closing of the Merger Agreement, EAWCISA merged with EIH, and adopted ISA’sEAWC’s business plan and changed its name to Eurosport Active World CorpCorporation (“EAWC”). Further, upon completion of the merger, the prior officers and directors of EIH resigned and the current officers and directors of the Companycompany were elected or appointed to their positions.

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This transaction was accounted for as a recapitalization effected by a share exchange, wherein ISA was considered the acquirer for accounting and financial reporting purposes.

 

ISA was a development stage company, incorporated on February 24, 2005 in the State of Florida. 2005.


Through December 31, 2012, the Companycompany had been seeking to primarily engagedengage in the promotion, development and commercialization of green technologies. technology solutions. In view of the increased demand for water and energy, in December 2012, the company began to focus on water generation, water purification, and green energy production (waste to energy); formed as an outsourcing green tech platform, seeking to exploit renewable technology solutions by providing technical and engineering consultancy services for the design and development of the identified appropriated solutions, this through collaboration with green tech research and developments centers in Europe and with the potential collaboration with technology companies such as Siemens and Bosh. Our services include but are not limited to provide feasibility studies for generation of water and energy as well as waste management, but to develop the designed technological solutions in collaboration with our potential partners, technical maintenance, education and training related to the technology solution.


The Business

In view of the increased demand of water and energy, the Companywe began to focus itsour business goals on water generation, water purification, and green energy production (Waste(waste to Energy); acquiringenergy). To accomplish this, we set out to establish an outsourcing green tech platform, seeking to provide engineering and licensingtechnical consultation services that leads to design the rightsmost sustainable technological solutions which can provide water and energy as well as to sell and produce related technologies and securing through collaboration with Green Tech research and developments centersmanage the waste in Europe, the research and development,a close cycle. As well as to secure all technical maintenance, education and training related to the technology.identified technology solutions; to accomplish our business purpose the company has sought potential collaboration with green tech research and development centers in Europe.

 

We wereare an engineering services company formed as a Greenan outsourcing green tech platform, ofseeking to exploit renewable technologies industry. technologies.


The Green Techgreen tech industry is subject to constantconstantly evolving due to ongoing and increasing water scarcity as well as increased energy increased need, thereby, makingwe believe, that by designing the most sustainable renewable solutions to these problems it would become an essential component of a rapidly growing up market.industry with many new markets. The Greengreen tech industry is complex, because it still requirerequires much promotion and information about its potential to be known furthermorepotential. Furthermore, regulations in each country are different and, in a way thatmany cases, several segments are regulated by both federalcentral and statelocal (state, provincial, municipal) governments. EAWC’s approach assistsseeks to assist general business operations with the growth and development of their business, by ensuring the efficient, profitable and sustainable supply/generation of water and energy as required;required, allowing our potential customers to focus on thetheir business while been sustainable on its development.adopting strategies of sustainability. Using the technology products and services licensed or purchased from other technological sources, we believe we will be able to deliver and install a product set that suits the green technology water and/or energy needs of our customers. By using the technologies/servicesdesigned technological solutions and technologies identified and provided by EAWC potential partners, we believe, that our potential clients arecan be free to focus on compliance with performance of their operations as well as with the water and energy consumption or generation regulations within their industry, and to complete their primary business goals. Our clients may be businesses seeking to upgrade their business processes or governmental entities seeking to apply green technology solutions for the water and energy they supply their constituencies.

 





We continue to be a development stage company. We have not yet generated any revenue from our operations.Our company presently outsources most of the services for the engineering and technical services as well as for the promotion, selling and distribution of the identified technological solutions. We presently have only two employees,employees: Mr. Hofmeier, our President, Chief Executive Officer, Ralph HofmeierChairman of the Board and a significant stockholder, and Ms. Velazquez, our Chief Operating Officer, Irma Velasquez. We presently rely on third parties to manufacture our products, sellVice-Chairman and distribute them.a significant stockholder.

 

EUROSPORT ACTIVE WORLD CORP focusesWe seek to focus on four main aspects of the Waterwater and Energyenergy business: Generation, Supply, Commercializationgeneration, supply, commercialization and Wastewaste to Energy. Assistingenergy, seeking to assist business owners and/or municipalities to build profitable and sustainable supply/generation of water and energy as required; byrequired, and selling them the required technology or technical service to enhance itstheir productivity/operability. With its outsourced technical arm (Swiss Water Tech R&D) and itits commission based global network of vendors, the company wouldexpects to add sustainable added value to each of the projects.

Our programs will be tailored to meetprojects it takes on while getting revenue from the needsengineering and requeststechnical consultancy services and project management, selling of our clients. We will assist our clients with growth by increasing their customer basethe various identified technologies, royalties from the commercialization of energy & water in certain cases and assisting their operations and growth management in new markets.revenues from the licensed innovated technologies.

 

We will providefocus on providing customized technologiestechnology solutions and technical services, based upon client need/preference, which may include any or all of the following:

 

Water/Energy Generation

Waste to Energy Plants

water/energy generation

Technical assistance

waste to energy plants

Strategic

technical assistance

strategic and financial partnering;

Project management;

project management.

 

The company is also focused on addressing areas of business, which concentrate on new technological and engineering concepts relating to water and energy generation as well as waste to energy development and those related components that assist in advancing the green tech industry. These include:

advancement of atmosphere water generators;

development of techniques to attain self-sufficient supply of energy;

advancement of new ideas on waste to energy implementation;

distribution of small, hi-energy cost effective generators;

Designing, prototyping and arranging the manufacture of new syngas engine/motors.

Current Projects


The company has consulted on a number of projects on a pro-bono basis seeking to establish a strong corporate history towardtowards obtaining a strong salesreferenceable client base. The pro-bono feasibilities studies made in regions such as Mexico, where an independent Contractor Agreement has been granted to EAWC to design and build five waste-to-energy (WtE) plants in the state of Chiapas (1), State of Mexico (1), State of Quintana Roo (2) and State of Hidalgo (1). (Each plant is expected to deliver 50 - 125 Mw/hour). The cost of ourthe identified technologies and/or for our services will be dependent upon particularities of the needs of supplying/supply/generation of water or energy of each project/client company and the complexity of the client/project company business. EAWC Technicaltechnical consulting fees will be negotiated and established based upon factors such as the level of services requested by the client.


Thus far we have marketed our technologies and services primarilyThe company has been also granted a contract Award Confirmation for the supply of Air Liquefying Machines to be supplied to Arriyadh Development Authority (ADA) of Saudi Arabia. The proforma invoice attached to the private sector and some municipalitiescontract award is for 100 Units (AWGs) in exchange for a payment of $10,640,000, expected to be delivered within 12 calendar months, once all technical details of the states of California, Nevada, Florida and Alaska in the United States of America (the “U.S.”) as well in other countriesconfiguration of the American Continent such as Mexico, Puerto Rico and Chile,machines would be confirmed.






We seek to mention some of them and other countries of the African Continent such as South Africa and Kenya and India in the Asian Continent. EAWC has been doing business development since its reactivation in April 2012. Ralph Hofmeier, our president has been involved in the company since inception and is the founder, as well as Ms. Irma Velazquez our COO. We focus on geographic areas, projects and budget levels where we believe there aremay be significant demand for our engineering, technical services and technologies & services and the potential for attractive returns to our company and investors. We do not consider our company to be a “blank check company” as such term is defined in Securities and Exchange Commission Rule 419; however, we are a company with minimalno revenues yet, and limited operations and our auditor has expressed substantial doubt about our ability to continue as a going concern. The company has no present plans to be acquired or to merge with another company nor does the company, nor any of its shareholders, have plans to enter into a change of control or similar transaction transaction.


The company does now and willplans to continue to operate as a Green Techgreen tech commercial company, on an income-based salesproviding technical engineering services and technical services through our agreements withtechnological solutions for the Swiss Water Tech R&D Centre, for independent clients requiring our technologies, expertise, experienceproduction of water and international contact networks.the production of electricity from waste matter. Any acquisitions that the company may make in the future, would be of companies similar in nature to our own, operating in similar or complementary industry segments or geographic location;locations and that would provide EAWC with new growth opportunities or competitive advantage. However, even though our business plan does contemplate potential growth through the acquisition of specialty service providers and other independent consulting services companies that would complement our business plan we are first and foremost a Green Tech companyEAWC anticipates growth through the consolidation of sales of technologies and consulting service providers. green tech solutions company.

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We believe that our conduct to date evidences significant, bona fide business operations and a scenario that is wholly inapposite to any attempt to create the mere appearance of a specific business plan and effort to avoid the application of Rule 419.Our Business Relationships


The Company is focused on addressing areas of business, which concentrate on new technological and engineering concepts relating to Water and Energy generation as well as Waste to Energy development and those related components that assist in advancing the Green Tech industry. These include:

Advancement of Atmosphere Water Generators, Energy self sufficient supply;

Advance new ideas on Waste to Energy implementation;

Small, Hi-energy cost effective generators;

New Syn Gas Engine/Motor Design, prototyping and manufacture.

The founders of Eurosport Active World Corp have extensive experience in both the technical development and operation processes aspects associated with this industry, and for this reason, we intend to enhance the collaboration with its today technical provider the Research & Development Centre (SWATE) to ensure the provision of the technical advice services and expended when required on a contractual basis, to project owners that acquire the EAWC Technologies.

Agreements with Swiss Water Tech Research and Development S.A.

 

The following paragraphs describe our relationship with Swiss Water Tech Research and Development S.A. (“SWATE”), an entity owned and controlled by Mr. Hofmeier, the Company’s President, Chief Executive Officer, Chairman of the Board and a significant stockholder, and Ms. Velazquez, the Company’s Chief Operating Officer, Vice-Chairman and a significant stockholder.

Effective February 1, 2013, and as amended on June 29, 2015 and January 29, 2016, the Companycompany entered into an exclusive Technology Transfer Agreement and License Agreement (the "Technology Transfer and License Agreement") for a period of ten years with SWATE. SWATE is a Swiss Water Tech Research & Development S.A. (“SWATE”), an entity ownedresearch and controlled by the Company's Chief Executive Officerdevelopment company with access to patent and Chief Operating Officer who are the primary beneficiaries.certain scientific and technical resources. Under the terms of the agreement, SWATE:SWATE agreed to: (a) will transfer to the Companycompany the license to manufacture products developed by SWATE; (b) grant a right to use all know-how and technical assistance necessary for the exploitation of their licensed patentsintellectual property and the manufacture of certain products; and (c) will grant the Companycompany the use of certain related trademarks. If the Companycompany generates revenue as a result of the products and licenses related to the Technology Transfer and License Agreement, the Company iscompany agreed to pay to SWATE a minimum annual royalty fee stipulated in the agreement plus five percent of revenue generated. Since the Companycompany has not generated revenues, during 2013 the Companycompany accrued the minimum fee of approximately $542,000 in accordance with the terms of the agreement.Technology Transfer and License Agreement. On April 15, 2015, SWATE agreed to waive licenses fees for 2014 and 2015.2015, and on January 29, 2016, SWATE agreed to waive license fees for the years 2016 and 2017.


Pursuant to the Technology Transfer and License Agreement, the products subject to such agreement include the following: (1) Design of Waste to Energy process assisted by a Plasma Converter system; (2) Design of Solar Power Water Purification system and the (3) Design of Atmosphere Water Generator.


Waste to Energy Process Design - Is a Plasma Gasification based process, self-powered by electricity generated by syngas. The process is based on the dissociation (breaking apart) of the molecular bonds of solid, liquid and gaseous compounds or materials of both hazardous and nonhazardous wastes (feedstock) organic and inorganic. Depends on the type of the operation’s daily input, significant amounts of energy, water and valuable hydrogen gas for sustainable power generation can be generated.


Solar Power Water Purification process- is a high-volume water purification solution utilizing solar, photovoltaic energy and, when applicable, a mini-windmill or an alternate source of renewable energy. From the sea, lake, river or stagnant, water is passed through several stages of purification and treatment until it is rendered drinkable as per World Health Organization standards. We believe that its innovative design allows its implementation in a challenging geographical location.


Atmosphere Water Generator system- is powered by a renewable energy solution the AWG produces pure potable water from the air’s humidity. We believe that the system could produce sufficient quantities even at very dry and hot climate conditions.

 





As part of the exclusive Technology Transfer and License Agreement, on February 1, 2013, the Companycompany was required to pay a non-refundable front-end fee of $6 million in exchange for the use of newly developed systems, concepts and license of patent and trademark.trademark when appropriate. The Companycompany satisfied the required payment in February 2013 through the issuance of 6 million shares of its common stock, valued at $1.00 per share. The value of the licensed technology rights acquired was recorded as an intangible asset and scheduled for amortization over the ten-year life of the Technology Transfer and License Agreement. During 2013, the Company recognized amortization expense in the amount ofcompany amortized $550,000. On December 31, 2013, the Companycompany evaluated the unamortized asset for impairment and determined that due to its inability to secure revenue generating commercial contracts, the recoverability of this asset in future periods was doubtful. Accordingly, the Companycompany fully impaired the remaining unamortized value of the front-end feelicensed technology rights of $5,450,000. Our transactions with related parties were valued


On January 5, 2018, SWATE and the company executed a Termination of the exclusive Technology Transfer and License Agreement effective from January 6, 2018. The termination cited default of some obligations acquired such as the absence of the company’s generation of revenue as a result of the Agreement, the potential manufacturing and change on the constitution and ownership of SWATE which could affect significantly the expected results of the agreement. SWATE confirmed that no open balance exists at zero dollars ($0.00)this time, confirming the waiving of due royalties for the Years 2016 and values ascribed2017.


SWATE confirms that the company shall be entitled to securities utilized in such transactions were determined arbitrarilymanufacture the designed products only and have no relationshipexclusively for the concept of Waste to book valueEnergy on the configured standards, without having to pay any further royalties until February 1, 2023. Nevertheless, it shall refrain from revealing any document or any traditional market values.information provided by SWATE (the Licensor) that is less than 10 years old.


Effective February 1, 2013, the Companycompany also entered into an International Service Contract with SWATE (the "SWATE Service Contract"). Under this agreement, SWATE will provideprovided operations management, engineering and technical services to the Company.company. These services include:

included the following: Financial and Accounting Matters– SWATE shall maintain the Company’s general ledger, accounts receivable and accounts payable records, and fixed asset records and provide billing and collection services. SWATE shall also provide, or cause to be provided to client, payroll services, including assistance with regulatory compliance matters.

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Matters; Insurance Matters – SWATE shall provide or cause to be provided to the Company, insurance with the coverage, insurers and maximum deductibles as will be requested by the Company via a written notice. All such insurance policies shall add the Company as an additional named insured, and such insurers shall be required to provide the Company with no less than 30 days’ prior written notice of any change or cancellation of any such insurance. In the event of any such potential change that may have a materially adverse effect on the Company, or in the event of potential cancellation, Company shall be entitled to secure replacement insurance at its own cost.

Matter; IT Services – SWATE shall provide certain general information technology services and infrastructure including assistance with installation, and maintenance of telephonic and computer equipment. SWATE shall also provide the Company with the use of SWATE’s existing and future telephone automatic call distribution networks and systems and email systems. SWATE shall provide such technical support and maintenance as the Company reasonably requests for the Company and its clients.

Services; Web Hosting and Maintenance of Client Web Site – SWATE will provide Web hosting and maintenance services for the Company website. In consideration of hosting and maintaining the Company website, Company transfers to SWATE the right to use the Company website has its own website in its efforts to sell the Company’s products.

Site; Customer Support – SWATE shall provide and perform such services related to technical assistance to the Company’s and user customers and distributors, customer training and any other tasks relating to servicing the Company’s customers and distributors.

Support; Supply Chain Management – SWATE shall provide and perform such services related to the delivery of physical Company packages to the Company’s distributors or end-user customers; provided that the cost of these services to the Company will equal Administrative Services compensation plus other direct costs and expenses related to packaging and shipping.

Management; Development Support – SWATE shall perform such specific consulting projects and research projects for the Company business development, from time to time, as requested by the Company and upon such terms as may be agreed upon between the Company and SWATE; provided that the cost of the services will equal SWATE’s salary and benefits costs for the employee-developers and other direct costs and expenses, plus fifteen percent (15%).

Other Services Provided– SWATE shall provide and perform such other services, as shall be requested by the Company and agreed upon between the Company and SWATE, from time to time, at such price and upon such terms as agreed.services.

 

The SWATE Service Contract hashad a term of five years and providesprovided for a monthly service fee of $35,000 plus out-of-pocket expenses. On November 1, 2016, SWATE and the company executed a Termination of the SWATE Service Contract effective from December 31, 2016. The termination cited default of important obligations; in particular the payment within an agreed period of time and the person responsible for the service provider would no longer be employed. It was further agreed that the outstanding balance at December 31, 2016 of $712,070 would be settled with EAWC shares valued at $1.00 per share, to be issued on July 1, 2017, and, accordingly, on February 2, 2018, we issued 712,070 shares to SWATE. In 2015, the company issued 274,515 common shares at $2.00 per share to satisfy an outstanding debt of $549,030 due to SWATE. These services are now provided to the company by EAWC Tecnologias Verdes SA de CV. (“Verdes”), a Mexican private company, 5% of which is owned by Mr. Hofmeier, our President, Chief Executive Officer, Chairman of the Board and a significant stockholder, pursuant to a Management and Administrative Services Agreement between the company and Verdes dated January 1, 2017. Mr. Hofmeier does not hold any management or other personnel positions with Verdes.


On April 1, 2013, the company signed a letter agreement with SWATE, which authorized SWATE to collect on behalf of the company payments made by investors on sales of company stock. According to the agreement, the proceeds collected by SWATE could be used by SWATE to pay down amounts due from the company for royalties and/or service fees pursuant to the above agreements. During the years ended December 31, 2016 and 2015, SWATE did not collect any amounts from investors as no sales of the company’s common stock to investors occurred during such time and SWATE no longer has this authority and this letter agreement is a Swiss research and development company with access to patent and certain scientific and technical resources. no longer active at this time.


As a result of the above agreements, the Companycompany has a variable implicit interest in SWATE, however it is not its primary beneficiary, does not provide any explicit or implied financial support and therefore does not consolidate SWATE's financial statements in its consolidated financial statements.


Pursuant to a Management and Administrative Services Agreement between the company and Verdes dated January 1, 2017, Verdes agreed to provide the following services to the company:


Financial and Accounting Matters – including maintaining the Company’s general ledger, accounts receivable and accounts payable records, and fixed asset records and provide billing and collection services and causing to be provided to client, payroll services, including assistance with regulatory compliance matters.


Insurance Matters – including providing or causing to be provided to the Company, insurance with the coverage, insurers and maximum deductibles as will be requested by the Company via a written notice.






IT Services – including certain general information technology services and infrastructure including assistance with installation, and maintenance of telephonic and computer equipment. And use of telephone automatic call distribution networks and systems and email systems and such technical support and maintenance as the Company reasonably requests for the Company and its clients.


Web Hosting and Maintenance of Client Web Site –Web hosting and maintenance services for the Company website. In consideration of hosting and maintaining the Company website.


Customer Support –provide and perform such services related to technical assistance to the Company’s and user customers and distributors, customer training and any other tasks relating to servicing the Company’s customers and distributors.


Supply Chain Management –such services related to the delivery of physical Company packages to the Company’s distributors or end-user customers.


Development Support –such specific consulting projects and research projects for the Company business development, from time to time, as requested by the Company and upon such terms as may be agreed upon between the Company and Verdes.


Other Services Provided –such other services, as shall be requested by the Company and agreed upon between the Company and Verdes, from time to time, at such price and upon such terms as agreed.


The company agreed to pay Verdes $25,000 per month pursuant to the agreement. The agreement terminates on January 1, 2022, unless extended.


Other Acquisitions


During 2012, the Companycompany agreed to issue an aggregate of 25,300,000 shares of its common stock in connection with its acquisitions of Powermax Energy & Business Solution, Inc. (“Powermax Energy”), Powermax Green Technologies, LLC (“Powermax Green Technologies”), Green Environmental Management LLC (“GEM”); Swiss Green Solutions, Srl (“Swiss Green Solutions”) and International Supply & Support-African Sunlight-Solstrom (“African Sunlight”). The latter entities were inactive and except for “African Sunlight” were acquired from current officers and directorsMr. Hofmeier, our President, Chief Executive Officer, Chairman of the Company; consequently, theBoard and a significant stockholder, and/or Ms. Velazquez, our Chief Operating Officer, Vice-Chairman and a significant stockholder. The equity interestinterests issued were recorded at an amount equal to the carrying amount of the net assets related to the latter entities. We undertook these acquisitions to secure certain intellectual property rights, technologies and accreditations as further explained below.

 

During 2013, the Companycompany issued common stock pursuant to its 2012 acquisition of Swiss Green Solutions, a corporation originally organized in Switzerland. In connection with this acquisition theSwitzerland (“Swiss Green”). The Company acquired 100% of Swiss Green all of the ownership interest in Swiss Green Solutionswhich was held by our Ms. Velazquez, our Chief Operating Officer and Vice-Chairman, in exchange for 8,000,000 shares of the Company's common stock valued at par. The Company acquired Swiss Green Solutions to secure design patent No. 138,065 for the Solar Power Water Purification System and all related technical designs and materials.

The duration of the foregoing patent is 20 years. The acquisition of the patent allows the Company to complete its suite of water equipment technologies using a Swiss water purification concept based on Swiss solar technology.

 

During 2013, the Companycompany issued common stock pursuant to its 2012 acquisition of African Sunlight, a corporation originally organized in Norway. In connection with this acquisition the Companycompany acquired all of the ownership interest all of which was held by a third party, in African Sunlight in exchange for 50,000 shares of the Company'scompany's common stock valued at $1 per share. The Companycompany acquired African Sunlight seeking to secure a vendor accreditation that allows the Companycompany to supply green technologieswater generation and purification, Energy generation as well as Waste to Energy Technological solutions to the United Nations members.

 

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Powermax Energy & Business Solution, Inc. iswas 100% owned by RalphMr. Hofmeier, the CEOCompany’s President, Chief Executive Officer, Chairman of EAWC. The Companythe Board and a significant stockholder. By this acquisition we secured the licensee rights for the core technologies for water and energy products from the patent owners of the technologies, AQUA SOCIETY GmbH, Germany. With the license, EAWC has the right to sell, manufacture and develop the core technologies of water and energy equipment for ninety-nine years across the world. In certain countries and regions like Mexico, Latin America and the United Sates, EAWC was granted exclusive rights from Powermax. With the acquisition of Swiss Green Solution, a Swiss entity owned by Irma Velazquez, the COO of EAWC, EAWC will complete the water equipment technologies with a Swiss water purification concept based on Swiss Solar technology. Swiss Green Solution already has a stronghold in Mexico and has become the Exclusive Regional distributer of EAWC in Latin America.Powermax Energy.

 

The acquisition of Powermax Green Technologies LLC gave EAWC access to a strong sales force and agents in around the globe. With distribution and agents in more than 30 countries, EAWC has the ability to sell and distribute its products around the world. To date, this sales network already brought in five projects, with a value of more than $170 million. These five projects are in the early stages of development, while the Company conducts feasibility studies and seeks financing approval.

With the 50% acquisitionattained 100% ownership of Green Environmental Management (GEM) a Texas entity by purchasing the remaining 50% we did not own from Texas,Irma Velazquez, our COO for 9 million shares of our common stock. As a result, EAWC has directacquired certain trade secrets with regard to process and commercialization methods and agreements for access to several Swiss and US Universities for environmental studies and support. GEM was ownedsupport, which we believe can serve to 50% from Irma Velazquez.enhance our know-how of green tech solutions.






The above described acquisitions gave EAWC was alreadythe necessary tools to be a 50% ownergreen tech company with an international outlook. As a result of GEMthese acquisitions EAWC has the ability to sell and just took over 100% of GEM.distribute its technical and engineering services as well as our potential partners technologies around the world, resulting in potential projects in Mexico, which we have described above at “Current Projects.”

 

Our Vision

 

The mission of EAWC is to provide sustainable water production design and already commercialized systems as well as energy design and systems based on high efficiency and renewable sources, as well asand also smart grid and storage solutions. Through a combination of the best design and configuration of AquaTech, EnergyTech and Wastewaste management assisted solutions and technologies, we believe that it is possible to create a completely self-sufficient energy generation and water production system, which can be used at the same time to meet the potable water requirements as well as the electrical energy needs of businesses, communities and entire States, like California. We have not yet realized any of the above results from the operations of our business.California in USA and or Cape Town in South Africa.

 

EAWC is promotingseeks to promote green technology solutionsolutions through its large network ofbased-commissioned distributers and agents worldwide. EAWC engagesanticipates using Made in patented German,Germany Green Tech, Swiss &and US technologies such as: Atmosphere Water Generatorsatmosphere water generators (AWGs), CO2-free energy production (Steam Energy Generators)(steam energy generators), Plasma-assistedplasma-assisted gasification &and sterilizations systems, Solar-powered Water Purification Systems,solar-powered water purification systems, as well as those in solar and wind energy solutions (own developments).which we may, when our financial condition permits, further develop ourselves.

 

Today EAWC has a network of proprietarywe believe we have potential technology partners, technology transfer agreements and technology representation agreements that cover nearly every aspectin place relating to aspects of renewable energy and water supply.

The Company maintains a partnership with a Swiss Water Tech Research & Development Centre to be the technical armsupply and provide technical services to the Company and it clients and distributors. The post-sales technical assistance, maintenance, training and education are delivered in a synergistic package that is enhanced by this relationship.


Onewe believe one of theour key unique selling features and capabilities is this relationship. We believe that one of the Companyour key unique selling features and capabilities is the combination of the different disciplines of water, energy and waste management. EAWC Technologies offers closed loop elemental recycling systems that safely destroy waste


Revenue would be generated by the sales of Engineering and produces commodity products.Technical Consultancy Services, sales of various identified technologies, royalties from the sales of energy and/or water in certain projects.


16

Table of Contents

The EAWC- WtE system achieves this without producing harmful, noxious or dangerous by-products, effluents or emissions. The materials fed into the process are in actual feed -stocks, once regarded as waste. The departments of our Companycompany are to be broken down below:as follows:


[eawc_s1001.jpg]





The technological solutions offered by our company are the following:


Atmosphere Water Generators (AWGs) & Aqua Mission Systems

 

The AWGs produce pure potable water from the air´s humidity. The system produces sufficient quantities of portablepotable water even in very dry and hot climate conditions. AWG plants can be scaled to almost any size, community and/or population. Presently, Atmosphere Water Generators are largely used in Asia and African countries. The main producers for AWGs, which are based on dehumidifying, come from China. Almost every US based AWG brand is supplied by manufacturers in China. EAWC usesplans to use 80 year proven German technology for condensate water from the air based on A/C technology. ThisWe believe that this concept allows a higher performance and larger quantity of water because of the use of high amounts of air. With the tech-agreement with Swiss Water Tech, S.A. (SWATE), a company 100% owned by Irma Velazquez and Ralph Hofmeier,Our previous affiliate, SWATE, developed speciallyparticularly for the California market the OCTAGON AWG system. This system is based on the German patent for AWG Tech from AQUA SOCIETY GmbH, Germany. EAWC has the rights for ninety-nine years to use thethis German technology.technology under patent number 2009/140944. The developed OCTAGON model line is different in size from the standard AM water generator line. The OCTAGON is energy self-sufficient and we believe can condense unlimited amounts of water out of the atmosphere. SWATE allowed EAWC the use of this development, which we believe can be used in many other countries around the world that deal with issues of water scarcity. EAWC plans to introduce the OCTAGON to the U.N.UN in the last fiscal quarter of 2016,2018, with the hopes of supplying it to large refugee camps around the world in need of fresh water. The first deployment of the OCTAGON will be at the second fiscal quarter of 2016 in California to supply the water needed to farmers.

 

The AWGs work by first inhaling large volumes of air, then cooling the air down to the dew point, and finally collecting, filtering and mineralizing the resulting condensed water. Through this process, pure drinking water is created that meets the quality standards of the World Health Organization (WHO). In regions with high temperatures and high humidity levels, a single machine can generate up to 50,000 liters or 15,000 gallons of water per day. The OCTAGON line starts at 150,000 gallons and can expandedexpand the water supply to ONE acre-feet/day.day, which we believe, in effect, is essentially the ability to produce an unlimited supply of water.

 

Solar Power Water Purification Systems

 

EAWC Technologies was createdseeks to respond to the growing need of drinking water and proposes a water purification solution utilizing solar, photovoltaic energy and, when applicable, a mini- windmill or an alternate source of renewable energy. TheWe believe that the design of the system is ready to be built from SWATE and delivered on demand. The first unit will be placed in California as part of a pilot program, along with the AWG model lines, OCTAGON & AM.

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Table of Contents

 

Seawater, lake water, river water or stagnant water is passed through several stages of purification and treatment until it is rendered drinkable as per World Health Organization standards. In the case of sea or stagnant water, we recommend a treatment via reverse osmosis membranes, which permits the retention of dissolved solids and results in obtaining water of drinking quality. If the water being treated emanates from lakes or rivers, we recommend treatment via an ultrafiltration membrane which functions by retaining suspended materials such as colloids, viruses and bacteria. The systems proposed by EAWC Technologies are containerized and we believe contain all equipment necessary to function in a perfectly autonomous fashion, notably due to a system of automatic cleansing, which can be accessed from a distance via satellite or Internet. Moreover, the machines also use available, renewable energy sources such as solar or wind. The system is proven fromhas been tested in the field by SWATE and certified, by SWATE as ready to be deployed on demand.

 

Steam Energy Generators

 

In a world where the goal of zero carbon factories, cities and economies is a priority for individuals, corporations and governments, we believe that the Energy Module offers zero carbon power generation in a simple, economical and reliable system.

 

The waste heat given off in industrial processes in the low-temperature range (up to 100°C) constitutes an energy potential in all industrialized countries that is substantially untapped. EAWC Technologies offers what we believe to be a novel process for generating electric current from low-temperature heat, thereby capturing the potential from this lost heat, which is produced in many industrial processes, to be capitalized.used to produce electricity. In addition to its potential using wasted heat, sources, the process can also utilize heat from other sources for the generation of electricity, including solar energy, geothermal heat, or technically conditioned waste heat flows from power stations and combined heat and power (CHP) plants. Through the specific utilization of low-temperature heat for the generation of electricity, we believe that a major worldwide contribution can be made in reducing the consumption of fossil energy resources and cutting CO2 emissions. The system is patented and owned from AQUA SOCIETYby Aqua Society GmbH, Germany. EAWC has the rights, worldwide, to sell the proven technology. On sale already for over five yearsthis technology which has been utilized in Germany,EAWC’s exclusive distributor isinstallations in the process of obtaining $16 million of financing necessary to build a prototype installation, which is scheduled to become operational in early 2016. The facility will not only be used to demo the technology to potential suppliers but will also generate revenue through the sale of generated electricity.Austria, Switzerland.






Plasma Converter System (PCS)

 

OneWe believe that one of the primary strengths and capabilities of the Companycompany is the synergistic combination of the complimentingcomplementary disciplines of water, energy and waste management. EAWC Technologies offersseeks to offer a closed-loop elemental recycling system that we believe safely destroys waste and produces commodity products. Theproducts, including water, energy, syngas, fertilizers, CO2 certificates (CO2 certificates represent the amount of emissions that are compensated for), and the real and closed cycle of waste management. We believe that the EAWC WtEwaste to energy system achievescan achieve this without producing harmful, noxious or dangerous by-products, effluents or emissions. The materials fed into the process are actual feed stocks, once regardedsuch as wastes.household waste and solid sewage waste.

 

The PCS is a gas converter that ionizes to becomegas, which becomes an effective electrical conductor and produces a lightning-like arc of electricity that is the source of intense energy transferred to the waste material as radiant energy. The arc in the plasma plume within the vessel can be as high as 30,000°F or 16,650°C.

 

The PCS is an electrochemical system powered by electricity that causes the dissociation (breaking apart) of the molecular bonds of solid, liquid and gaseous compounds or materials of both hazardous and nonhazardous wastes (feedstock) both organic and inorganic. Within the PCS, the molecules of the waste material are separated into their elemental components (atoms), and then reformed into recoverable nonhazardous commodity products products—water, electricity, syngas, fertilizers, CO2 certificates, and closed cycle of waste management—ready for commercial use.

 

The PCS process isdoes not involve a burning operation within an incinerator. The PCS is ignitingignites ionized gas from electric spark like in a neon light bulb. PatentPatented for the first time in 1804 in Germany, the gasification system was widely used in Europe tilluntil the mid- 1940s.mid-1940s. The “Synthetic Gas”Syngas produced out of the organic/carbon basedbase material can be used to power an internal combustion engine or a turbine to run an electrical generator. Today, over 400 gasification plants to process wastes are in use. Mostlyuse, mostly in Europe, theEurope. The gas is used to produce electricity or clean fuel. (www.gasification.org)

 

The Plasma ConverterPCS is computer controlled and easy to use. ItWe believe that it operates safely and at normal atmospheric pressure safely by quietly generating sustainable power. SignificantWe believe that significant valuable resources can be created from the use of the Plasma Converter.PCS. For example, 1,000 tons-per-day of urban and industrial waste of all kinds that is processed by a typical large municipality can be harnessed emission freeconverted safely and converted safelyemission-free into syngas. The operation’s daily output of syngas can be used to produce millions of cubic feet of valuable hydrogen gas. In a typical 10001,000 tons-per-day operation, we believe that the 7.8 million Plasma ConverterPCS, with a 7.8-ton capacity, could theoretically pay for itself in well under two years. Here’s how: Landfill usage “Tipping Fees”“tipping fees” run from an average $35 to over $100 per ton in high population areas. Tipping fees are charges levied upon a given quantity of waste received at a waste processing facility. In the case of a landfill it is generally levied to offset the cost of opening, maintaining and eventually closing the site. It may also include any landfill tax which is applicable in the region. These costs, along with hauling fees, could be reduced by up to $75 per-ton / per-ton/per-day by Plasma-Convertingplasma-converting the waste and selling the electric, water, gas, and solid by-products, identified above instead of paying the costs of a landfill.

applicable tipping fees.

 

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Table of Contents

Plasma Assisted Sterilization Process

 

The Plasma Arc Flow™ is a patented technology that converts most liquid waste into a clean fuel called Syngas.syngas. It works by moving the target liquid waste through a submerged electric arc between two electrodes. The arc decomposes the liquid molecules into atoms and forms a plasma around the tips of the electrodes. At about 10,000°F / 5,500 °C5,500°C the plasma arc flow moves the plasma away from the electrodes and controls the formation of “Syngas”syngas that rises to the surface for collection. This US certified and Patent technology is intended solely to sterilize target liquid wastes such as sewage, agricultural wastes or any effluent where eliminating bacteriological activity is beneficial to convert the waste liquid into a fertilizer and/or irrigation water. These results ofoutputs from processing toxic liquid are completely sterilized (US Lab proven).sterilized. EAWC has the sole rights granted to sell the technology in Mexico. The process results in production of syngas which can be used to produce electricity either through direct combustion of the syngas or through use of the syngas as a fuel for steam generation technology; the residue in either case is a fertilizer.

 

Worldwide Partnerships and Business opportunitiesRelationships

 

EAWC already has commission-based agents and dealersdistributors strategically placed around the world. The Companycompany has sales agents in Switzerland,Germany, Mexico and Miami. The Companycompany also has dealers located in Las Vegas, Nevada, India, Pakistan, Canada, Australia, Colombia, Nepal and Kenya. In total, we work with 34 commission-based agents and distributersdistributors to promote and sell EAWC technologies.EAWC’s technology solutions. Their compensation is commission-based.


WithWe believe that this worldwide presence through our agents located around the world, the Company intends to have a presence in alland distributors will provide us access the most important markets in the world in need of Energy, Freshenergy, fresh water and Wastewaste to Energy Solutions.energy solutions.

 





Competition

 

The atmospheric water generator and water purification and bottled water industries are highly competitive. Competition is intense and is expected to increase. This market is characterized by technological innovation and change. We plan to compete by providing products and services that are valued by our customers such as sales relationships, product innovations, and responses to changing market/business needs.  See “Risk Factors.”


Our main competitors at this time are Ambient Water (AWGI)Corp., Quest Water (QWTR)Global, Inc. and Westinghouse Plasma Technology.Corporation. This market segment includes numerous manufacturers, distributors, marketers, and retailers that actively compete for the business of consumers both in the United States and abroad. In addition, the market is highly sensitive to the introduction of new products and technologies that may rapidly capture a significant share of the market. As a result, our ability to remain competitive depends in part upon its successful introduction and consumer acceptance of new products. Although our products bear our own exclusive branding, weWe expect that the competition will intensify in the future, since our competitors can and may duplicate similar products or services to those offered by us.

 

Government Regulation

 

The manufacturing, processing, testing, packaging, labeling and advertising of the productstechnologies that we sell may be subject to regulation by one or more U.S. federal agencies, including the Food and Drug Administration, the Federal Trade Commission, the Community Supported Agriculture in North America, the United StatesU.S. Department of Agriculture, the Environmental Protection Agency, and by the standards provided by the United States PublicU.S. Department of Health Authorityand Human Services and the World Health Organization for drinking water. These activitiesOur operations may also be regulated by various agencies of the states, localities and foreign countries in which consumers reside. Currently, the Company’s productstechnologies we intend to use in our solutions and our services are not subject to any governmental regulation although it is possible that the FDA may choose to regulate the quality of water produced from atmospheric water generating machines.

 

Since the Companycompany may be subject to a wide range of regulation covering every aspect of our business as mentioned above, itwe cannot predict the nature of any future U.S. laws, regulations, interpretations or applications, nor can itwe determine what effect additional governmental regulations or administrative orders, when and if promulgated, would have on the business in the future. Although the regulation of water is less restrictive than that of drugs and food additives, we cannot offer assurance that the current statutory scheme and regulations applicable to water will remain less restrictive. Further, we cannot assure you that, under existing laws and regulations, or if more stringent statutes are enacted, regulations are promulgated, or enforcement policies are adopted, we are or will be in compliance with these existing or new statutes, regulations or enforcement policies without incurring material expenses or adjusting our business strategy. Any laws, regulations, enforcement policies, interpretations or applications applicable to our business could require the reformulation of certain products, all of which are supplied by third parties, to meet new standards or the recall or discontinuance of certain products not capable of reformulation, additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling or scientific substantiation.

 

Employees

 

As of October 15, 2015, December 14, 2018, we currently have 2 full timetwo full-time employees. Over time, we maywill be required to hire employees or continue to engage independent contractors in order to execute variousthe projects necessary to grow and develop the business. These decisions will be made by our officers and directors, if and when appropriate. We work with approximately 34 based-commissioned agents and brokers around the world to promote the Companycompany and sell our technologies.technological solutions and services. These agents and brokers are independent contractors andwith whom we have contractual relationships; they are compensated solely based on commission.

 

Judgments Against the Company


If, in the future, the Company is able to raise the necessary funds to execute its business plan or if the Company earns any revenues from its business operations, some of the funds raised or earned will be used to pay off the outstanding judgments against the Company which are discussed under the heading “Legal Proceedings” herein, and which total $192,265.


As of July 7, 2010, a judgment was entered against the Company from Case No. 09-81555 CA 21 in Miami-Dade County, Florida in the amount of $84,393 in favor of Coco Grove, LLC.


In addition, the Circuit Court in Miami-Dade County, Florida entered a Stipulation for Final Judgment that requires the Company and Ralph Hofmeier, the Company’s President, Chief Executive Officer, Chairman of the Board and a significant stockholder, to pay to Nick Norwood a total amount (as of that date) of $107,872.




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DESCRIPTION OF PROPERTY

 

Our principal executive office is located at 2000 Ponce de Leon Blvd.3250 Mary St., 6th Floor,#303, Miami, Florida 33134.33133. Our telephone number is (305) 517-7330. The rental fee for such property is $300 per month and the space is 1,000 square meters. The lease agreement for this is month to month and is still ongoing. The rental fee was waived through July 31, 2017.






LEGAL PROCEEDINGS

 

LEGAL PROCEEDINGSAquasphere Greentech Solutions Pvt., Ltd filed a complaint against Powermax Green Technologies, LLC and the Company in the Circuit Court of the 11th Judicial Circuit for Miami-Dade County, Florida (case number 2014 8179-CA). The plaintiff alleged a breach of a contract for the purchase of a AM65 water generator with a purchase price of $70,000, for which the plaintiff made a deposit totaling $42,000. The plaintiff was seeking a refund of its deposit. The Company argued that the contract at issue required payment in full prior to the release of shipment for the generator. On February 28, 2018, the case was dismissed without prejudice.


WeAs of July 7, 2010, a judgment was entered against the Company from Case No. 09-81555 CA 21 in Miami-Dade County, Florida in the amount of $84,393 in favor of Coco Grove, LLC. The amount bears interest at a rate of 6%. The plaintiff filed suit for a breach of a lease agreement. The Company paid $5,000 toward the judgment in 2013, and there have been no efforts to seek collection of the judgment since such time. The Company intends to resolve this matter when it is in a financial position to make payment on a reduced amount of the judgment.


Nick Norwood filed suit against the Company and Ralph Hofmeier, the Company’s President, Chief Executive Officer, Chairman of the Board and a significant stockholder in Miami-Dade County, FL Circuit Court (Case Number 10-58982 CA 09). In 2013, the parties entered into a Stipulation for Final Judgement pursuant to which the Company and Mr. Hofmeier agreed to pay a total amount (as of that date) of $107,872. The Company intends to resolve this matter when it is in a financial position to make payment on a reduced amount of the judgment. However, Company filed suit against Nick Norwood and David Packard, Circuit Court (Case 2018-031011-CA-01 (34). The company is suing in the counts of Civil Theft, Conversion, Conspiracy and Injunctive Relief.


Except as set forth above, we are not currently not involved ina party to any material litigation, that we believe could have a material 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,nor to the knowledge of the executive officers of our company ormanagement is any of our subsidiaries,litigation threatened against or affecting our company, our Common Stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.  us that may materially affect us.


 





MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

 

Price Range of Common Stock

Our common stock is currently listed on the OTC Bulletin Board and is quoted on the OTC Pink Market maintained by OTC Markets Group, Inc. under the symbol “EAWD; however, because we do not currently file reports with the SEC or otherwise provide financial disclosures to the public, our quotation on OTC Markets contains “Pink No Information” and “Dark or Defunct” labels. Upon effectiveness of the registration statement of which this Prospectus forms a part, we expect that the “Pink No Information” and “Dark or Defunct” labels will be automatically removed.Only a limited market exists for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder may be unable to resell histhe securities inof our company.


On February 11 2016, December 14, 2018, the closing price of our Common Stockcommon stock was $1.38 $0.35 per share as reported on the OTC Pink Marketplace.


The following table sets forth for the respective periods indicated the prices of our common stock in this market as reported and summarized by the OTC Markets. Such prices are based on inter-dealer bid and asked prices, without markup, markdown, commissions, or adjustments and may not represent actual transactions.


 

 

HIGH

 

 

LOW

 

Fiscal Year 2018:

 

 

 

 

 

 

First Quarter

 

$

0.165

 

 

$

0.08

 

Second Quarter

 

$

0.206

 

 

$

0.1

 

Third Quarter

 

$

3.00

 

 

$

0.10

 

 

 

 

 

 

 

 

 

 

Fiscal Year 2017:

 

 

 

 

 

 

 

 

First Quarter

 

$

0.4

 

 

$

0.1414

 

Second Quarter

 

$

0.29

 

 

$

0.2347

 

Third Quarter

 

$

0.29

 

 

$

0.15

 

Fourth Quarter

 

$

0.23

 

 

$

0.08

 

 

 

 

 

 

 

 

 

 

Fiscal Year 2016:

 

 

 

 

 

 

 

 

First Quarter

 

$

1.38

 

 

$

1.35

 

Second Quarter

 

$

1.38

 

 

$

1.38

 

Third Quarter

 

$

1.9

 

 

$

0.6654

 

Fourth Quarter

 

$

1.25

 

 

$

0.4

 

Penny Stock

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

 

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

 





In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

 

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholdersshareholders may have difficulty selling our securities.

 

Holders

 

As of February 10, 2016 December 14, 2018, we had 610 record holders of our common stock, holding 87,201,86387,913,933 shares of common stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of bank, brokers and other nominees.

 

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Dividends

 

We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our Board and depends upon our earnings, if any, our capital requirements and financial position, and general economic conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

 

Securities authorized for issuance under equity compensation plans

 

Not applicable.On January 2, 2012, the company’s Board of Directors approved the creation of the 2012 Non-Qualified Stock Option Plan (the “2012 Plan”). The 2012 Plan provides for the issuance of incentive stock options to designated employees, certain key advisors and non-employees’ members of the Board of Directors with the opportunity to receive grant awards to acquire, in the aggregate, up to 5,000,000 shares of the Corporation’s common stock.





FINANCIAL STATEMENTS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of the results of operations and financial condition for the nine months ended September 30, 2015 and 2014 and the fiscal years ended December 31, 20142017 and 20132016 should be read in conjunction with our consolidated financial statements and the notes to those consolidated financial statements that are included elsewhere in this Registration Statement.Prospectus. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. See “Forward-Looking Statements.”

 

Overview


We are an engineering services company formed as an outsourcing green tech platform, seeking to exploit renewable technologies. The missionBusiness plan of EAWC is based on seeking to providecommercialize its technical and engineering services to design and built sustainable solutions to generate and purify water and sustainable energy systems based on high efficiency and renewable sources as well as smart grid and storage solutions. ThroughUsing the technology products and services licensed or purchased from other technological sources, we believe we will be able to deliver and install a product set that suits the green technology water and/or energy needs of our customers. Our clients may be businesses seeking to upgrade their business processes or governmental entities seeking to apply green technology solutions for the water and energy they supply their constituencies.

We continue to be a development stage company. Our company presently outsources most of the services for the engineering and technical services as well as for the promotion, selling and distribution of the identified technological solutions.


The Company is currently a party to the following contracts:


On March 15, 2015, we entered into a commercial agreement with EAWC Tecnologias Verdes SA de CV (“Verdes”), our exclusive representative of the region of Mexico and Latin America, to design and build the country’s first waste-to-energy plant in the state of Chiapas. The plant is desired to be designed to process waste material in order to produce an estimated 95 million cubic meters of synthetic gas, which could then be used to power an internal combustion turbine used to power generator for electricity. Verdes is a Mexican private company, 5% of which is owned by Mr. Hofmeier, our President, Chief Executive Officer, Chairman of the Board and a significant stockholder. Mr. Hofmeier does not hold any management or other personnel positions with Verdes.


For this Project, the company plans to supply the equipment acquired from its potential partners such as Siemens and Bosh.


Under this agreement it is planned that the company will receive a total revenue of 5 million USD on the supply of equipment and a royalty of 6.5% on the sale of electricity generated by the project. However, there can be no assurance that the foregoing can occur as planned.


Financing for this project is coordinated by Verdes with its private investors. Presently the legal permits and licenses required for the construction of the plant are in process, as is the design of the waste to energy plant in coordination with the technology suppliers. EAWC submitted the proposed design indicating the configuration of required equipment and its potential performance. Verdes submitted this proposal to its investors for approval. As result of the investors review, on March 15, 2017, at the request of Verdes’ private investors, a revised agreement was entered into to expand the plans to design and build another four waste to energy power plants in the state of Chiapas (1), State of Mexico (1), State of Quintana Roo (2) and State of Hidalgo (1). Each plant is expected to deliver 50 - 125 Mw/hour, with all five scheduled to be completed and in operation if possible, no later than 2020, however it is foreseen that this time frame would be extend as required, once establishment of the financing is complete to formalize all required contracts to begging the construction. The projects are expected to be financed through a combination of private partnerships, public and private banking and the AquaTech, EnergyTechplacement of bonds secured by energy contracts.


Presently all the necessary formalities mutually agreed including signing of all the Agreements between the EAWC and Waste management assisted technologies, we believe it is possible to create a completely self-sufficient energy generationthe Project Owners, are taking place in accordance with the ‘Contract’. The frame work for the feasibility studies for the two plants in Quintana Roo are in process in coordination with EAWC and water production system, which can be used at the same time to meet the potable water requirementsVerdes as well as with various technology suppliers.


Under this agreement the electrical energy needscompany will receive revenue on the supply of communities.equipment for each project and will receive a royalty as well on the sale of Gas and electricity generated by the projects.






On November 2, 2017, we were granted a contract Award Confirmation for the supply of Air Liquefying Machines to be supplied to Arriyadh Development Authority (ADA) of Saudi Arabia. The proforma invoice attached to the contract award is for 100 Units (AWGs) in exchange for a payment of $10,640,000, expected to be delivered within 12 calendar months. If the contract is not fulfilled within 12 months from execution, it shall terminate by its terms. To date, there have been no deliveries or payments made under the foregoing, because ADA has requested to make an amendment of the contract based on the expected design and performance of the AWGs. The parties are continuing to negotiate an amendment to the contract.


EAWC plans to outsource the services from a German research and development institute for the development of this project.


On March 23, 2017, we entered into a representation letter agreement with HIS WILL Innovations, LTD a South Africa based company, which agreed to promote develop, manufactureour technological solutions and commercialize green technologies. EAWC engagestechnical services in patentedSouth Africa. Currently, HIS WILL Innovations, LTD is in advanced negotiations for the development of a Waste to Energy plant, and if successful, we believe it can provide us with contracts for the supply of the technologies such as: Atmosphere Water Generators (AWGs), CO2-free energy production (Steam Energy Generators), Plasma-assisted gasification & sterilizations systems, Solar-powered Water Purification Systems, as well as solar and wind energy solutions.engineering procurement (EPC) services. A first unit is planned to be placed in South Africa as part of a pilot program, along with the AWG model lines, OCTAGON & AM by June 2019.

 

12 Month Growth Strategy and Milestones

 

While aWe expect the conclusion of the contracts mentioned above as we continue working in our strategic and wisely executed sales marketing campaign is keycarefully designed business plan to expanding ourdevelop and expand a customer base;base providing new, cutting-edge, innovative technologies developedgreen technology solutions customized designed and implemented for our clients,clients. We believe that will providedevelop a solid platform upon which our operations will continue to grow and deliver long-term success.


Note: The following milestones are based on the contractual agreements the company has received and on the company's business development strategy, which will require capital to execute.execute and there can be no assurance that the company will be able to obtain such capital, until the monies for those agreements are received, but we hope that becoming a fully reporting company with the SEC could help us to raising the required capital for further continuity and development.  However, there can be no assurance that the foregoing can occur.

 

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For the next 0-3 Months we believe that we need:


-$500,000

Provided by in order to operate which we plan to obtain through our operations a and or equity/debt offering

 

Establish-We also plan to establish a bigger office in Miami.Miami in such time frame

 

Supplemental-Supplemental technical and adminadministrative resources and personnel.personnel

 

Travel-Travel to ongoing projects (Mexico, India & Switzerland)USA and South Africa).


For the next 4-6 Months we believe that we need:


-$400,000


-Provided by operations and/or equity/debt offering.

 

4-6 Months

$400,000

Provided by operations and or equity/debt offering

Defining-Defining technical and engineering requirements to enhance technical services.

 

Continue-Continue marketing ofto those sectors and industries to which EAWC anticipates providing its Technologiestechnologies and technical services.

 

Web-Web site development and promotional events.

 

Travel-Travel to relevant industry association events and trade shows.

 





For the next 7-12 Months we believe that we need:


-$2,500,000

Provided

-Provided by operations and and/or equity/debt offeringoffering.

 

Discussions-Pay off the outstanding judgments against the company which are discussed under the heading “Legal Proceedings” herein, and which total $192,265.29.


-Discussions with interested companies (Green Tech(green tech development institutions, companies and manufacturers) to begin establishing joint research and development projects.

 

Acquisition-Acquisition of new equipment to increase the company's core capabilities and to enable it to provide its clients with value added technical contract.contracts.

 

New-New clients will be brought in along with a growing staff to accommodate the growing demand accordingly.

 

R&DResearch and development institutions will then be approached for larger possible joint ventures which will see a separatedevelop an additional revenue income.stream.

 

We therefore EAWC expect to incur the above costs in the next 12 months in connection with our ongoing business operations. We expect to generate incomerevenue from the sales ofby our Distributorsdistributors as identified bellow.below. We also will most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct another private offering under Section 4(2)4(a)(2) of the Securities Act of 1933.Act. However, there can be no assurance that we’ll be able to generate any revenues or raise any funds as needed.


Revenue Generation:

 

A sales contract

An Independent Contractor Agreement with our Mexican distributor (an affiliate)EAWC Tecnologias Verdes SA de CV, for a Wastewaste to Energy Plantenergy plant to be delivered in Chiapas, Mexico which has been signed. We believe the project could generate revenue of up to US$4,800,000 givenas a commission for this project from the performance milestones stipulatedsupplier of Engineering and tech services as well as technology supply. Financing for this project is been coordinated by Tecnologias Verdes and its private investors.

As result of the investors review, of the proposed design for the Chiapas Project; on March 15, 2017, at the request of Verdes’ private investors, a revised agreement was entered into to expand the plans to design and build another four waste to energy power plants in the state of State of Mexico (1), State of Quintana Roo (2) and State of Hidalgo (1). Each plant is expected to deliver 50 - 125 Mw/hour. These four proposals for a waste to energy plants has been undertaken by EAWC Tecnologias Verdes SA de CV. Under this agreement it is planned that the company will receive a revenue on the sale of equipment for each project for about $3,300,000 to $4,900,000 and will receive as well as royalties on the sale of Gas and electricity generated by the project in Chiapas. The financing of the projects is been coordinated by a joint venture between private partners public and private banking and the placement of bonds secured by energy contracts. Financing for this project is been coordinated by Tecnologias Verdes and its private investors.

On November 2, 2017, we were granted a contract that revenue couldAward Confirmation for the supply of Air Liquefying Machines to be recognized oversupplied to Arriyadh Development Authority (ADA) of Saudi Arabia. The Proforma invoice attached to the firstcontract award is for 100 Units (AWGs) in exchange for a payment of $10,640,000.00, expected to be delivered within 12 Calendar Months. If the contract is not fulfilled within 12 months from execution, it shall terminate by its terms. To date, there have been no deliveries or payments made under the foregoing due to a Client request to make an amendment of the contract based on the expected design and second quartersperformance of 2016.the AWGs, the amendment is on ongoing process.


EAWC would outsource the services from a German Research & Development Institutes for the development of this project.

Another Proposal for a Waste to Energy Plant in Ciudad Juarez Chihuahua, Mexico has been provided to our Mexican distributor (an affiliate) to proceed with the feasibility study. Upon completion of this study we believe that a sales contract when signed, could generate revenue up to US$3,300,000.  We forecast that revenue to be recognized by the end of the third quarter of 2016.
A sales proposal for a Waste to Energy Plant in Kenya has been provided to The Client and a sales contract has been prepared for execution. If executed, this sale has the potential to generate revenue of approximately US$7,900,000 through the end of the second quarter of 2016.

Other proposals that we have submitted are the subject of current negotiations.negotiations of the Scope of Work of the Engineering Procurement Contract.





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Critical Accounting Policies and Estimates

 

Our consolidated financial statements included elsewhere in this prospectusProspectus are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on historical experience, as appropriate, and on various other assumptions that we believe to be reasonable under the circumstances. Changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the following critical accounting policies involve a greater degree of judgment and complexity than our other accounting policies. Accordingly, these are the policies we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations.

 

Use of Estimates

 

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. Estimates which are particularly significant to the consolidated financial statements include estimates relating to the determination of impairment of assets, the useful life of property and equipment, the determination of the fair value of stock-based payments, and the recoverability of deferred income tax assets.


Income taxesTaxes

 

We record our provision for income taxes in our consolidated statements of operations by estimating our taxes in each of the jurisdictions in which we operate. We estimate our actual current tax exposure together with assessing temporary differences arising from differing treatment of items recognized for financial reporting versus tax return purposes. These differences result in deferred tax assets, which are included in our consolidated balance sheets. In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in our consolidated statements of operations become deductible expenses under applicable income tax laws, or loss or credit carry forwards are utilized. Valuation allowances are recorded when necessary to reduce deferred tax assets to the amount expected to be realized.

 

Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We make these estimates and judgments about our future taxable income that are based on assumptions that are consistent with our future plans. As of September 30, 2015,December 31, 2017, we had recorded a full valuation allowance on our U.S. net deferred tax assets because we expect that it is more likely than not that our deferred tax assets will not be realized in the foreseeable future. Should the actual amounts differ from our estimates, the amount of our valuation allowance could be materially impacted.

Stock-Based Payments

 

The Companycompany applies the fair value method of ASC 718, “Share Based Payment” in accounting for its stock basedstock-based compensation. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Companycompany values stock basedstock-based compensation at the marketsmarket price for the Company’scompany’s common stock and other pertinent factors at the grant date.

 

The Companycompany accounts for transactions in which services are received in exchange for stock based on the fair value of such services received from non-employees, in accordance with ASC 505-50, “Equity Based Payments to Non-employees.”

 

The Companycompany measures the fair value of the equity instruments issued based on the market price of the Company’scompany’s stock at the time services or goods are provided.






Recent Accounting Pronouncements


Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’scompany’s future consolidated financial statements. The following are a summary of recent accounting developments.

 

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810)Amendments to the Consolidation Analysis (“ASU 2015-02”)”, which provides guidance on evaluating whether a reporting entity should consolidate certain legal entities. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities. Further, the amendments eliminate the presumption that a general partner should consolidate a limited partnership, as well as affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. ASU 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. A reporting entity may apply the amendments using a modified retrospective approach or a full retrospective application. The Company is currently evaluating the impact, if any, that adoptingAdopting ASU 2015-02 will havehas had no effect on its consolidatedcondensed unaudited interim financial statements.

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In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (“ASU 2014-09”)”. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: identify the contract(s) with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 supersedes the revenue-recognition requirements in ASC Topic 605, “Revenue Recognition”, and most industry-specific guidance throughout the industry topics of the accounting standards codification. ASU 2014-09 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Companycompany is currently evaluating the approach for implementation and the potential impact of adopting this guidance on its consolidated financial statements. Adopting this guidancehas had no effect on its condensed unaudited interim financial statements.

 

There were various other accounting standards and interpretations issued, in 2014, none of which are expected to have a material impact on the Company’scompany’s financial position, operations or cash flows.

 

Results of Operations

 

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Registration Statement. Prospectus.


Comparison of the fiscal yearyears ended December 31, 20142017 and December 31, 20132016

 

Revenue

 

For the fiscal years 20142017 and 2013,2016, we generated no revenue.

 

General and AdministrationAdministrative Expense

 

General and Administrationadministrative expense decreased $6,546,198 (84.7%)$81,643 or 9.2% to $1,185,318$807,497 for the year ended December 31, 20142017 from $7,731,516$889,140 for the year ended December 31, 2013.  This decrease was attributable to2016. The following discussion provides further explanation of the following:change in each item.

 

There were $134,057 in combined decreases inresulting from the following items:

 

$6,000,000 ($550,000 for amortization of intangibles and $5,450,000 for impairment loss) decrease associated with an exclusive Technology Transfer Agreement and License Agreement with Swiss Water Tech Research & Development S.A (SWATE) entered into on February 1, 2013, wherein the Company was required to pay a non-refundable initial license fee of $6 million in exchange for the use of newly developed systems, concepts and license of patent and trademark. The Company satisfied the required payment through the issuance of 6 million shares of its common stock, valued at $1.00 per share. The value of the licensed technology rights acquired was recorded as an intangible asset and scheduled for amortization over the ten-year life of the Technology Transfer and License Agreement. During 2013, the Company amortized $550,000. On December 31, 2013 the Company evaluated the unamortized asset for impairment and determined that due to its inability to secure revenue generating commercial contracts, the recoverability of this asset in future periods was doubtful. Accordingly, the Company fully impaired the remaining unamortized value of the licensed technology rights of $5,450,000.

$542,020 (100.0%)

 $116,000 for royaltymanagement fees to affiliates as a result of an agreement by SWATE to suspend fees for 2014 and 2015.a change in service suppliers;

$47,304 (20.1%)14,500 for professional feesresearch and development as a result of several agreements to produce technical tools for /of the technologies.focusing resources on financing and offering activities; and

$25,437 (69.0%)3,557 for other general and administrative expenses as a result of decreased bank fees due to outsourced disbursement services and decreased transfer agent fees.






Which were partially offset by a $52,414 in combined increases resulting from the following items:


$48,912 for professional fees due to financial audits in preparation of the offering; and

$3,502 for advertising and other selling and marketing activities as a result of agreementsexpense due to participating in Green Tech Fares, and Developing Multimedia advocacy tools.

$60,200 (39.8%) for other general and administrative expenses.increased communication to shareholders.


Which were partially offset by increase in the following items:

$35,000 (9.1%) for management fees as a result of contractual increases,
$80,758 (100.0%) for bad debt as a result of collection uncertainties associated with advances related to the Mexican project,
$3,006 (6.2%) for travel and entertainment expenses, which is considered negligible, and
$10,000 (100.0%) for research and development expenses as a result of the Waste to Energy concept further development.

Interest Expense and other expensesOther Income (Expense)

 

Interest expense and other expensesOther Income (Expense) increased $2,747 (51.9%)$37,918 to $8,096$29,584 income for the year ended December 31, 20142017 from $5,349$(8,334) expense for the year ended December 31, 2013, which is considered negligible.2016 primarily due to a one-time gain resulting from the cancellation of a distribution agreement.

 

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Net lossLoss

 

Net Loss decreased $6,543,451 (84.7%)$119,561 to $1,193,414$777,913 for the year ended December 31, 20142017 from $7,736,865$897,474 for the year ended December 31, 2013.2016. This decrease was attributable to the decrease in general and administrative expenses, as discussed above.


Liquidity and Capital Resources

 

We had cash and cash equivalents of $0 and a working capital deficit of $2,061,033$3,651,153 at December 31, 2014.2017. Our operating and capital requirements in connection with supporting our operations will continue to be significant to us.significant. Since inception, our losses from operations and working capital requirement wererequirements have been satisfied through the deferral of payment for services performed by our founders and related party’sparties discussed more fully below.

 

We have sustained operationaloperating losses since our inception. At December 31, 2014,2017, we had an accumulated deficit of $12,359,323.$10,214,859. The Companycompany cannot predict how long it will continue to incur further losses or whether it will ever become profitable as this is dependent upon the reduction of certain expenses and success in obtaining project contracts, among other things. These conditions raise substantial doubt about the entity’s ability to continue as a going concern.

 

We also satisfied our cash and working capital requirements in 20142017 and 2013,2016, primarily through issuance of convertible debentures. During the saleyears ended December 2017 and 2016, the Company issued $478,325 and $81,000 respectively, in convertible debentures. The holders of the instrument have the option to convert these convertible debentures into common stock.stocks at conversion prices ranging from $1.00 to $0.10 price upon Securities Exchange Commission's (SEC) registration of the Corporation’s Form S-1. The Form S-1 was originally filed with SEC on October 7, 2015 which has been withdrawn and is now filling a new Form S-1 with Securities Exchange Commission.


The above debentures were determined to be solely debt without equity portion as the Company has determined that these conversion options are not beneficial. As such, these convertible debentures have no equity portion and are presented as loans payable in the financial statements. The transaction price for these loans payable reflects the fair value of the instruments issued.

 

The estimated cash requirementrequirements for the next 12 months isare as follows:


$

1,500,000

 – Officers’ salaries (includes partial payment of prior accrued balance)

$

600,000

 – Staff salaries (new staff)

$

500,000

 – For license and management fees (includes partial payment of prior accrued balance)

$

700,000

 – For general and administrative expenses

$

500,000

 – For prior balances owed

$

700,000

 – Increased working capital


$570,000 – Officers’ salaries (includes partial payment of prior accrued balance)



$440,000 – Staff salaries (new staff)

$710,000 – For license and management fees (includes partial payment of prior accrued balance)

$690,000 – For G&A expenses

$  50,000 – For prior balances owed

$540,000 – Increased working capital

Cash Flows for the Year Ended December 31, 20142017

 

Cash Flows from Operating Activities

 

Operating activities used net cash for the year ended December 31, 20142017 of $506,285.$ 558,396 Our net loss, when adjusted by various items which impact net loss but do not impact cash during the period,[such as issuance of warrants or stock for services and for depreciation and amortization,] resulted in a net loss adjusted by noncash items of $939,460$ 813,813 which was partially offset by changes in operating assets and liabilities which provided cash of $433,175 as follows:$ 255,417.

 

$96 provided by a decrease in prepaid expenses, which is considered negligible,
$144,638 provided by increased accounts payable and accrued expenses as a result of increased outstanding vendor balances,
$8,158 provided by affiliates increased in outstanding balances, which is considered negligible, and
$280,283 provided by officers as a result of deferred compensation payments.

Cash Flows used in Investing Activities

 

Our investing activities used $80,958provided $80,022 in net cash during the year ended December 31, 20142017 as a result of advances related to the Mexican project.its affiliates.

 

Cash Flows from Financing Activities

 

Our financing activities in the year ended December 31, 2017 provided $579,125$478,325 in net cash as a resultproceeds from the issuance of the following:convertible debt

$26,750 provided by advances under stock subscriptions,
$5,000 used to repurchase common shares, and
$557,375 provided from the sale of common stock.


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Financial Position

 

Total AssetsOurThe Company did not have significant total assets decreased $23,211 or 35.1% from $66,154 as ofin both fiscal years end December 31, 2013 to $42,943 as of December 31, 2014. $4,996 of the decrease is the result of depreciation of fixed assets. $10,000 of the decrease is the result of amortization of other assets. The remaining decrease is associated with current assets2017 and is discussed as follows.2016.


Current Assets – The net decreaseCompany did not have significant total assets in current assets of $8,215 was primarily associated with a decrease in cash of $8,118 as a result of the net use of cash for operational activitiesboth fiscal years end December 31, 2017 and a $97 decrease in prepaid expenses and other current assets, which is negligible.2016.

 

Material Commitments

 

Technology Transfer and License Agreement with SWATE

 

Effective February 1, 2013, the Companycompany entered into a ten yearten-year Technology Transfer and License Agreement with SWATE. In accordance with the Technology Transfer and License Agreement, if the Companycompany generates revenue as a result of the products and licenses related to the agreement, the Companycompany is to pay SWATE an annual fee stipulated in the agreement plus 5% of revenue generated. If revenue is not generated, future minimum royalty fees are as follows: during the first year: $542,000; during the second year: $1,000,000; and during the third and succeeding years: $2,000,000. On April 15, 2015, SWATE agreed to waive licenses fees for 2014 and 2015.2015, and on January 29, 2016 SWATE agreed to waive license fees for 2016 and 2017.

 

On January 5, 2018, SWATE and the company executed a Termination of the exclusive Technology Transfer and License Agreement effective from January 6, 2018. The termination cited default of some obligations acquired such as the absence of the company’s generation of revenue as a result of the Agreement, the potential manufacturing and change on the constitution and ownership of SWATE which could affect significantly the expected results of the agreement. SWATE confirmed that no open balance exists at this time, confirming the waiving of due royalties for the Years 2016 and 2017. SWATE confirms that the company shall be entitled to manufacture the designed products only and exclusively for the concept of Waste to Energy on the configured standards, without having to pay any further royalties until February 1st, 2023. Nevertheless, it shall refrain from revealing any document or information of intellectual property provided by SWATE (the Licensor) that is less than 10 years old.

Employment Agreements

 

The Companycompany entered into employment agreements with Mr. Hofmeier, its President, Chief Executive Officer Mr. Ralph Hofmeier, and Chairman of the Board, and Ms. Velazquez, its Chief Operating Officer Ms. Irma Velazquez (collectivelyand Vice-Chairman (together, the “Employment Agreements”), effective January 1, 2012. Under the Employment Agreements, the Company willcompany agreed to pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the Company’scompany’s Board of Directors. TheEach Employment Agreements eachAgreement has an initial termsterm of ten (10) years and is automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew.

 





Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Prospectus.


Related Party TransactionsComparison of the fiscal years ended December 31, 2017 and December 31, 2016

Revenue

For the fiscal years 2017 and 2016, we generated no revenue.

 

Due to officersGeneral and Administrative Expense

 

Amounts dueGeneral and administrative expense decreased $81,643 or 9.2% to officers as of$807,497 for the year ended December 31, 2014 and 2013 are comprised2017 from $889,140 for the year ended December 31, 2016. The following discussion provides further explanation of the following:change in each item.

 

  2014  2013 
Ralph Hofmeier:      
Unsecured advances due to officer $24,161  $40,280 
Accrued salaries  425,000   275,000 
Total due to Ralph Hofmeier  449,161   315,280 
Irma Velazquez:        
Unsecured advances due to officer  40,109   43,707 
Accrued salaries  425,000   275,000 
Total due to Irma Velazquez  465,109   318,707 
  $914,270  $633,987 

There were $134,057 in combined decreases resulting from the following items:

 

 $116,000 for management fees to affiliates as a result of a change in service suppliers;

$14,500 for research and development as a result of focusing resources on financing and offering activities; and

$3,557 for other general and administrative expenses as a result of decreased bank fees due to outsourced disbursement services and decreased transfer agent fees.

Unsecured advances due to officers represent unreimbursed Company expenses paid





Which were partially offset by a $52,414 in combined increases resulting from the officers on behalf of the Company. These net advances are non-interest bearing and are due on demand.following items:


Accrued salaries represent amounts accrued in accordance with the employment agreements for the Company’s Chief Executive Officer and Chief Operating Officer.

26

$48,912 for professional fees due to financial audits in preparation of the offering; and

$3,502 for advertising and other selling and marketing expense due to increased communication to shareholders.

Table of Contents


Due to affiliateOther Income (Expense)

 

DueOther Income (Expense) increased $37,918 to affiliate$29,584 income for the year ended December 31, 2017 from $(8,334) expense for the year ended December 31, 2016 primarily due to a one-time gain resulting from the cancellation of a distribution agreement.

Net Loss

Net Loss decreased $119,561 to $777,913 for the year ended December 31, 2017 from $897,474 for the year ended December 31, 2016. This decrease was attributable to the decrease in general and administrative expenses, as discussed above.


Liquidity and Capital Resources

We had cash and cash equivalents of $0 and a working capital deficit of $3,651,153 at December 31, 2017. Our operating and capital requirements in connection with supporting our operations will continue to be significant. Since inception, our losses from operations and working capital requirements have been satisfied through the deferral of payment for services performed by our founders and related parties discussed more fully below.

We have sustained operating losses since our inception. At December 31, 2017, we had an accumulated deficit of $10,214,859. The company cannot predict how long it will continue to incur further losses or whether it will ever become profitable as this is compriseddependent upon the reduction of certain expenses and success in obtaining project contracts, among other things. These conditions raise substantial doubt about the entity’s ability to continue as a going concern.

We also satisfied our cash and working capital requirements in 2017 and 2016, primarily through issuance of convertible debentures. During the years ended December 2017 and 2016, the Company issued $478,325 and $81,000 respectively, in convertible debentures. The holders of the followinginstrument have the option to convert these convertible debentures into common stocks at conversion prices ranging from $1.00 to $0.10 price upon Securities Exchange Commission's (SEC) registration of the Corporation’s Form S-1. The Form S-1 was originally filed with SEC on October 7, 2015 which has been withdrawn and is now filling a new Form S-1 with Securities Exchange Commission.


The above debentures were determined to be solely debt without equity portion as the Company has determined that these conversion options are not beneficial. As such, these convertible debentures have no equity portion and are presented as loans payable in the financial statements. The transaction price for these loans payable reflects the fair value of the instruments issued.

The estimated cash requirements for the next 12 months are as follows:


$

1,500,000

 – Officers’ salaries (includes partial payment of prior accrued balance)

$

600,000

 – Staff salaries (new staff)

$

500,000

 – For license and management fees (includes partial payment of prior accrued balance)

$

700,000

 – For general and administrative expenses

$

500,000

 – For prior balances owed

$

700,000

 – Increased working capital






Cash Flows for the Year Ended December 31, 2014 and 2013:2017

 

Cash Flows from Operating Activities

  2014  2013 
Swiss Water Tech Research and Development, S.A.:      
Royalty fees under Technology Transfer and License Agreement $-  $136,278 
International Service Contract fees  529,436   385,000 
  $529,436  $521,278 

Operating activities used net cash for the year ended December 31, 2017 of $ 558,396 Our net loss, when adjusted by various items which impact net loss but do not impact cash during the period,[such as issuance of warrants or stock for services and for depreciation and amortization,] resulted in a net loss adjusted by noncash items of $ 813,813 which was partially offset by changes in operating assets and liabilities which provided cash of $ 255,417.

Cash Flows used in Investing Activities

Our investing activities provided $80,022 in net cash during the year ended December 31, 2017 as a result of advances related to its affiliates.

Cash Flows from Financing Activities

Our financing activities in the year ended December 31, 2017 provided $478,325 in net cash as proceeds from the issuance of convertible debt


Financial Position

Total Assets – The Company did not have significant total assets in both fiscal years end December 31, 2017 and 2016.


Current Assets – The Company did not have significant total assets in both fiscal years end December 31, 2017 and 2016.

Material Commitments

Technology Transfer and License Agreement with SWATE

 

Effective February 1, 2013, and as amended on June 29, 2015, the Companycompany entered into an exclusivea ten-year Technology Transfer Agreement and License Agreement (the “Technologywith SWATE. In accordance with the Technology Transfer and License Agreement”) for a period of ten years with Swiss Water Tech Research & Development S.A. (SWATE), an entity owned and controlled byAgreement, if the Company’s Chief Executive Officer and Chief Operating Officer who are the primary beneficiaries. Under the terms of the agreement, SWATE: (a) will transfer to the Company the license to manufacture products developed by SWATE; (b) all know-how and technical assistance necessary for the exploitation of their licensed patents and the manufacture of certain products; and (c) will grant the Company the use of certain related trademarks. If the Companycompany generates revenue as a result of the products and licenses related to the Technology Transfer and License Agreement,agreement, the Companycompany is to pay to SWATE a minimuman annual royalty fee stipulated in the agreement plus five percent5% of revenue generated. Since the Company hasIf revenue is not generated, revenues,future minimum royalty fees are as follows: during 2013 the Company accruedfirst year: $542,000; during the minimum fee of approximately $542,000 in accordance withsecond year: $1,000,000; and during the terms of the agreement.third and succeeding years: $2,000,000. On April 15, 2015, SWATE agreed to waive licenses fees for 2014 and 2015.2015, and on January 29, 2016 SWATE agreed to waive license fees for 2016 and 2017.

 

As partOn January 5, 2018, SWATE and the company executed a Termination of the exclusive Technology Transfer and License Agreement on February 1, 2013,effective from January 6, 2018. The termination cited default of some obligations acquired such as the Company was required to pay a non-refundable front-end fee of $6 million in exchange for the use of newly developed systems, concepts and license of patent and trademark. The Company satisfied the required payment through the issuance of 6 million shares of its common stock, valued at $1.00 per share. The valueabsence of the licensed technology rights acquired was recordedcompany’s generation of revenue as an intangible asset and scheduled for amortization over the ten year life of the Technology Transfer and License Agreement. During 2013, the Company recognized amortization expense in the amount of $550,000. On December 31, 2013 the Company evaluated the unamortized asset for impairment and determined that due to its inability to secure revenue generating commercial contracts, the recoverability of this asset in future periods was doubtful. Accordingly, the Company fully impaired the remaining unamortized value of the front-end fee of $5,450,000.

Effective February 1, 2013, the Company also entered into an International Service Contract with SWATE (the “SWATE Service Contract”). Under this agreement, SWATE will provide operations management, engineering and technical services to the Company. The SWATE Service Contract has a term of five years, and provides for a monthly service fee of $35,000, plus out-of-pocket expenses. During 2014 and 2013, the Company has accrued $420,000 and $385,000, respectively, pursuant to this agreement.

On April 1, 2013, the Company signed an agreement with SWATE, which authorizes SWATE to collect on behalf of the Company, payments made by investors on sales of Company stock. According to the agreement, the proceeds collected by SWATE can be used by SWATE to pay down amounts due from the Company for royalties and or service fees pursuant to the above agreements. During the years ended December 31, 2014 and 2013, SWATE collected and applied against amounts due from the Company approximately $120,400 and $305,600 respectively from amounts received from investors. 

SWATE is a Swiss research and development company with access to patent and certain scientific and technical resources. As a result of the above agreements,Agreement, the Company has a variable implicit interest inpotential manufacturing and change on the constitution and ownership of SWATE howeverwhich could affect significantly the expected results of the agreement. SWATE confirmed that no open balance exists at this time, confirming the waiving of due royalties for the Years 2016 and 2017. SWATE confirms that the company shall be entitled to manufacture the designed products only and exclusively for the concept of Waste to Energy on the configured standards, without having to pay any further royalties until February 1st, 2023. Nevertheless, it shall refrain from revealing any document or information of intellectual property provided by SWATE (the Licensor) that is not its primary beneficiary, does not provide any explicit or implied financial support and therefore does not consolidate SWATE’s financial statements in its consolidated financial statements.less than 10 years old.

 

Due from affiliateEmployment Agreements

 

During 2014,The company entered into employment agreements with Mr. Hofmeier, its President, Chief Executive Officer and Chairman of the Company advanced fundsBoard, and Ms. Velazquez, its Chief Operating Officer and Vice-Chairman (together, the “Employment Agreements”), effective January 1, 2012. Under the Employment Agreements, the company agreed to pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the company’s Board of Directors. Each Employment Agreement has an initial term of ten (10) years and is automatically renewed for successive one-year terms unless either party delivers timely notice of its affiliate, EAWC Tecnologias Verdes, S.A. The amounts advanced of $80,758, including interest, have been offset by an allowance for doubtful collection since the affiliate doesintention not currently have the ability to generate revenues or repay the Company.renew.

 



27

Table of Contents



Going Concern Qualification

We have incurred significant losses and cash used in operations, and such losses and use of cash are expected to continue. Our Independent Registered Public Accounting Firm has included a "Going Concern Qualification" in their report for the fiscal years ended December 31, 2014 and 2013.  In addition, we have negative working capital. The foregoing raises substantial doubt about our ability to continue as a going concern. Management's plans include seeking additional capital or debt financing. There is no guarantee that additional capital or debt financing will be available when and to the extent required, or that if available, it will be on terms acceptable to us. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.  The "Going Concern Qualification" might make it substantially more difficult to raise capital.

Results of Operations

 

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Registration Statement. Prospectus.


Comparison of the nine monthsfiscal years ended September 30, 2015December 31, 2017 and September 30, 2014December 31, 2016

 

Revenue

For the nine months ended September 30, 2015fiscal years 2017 and 2014,2016, we generated no revenue, as the Company was primarily engaged in research and development efforts during this period. In addition, we were completing the registration and testing of our combination of technologies and arranging customer-financing packages to facilitate the commercialization and purchase of our product.revenue.

 

General and AdministrationAdministrative Expense

 

General and Administrationadministrative expense increased $988,627 (107.9%)decreased $81,643 or 9.2% to $1,904,526$807,497 for the nine monthsyear ended September 30, 2015December 31, 2017 from $915,899$889,140 for the nine monthsyear ended September 30, 2014.  This increase was attributable toDecember 31, 2016. The following discussion provides further explanation of the following:change in each item.

 

There were increases$134,057 in combined decreases resulting from the following items:

 

$900,000 Expense as compensation to our COO through the issuance of 9 Million shares of common stock.

 

$171,960 (112.2%)

 $116,000 for professionalmanagement fees to affiliates as a result of increased financial consultinga change in service suppliers;

$14,500 for research and development as a result of focusing resources on financing and offering activities; and

$3,557 for other general and administrative expenses associated with additional performance contracts for investor presentationsas a result of decreased bank fees due to outsourced disbursement services and financial consulting along with additional accounting and auditing services.decreased transfer agent fees.






Which were partially offset by decreasesa $52,414 in combined increases resulting from the following items:


$26,593 (58.0%)48,912 for travel and entertainment expensesprofessional fees due to timingfinancial audits in preparation of business needs,the offering; and

$4,881 (51.2%)3,502 for advertising and other selling and marketing expenses which is considered a negligible amount, and

$44,573 (56.3%) for other general and administrative expenses, primarily as a result of a $42,000 non-recurring claim settlement in 2014, which was partially offset by a $6,000 increase in office expenses in 2015.expense due to increased communication to shareholders.


Interest Expense/Other Income (Expense)

 

Interest expense decreased $5,763 (111.0%)Other Income (Expense) increased $37,918 to $569$29,584 income for the nine monthsyear ended September 30, 2015December 31, 2017 from $5,194$(8,334) expense for the nine monthsyear ended September 30, 2014, which is consideredDecember 31, 2016 primarily due to a negligible amount.one-time gain resulting from the cancellation of a distribution agreement.

 

Net lossLoss

Net Loss increased $982,864 (106.7%)decreased $119,561 to $1,903,957$777,913 for the nine monthsyear ended September 30, 2015December 31, 2017 from $921,093$897,474 for the nine monthsyear ended September 30, 2014.December 31, 2016. This decrease is considered nominal overall but was attributable to the decrease in general and administrative expenses, as discussed above.


Liquidity and Capital Resources

 

We had cash and cash equivalents of $12,461$0 and a working capital deficit of $1,765,566$3,651,153 at September 30, 2015.December 31, 2017. Our operating and capital requirements in connection with supporting our operations will continue to be significant to us.significant. Since inception, our losses from operations and working capital requirement wererequirements have been satisfied through the deferral of payment for services performed by our founders and related party’sparties discussed more fully below.

 

We have sustained operationaloperating losses since our inception. At September 30, 2015,December 31, 2017, we had an accumulated deficit of $14,263,280.$10,214,859. The Companycompany cannot predict how long it will continue to incur further losses or whether it will ever become profitable as this is dependent upon the reduction of certain expenses and success in obtaining project contracts, among other things. These conditions raise substantial doubt about the entity’s ability to continue as a going concern.

 

28

Table of Contents

Historically, we haveWe also satisfied our cash and working capital requirements in 20152017 and 2014,2016, primarily through issuance of convertible debentures. During the saleyears ended December 2017 and 2016, the Company issued $478,325 and $81,000 respectively, in convertible debentures. The holders of ourthe instrument have the option to convert these convertible debentures into common stock, however, in Julystocks at conversion prices ranging from $1.00 to $0.10 price upon Securities Exchange Commission's (SEC) registration of the Corporation’s Form S-1. The Form S-1 was originally filed with SEC on October 7, 2015 our exclusive Mexican distributor EAWC Tecnologias Verdes SA de CV., engaged inwhich has been withdrawn and is now filling a projectnew Form S-1 with Securities Exchange Commission.


The above debentures were determined to create a prototype Waste to Energy prototype plant (12Mw/h Power Generation Plantbe solely debt without equity portion as the Company has determined that these conversion options are not beneficial. As such, these convertible debentures have no equity portion and are presented as loans payable in the Statefinancial statements. The transaction price for these loans payable reflects the fair value of Chiapas. Mexico The project is in its final stage of obtaining the necessary financing. Once completed, the prototype plant will be used to demonstrate the technology in an effort to sell additional projects and to generate positive cash flow from sale of generated electricity.instruments issued.

 

The estimated cash requirements for the next 12 months are as follows:


$

1,500,000

 – Officers’ salaries (includes partial payment of prior accrued balance)

$

600,000

 – Staff salaries (new staff)

$

500,000

 – For license and management fees (includes partial payment of prior accrued balance)

$

700,000

 – For general and administrative expenses

$

500,000

 – For prior balances owed

$

700,000

 – Increased working capital






Cash Flows for the Nine MonthsYear Ended September 30, 2015December 31, 2017

 

Cash Flows from Operating Activities

 

Operating activities used net cash for the nine monthsyear ended September 30, 2015December 31, 2017 of $281,088.$ 558,396 Our net loss, when adjusted by various items which impact net loss but do not impact cash during the period,[such as issuance of warrants or stock for services and for depreciation and amortization,] resulted in a net loss adjusted by noncash items of $782,362$ 813,813 which was partially offset by changes in operating assets and liabilities which provided cash of $501,274 as follows:$ 255,417.

$900,000 in compensation awarded resulting from the issuance of 9 Million shares of restricted common stock valued at $ 0.10 per share,
$3,151 used by an increase in prepaid expenses, as a result of expensing a service agreement,
$81,923 provided by increased accounts payable and accrued expenses as a result of increased outstanding vendor balances,
$211,594 provided by affiliates increased in outstanding balances, and
$210,908 provided by officers as a result of deferred compensation payments.

 

Cash Flows used in Investing Activities

Our investing activities used $56,134provided $80,022 in net cash forduring the year ended December 31, 2017 as a result of advances related to its affiliates.

 

Cash Flows from Financing Activities

 

Our financing activities in the year ended December 31, 2017 provided $349,683$478,325 in net cash as a resultproceeds from the issuance of the following:convertible debt

$42,000 provided by advances under stock subscriptions, and
$307,683 provided by the sale of common stock.


Financial Position

 

Total AssetsOurThe Company did not have significant total assets increased $131,661 or 306.6% from $42,943 as ofin both fiscal years end December 31, 2014 to $174,604 as of September 30, 2015. As part of the overall increase in total assets,2017 and 2016.

fixed assets decreased $3,951 as a result of depreciation,

other assets decreased $7,500 as a result of amortization, and

the remaining increase of $143,112 is associated with current assets and is discussed as follows.


Current Assets – The net increaseCompany did not have significant total assets in current assets of $143,112 was primarily associated with the full prepayment in common stock issued for a $255,000 performance based service agreement, net of amortization along with an increase in cash of $12,461 as a result of the sale of securitiesboth fiscal years end December 31, 2017 and increased available credit from vendors and associates.2016.

 

29

Table of Contents

Material Commitments

 

Technology Transfer and License Agreement with SWATE

 

Effective February 1, 2013, the Companycompany entered into a ten yearten-year Technology Transfer and License Agreement with SWATE. In accordance with the Technology Transfer and License Agreement, if the Companycompany generates revenue as a result of the products and licenses related to the agreement, the Companycompany is to pay SWATE an annual fee stipulated in the agreement plus 5% of revenue generated. If revenue is not generated, future minimum royalty fees are as follows: during the first year: $542,000; during the second year: $1,000,000; and during the third and succeeding years: $2,000,000. On April 15, 2015, SWATE agreed to waive licenses fees for 2014 and 2015.2015, and on January 29, 2016 SWATE agreed to waive license fees for 2016 and 2017.

On January 5, 2018, SWATE and the company executed a Termination of the exclusive Technology Transfer and License Agreement effective from January 6, 2018. The termination cited default of some obligations acquired such as the absence of the company’s generation of revenue as a result of the Agreement, the potential manufacturing and change on the constitution and ownership of SWATE which could affect significantly the expected results of the agreement. SWATE confirmed that no open balance exists at this time, confirming the waiving of due royalties for the Years 2016 and 2017. SWATE confirms that the company shall be entitled to manufacture the designed products only and exclusively for the concept of Waste to Energy on the configured standards, without having to pay any further royalties until February 1st, 2023. Nevertheless, it shall refrain from revealing any document or information of intellectual property provided by SWATE (the Licensor) that is less than 10 years old.

 

Employment Agreements

 

The Companycompany entered into employment agreements with Mr. Hofmeier, its President, Chief Executive Officer Mr. Ralph Hofmeier, and Chairman of the Board, and Ms. Velazquez, its Chief Operating Officer Ms. Irma Velazquez (collectivelyand Vice-Chairman (together, the “Employment Agreements”), effective January 1, 2012. Under the Employment Agreements, the Company willcompany agreed to pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the Company’scompany’s Board of Directors. TheEach Employment Agreements eachAgreement has an initial termsterm of ten (10) years and is automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew.

 





Related Party Transactions

Due to officers

Amounts due to officers as of December 31, 2017 and 2016 are:

 

 

2017

 

 

2016

 

Ralph Hofmeier:

 

 

 

 

 

 

Unsecured advances due to officer

 

$

17,678

 

 

$

17,678

 

Accrued salaries

 

 

875,000

 

 

 

725,000

 

Total due to Ralph Hofmeier

 

 

892,678

 

 

 

742,678

 

Irma Velazquez:

 

 

 

 

 

 

 

 

Unsecured advances due to officer

 

 

38,490

 

 

 

38,573

 

Accrued salaries

 

 

763,000

 

 

 

725,000

 

Total due to Irma Velazquez

 

 

801,490

 

 

 

763,573

 

 

 

$

1,694,168

 

 

$

1,506,251

 

Unsecured advances due to officers represent unreimbursed company expenses paid by the officers on behalf of the company. These net advances are non-interest bearing and are due on demand.


Accrued salaries represent amounts accrued in accordance with the employment agreements for Mr. Hofmeier, the company’s President, Chief Executive Officer and Chairman of the Board, and Ms. Velazquez, the Company’s Chief Operating Officer and Vice-Chairman. Each of Mr. Hofmeier and Ms. Velazquez is also a significant stockholder.

Due to affiliate

Due to affiliate is comprised of the following as of December 31, 2017 and 2016:

 

 

2017

 

 

2016

 

Swiss Water Tech Research and Development, S.A.:(SWATE)

 

 

 

 

 

 

Royalty fees under Technology Transfer and License Agreement

 

$

 

 

$

 

International Service Contract fees (1)

 

 

712,070

 

 

 

712,070

 

 

 

$

712,070

 

 

$

712,070

 

———————

(1)

We have described above at “Our Business” our relationships with SWATE, which were terminated by agreement on December 31st, 2016. Other than issuance of 712,070 shares of common stock no other amounts are owing to SWATE.

Due from affiliate

During 2017 and 2016, the company advanced funds of $461,925 and $63,120 respectively, to its then affiliate, EAWC Tecnologias Verdes SA de CV. These amounts were being offset by the technical services provided by Tecnologias Verdes since January 1, 2017 at the rate of $25,000 per month for administration services and for EAWC Tecnologias Verdes SA de CV to remit funds to other suppliers for services rendered to EAWC on EAWC’s behalf. On April 25, 2018, EAWC-TV presented their monthly invoice for administrative services of $25,000 which was offset/paid on April 25, 2018 which exceeded the amount owed by EAWC-TV to EAWC at the time. Therefore, at that moment EAWC-TV no longer owed any funds to EAWC and since such time, EAWC owes money to EAWC-TV.

Going Concern Qualification

We have incurred significant losses and cash used in operations, and such losses and use of cash are expected to continue. Our Independent Registered Public Accounting Firm has included a "Going Concern Qualification" in their report for the fiscal years ended December 31, 2016 and 2017 In addition, we have negative working capital. The foregoing raises substantial doubt about our ability to continue as a going concern. Management's plans include seeking additional capital or debt financing. There is no guarantee that additional capital or debt financing will be available when and to the extent required, or that if available, it will be on terms acceptable to us. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





Comparison of the Nine Months Ended September 30, 2018 and2017

Revenue

For the nine months ended September 30, 2018 and 2017, we generated no revenue, as the company was primarily engaged in marketing and sales efforts during this period. In addition, we were completing the registration and testing of our combination of technologies and arranging customer-financing packages to facilitate the commercialization of our products.

General and Administrative Expense

General and administrative expense increased $32,606 or 5.1% to $672,388 for the nine months ended September 30, 2018 from $639,782 for the nine months ended September 30, 2017. The following discussion provides further explanation of the change in each item impacting the increase.


There were $ 71,939 in combined increases resulting from the following items:

$60,221 or a 47.7% increase in professional fees over the prior periodrelated to costs of preparing for the offering; and

$11,718 or a 252.5% increase for other general and administrative expenses.

These increases were partially offset by $39,333 in combined decreases from the following items:

$28,000 or a 11.1% decrease in management fees to affiliate as a result of switching service suppliers;

$8,260 or an 81.1% decrease in travel and entertainment expenses as a result of decreased travel events pending the completion of the offering efforts; and

$3,073 or an 88.4% decrease for advertising and other selling and marketing expenses.

Other Income (Expense)

Other income (expense) increased $85,186 income to $90,937 income for the nine months ended September 30, 2018 from $5,751 income for the nine months ended September 30, 2017.


Net Loss


Net Loss decreased $52,580 to $581,451 for the nine months ended September 30, 2018 from $634,031 for the nine months ended September 30, 2017. This decrease is considered nominal overall.

Liquidity and Capital Resources

We had current assets of $0 and working capital deficit of $3,520,534 at September 30, 2018. Our operating and capital requirements in connection with supporting our operations will continue to be significant to us. Since inception, our losses from operations and working capital requirements have been satisfied through the deferral of payment for services performed by our founders and related parties discussed more fully below.


We have sustained operational losses since our inception. At September 30, 2018, we had an accumulated deficit of $10,796,310. The company cannot predict how long it will continue to incur further losses or whether it will ever become profitable as this is dependent upon the reduction of certain expenses, success in execution and reception of payment of the obtained contract and obtaining more project contracts among other things. These conditions raise substantial doubt about our ability to continue as a going concern.

Historically, we have satisfied our cash and working capital requirements in 2018 and 2017, primarily through proceeds from borrowings.





Cash Flows for the Nine Months Ended September 30, 2018


Operating activities used net cash for the nine months ended September 30, 2018 of $380,793. Our net loss, when adjusted by various items which impact net loss but do not impact cash during the period, such as issuance of warrants or stock for services and for depreciation and amortization, resulted in a net loss adjusted by noncash items of $620,070 which was partially offset by changes in operating assets and liabilities which provided cash of $239,277 as follows:


$13,644 resulting from increase in accounts payable and accrued expenses, and

$225,633 resulting from increase in amounts due to officers.

Cash Flows used in Investing Activities


Our investing activities provided $157,103 in net cash during the nine months ended September 30, 2018 as a result of repayments of funds loaned to its affiliates.


Cash Flows from Financing Activities

Our financing activities provided $223,690 during the nine months ended September 30, 2018 as a result of advances received from its affiliate after the affiliates obligation to the Company has been repaid.


Financial Position

Total Assets– The Company did not have significant total assets in the nine months ended September 30, 2018 and 2017.

Current Assets – The Company did not have significant current assets in the nine months ended September 30, 2018 and 2017.


Long Term AssetsThe Company did not have significant long-term assets in the nine months ended September 30, 2018 and 2017.


Related Party Transactions

 

Due to officers

 

Amounts due to officers as of September 30, 20152018 and December 31, 20142017 are comprised of the following:

 

 2015  2014 

 

September 30,
2018

 

December 31,
2017

 

Ralph Hofmeier:     

 

 

 

 

 

Unsecured advances due to officer $8,411  $24,161 

 

$

17,678

 

$

17,678

 

Accrued salaries  537,500   425,000 

 

 

987,500

 

 

 

875,000

 

Total due to Ralph Hofmeier  545,911   449,161 

 

 

1,005,178

 

 

 

892,678

 

Irma Velazquez:        

 

 

 

 

 

Unsecured advances due to officer  41,767   40,109 

 

39,123

 

38,490

 

Accrued salaries  537,500   425,000 

 

 

875,500

 

 

 

763,000

 

Total due to Irma Velazquez  579,267   465,109 

 

 

914,623

 

 

 

801,490

 

 $1,125,178  $914,270 

 

$

1,919,801

 

 

$

1,694,168

 

 

Unsecured advances due to officers represent unreimbursed Companycompany expenses paid by the officers on behalf of the Company, ended September 30, 2015, the Company made unsecured advances to Ralph Hofmeier and Irma Velazquez of $0 and $545,780, respectively and received repayments of $ 12,350 and $48,621 respectively.company. These net advances are non-interest bearing and are due on demand.


Accrued salaries represent amounts accrued in accordance with the employment agreements for Mr. Hofmeier, the Company’scompany’s President, Chief Executive Officer and Chairman of the Board, and Ms. Velazquez, the Company’s Chief Operating Officer.Officer and Vice-Chairman.


In addition to the direct unsecured advances and accrued salaries due to officers, the Company’s officers are also the primary beneficiaries of transactions due to and from affiliates as discussed further below.





Due to affiliate

 

Due to affiliate is comprised of the following as of September 30, 20152018 and December 31, 2014:2017:


  2015  2014 
Swiss Water Tech Research and Development, S.A.        
Royalty fees under Technology Transfer and License Agreement $-  $- 
International Service Contract fees  192,000   529,436 
  $192,000  $529,436 

 

 

2018

 

 

2017

 

Swiss Water Tech Research and Development, S.A. (SWATE)

 

 

 

 

 

 

Royalty fees under Technology Transfer and License Agreement

 

$

 

 

$

 

International Service Contract fees1

 

 

 

 

 

712,070

 

 

 

$

 

 

$

712,070

 

———————

30

Paid by issuance of 712,000 shares of the Company’s common stock.

Table of Contents

Effective February 1, 2013, and as amended on June 29, 2015, the Company entered into an exclusive Technology Transfer Agreement and License Agreement (the “Technology Transfer and License Agreement”) for a period of ten years with Swiss Water Tech Research & Development S.A. (SWATE), an entity owned and controlled by the Company’s Chief Executive Officer and Chief Operating Officer who are the primary beneficiaries. Under the terms of the agreement, SWATE: (a) will transfer to the Company the license to manufacture products developed by SWATE; (b) all know-how and technical assistance necessary for the exploitation of their licensed patents and the manufacture of certain products; and (c) will grant the Company the use of certain related trademarks. If the Company generates revenue as a result of the products and licenses related to the Technology Transfer and License Agreement, the Company is to pay to SWATE a minimum annual royalty fee stipulated in the agreement plus five percent of revenue generated. On April 15, 2015, SWATE agreed to waive licenses fees for 2014 and 2015.

Effective February 1, 2013, the Company also entered into an International Service Contract with SWATE (the “SWATE Service Contract”). Under this agreement, SWATE will provide operations management, engineering and technical services to the Company. The SWATE Service Contract has a term of five years, and provides for a monthly service fee of $35,000, plus out-of-pocket expenses. During the nine months ended September 30, 2015 and 2014, the Company accrued $315,000 and $315,000, respectively.

On April 1, 2013, the Company signed an agreement with SWATE, which authorizes SWATE to collect on behalf of the Company, payments made by investors on sales of Company stock. According to the agreement, the proceeds collected by SWATE can be used by SWATE to pay down amounts due from the Company for royalties and or service fees pursuant to the above agreements. During the nine months ended September 30, 2015 and the year ended year ended December 31, 2014, SWATE collected and applied against amounts due from the Company approximately $0 and $120,400 respectively from amounts received from investors.

SWATE is a Swiss research and development company with access to patents and certain scientific and technical resources. As a result of the above agreements, the Company has a variable implicit interest in SWATE, however it is not its primary beneficiary, does not provide any explicit or implicit financial support and therefore does not consolidate SWATE’s financial statements in its condensed consolidated financial statements.


Due fromfrom/to affiliate

During the nine months ended September 30, 2015 and2018, the year ended December 31, 2014, the Company advanced funds tocompany was repaid $377,793 by its affiliate, EAWC Tecnologias Verdes S.ASA de C V,CV (“EAWC-TV”). $225,000 of the repayments represents an entity owned and controlledoffset for the technical services provided by this affiliate since January 1, 2017 at the rate of $25,000 per month. The remainder of the repayments represents the payment of EAWC bills by the Company’s Chief Executive Officeraffiliate. On April 25, 2018, EAWC-TV presented their monthly invoice for administrative services of $25,000, which was offset/paid on April 25, 2018 which exceeded the amount owed by EAWC-TV to EAWC at the time. Therefore, at that moment EAWC-TV no longer owed any funds to EAWC and Chief Operating Officer who are the primary beneficiaries. The amounts advanced of $56,134 and $80,758, respectively, have been offset by an allowance for doubtful collection since the affiliate does not currently have the abilityat September 30, 2018, EAWC owes $205,532 to generate revenues or repay the Company. However, in July 2015, the Mexican exclusive distributor EAWC Tecnologias Verdes SA de CV., engaged in a project to create a prototype Waste to Energy prototype plant (12Mw/h Power Generation Plant in the State of Chiapas in Mexico. The project is in a final stage of obtaining the necessary financing. Once completed, the prototype plant will be used to demonstrate the technology in an effort to sell additional projects and to generate positive cash flow from sale of generated electricity.EAWC-TV.


Changes Inin and Disagreements with Accountants on Accounting and Financial Disclosure

 

ThereOn February 28, 2016 Mallah Furman’s contract with the company as its independent registered public accounting firm expired and was not renewed.


Mallah Furman served as the Company’s registered public accounting firm from February 11, 2015 to January 30, 2016.


During such time, there were (1) no disagreements with Mallah Furman on any matter of GAAP or practices, financial statement disclosures, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Mallah Furman would have caused Mallah Furman to make reference to the subject matter of the disagreements in connection with its reports, and (2) no events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation S-K.


On June 12, 2017, the company engaged MNP, LLP as its registered public accounting firm. However, MNP, LLC failed to finish the requested audit for the company despite the fact that the company made payments for same. The company has since filed suit against MNP, LLP, alleging Breach of Contract and Professional Negligence.


On December 7, 2017 MNP, LLC terminated the relationship between the Company as its registered public accounting firm. MNP, LLP served as the Company’s registered public accounting firm from June 12, 2017 to December 7, 2017.


During such time, there were (1) no disagreements with MNP, LLC on any matter of GAAP or practices, financial statement disclosures, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of MNP, LLC would have caused MNP, LLC to make reference to the subject matter of the disagreements in connection with its reports, and (2) no events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation S-K.


On March 23, 2018 the company engaged Malone Bailey as its independent registered public accounting firm. During the company’s two most recent fiscal years and through the 3rd Quarter of 2018, neither the company nor anyone acting on its behalf consulted Malone Bailey regarding any of the matters or reportable events set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.


Other than the foregoing, there have been no changes in or disagreements with accountants on accounting or financial disclosure matters.






MANAGEMENTDIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

Our directors and executive officers and key employees are listed below. The number of directors is determined by our board of directors. All directors hold office until the next annual meeting of the board or until their successors have been duly elected and qualified. Officers are elected by the board of directors and their terms of office are, except to the extent governed by employment contract, at the discretion of the board of directors.

 

NameAge

Name

Age

Principal Positions Withwith Us

Mr. Ralph Hofmeier

54

57

President, Chief Executive Officer and Chairman of the Board of Directors

Ms. Irma Velazquez

49

52

Chief Operating Officer and Vice-Chairman of the Board of Directors

 

Set forth below is a brief description of the background and business experience of our directordirectors and executive officerofficers for the past five years.

 

Mr. Ralph Hofmeier 54, has a Mechanicalmechanical engineering background, duringbackground. During the past five years, Hehe has worked in companies such as Powermax Energy & Business Solutions Inc;Inc., where from 2003 to 2008 performedhe served as President. Since the position of President of the Incorporation. Further merger of thethat company with Eurosport Active World Corp;EAWC, from 2008 to up todaythe present he has performed the role ofserved as President, Chief Executive Officer and Chairman of Eurosport Active World Cop.the Board of EAWC. Mr. Hofmeier speaks German and English.English.

 

Over the last 20 years, Mr. Hofmeier has established and developed several multinational companies in green tech distribution and commercialization.commercialization, such as Powermax LLC, Powermax Inc and Powermax GmbH. With a solid track record of investment and financial joint ventures Mr. Hofmeier brings a clear vision of Business development, Investor relations and joint ventures to the Company. His vasthis prior multicultural experience throughout the European and the American Continents provides EAWC withmarkets, we believe that Mr. Hofmeier brings our Board and our company a strong homologationclear vision of synergiesbusiness development, investor relations and a solid portfolio of green technologies.joint ventures.


31

Table of Contents

Ms. Irma Velazquez 49, brings to the Companycompany her certifiedexpertise of sustainable development and emerging technologies, along with her extensive experience and managerial skills on large-scale project management. Ms. Velazquez workworked from 1997 to 2010 in the United Nations performingAgencies such as World Health Organization, Farmaciens Sans Frontieres, Red Cross and Crescent Societies (IFRC) where she served in the positions of Information Technology Manager, Sustainable Development Manager and Programme Manager for, leading the strategic development and execution of corporate vision for operations, communications, and marketing. From 2010 to 2012 she worked for the International Federation of the Red Cross and Crescent Societies (IFRC) as a Disaster & Crisis Management Coordinator, where Sheshe demonstrated the ability to govern complex programs and organizations, which drove development and implementation of business plans, operational structures, processes, and procedures. From 2012 to up todaythe present, Ms. Velazquez has performed the role ofacted as Chief Operations Officer and Vice-Chairman of Eurosport Active World Corp. She hasEAWC. The Board believes that Ms. Velazquez is a valuable director in light of her extensive employment history as described above, and her solid track record of driving improvements in finance, operations, and HRhuman resources processes, resulting in greater efficiency and cost control. Ms. Velazquez withhas a Master in Sciences is an expertfrom the Erasmus University of Rotterdamand has experience in diplomatic negotiations and proven experience on building positive relationships with government entities, agencies, and partners. Ms. Velazquez speaks French, English and Spanish.

 

Family Relationships

 

Mr. Hofmeier and Ms. Velazquez are married.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, none of our directors or officers, during the past ten years:years has:

 

been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which hethe person was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;








been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, histhe person's involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to bebeen associated with persons engaged in any such activity;

been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; 

been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Except as set forth in our discussion belowdiscussions in “Certain Relationships and Related Transactions,”this Prospectus, none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

 

32

Table of Contents

Term of OfficeBoard Committees and Corporate Governance

 

Our directors hold office until a successor is elected and qualified or until earlierboard of resignation, removal from office or death

Board Committees

Our Board of Directorsdirectors has no separate committees and our Boardboard of Directorsdirectors acts as the audit committee and the compensation committee. The functions of those committees are being undertaken by our Board. Because we do not have any independent directors, our Board believes that the establishment of committees of our Board would not provide any benefits to our Company and could be considered more form than substance. We do not have yet, an audit committee financial expert serving on our Boardboard of Directors.directors.


Shareholder Communications

 

Although we do not have a formal policy regarding communications with the Board, shareholders may communicate with the Board by writing to us at 2000 Ponce de Leon Blvd.3250 Mary St., 6th Floor, Miami, Florida 33134,33133, Attention: Corporate Secretary, or by facsimile (305) 443-6624.  443-6624 or email to hofmeierr@eawctechnologies.com.


Shareholders who would like their submission directed to a member of the Boardboard may so specify, and the communication will be forwarded, as appropriate.

 





EXECUTIVE COMPENSATION

 

2017 Summary Compensation Table

 

The following table sets forth the compensation paid or accruedearned by us to our President and Chief Executive Officer and our Chief Operating Officer, and each ofwho are our otheronly officers, for the years ended December 31, 20142017 and 2013.2016.

 

Name and Principal Position Year Salary
($)
 All Other
Compensation
($)
 Total
($)
 

 

Year

 

Salary
($)

 

All Other
Compensation
($)

 

Total
($)

 

Ralph Hofmeier (1)  2014   150,000   -   150,000 

 

2017

 

150,000

 

 

150,000

 

Chief Executive Officer  2013   150,000   -   150,000 

President and Chief Executive Officer

 

2016

 

150,000

 

 

 

150,000

 

Irma Velazquez (2) (3)  2014   150,000   -   150,000 

 

2017

 

150,000

 

 

150,000

 

Chief Operating Officer  2013   150,000   -   150,000 

 

2016

 

150,000

 

 

 

150,000

 

———————

(1)

Pursuant to an employment agreement dated January 1, 2012. Accrued but not paid.

(2)

Pursuant to an employment agreement dated January 1, 2012. Accrued but not paid.

(3)

On April 2, 2015 our COO was awarded 9,000,000 restricted shares of our common stock valued at $900,000.

 

Outstanding Equity Awards at Fiscal Year-End Table

 

There areThe named executive officers had no outstanding equity awards.awards at December 31, 2017.


Compensation of Directors

 

Directors are permitted to receive fixed fees and other compensation for their services as directors. The Boardboard of Directorsdirectors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.


Employment Agreements

33

Table of Contents

 

The company entered into employment agreements with Mr. Hofmeier, its President and Chief Executive Officer, and Ms. Velazquez, its Chief Operating Officer (collectively the “Employment Agreements”), effective January 1, 2012. Mr. Hofmeier and Ms. Velazquez also serve as the Company’s only directors, and each is a significant stockholder of the Company. Under the Employment Agreements, the company agreed to pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the company’s Board of Directors. Each Employment Agreement has an initial term of ten (10) years and is automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew.





SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth the number of shares of our voting stock beneficially owned, as of February 9, 2016 December 14, 2018 by (i) those persons known by Eurosportus to be owners of more than 5% of Eurosportour common stock, (ii) each director, (iii) our Named Executive Officer,Officers, and (iv) all executive officers and directors as a group:


 

 

Common Stock(1)

 

Name and Address of Beneficial Owner

 

No. of
Shares

 

 

% of
Class

 

Directors and Officers

 

 

 

 

 

 

Mr. Ralph Hofmeier(2)(3)
3250 Mary Street, #303, Miami, FL 33133

 

 

56,986,585

 

 

 

64.82

%

Ms. Irma Velazquez(2)(3)
3250 Mary Street, #303, Miami, FL 33133

 

 

56,986,585

 

 

 

64.82

%

All officers and directors as a group (two persons)

 

 

63,261,100

 

 

 

71.96

%

5% Security Holders:

 

 

 

 

 

 

 

 

Swiss Water Tech Research & Development(3) 
3250 Mary Street, #303, Miami, FL 33133 ("SWATE")

 

 

6,274,515

 

 

 

7.14

%

Viridiana Lherisson

 

 

5,084,468

 

 

 

5.78

%

Andrea Hofmeier(2)

 

 

8,000,000

 

 

 

9.10

%

  Common Stock (1)    
Name and Address of Beneficial Owner No. of
Shares
  % of
Class
  Beneficial Ownership 
Directors and Officers         
Mr. Ralph Hofmeier (2)  2000 Ponce de Leon Blvd., 6th FL, Miami, FL 33134  25,000,000   28.67%  3,137,257 
Ms. Irma Velazquez  2000 Ponce de Leon Blvd., 6th FL, Miami, FL 33134  25,000,000   28.67%  3,137,257 
All officers and directors as a group (two persons)  50,000,000   57.34%    
 5% Security Holders:            
Swiss Water Tech Research & Development (3) 2000 Ponce de Leon Blvd., 6th FL, Miami, FL 33134  6,274,515   7.196%    
Viridiana Lherisson  5,084,468   5.831%    
Andrea Hofmeier  8,000,000   9.175%    

———————

(1) 

Applicable percentages are based on 87,196,863 87,913,933-shares outstanding, adjusted as required by rules of the SEC. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Unless otherwise indicated in the footnotes to this table, Eurosport believeswe believe that each of the stockholders named in the table has sole voting and investment power with respect to the shares of common stock indicated as beneficially owned by them.

(2) 

Ralph Hofmeier is the record holder of 25,000,00025,356,035 shares of common stock. Irma Velazquez, the wife of Ralph Hofmeier is the record holder of 25,000,00025,356,035 shares of common stock.stock, over which both Mr. Hofmeier and Ms. Velazquez have joint voting and dispositive power. Andrea Hofmeier, the divorced wife (2012) of Ralph Hofmeier, is the record holder of 8,000,000 shares of common stock.

(3)

Ralph Hofmeier and Irma Velazquez each vote 50% of the Companycompany shares held by SWATE, or 3,137,257 common shares each.







TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

 

Due to officers

 

Amounts due to officers as of December 31, 20142017 and 20132016 are comprised of the following:

 

 2014 2013 

 

2017

 

2016

 

Ralph Hofmeier:     

 

 

 

 

 

Unsecured advances due to officer $24,161  $40,280 

 

$

17,678

 

$

17,678

 

Accrued salaries  425,000   275,000 

 

 

875,000

 

 

 

725,000

 

Total due to Ralph Hofmeier  449,161   315,280 

 

 

892,678

 

 

 

742,678

 

Irma Velazquez:        

 

 

 

 

 

Unsecured advances due to officer  40,109   43,707 

 

38,490

 

38,573

 

Accrued salaries  425,000   275,000 

 

 

763,000

 

 

 

725,000

 

Total due to Irma Velazquez  465,109   318,707 

 

 

801,490

 

 

 

763,573

 

 $914,270  $633,987 

 

$

1,694,168

 

 

$

1,506,251

 

 

Unsecured advances due to officers represent unreimbursed Companycompany expenses paid by the officers on behalf of the Company.company. During the year ended December 31, 2014,2017, the Company made unsecured advances tocompany accrued salaries of $150,000 each for Ralph HofmeirHofmeier and Irma Velazquez. Irma Velazquez also received a $112,000 payment against her accrued salary. In addition, the company repaid Irma Velazquez $100 and recorded charges of $5,000 and $120,257, respectively and received repayments of $16,619 and $128,355, respectively.$17 for advances due to officer. During the year ended December 31, 2013,2016, the Company made unsecured advances tocompany accrued salaries of $150,000 each for Ralph HofmeirHofmeier and Irma Velazquez. In addition, the company repaid Irma Velazquez $4,010 and recorded charges of $11,949$815 for advances due to officer. The company also repaid Ralph Hofmeier $300 and $85,610, respectively and received repaymentsrecorded charges of $16,300 and $44,674, respectively.$10,000 for advances due to officer. These net advances are non-interest bearing and are due on demand.

 

Accrued salaries represent amounts accrued in accordance with the employment agreements for the Company’scompany’s President and Chief Executive Officer, and Chief Operating Officer (See Note 10)"Note 8").

 

In addition to the direct unsecured advances and accrued salaries due to officers, the Company’scompany’s officers are also the primary beneficiaries of transactions due to and from affiliates as discussed further below.

 

34

Table of Contents

Due to affiliate


Due to affiliate is comprised of the following as of December 31, 20142017 and 2013:

 2014  2013 
Swiss Water Tech Research and Development, S.A.:      
Royalty fees under Technology Transfer and License Agreement $-  $136,278 
International Service Contract fees  529,436   385,000 
  $529,436  $521,278 

Effective February 1, 2013, and as amended on June 29, 2015, the Company entered into an exclusive Technology Transfer Agreement and License Agreement (the “Technology Transfer and License Agreement”) for a period of ten years with Swiss Water Tech Research & Development S.A. (SWATE), an entity owned and controlled by the Company’s Chief Executive Officer and Chief Operating Officer who are the primary beneficiaries. Under the terms of the agreement, SWATE: (a) will transfer to the Company the license to manufacture products developed by SWATE; (b) all know-how and technical assistance necessary for the exploitation of their licensed patents and the manufacture of certain products; and (c) will grant the Company the use of certain related trademarks. If the Company generates revenue as a result of the products and licenses related to the Technology Transfer and License Agreement, the Company is to pay to SWATE a minimum annual royalty fee stipulated in the agreement plus five percent of revenue generated. Since the Company has not generated revenues, during 2013 the Company accrued the minimum fee of approximately $542,000 in accordance with the terms of the agreement. On April 15, 2015, SWATE agreed to waive licenses fees for 2014 and 2015.

As part of the exclusive Technology Transfer and License Agreement, on February 1, 2013, the Company was required to pay a non-refundable front-end fee of $6 million in exchange for the use of newly developed systems, concepts and license of patent and trademark. The Company satisfied the required payment through the issuance of 6 million shares of its common stock, valued at $1.00 per share. The value of the licensed technology rights acquired was recorded as an intangible asset and scheduled for amortization over the ten-year life of the Technology Transfer and License Agreement. During 2013, the Company recognized amortization expense in the amount of $550,000. On December 31, 20132016:


 

 

2017

 

 

2016

 

Swiss Water Tech Research and Development, S.A. (SWATE)

 

 

 

 

 

 

Royalty fees under Technology Transfer and License Agreement

 

$

 

 

$

 

International Service Contract fees1

 

 

712,070

 

 

 

712,070

 

 

 

$

712,070

 

 

$

712,070

 

———————

1

To be paid by issuance of 712,000 shares of the Company’s common stock.


During 2017 and 2016, the Company evaluated the unamortized asset for impairmentcompany advanced funds of $ 461,925 and determined that due$63,120 respectively, to its inability to secure revenue generating commercial contracts, the recoverability of this asset in future periods was doubtful. Accordingly, the Company fully impaired the remaining unamortized value of the front-end fee of $5,450,000.

Effective February 1, 2013, the Company also entered into an International Service Contract with SWATE (the “SWATE Service Contract”). Under this agreement, SWATE will provide operations management, engineering and technical services to the Company. The SWATE Service Contract has a term of five years, and provides for a monthly service fee of $35,000, plus out-of-pocket expenses. During 2014 and 2013, the Company has accrued $420,000 and $385,000, respectively, pursuant to this agreement.

On April 1, 2013, the Company signed an agreement with SWATE, which authorizes SWATE to collect on behalf of the Company, payments made by investors on sales of Company stock. According to the agreement, the proceeds collected by SWATE can be used by SWATE to pay down amounts due from the Company for royalties and or service fees pursuant to the above agreements. During the years ended December 31, 2014 and 2013, SWATE collected and applied against amounts due from the Company approximately $120,400 and $305,600 respectively from amounts received from investors.

SWATE is a Swiss research and development company with access to patent and certain scientific and technical resources. As a result of the above agreements, the Company has a variable implicit interest in SWATE, however it is not its primary beneficiary, does not provide any explicit or implied financial support and therefore does not consolidate SWATE’s financial statements in its consolidated financial statements.

Due from affiliate

During 2014, the Company advanced funds to itsthen affiliate, EAWC Tecnologias Verdes S.A., an entity owned and controlledSA de CV. These amounts are being offset by the technical services provided by Tecnologias Verdes since January 1, 2017 at the rate of $25,000 per month for administration services and for EAWC Tecnologias Verdes SA de CV to remit funds to other suppliers for services rendered to EAWC on EAWC’s behalf. On April 25, 2018, EAWC-TV presented their monthly invoice for administrative services of $25,000 which was offset/paid on April 25, 2018 which exceeded the amount owed by EAWC-TV to EAWC at the time. Therefore, at that moment EAWC-TV no longer owed any funds to EAWC and since such time, EAWC owes money to EAWC-TV.






INTERESTS OF NAMED EXPERTS AND COUNSEL

None.


EXPERTS


The Company’s Chief Executive Officer and Chief Operating Officer who are the primary beneficiaries. The amounts advanced of $80,758, including interest,financial statements included in this Prospectus have been offsetaudited by MaloneBailey, LLP, an allowance for doubtful collection sinceindependent registered public accounting firm, and upon the affiliate does not currently have the ability to generate revenues or repay the Company.authority of said firm as experts in accounting and auditing.

 

In March 2013,LEGAL MATTERS


The law firm of Jonathan D. Leinwand, P.A. has provided opinions regarding the Company issued 8 millionvalidity of the shares of its restrictedour common sharesstock offered pursuant to its COO in exchange for her interests in the intellectual property, underling assets and equitythis Prospectus. The address of Swiss Green Solutions acquired in 2012. The transaction was valued at par, which represents the carry over basis of the minimal operating assets underlying this transaction.Jonathan D. Leinwand, P.A. is 20900 NE 30th Ave. Eight Floor Aventura, FL 33180.


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Table of Contents

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES

 

Our directors and officers are indemnified as provided by the Florida corporate law and our Bylaws.bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

We have been advised that in the opinion of the SEC indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

 

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of our common stock offered by the selling stockholders pursuant to this prospectus.Prospectus. For purposes of this section, the term registration statement means the original registration statement and any and all amendments including the schedules and exhibits to the original registration statement or any amendment. This prospectus,Prospectus, filed as part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules thereto as permitted by the rules and regulations of the SEC.

 

For further information about our common stock and us you should refer to the registration statement, including the exhibits this prospectusexhibits. This Prospectus summarizes provisions that we consider material of certain contracts and other documents to which we refer you. Because the summaries may not contain all of the information that you may find important, you should review the full text of those documents. The registration statement, including its exhibits and schedules, may be inspected and copied at the public reference facilities maintained by the SEC at 100 F. Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling 1-202-551-8909. Copies of such materials are also available by mail from the Public Reference Branch of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549 at prescribed rates. In addition, the SEC maintains a website at (http://www.sec.gov) from which interested persons can electronically access the registration statement, including the exhibits and schedules to the registration statement.


36

Table of Contents

Financial Statements

 





INDEX TO FINANCIAL STATEMENTS



Eurosport Active World Corp.


December 31, 2014 and 2013

37

Table of Contents

Eurosport Active World Corp.

FINANCIAL STATEMENTS

TABLE OF CONTENTS


Page

Page

Financial Statements as of September 30, 2018 (Unaudited) and December 31, 2017

Condensed Consolidated Balance Sheets as of September 30, 2018 (Unaudited) and December 31, 2017

F-2

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and 2017 (Unaudited)

F-3

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the period from December 31 2017 through September 30, 2018 (Unaudited)

F-4

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017 (Unaudited)

F-5

Notes to the Condensed Consolidated Financial Statements (Unaudited)

F-6


Audited Financial Statements as of and for the Years Ended December 31, 20142017 and 20132016

Report of Independent Registered Public Accounting Firm

F-1

F-10

Consolidated Balance Sheets as of December 31, 20142017 and 20132016

F-2

F-11

Consolidated Statements of Operations for the years ended December 31, 20142017 and 20132016

F-3

F-12

Consolidated Statements of Changes in Stockholders'Stockholders’ Deficit for the years ended December 31, 20142017 and 20132016

F-4

F-13

Consolidated Statements of Cash Flows for the years ended December 31, 20142017 and 20132016

F-5

F-14

Notes to the Consolidated Financial Statements

F-6 - F-14

F-15






38


Eurosport Active World Corp.

Condensed Consolidated Balance Sheets


 

 

September 30,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash

 

$

 

 

$

 

TOTAL CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

 

 

$

��

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

808,376

 

 

$

794,733

 

Due to affiliate (Note 4)

 

 

205,532

 

 

 

595,427

 

Convertible Loan payables

 

 

586,825

 

 

 

566,825

 

Due to officers (Note 4)

 

 

1,919,801

 

 

 

1,694,168

 

TOTAL CURRENT LIABILITIES

 

 

3,520,534

 

 

 

3,651,153

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT:

 

 

 

 

 

 

 

 

Preferred stock, par value $.001 per share; 500,000,000,000 shares authorized, no shares issued and outstanding in September 30, 2018 and December 31, 2017, respectively

 

 

 

 

 

 

Common stock, par value $.001 per share; 1,000,000,000 shares authorized, 87,913,933 and 87,201,863 shares issued and outstanding in September 30, 2018 and December 31, 2017, respectively

 

 

87,914

 

 

 

87,202

 

Additional paid in capital

 

 

7,187,862

 

 

 

6,476,504

 

Accumulated deficit

 

 

(10,796,310

)

 

 

(10,214,859

)

TOTAL STOCKHOLDERS' DEFICIT

 

 

(3,520,534

)

 

 

(3,651,153

)

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$

 

 

$

 


See accompanying notes to the unaudited condensed consolidated financial statements.






Eurosport Active World Corp.Table

Condensed Consolidated Statements of ContentsOperations

(Unaudited)


 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GENERAL and ADMINISTRATIVE EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Management fees to affiliate

 

$

75,000

 

 

$

79,000

 

 

$

225,000

 

 

$

253,000

 

Officers salaries and payroll taxes

 

 

80,738

 

 

 

80,738

 

 

 

242,213

 

 

 

242,213

 

Professional fees

 

 

63,736

 

 

 

53,365

 

 

 

186,486

 

 

 

126,265

 

Travel and entertainment

 

 

 

 

 

 

 

 

1,928

 

 

 

10,188

 

Advertising and other selling and marketing

 

 

 

 

 

 

 

 

403

 

 

 

3,476

 

Other general and administrative expenses

 

 

6,741

 

 

 

1,644

 

 

 

16,358

 

 

 

4,640

 

TOTAL GENERAL and ADMINISTRATIVE EXPENSES

 

 

226,215

 

 

 

214,747

 

 

 

672,388

 

 

 

639,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(226,215

)

 

 

(214,747

)

 

 

(672,388

)

 

 

(639,782

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income (expense), net

 

 

11,610

 

 

 

9,173

 

 

 

90,937

 

 

 

5,751

 

TOTAL OTHER INCOME (EXPENSE)

 

 

11,610

 

 

 

9,173

 

 

 

90,937

 

 

 

5,751

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE TAXES

 

 

(214,605

)

 

 

(205,574

)

 

 

(581,451

)

 

 

(634,031

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TAXES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(214,605

)

 

$

(205,574

)

 

$

(581,451

)

 

$

(634,031

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share - Basic and diluted

 

$

(0.00

)

 

(0.00

)

 

(0.01

)

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding - Basic and diluted

 

 

87,913,933

 

 

 

87,201,863

 

 

 

87,827,859

 

 

 

87,201,863

 


See accompanying notes to the unaudited condensed consolidated financial statements.






Eurosport Active World Corp.

 Condensed Consolidated Statement of Changes in Stockholders’ Deficit

For the period from December 31, 2017 through September 30, 2018


 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AT DECEMBER 31, 2017

 

 

87,201,863

 

 

$

87,202

 

 

$

6,476,504

 

 

$

(10,214,859

)

 

$

(3,651,153

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for debt

 

 

712,070

 

 

 

712

 

 

 

711,358

 

 

 

 

 

 

712,070

 

Net Loss

 

 

 

 

 

 

 

 

 

 

 

(581,451

)

 

 

(581,451

)

BALANCE AT SEPTEMBER 30, 2018 (Unaudited)

 

 

87,913,933

 

 

$

87,914

 

 

$

7,187,862

 

 

$

(10,796,310

)

 

$

(3,520,534

)


See accompanying notes to the unaudited condensed consolidated financial statements.







Eurosport Active World Corp.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

CASH FLOW FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

NET LOSS

 

$

(581,451

)

 

$

(634,031

)

ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Bad debt (recovery) expense (Note 4)

 

 

(38,619

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accrued management fees

 

 

225,000

 

 

 

225,000

 

Accounts payable and accrued expenses

 

 

13,644

 

 

 

42,740

 

Due to affiliate

 

 

 

 

 

 

Due to officers

 

 

633

 

 

 

(112,083

)

Net cash used in operating activities

 

 

(380,793

)

 

 

(478,374

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Receipts from affiliate

 

 

157,103

 

 

 

472,545

 

Payments to affiliate

 

 

 

 

 

(472,545

)

Net cash provided by (used in) investing activities

 

 

157,103

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from loan

 

 

20,000

 

 

 

478,325

 

Advances to related parties

 

 

(17,000

)

 

 

 

Advances from related parties

 

 

220,690

 

 

 

 

Net cash provided by financing activities

 

 

223,690

 

 

 

478,325

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH

 

 

 

 

 

(49

)

 

 

 

 

 

 

 

 

 

CASH AT THE BEGINNING OF THE PERIOD

 

 

 

 

 

49

 

CASH AT THE END OF THE PERIOD

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Income taxes

 

$

 

 

$

 

Interest

 

$

 

 

$

 

NON-CASH INVESTING AND FINANCING TRANSACTION:

 

 

 

 

 

 

 

 

Stock issued to satisfy debt

 

$

712,070

 

 

$

 


See accompanying notes to the unaudited condensed consolidated financial statements.







Eurosport Active World Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

September 30, 2018 and December 31, 2017


Note 1.

Incorporation and Nature of Operations


Eurosport Active World Corp. (formerly Eagle International Holdings Group Inc.”) (the “Corporation”, “EIH”, “we” or “our”), was incorporated under the laws of the State of Florida on August 23, 2000.


Note 2.

Summary of Significant Accounting Policies


Principles of Consolidation


The condensed consolidated financial statements include the accounts of Eurosport Active World Corp. and its wholly-owned subsidiaries Powermax Energy, Powermax Green Technologies, GEM, Swiss Green Solutions and African Sunlight. All significant inter-company transactions and accounts have been eliminated in consolidation.


Basis of Presentation


The accompanying unaudited consolidated interim financial statements of Eurosport Active World Corp. (formerly Eagle International Holdings Group Inc.”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited financial statements and notes thereto of the Company contained elsewhere herein the Company’s Form S-1.


In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements of Eurosport Active World Corp. for the fiscal year ended December 31, 2017 as reported in this Form S-1 have been omitted.


Certain reclassifications have been made in Fiscal 2017 results to conform to the presentation used in Fiscal 2018.


Stock-Based Payments


The Corporation accounts for transactions in which services are received in exchange for stock based on the fair value of such services received from non-employees, in accordance with ASC 505-50 “Equity Based Payments to Non-employees.”


The Corporation follows ASC 718, “Compensation – Stock Compensation”, in accounting for its stock-based payments. This standard states that compensation cost or the value of stock issued for services is measured at the grant date based on the value of the stock granted and is recognized over the vesting or service period.


Loss Per Common Share


The Corporation accounts for earnings (loss) per share in accordance with FASB ASC Topic No. 260 - 10, Earnings Per Share, which establishes the requirements for presenting earnings per share (“EPS”). FASB ASC Topic No. 260 - 10 requires the presentation of “basic” and “diluted” EPS on the face of the statement of operations. Basic EPS amounts are calculated using the weighted-average number of common shares outstanding during each period. Diluted EPS assumes the exercise of all stock options, warrants and convertible securities having exercise prices less than the average market price of the common stock during the periods, using the treasury stock method. When a loss from operations exists, potential common shares are excluded from the computation of diluted EPS because their inclusion would result in an anti-dilutive effect on per share amounts.


For the nine months ended September 30, 2018 and the year ended December 31, 2017, an aggregate of 2,200,000 stock options to purchase shares of common stock were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive.

 





F-6



Eurosport Active World Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

September 30, 2018 and December 31, 2017


Note 2.

Summary of Significant Accounting Policies (continued)


In addition, convertible note holders have the option of converting their loans into common shares subject to the completion of an approved S-1 registration of its common shares. In addition, some lenders were also granted the right to purchase additional shares which was also subject to the completion of an approved S-1 registration of its common shares. The above conversion feature represents a potential for 4,916,750 and 4,831,150 shares at September 30, 2018 and December 31, 2017, respectively. The rights to purchase additional shares represents a potential for 430,000 shares at both September 30, 2018 and December 31, 2017, respectively. The potential shares from both the conversion feature and the rights to purchase additional shares were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive. As of June 13, 2018, all rights to purchase additional shares have expired.


Related Party Transactions


A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. A related party is generally defined as:

(i)

any person that holds 10% or more of the Company’s securities including their immediate families,

(ii)

the Company’s management,

(iii)

someone that directly or indirectly controls, is controlled by or is under common control with the Company, or

(iv)

anyone who can significantly influence the financial and operating decisions of the Company.


Note 3.

Going Concern


The Corporation has accumulated operating losses since inception (June 24, 2005) and had working capital deficits as of September 30, 2018.


These factors raise substantial doubt regarding the Corporation’s ability to continue as a going concern. The ability of the Corporation to continue as a going concern depends upon its ability to obtain funding to finance operating losses until the Corporation is profitable. The Corporation expects to be financed through equity capital, debt financing or from deposits related to purchases orders on proposals pending customer acceptance.

In the event the Corporation does not generate sufficient funds from issuance of common stock, debt financing or purchase orders, it may be unable to fully implement its business plan and pay its obligations as they become due, any of which circumstances would have a material adverse effect on its business prospects, financial condition, and results of operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.


Note 4.

Related Party Transactions and Balances


Due to officers


Amounts due to officers as of September 30, 2018 and December 31, 2017 are comprised of the following:


 

 

2018

 

 

2017

 

 

 

(Unaudited)

 

 

 

 

Ralph Hofmeier:

 

 

 

 

 

 

 

 

Unsecured advances due to officer

 

$

17,678

 

 

$

17,678

 

Accrued salaries

 

 

987,500

 

 

 

875,000

 

Total due to Ralph Hofmeier

 

 

1,005,178

 

 

 

892,678

 

Irma Velazquez:

 

 

 

 

 

 

 

 

Unsecured advances due to officer

 

 

39,123

 

 

 

38,490

 

Accrued salaries

 

 

875,500

 

 

 

763,000

 

Total due to Irma Velazquez

 

 

914,623

 

 

 

801,490

 

 

 

$

1,919,801

 

 

$

1,694,168

 



F-7



Eurosport Active World Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

September 30, 2018 and December 31, 2017


Note 4.

Related Party Transactions and Balances (continued)


Unsecured advances due to officers represent unreimbursed Corporation expenses paid by the officers on behalf of the Corporation. These advances are non-interest bearing and are due on demand.


Accrued salaries represent amounts accrued in accordance with the employment agreements for the Corporation’s Chief Executive Officer and Chief Operating Officer.


Due to affiliate


Due to affiliate is comprised of the following as of September 30, 2018 and December 31, 2017:


 

 

2018

 

 

2017

 

 

 

(Unaudited)

 

 

 

 

Swiss Water Tech Research and Development, S.A. (SWATE)

 

 

 

 

 

 

 

 

Royalty fees under Technology Transfer and License Agreement

 

$

 

 

$

 

International Service Contract fees

 

 

 

 

 

712,070

 

 

 

$

 

 

$

712,070

 


It was further agreed that the outstanding balance at December 31, 2017 of $712,070 was settled with the issuance of 712,070 EAWC restricted common shares valued at $1.00 per share, which EAWC issued on February 2, 2018.


Due from/to affiliate


In August 2014, the Company began advancing funds to its affiliate EAWC Tecnologias Verdes, S.A. (“EAWC-TV”). EAWC TV is an exclusive distributor of EAWC for Mexico and Latin America and as their relationship matured, it became a provider of professional administration services to EAWC. As of December 31, 2015, the Company had advanced $151,715 and during the year ended December 31, 2016, the Company advanced an additional $71,616 bringing the total funds advanced to its affiliate at December 31, 2016 to $223,331. During 2017, EAWC TV operations began to stabilize and effective January 2017 the Company engaged EAWC-TV to provide its management services, including disbursement processing for $25,000 per month totaling $300,000 annually. During 2017, EAWC-TV processed $461,925 of cash proceeds received from EAWC convertible notes and disbursed $237,947 on behalf of EAWC for EAWC operational expenses. This fundamental change in their business relationship resulted in EAWC-TV repaying the funds advanced by EAWC, flipping the relationship in April 2018 where EACW-TV was advancing funds to EAWC. The total due from EAWC-TV at December 31, 2017 was $155,790 but during the nine months ending September 2018, EAWC-TV provided $225,000 of services plus $528 in interest and remitted $152,793 to vendors in satisfaction of EAWC obligations. EAWC also remitted $17,000 to EAWC-TV. In 2018, EAWC-TV has reduced its obligation to the Company from a $155,790 (due from EAWC-TV) at December 31, 2017 to $205,532 (due to EAWC-TV) at September 30, 2018.


Note 5.

Commitments and Contingencies


Commitments


Lease


The Corporation utilizes shared office space rented from its corporate counsel at 325 Mary St #303 Miami FL 33133 USA for $300 per month and accordingly incurred rent expense of $2,700 and $0 during thenine months ended September 30, 2018 and 2017, respectively.




F-8



Eurosport Active World Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

September 30, 2018 and December 31, 2017


Note 5.

Commitments and Contingencies (continued)


Contingencies


From time to time, the Corporation may be a defendant in pending or threatened legal proceedings arising in the normal course of its business. While the outcome and impact of currently pending legal proceedings cannot be predicted with certainty, the Corporation’s management and legal counsel believe that the resolution of these proceedings through settlement or adverse judgment will not have a material adverse effect on its consolidated operating results, financial position or cash flows.


Litigation


There is a pending litigation based on the complaint filed by Aquasphere Greentech Solutions Pvt., Ltd against Powermax Green Technologies, LLC and Eurosport Active World Corp. The case No. 9s 20148179-CA, is pending in the Circuit Court of the Eleventh Judicial Circuit for Miami-Dade County, Florida. The plaintiff is alleging breach of contract date on March 24, 2011; for purchase of an AM65 water generator with a purchase price of $ 70,000.00, a deposit was received for a total of $42,000.00. Purchase contract clearly indicates that requires full payment for release of shipment. The plaintiff is seeking refund of deposits made. Legal counsel has filed answer to complain and discovery is in process and pending. On February 28, 2018 the case was dismissed without prejudice.


Note 6.

Convertible Notes


As of September 30, 2018 and December 31, 2017, the Company had issued in aggregate of $586,825 and $566,825, in convertible debentures. In August 2018, the Company issued convertible notes to two investors for a total of $20,000. The convertible debentures are due on demand unsecured, have no maturity date and are generally non-interest bearing although some of the notes have 2% interest. The holders of the instrument have the option to convert these convertible debentures into common stock at conversion prices ranging from $1.00 to $.10 per share upon Securities Exchange Commission’s (SEC) approval and registration of the Corporation’s Form S-1 for one year after issuance.


The above debentures were determined to be solely debt without an equity portion as the Company has determined that these conversion options are not beneficial. As such, these convertible debentures have no equity portion and are presented as loans payables in the financial statements. The transaction price for these loans payable reflects the fair value of the instruments issued.









Report of Independent Registered Public Accounting Firm


The

To the Board of Directors and Stockholders
of Eurosport Active World Corp.


Miami, Florida

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Eurosport Active World Corp. and its subsidiaries (collectively, the “Company”) as of December 31, 20142017 and 2013,2016, and the related consolidated statements of operations, changes in stockholders'shareholders’ deficit, and cash flows for the years then ended. ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on these consolidatedthe Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform anthe audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. OurAs part of our audits included considerationwe are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposespurpose of expressing an opinion on the effectiveness of the Company's internal controlscontrol over financial reporting. Accordingly, we express no such opinion. An audit includes

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Eurosport Active World Corp./s/ MaloneBailey, LLP

www.malonebailey.com

We have served as of December 31, 2014 and 2013, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the consolidated financial statements, the Company has incurred accumulated operating losses since inception, has incurred operating losses in 2014 and 2013 and has working capital deficits at the end of 2014 and 2013, respectively. These conditions raise a substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.auditor since 2018.

Houston, Texas

July 30, 2018

 





Fort Lauderdale, Florida
July 22, 2015

mallahfurman.com

Brickell Bay Office Tower 1001 Brickell Bay Drive, Suite 1400, Miami, Florida 33131 Phone: 305.371.6200 Fax: 305.371.8726

Royal Palm at Southpointe900 South Pine Island Road, Suite 110, Ft. Lauderdale, Florida 33324 Phone: 954.475.3199 Fax: 954,472,4500

Member American Institute of Certified Public Accountants ● Florida Institute of Certified Public Accountants ● JHI International

F-1

Table of Contents

Eurosport Active World Corp.

Consolidated Balance Sheets


 December 31, 

 

December 31,

 

 2014  2013 

 

2017

 

2016

 

      

 

 

 

 

 

ASSETS      

 

 

 

 

 

CURRENT ASSETS:     

 

 

 

 

 

Cash $-  $8,118 

 

$

 

$

49

 

Prepaid expenses and other current assets  1,498   1,595 

 

 

 

 

 

 

TOTAL CURRENT ASSETS  1,498   9,713 

 

 

 

 

 

49

 

        

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET  15,745   20,741 
OTHER ASSETS, NET  25,700   35,700 

TOTAL ASSETS

 

$

 

 

$

49

 

        

 

 

 

 

 

TOTAL ASSETS $42,943  $66,154 
        

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT       

 

 

 

 

 

CURRENT LIABILITIES:        

 

 

 

 

 

Accounts payable and accrued expenses $496,075  $530,565 

 

$

794,733

 

$

763,132

 

Due to affiliate  529,436   521,278 
Due to officers  914,270   633,987 
Stock subscribed  122,750   204,600 

Due to affiliate (Note 5)

 

595,427

 

515,406

 

Convertible loan payables (Note 6)

 

566,825

 

88,500

 

Due to officers (Note 5)

 

 

1,694,168

 

 

 

1,506,251

 

TOTAL CURRENT LIABILITIES  2,062,531   1,890,430 

 

 

3,651,153

 

 

 

2,873,289

 

        

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES        

COMMITMENTS AND CONTINGENCIES (Note 8)

 

 

 

 

 

        

 

 

 

 

 

STOCKHOLDERS' DEFICIT:        

Preferred stock, par value $.001 per share;
500,000,000 shares authorized, no shares issued or outstanding in 2014 and 2013

      

Common stock, par value $.001 per share;
1,000,000,000 shares authorized, 75,506,308 and 74,713,192 shares issued and outstanding in 2014 and 2013, respectively

  75,506   74,713 

STOCKHOLDERS' DEFICIT: (Note 7)

 

 

 

 

 

Preferred stock, par value $.001 per share; 500,000,000 shares authorized, no shares issued and outstanding in December 31, 2017 and December 31, 2016, respectively

 

 

 

Common stock, par value $.001 per share; 1,000,000,000 shares authorized, 87,201,863 shares issued and outstanding in December 31, 2017 and December 31, 2016, respectively

 

87,202

 

87,202

 

Additional paid in capital  10,264,229   9,266,920 

 

6,476,504

 

6,476,504

 

Accumulated deficit  (12,359,323)  (11,165,909)

 

 

(10,214,859

)

 

 

(9,436,946

)

TOTAL STOCKHOLDERS' DEFICIT  (2,019,588)  (1,824,276)

 

 

(3,651,153

)

 

 

(2,873,240

)

        

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $42,943  $66,154 

 

$

 

 

$

49

 



See accompanying notes to the consolidated financial statements.




F-2

Table of Contents



Eurosport Active World Corp.

Consolidated Statements of Operations


  For the Years Ended
December 31,
 
  2014  2013 
       
REVENUES $-  $- 
         
COST OF REVENUES  -   - 
         
GROSS PROFIT  -   - 
         
GENERAL AND ADMINISTRATIVE EXPENSES        
Royalty fees  -   542,020 
Management fees to affiliate  420,000   385,000 
Officers salaries and payroll taxes  322,950   322,950 
Professional fees  188,097   235,402 
Bad debt  80,758   - 
Travel and entertainment  51,126   48,120 
Amortization of intangibles  10,000   560,000 
Advertising and other selling and marketing  11,421   36,858 
Research and development  10,000   - 
Impairment of front-end fee related to Technology Transfer and License Agreement (Note 7)  -   5,450,000 
Other general and administrative expenses  90,966   151,166 
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES  1,185,318   7,731,516 
         
LOSS FROM OPERATIONS  (1,185,318)  (7,731,516)
         
OTHER EXPENSE        
Interest expense, net  3,929   5,349 
Other expense  4,167     
TOTAL OTHER EXPENSE  8,096   5,349 
         
LOSS BEFORE TAXES  (1,193,414)  (7,736,865)
         
TAXES  -   - 
         
NET LOSS (1,193,414) $(7,736,865)
         
Loss per share - Basic and diluted (0.02) $(0.11)
         
Weighted average number of shares outstanding - Basic and diluted  74,883,681   67,594,221 

 

 

For the Years Ended

 

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

GENERAL and ADMINISTRATIVE EXPENSES

 

 

 

 

 

 

Management fees to affiliate

 

$

304,000

 

 

$

420,000

 

Officers’ salaries and payroll taxes

 

 

322,950

 

 

 

322,950

 

Professional fees

 

 

139,175

 

 

 

90,263

 

Travel and entertainment

 

 

10,188

 

 

 

10,392

 

Advertising and other selling and marketing

 

 

3,603

 

 

 

101

 

Research and development

 

 

 

 

 

14,500

 

Other general and administrative expenses

 

 

27,581

 

 

 

30,934

 

TOTAL GENERAL and ADMINISTRATIVE EXPENSES

 

 

807,497

 

 

 

889,140

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(807,497

)

 

 

(889,140

)

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

36,650

 

 

 

433

 

Interest income (expense), net

 

 

(7,066

)

 

 

(8,767

)

TOTAL OTHER INCOME (EXPENSE)

 

 

29,584

 

 

 

(8,334

)

 

 

 

 

 

 

 

 

 

LOSS BEFORE TAXES

 

 

(777,913

)

 

 

(897,474

)

 

 

 

 

 

 

 

 

 

TAXES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(777,913

)

 

$

(897,474

)

 

 

 

 

 

 

 

 

 

Loss per share - Basic and diluted

 

(0.01

)

 

(0.01

)

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding - Basic and diluted

 

 

87,201,863

 

 

 

87,201,863

 


See accompanying notes to the consolidated financial statements.





F-3

Table of Contents



Eurosport Active World Corp.

Consolidated Statement of Changes in Stockholders'Stockholders’ Deficit

For the Years Endedyears ended December 31, 20142017 and 20132016


 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AT DECEMBER 31, 2015

 

 

87,201,863

 

 

$

87,202

 

 

$

6,464,506

 

 

$

(8,539,472

)

 

$

(1,987,764

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options vesting to former officer (Note 11)

 

 

 

 

 

 

 

 

11,998

 

 

 

 

 

 

11,998

 

Net Loss

 

 

 

 

 

 

 

 

 

 

 

(897,474

)

 

 

(897,474

)

BALANCE AT DECEMBER 31, 2016

 

 

87,201,863

 

 

$

87,202

 

 

$

6,476,504

 

 

$

(9,436,946

)

 

$

(2,873,240

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

 

 

 

 

 

 

 

 

 

(777,913

)

 

 

(777,913

)

BALANCE AT DECEMBER 31, 2017

 

 

87,201,863

 

 

$

87,202

 

 

$

6,476,504

 

 

$

(10,214,859

)

 

$

(3,651,153

)

  Preferred Stock  Common Stock  Additional
Paid-in
  Accumulated  Total
Stockholders'
 
  Shares  Amount  Shares  Amount  Capital  Deficit  Deficit 
                      
BALANCE AT JANUARY 1, 2013  -  $-   55,940,665  $55,941  2,874,052  (3,429,144 $(499,051
                             
Stock issued to officer for 2012 acquisition of Swiss Green Solutions  -   -   8,000,000   8,000   (8,000)  -   - 
Stock issued to finance company in contemplation of financing  -   -   3,000,000   3,000   (3,000)  -   - 
Stock issued to affiliate pursuant to Technology Transfer andLicense Agreement  -   -   6,000,000   6,000   5,994,000   -   6,000,000 
Stock issued for 2012 acquisition of African Sunlight  -   -   50,000   50   49,950   -   50,000 
Sale of common stock  -   -   1,689,916   1,689   314,283   -   315,972 
Stock issued for services  -   -   32,611   33   33,635   -   33,668 
Options vesting to formerofficer  -   -   -   -   12,000   -   12,000 
Net Loss  -   -   -   -   -   (7,736,865)  (7,736,865
BALANCE AT DECEMBER 31, 2013  -   -   74,713,192   74,713   9,266,920   (11,165,909  (1,824,276)
                             
Sale of common stock  -   -   3,531,713   3,532   662,442   -   665,974 
Stock issued for services  -   -   146,000   146   145,854   -   146,000 
Stock issued to settle liabilities  -   -   215,403   215   178,913   -   179,128 
Cancellation of stock issued to finance company in contemplation of financing  -   -   (3,000,000)  (3,000)  3,000   -   - 
Repurchase of common stock for cash  -   -   (100,000)  (100)  (4,900)  -   (5,000)
Options vesting to former officer  -   -   -   -   12,000   -   12,000 
Net Loss  -   -   -   -   -   (1,193,414)  (1,193,414)
BALANCE AT DECEMBER 31, 2014  -  $-   75,506,308  75,506  10,264,229  (12,359,323)  $(2,019,588


See accompanying notes to the consolidated financial statements.






F-4

Table of Contents

Eurosport Active World Corp.

Consolidated Statements of Cash Flows


 

 

For the Years Ended

 

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

CASH FLOW FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

NET LOSS

 

$

(777,913

)

 

$

(897,474

)

ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Options vesting to former officer (Note 7)

 

 

 

 

 

11,998

 

Gain on termination of distributor agreement

 

 

(35,900

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaids and other current assets

 

 

 

 

 

1,449

 

Accrued management fees

 

 

 

 

 

420,000

 

Accounts payable and accrued expenses

 

 

67,500

 

 

 

144,217

 

Due to officers

 

 

187,917

 

 

 

306,505

 

Net cash used in operating activities

 

 

(558,396

)

 

 

(13,305

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Receipts from affiliates

 

 

80,022

 

 

 

 

Payments to affiliate

 

 

 

 

 

(67,650

)

Net cash provided by (used in) investing activities

 

 

80,022

 

 

 

(67,650

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from loan

 

 

478,325

 

 

 

81,000

 

Net cash provided by financing activities

 

 

478,325

 

 

 

81,000

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH

 

 

(49

)

 

 

45

 

 

 

 

 

 

 

 

 

 

CASH AT THE BEGINNING OF THE PERIOD

 

 

49

 

 

 

4

 

CASH AT THE END OF THE PERIOD

 

$

 

 

$

49

 

  For the Years Ended
December 31,
 
  2014  2013 
       
CASH FLOW FROM OPERATING ACTIVITIES:      
NET LOSS $(1,193,414) $(7,736,865)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATIONS:        
Depreciation and amortization  15,196   565,094 
Bad debt expense  80,758   - 
Impairment of front-end fee related to Technology Transfer and License Agreement  -   5,450,000 
Common stock issued for services  146,000   15,107 
Options vesting to former officer  12,000   12,000 
Changes in operating assets and liabilities:        
Prepaids and other current assets  96   (1,594)
Accounts payable and accrued expenses  144,638   306,525 
Due to affiliate  8,158   521,278 
Due to officers  280,283   336,585 
Other assets  -   (700)
Net cash used in operating activities  (506,285)  (532,570)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Advances to affiliate  (80,758)  - 
Purchases of furniture and equipment  (200)  (25,742)
Proceeds from sale of fixed assets  -   1,368 
Net cash used in investing activities  (80,958)  (24,374)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Repayments on notes  -   (5,095)
Advances on stock subscribed  26,750   204,600 
Proceeds from the sales of common stock  557,375   325,222 
Repurchase of common stock  (5,000)  - 
Net cash provided by financing activities  579,125   524,727 
         
NET CHANGE IN CASH  (8,118)  (32,217)
CASH AT THE BEGINNING OF THE YEAR  8,118   40,335 
CASH AT THE END OF THE YEAR $-  $8,118 
         
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:        
Cash paid during the year for: $-  $- 
Income taxes $-  $- 
Interest        
NON-CASH INVESTING AND FINANCING TRANSACTION:        
Stock issued for the acquisition of related company $-   8,000 
Stock (canceled) issued to finance company $(3,000) $3,000 
Stock issued to affiliate pursuant to technology transfer and license agreement $-  $6,000,000 
Common stock issued to settle liabilities $179,128     


See accompanying notes to the consolidated financial statements.





F-5

Table of Contents



Eurosport Active World Corp.

Notes to the Consolidated Financial Statements

December 31, 2017 and 2016


Note 1.Incorporation Reverse Merger and Nature of Operations


Eurosport Active World Corp. (formerly Eagle International Holdings Group Inc.") (the "Company"“Corporation” or "EIH"“EIH”), was incorporated under the laws of the State of Florida on August 23, 2000. The Company was a shell entity that was in the market to merge with an operating company.


On March 17, 2008, EIH entered into an Agreement and Plan of Acquisition (the "Merger Agreement") with Inko Sport America, LLC ("ISA"), a Florida privately-held limited liability company. In connection with the closing of the Merger Agreement, ISA merged with and into EIH effective May 07, 2008, with the filing of the Merger Agreement with the Florida Secretary of State.

Pursuant to the terms and conditions of the Merger Agreement:

As a precondition of the consummation of the merger transaction, a reverse stock split of EIH common stock was consummated on a one for 1,000 basis pursuant to which each 1,000 outstanding shares of EIH common stock was converted into one share of EIH common stock. After giving effect to the reverse stock split, the authorized capital stock of EIH immediately prior to the closing of the Merger Agreement consisted of one billion shares of EIH common stock, of which 106,214 shares (as a result of the reverse stock split) was issued and outstanding.

After the reverse stock split, the Company agreed to acquire 100% of the ownership interest in ISA, in exchange for the issuance of 20,500,000 (approximately 99% of the issued and outstanding common stock of the Company).

Concurrent with the closing of the Merger Agreement, 4,394,044 shares of common stock were issued to EIH's majority shareholder and officer, for the satisfaction of obligations payable to him; and

Immediately after the closing of the Merger Agreement, ISA merged with EIH, and EIH adopted ISA's business plan and changed its name to Eurosport Active World Corp ("EAWC"). Further, upon completion of the merger, the prior officers and directors of EIH resigned and the current officers and directors of the Company were appointed to their positions.

This transaction was accounted for as a recapitalization effected by a share exchange, wherein ISA was considered the acquirer for accounting and financial reporting purposes.

ISA was a development stage company, incorporated on February 24, 2005 in the State of Florida. Through December 31, 2012, the Company had been primarily engaged in the promotion, development and commercialization of green technologies. In view of the increased demand of water and energy, the Company began to focus on water generation, water purification, and green energy production (Waste to Energy); acquiring and licensing the rights to sell and produce related technologies and securing through collaboration with Green Tech research and developments centers in Europe, the research and development, technical maintenance, education and training related to the technology.

During 2012, the Company agreed to issue an aggregate of 25,300,000 shares of common stock in connection with its acquisitions of Powermax Energy & Business Solution, Inc. ("Powermax Energy"), Powermax Green Technologies, LLC ("Powermax Green Technologies"), Green Environmental Management LLC ("GEM"); Swiss Green Solutions, Srl ("Swiss Green Solutions") and International Supply & Support-African Sunlight-Solstrom ("African Sunlight"). The latter entities were inactive and except for "African Sunlight" were acquired from current officers and directors of the Company; consequently, any net assets acquired were recorded at a nominal amount, which approximated the transferor's historical cost basis.

F-6

Table of Contents

Eurosport Active World Corp.

Notes to Consolidated Financial Statements

(Continued)

Note 2. Summary of Significant Accounting Policies


Principles of Consolidation


The consolidated financial statements include the accounts of EAWCEurosport Active World Corp. and its wholly ownedwholly-owned subsidiaries Powermax Energy, Powermax Green Technologies, GEM, Swiss Green Solutions and African Sunlight. All significant intercompanyinter-company transactions and accounts have been eliminated in consolidation.


Use of Estimates


The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. Estimates which are particularly significant to the consolidated financial statements include estimates relating to the determination of impairment of assets, assessment of going concern, the useful life of property and equipment, the determination of the fair value of stock-based payments,compensation, and the recoverability of deferred income tax assets.


Development Stage Company

Effective June 10, 2014, the Financial Accounting Standards Board (“FASB") changed its reporting requirements with respect to Development Stage Entities with the issuance of ASU 2014-10. As a result, certain additional disclosures, previously applicable under ASC 915-205 "Development Stage Entities", will no longer be required for annual reporting periods beginning after December 15, 2014 for public entities. Since the literature does permits early adoption of these new provisions, the Company has elected early adoption for all years presented. Consequently, the Company does not present results of operations and changes in equity since inception and does not identify its financial statements as those of a development stage company.

Cash and Cash Equivalents


The CompanyCorporation considers short-term interest bearinginterest-bearing investments with initial maturities of three months or less to be cash equivalents. The Company has no cash equivalents at December 31, 20142017 and 2013.2016.


Property and Equipment

Property and equipment consists of furniture and office equipment, and is stated at cost less accumulated depreciation. Depreciation is determined by using the straight- line method over the estimated useful lives of the related assets, generally five to seven years.

Long-Lived Assets

In accordance with Financial Accounting Standard Board ("FASB") Accounting Standards Codification ("ASC") Topic 360 "Property, Plant, and Equipment," the Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. There were no impairment charges during the years ended December 31, 2014 and 2013.

Fair Value of Financial Instruments


The fair values of the Company'sCorporation’s assets and liabilities that qualify as financial instruments under FASB ASC Topic 825, "Financial“Financial Instruments," approximate their carrying amounts presented in the accompanying financial statements at December 31, 20142017 and 2013.2016.


Income taxesTaxes


Income taxes are accounted for under the asset and liability method as stipulated by ASC 740, "Accounting“Accounting for Income Taxes"Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use of the valuation allowance. A valuation allowance is applied when in management'smanagement’s view it is more likely than not (50%) that such deferred tax will not be utilized.

F-7

Table of Contents

Eurosport Active World Corp.

Notes to Consolidated Financial Statements

(Continued)

Note 2. Summary of Significant Accounting Policies (continued)

Income taxes (continued)


ASC 740 provides interpretative guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In the unlikely event that an uncertain tax position exists in which the CompanyCorporation could incur income taxes, the CompanyCorporation would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. A liability for uncertain tax positions would then be recorded if the CompanyCorporation determined it is more likely than not that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable.




F-15



Eurosport Active World Corp.

Notes to the Consolidated Financial Statements

December 31, 2017 and 2016


Note 2.Summary of Significant Accounting Policies (continued)


As of December 31, 20142017 and 2013,2016, the CompanyCorporation does not believe any uncertain tax positions exist that would result in the CompanyCorporation having a liability to the taxing authorities. The Company'sCorporation’s policy is to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of interest expense and general and administrative expense, respectively, in the consolidated statementsstatement of operations. The Company'sCorporation’s tax returns for the years ended 2012 through 2014 are subject to examination by the federal and state tax authorities. The Corporation’s tax returns for the tax years ended 2017, 2016 and 2015 have not been filed.


Stock-Based Payments


The Company applies the fair value method of ASC 718, “Share Based Payment” in accounting for its stock based compensation. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Company values stock based compensation at the markets price for the Company’s common stock and other pertinent factors at the grant date.

The CompanyCorporation accounts for transactions in which services are received in exchange for stock based on the fair value of such services received from non-employees, in accordance with ASC 505-50 "Equity“Equity Based Payments to Non-employees."


The company measuresCorporation follows ASC 718, “Compensation – Stock Compensation”, in accounting for its stock-based payments. This standard states that compensation cost or the fairvalue of stock issued for services is measured at the grant date based on the value of the equity instruments issued based onstock granted and is recognized over the market price of the Company’s stock at the time servicesvesting or goods are provided.service period.


Loss Per Common Share


The CompanyCorporation accounts for earnings (loss) per share in accordance with FASB ASC Topic No. 260 - 10 "Earnings, Earnings Per Share",Share, which establishes the requirements for presenting earnings per share ("EPS"(“EPS”). FASB ASC Topic No. 260 - 10 requires the presentation of "basic"“basic” and "diluted"“diluted” EPS on the face of the statement of operations. Basic EPS amounts are calculated using the weighted-average number of common shares outstanding during each period. Diluted EPS assumes the exercise of all stock options, warrants and convertible securities having exercise prices less than the average market price of the common stock during the periods, using the treasury stock method. When a loss from operations exists, potential common shares are excluded from the computation of diluted EPS because their inclusion would result in an anti-dilutive effect on per share amounts.


For the years ended December 31, 20142017 and 2013,2016, an aggregate of 2,200,000 stock options to purchase shares of common stock were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive.


In addition, as discussed more fully in Note 6, convertible note holders have the option of converting their loans into common shares subject to the completion of an approved S-1 registration of its common shares. In addition, some lenders were also granted the right to purchase additional shares, which was also subject to the completion of an approved S-1 registration of its common shares. The above conversion feature represents a potential for 4,831,750 and 88,500 shares at December 31, 2017 and 2016, respectively. In addition, certain notes provided rights to purchase additional shares representing a potential for 0 and 430,000 shares at December 31, 2017 and 2016, respectively. The potential shares from both the conversion feature and the rights to purchase additional shares were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive. As of June 13, 2018, all rights to purchase additional shares have expired.


Related Party Transactions


A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. A related party is generally defined as:


(i)

any person that holds 10% or more of the Company’s securities including such person’s immediate families,

(ii)

the Company’s management,

(iii)

someone that directly or indirectly controls, is controlled by or is under common control with the Company, or

(iv)

anyone who can significantly influence the financial and operating decisions of the Company.





F-16



Eurosport Active World Corp.

Notes to the Consolidated Financial Statements

December 31, 2017 and 2016


Note 3.Recently Issued Accounting Standards


Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company'sCorporation’s future consolidated financial statements. The following are a summary of recent accounting developments.


In February 2015,January 2016, the FASB issued ASU 2015-02, "Consolidation (Topic 810)—AmendmentsNo. 2016-01, “Financial Instruments – Overall Recognition and Measurement of Financial Assets and Financial Liabilities” to improve the Consolidation Analysis ("ASU 2015-02")", which providesrecognition and measurement of financial instruments the new guidance on evaluating whether a reporting entity should consolidate certain legal entities. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities. Further, the amendments eliminate the presumption that a general partner should consolidate a limited partnership, as well as affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. ASU 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. A reporting entity may apply the amendments using a modified retrospective approach or a full retrospective application. The Company is currently evaluating the impact, if any, that adopting ASU 2015-02 will have on its consolidated financial statements.makes targeted improvements to existing U.S. GAAP by:


F-8

o

Requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income;

o

Requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes;

o

Requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements;

o

Eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities;

o

Eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and

o

Requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.

Table of Contents

Eurosport Active World Corp.

Notes to Consolidated Financial Statements

(Continued)

Note 3. Recently Issued Accounting Standards (Continued)


In May 2014,February 2016, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers ("ASU 2014-09")". The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: identify the contract(s) with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 supersedes the revenue-recognition requirements in ASC Topic 605, "Revenue Recognition", and most industry-specific guidance throughout the industry topics of the accounting standards codification. ASU 2014-09 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company is currently evaluating the approach for implementation and the potential impact of adopting this guidance on its consolidated financial statements.

There were various other accounting standards and interpretations issued in 2014, none of which are expected to have a material impact on the Company's financial position, operations or cash flows.

Note 4. Going Concern

The Company has accumulated operating losses since inception (June 24, 2005) through December 31, 2014 of $12,359,323. During the years ended December 31, 2014 and 2013, the Company incurred net losses of $1,193,414 and $7,736,865, respectively, and had working capital deficits of $2,061,033 and $1,880,717 as of December 31, 2014 and 2013, respectively.

These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern depends upon its ability to obtain funding to finance operating losses until the Company is profitable. The Company expects to be financed through equity capital, debt financing, or from deposits related to purchases orders on proposals pending customer acceptance.

In the event the Company does not generate sufficient funds from issuance of common stock, debt financing or purchase orders, it may be unable to fully implement its business plan and pay its obligations as they become due, any of which circumstances would have a material adverse effect on its business prospects, financial condition, and results of operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Note 5. Property and Equipment, net

Property and equipment, net at December 31, 2014 and 2013 consists of the following:

  2014  2013 
Furniture and fixtures $7,085  $7,085 
Office equipment  18,968   18,768 
Less: Accumulated depreciation  10,308   5,112 
  $15,745  $20,741 

Depreciation expense was $5,196 and $5,094 for the years ended December 31, 2014 and 2013, respectively.

Note 6. Other assets, net

Other assets, net represent the unamortized cost of a vendor accreditation that allows the Company to supply green technologies to the United Nations members as well as other assets acquired from African Sunlight in 2012. These amounts are being amortized over the estimated useful lives of the assets which approximate 5 years The Company's other assets, net of accumulated amortization, was $25,700 and $35,700 at December 31, 2014 and 2013, respectively. Amortization expense related to these assets was $10,000 and $10,000 for the years ended December 31, 2014 and 2013, respectively.

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Table of Contents

Eurosport Active World Corp.

Notes to Consolidated Financial Statements

(Continued)

Note 7. Related Party Transactions and Balances

Due to officers

Amounts due to officers as of December 31, 2014 and 2013 are comprised of the following:

  2014  2013 
Ralph Hofmeier:      
Unsecured advances due to officer $24,161  $40,280 
Accrued salaries  425,000   275,000 
Total due to Ralph Hofmeier  449,161   315,280 
         
Irma Velazquez:        
Unsecured advances due to officer  40,109   43,707 
Accrued salaries  425,000   275,000 
Total due to Irma Velazquez  465,109   318,707 
  $914,270  $633,987 

Unsecured advances due to officers represent unreimbursed Company expenses paid by the officers on behalf of the Company. These advances are non-interest bearing and are due on demand.

Accrued salaries represent amounts accrued in accordance with the employment agreements for the Company's Chief Executive Officer and Chief Operating Officer (See Note 10).

Due to affiliate

Due to affiliate is comprised of the following as of December 31, 2014 and 2013:

  2014  2013 
       
Swiss Water Tech Research and Development, S.A.:      
Royalty fees under Technology Transfer and License Agreement $-   136,278 
International Service Contract fees  529,436   385,000 
  $529,436  $521,278 

Effective February 1, 2013, and as amended on June 29, 2015, the Company entered into an exclusive Technology Transfer Agreement and License Agreement (the "Technology Transfer and License Agreement") for a period of ten years with Swiss Water Tech Research & Development S.A. (SWATE), an entity owned and controlled by the Company's Chief Executive Officer and Chief Operating Officer who are the primary beneficiaries. Under the terms of the agreement, SWATE: (a) will transfer to the Company the license to manufacture products developed by SWATE; (b) all know-how and technical assistance necessary for the exploitation of their licensed patents and the manufacture of certain products; and (c) will grant the Company the use of certain related trademarks. If the Company generates revenue as a result of the products and licenses related to the Technology Transfer and License Agreement, the Company is to pay to SWATE a minimum annual royalty fee stipulated in the agreement plus five percent of revenue generated. Since the Company has not generated revenues, during 2013 the Company accrued the minimum fee of approximately $542,000 in accordance with the terms of the agreement. On April 15, 2015, SWATE agreed to waive licenses fees for 2014 and 2015.

As part of the exclusive Technology Transfer and License Agreement, on February 1, 2013, the Company was required to pay a non-refundable front-end fee of $6 million in exchange for the use of newly developed systems, concepts and license of patent and trademark. The Company satisfied the required payment through the issuance of 6 million shares of its common stock, valued at $1.00 per share. The value of the licensed technology rights acquired was recorded as an intangible asset and scheduled for amortization over the ten year life of the Technology Transfer and License Agreement. During 2013, the Company recognized amortization expense in the amount of $550,000. On December 31, 2013 the Company evaluated the unamortized asset for impairment and determined that due to its inability to secure revenue generating commercial contracts, the recoverability of this asset in future periods was doubtful. Accordingly, the Company fully impaired the remaining unamortized value of the front-end fee of $5,450,000.

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Table of Contents

Eurosport Active World Corp.

Notes to Consolidated Financial Statements

(Continued)

Note 7. Related Party Transactions and Balances (Continued)

Effective February 1, 2013, the Company also entered into an International Service Contract with SWATE (the "SWATE Service Contract"). Under this agreement, SWATE will provide operations management, engineering and technical services to the Company. The SWATE Service Contract has a term of five years, and provides for a monthly service fee of $35,000, plus out-of-pocket expenses. During 2014 and 2013, the Company has accrued $420,000 and $385,000, respectively, pursuant to this agreement.

On April 1, 2013, the Company signed an agreement with SWATE, which authorizes SWATE to collect on behalf of the Company, payments made by investors on sales of Company stock. According to the agreement, the proceeds collected by SWATE can be used by SWATE to pay down amounts due from the Company for royalties and or service fees pursuant to the above agreements. During the years ended December 31, 2014 and 2013, SWATE collected and applied against amounts due from the Company approximately $120,400 and $305,600 respectively from amounts received from investors.

SWATE is a Swiss research and development company with access to patent and certain scientific and technical resources. As a result of the above agreements, the Company has a variable implicit interest in SWATE, however it is not its primary beneficiary, does not provide any explicit or implied financial support and therefore does not consolidate SWATE's financial statements in its consolidated financial statements.

Due from affiliate

During 2014, the Company advanced funds to its affiliate, EAWC Tecnologias Verdes, S.A. The amounts advanced of $80,758, including interest, have been offset by an allowance for doubtful collection since the affiliate does not currently have the ability to generate revenues or repay the Company.

Note 8. Stockholders' Deficit

Set forth below are major stockholder transactions taking place during the years ended December 31, 2014 and 2013:

Stock Issued to officer for 2012 Acquisition of Swiss Green Solutions

During 2013, the Company issued common stock pursuant to its 2012 acquisition of Swiss Green Solutions, a corporation originally organized in Switzerland. In connection with this acquisition the Company acquired all of the ownership interest in Swiss Green Solutions from a related party in exchange for 8,000,000 shares of the Company's common stock valued at par. (See Note 1) The Company acquired Swiss Green Solutions to secure design patent No. 138'065 for the Solar Power Water Purification System and all related technical designs and materials. The net assets acquired were recorded at a nominal amount, which approximated the transferor's historical cost basis.

Stock issued to Finance Company in Contemplation of Financing

During November 2013, the Company issued 3,000,000 shares of stock to Dominion Asset Finance Corp. as collateral for equipment financing. The lease negotiations were terminated in 2014 and the shares were returned and cancelled by the Company.

Stock issued to Affiliate pursuant to Technology Transfer and License Agreement

In connection with the Technology Transfer and License Agreement (see Note 7), on February 1, 2013, the Company issued 6,000,000 shares of its stock to SWATE in exchange for licensed technology rights pursuant to the agreement. The stock issued was valued at $1.00.

Stock Issued for 2012 Acquisition of African Sunlight

During 2013, the Company issued common stock pursuant to its 2012 acquisition of African Sunlight, a corporation originally organized in Norway. In connection with this acquisition the Company acquired all of the ownership interest in African Sunlight in exchange for 50,000 shares of the Company's common stock valued at $1 per share. The Company acquired African Sunlight to secure a vendor accreditation that allows the Company to supply green technologies to the United Nations members. The purchase price was allocated entirely to the vendor accreditation based on a study conducted by management (see Note 6).

F-11

Table of Contents

Eurosport Active World Corp.

Notes to Consolidated Financial Statements

(Continued)

Note 8. Stockholders' Deficit (Continued)

Sale of Common Stock

During 2014 and 2013, the Company sold 3,531,713 and 1,689,916 shares of stock to various investors at prices ranging from $.05 to $2 and $.13 to $1 per share, respectively. Amounts raised by the Company pursuant to these sales amounted to $665,974 and $315,972 in 2014 and 2013, respectively.

Note 9. Stock Option Plan

On January 2, 2012, the Company's Board of Directors approved the creation of the 2012 Non-Qualified Stock Option Plan (the "2012 Plan"). The 2012 Plan provides for the issuance of incentive stock options to designated employees, certain key advisors and non-employees members of the Board of Directors with the opportunity to receive grant awards to acquire, in the aggregate, up to 5,000,000 shares of the Company's common stock.

A summary of information regarding the Company's common stock options outstanding is as follows:

        Weighted 
        Average 
     Weighted  Remaining 
  Number of  Average  Contractual 
  Shares  Exercise Price  Term (Years) 
Outstanding at December 31, 2012  2,200,000  $0.10   8 
Issued  -   -   - 
Exercised  -   -   - 
Outstanding at December 31, 2013  2,200,000   0.10   7 
Issued  -   -   - 
Exercised  -   -   - 
Outstanding at December 31, 2014  2,200,000  $0.10   6 

The above outstanding options were granted to a former Company executive. Of these options, 1,240,000 shares were vested and exercisable at December 31, 2012. During the years ended December 31, 2014 and 2013, the Company recognized stock-based compensation expense of approximately $12,000 and $12,000, respectively, related to stock options. The weighted-average grant date fair value of each option was estimated to approximate $.05 using the Black Scholes valuation methodology. As of December 31, 2014, there was approximately $24,000, of total unrecognized compensation costs related to non-vested stock options, which is to be recognized over the next 2 years.

The fair value of stock options granted of $0.05 per share was calculated using the Black-Scholes option pricing model based on the following assumptions; risk free interest rate of 1.89%, expected volatility of 317.38%, expected option terms of 9.08 years and no expected dividend yield.

Expected volatility is based on historical volatility of the Company and other comparable companies. Short Term U.S. Treasury rates were utilized. The expected term of the options was calculated using the alternative simplified method permitted by SAB 107, which defines the expected life as the average of the contractual term of the options and the weighted average vesting period for all option tranches.

F-12

Table of Contents

Eurosport Active World Corp.

Notes to Consolidated Financial Statements

(Continued)

Note 9. Stock Option Plan(Continued)

The following table summarizes the activity of non-vested employee stock options for the years ended December 31, 2013 and 2014:

  Number of
Non-Vested
Shares
  Weighted-
Average
Grant Date
Fair Value
 
Outstanding at December 31, 2012 960,000  $48,000 
Granted  -   - 
Vested  240,000   12,000 
Forfeited  -   - 
Outstanding at December 31, 2013  720,000   36,000 
Granted  -   - 
Vested  240,000   12,000 
Forfeited  -   - 
Outstanding at December 31 2014  480,000  $24,000 

Note 10. Commitments and Contingencies

Commitments

Technology Transfer and License Agreement with SWATE

As discussed on Note 7, effective February 1, 2013, the Company entered into a ten year Technology Transfer and License Agreement with SWATE. In accordance with the Technology Transfer and License Agreement, if the Company generates revenue as a result of the products and licenses related to the agreement, the Company is to pay SWATE an annual fee stipulated in the agreement plus 5% of revenue generated. If revenue is not generated, future minimum royalty fees are as follows: during the first year: $542,000; during the second year: $1,000,000; and during the third and succeeding years: $2,000,000. On April 15, 2015, SWATE agreed to waive licenses fees for 2014 and 2015.

Employment Agreements

The Company entered into employment agreements with its Chief Executive Officer, Mr. Ralph Hofmeier, and its Chief Operating Officer, Ms. Irma Velazquez (collectively the "Employment Agreements"), effective January 1, 2012. Under the Employment Agreements, the Company will pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the Company's Board of Directors. The Employment Agreements each have initial terms of ten (10) years and are automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew.

Contingencies

From time to time, the Company may be a defendant in pending or threatened legal proceeding arising in the normal course of its business. While the outcome and impact of currently pending legal proceedings cannot be predicted with certainty, the Company's management and legal counsel believe that the resolution of these proceedings through settlement or adverse judgment will not have a material adverse effect on its consolidated operating results, financial position or cash flows.

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Table of Contents

Eurosport Active World Corp.

Notes to Consolidated Financial Statements

(Continued)

Note 11. Income Taxes

The Company files a consolidated tax return. During 2014 and 2013, the Company incurred operating losses; consequently, there are no taxes due for these years.

A reconciliation of the differences between the effective income tax rate and the statutory federal tax rate for the years ended December 31, 2014 and 2013 are as follows:

  2014  2013 
Tax benefit at U.S. statutory rate  35.00%  35.00%
State taxes, net of federal benefit  3.63%  3.63%
Change in valuation allowance  (38.63%)  (38.63%)
   -%  -%

The tax effect of temporary differences that give rise to significant portions of the deferred tax assets at December 31, 2014 and 2013 consisted of the following:

Deferred Tax Assets 2014  2013 
       
Net Operating Losses Carryforward $1,642,147  $1,305,077 
Unpaid accruals  782,075   663,684 
Amortization  220,095   215,952 
Net Non-current Deferred Tax Asset  2,644,317   2,184,713 
Valuation Allowance  (2,644,317)  (2,184,713)
Total Net Deferred Tax Asset $-  $- 

As of December 31, 2014, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $4,300,000 that may be offset against future taxable income through 2031. Current tax laws limit the amount of losses available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax asset has been reported in the consolidated financial statements because the Company believes that there is a greater than 50% chance that short-term profitability will not be attained. Accordingly, the deferred tax assets have been offset by a valuation allowance of the same amount as of December 31, 2014 and 2013.

Note 12. Subsequent Events

Subsequent to December 31, 2014, the Company issued the following shares of common stock:

DescriptionNumber of Shares Issued
Stock issued for cash932,857
Stock issued for cash received in prior years900,000
Stock issued to officer9,000,000
Stock issued for services510,000
Total stock issued11,342,857

The Company received $252,500 for the stock issued for cash and $146,750 for stock issued for cash received in prior years. The stock issued to officer was granted as compensation to the Chief Operating Officer and it was valued at $0.10 per share, while the stock issued for services was granted to a consultant for $255,000 of services to be provided in 2015 and 2016. 

F-14

Table of Contents

Eurosport Active World Corp.

FINANCIAL STATEMENTS

(Unaudited)

TABLE OF CONTENTS

Page
Unaudited Financial Statements as of September 30, 2015 and December 31, 2014 and for the Nine Months Ended September 30, 2015 and 2014
Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014F-16
Condensed Consolidated Statements of Operations for the nine months ended September 30, 2015 and 2014F-17
Consolidated Statement of Changes In Stockholders’ Deficit for the Period January 1, 2014 trough September 30, 2015F-18
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014F-19
Notes to Condensed Consolidated Financial Statements (Unaudited)F-20 - F-27

F-15

Table of Contents

Eurosport Active World Corp.

Condensed Consolidated Balance Sheets

  September 30,  December 31, 
  2015  2014 
  (Unaudited)  (Audited) 
       
ASSETS
CURRENT ASSETS:      
Cash $12,461  $- 
Prepaid expenses and other current assets  132,149   1,498 
TOTAL CURRENT ASSETS  144,610   1,498 
         
PROPERTY  AND EQUIPMENT, NET  11,794   15,745 
OTHER ASSETS, NET  18,200   25,700 
         
TOTAL ASSETS $174,604  $42,943 
         
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:        
Accounts payable and accrued expenses $577,998  $496,075 
Due to affiliate  192,000   529,436 
Due to officers  1,125,178   914,270 
Stock subscribed  15,000   122,750 
TOTAL CURRENT LIABILITIES  1,910,176   2,062,531 
         
COMMITMENTS AND CONTINGENCIES        
         
STOCKHOLDERS' DEFICIT:        
Preferred stock, par value $.001 per share; 500,000,000,000 shares authorized, no shares issued and outstanding in September 30, 2015 and December 31, 2014, respectively 
 
 
 
 
-
 
 
 
 
 
 
 
-
 
 
Common stock, par value $.001 per share; 1,000,000,000 shares authorized, 87,201,863 and 75,506,308 shares issued and outstanding in September 30, 2015 and December 31, 2014, respectively 
 
 
 
 
87,202
 
 
 
 
 
 
 
75,506
 
 
Additional paid in capital  12,440,506   10,264,229 
Accumulated deficit  (14,263,280)  (12,359,323)
TOTAL STOCKHOLDERS' DEFICIT  (1,735,572)  (2,019,588)
         
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $174,604  $42,943 

See accompanying notes to the condensed consolidated financial statements (unaudited).

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Table of Contents

Eurosport Active World Corp.

Condensed Consolidated Statements of Operations

(Unaudited)

  For the Nine Months Ended 
  September 30, 
  2015  2014 
       
REVENUES $-  $- 
         
COST OF REVENUES  -   - 
         
GROSS PROFIT  -   - 
         
GENERAL and ADMINISTRATIVE EXPENSES        
         
Management fees to affiliate  315,000   315,000 
Officers compensation and payroll taxes  1,142,213   242,213 
Professional fees  325,235   153,275 
Bad debt  56,134   63,419 
Travel and entertainment  19,221   45,814 
Amortization of intangibles  7,500   7,500 
Advertising and other selling and marketing  4,646   9,527 
Other general and administrative expenses  34,577   79,151 
TOTAL GENERAL and ADMINISTRATIVE EXPENSES  1,904,526   915,899 
         
LOSS FROM OPERATIONS  (1,904,526)  (915,899)
         
OTHER INCOME (EXPENSE)        
Interest income (expense), net  569   (5,194)
TOTAL OTHER INCOME (EXPENSE)  569   (5,194)
         
LOSS BEFORE TAXES  (1,903,957)  (921,093)
         
TAXES  -   - 
         
NET LOSS $(1,903,957) $(921,093)
         
Loss per share - Basic and diluted $(0.02) $(0.01)
         
Weighted average number of shares outstanding - Basic and diluted  83,040,319   74,831,921 

See accompanying notes to the condensed consolidated financial statements (unaudited).

F-17

Table of Contents

Eurosport Active World Corp.

Consolidated Statement of Changes in Stockholders; Deficit

For the Period January 1, 2014 through September 30, 2015

        Additional     Total 
  Common Stock  Paid-in  Accumulated  Stockholders’ 
  Shares  Amount  Capital  Deficit  Deficit 
                
BALANCE AT JANUARY 1, 2014  74,713,192  $74,713  $9,266,920  $(11,165,909) $(1,824,276)
                     
Sale of common stock  3,531,713   3,532   662,442   -   665,974 
Common stock issued for services  146,000   146   145,854   -   146,000 
Common stock issued to settle liabilities  215,403   215   178,913   -   179,128 
Cancelation of stock issued to finance company in contemplation of financing  (3,000,000)  (3,000)  3,000   -   - 
Repurchase of common stock for cash  (100,000)  (100)  (4,900)  -   (5,000)
Options vesting to former officer  -   -   12,000   -   12,000 
Net Loss  -   -   -   (1,193,414)  (1,193,414)
BALANCE AT DECEMBER 31, 2014  75,506,308   75,506   10,264,229   (12,359,323)  (2,019,588)
                     
Sale of common stock  1,886,040   1,886   455,547   -   457,433 
Common stock issued for services  535,000   535   271,975   -   272,510 
Common stock issued to officer for services  9,000,000   9,000   891,000   -   900,000 
Options vesting to former officer  -   -   9,000   -   9,000 
Common stock issued tot satisfy obligations to SWATE, an affiliate  274,515   275   548,755       549,030 
Net Loss  -   -   -   (1,903,957)  (1,903,957)
BALANCE AT SEPTEMBER 30, 2015 (UNAUDITED)  87,201,863  $87,202  $12,440,506  $(14,263,280) $(1,735,572)

See accompanying notes to the condensed consolidated financial statements (unaudited).

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Table of Contents

Eurosport Active World Corp.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

  For the Nine Months Ended 
  September 30, 
  2015  2014 
       
CASH FLOW FROM OPERATING ACTIVITIES:      
NET LOSS $(1,903,957) $(921,093)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:        
Depreciation and amortization  11,451   11,397 
Bad debt expense  56,134   - 
Common stock issued for services  917,510   146,000 
Options vesting to former officer  9,000   9,000 
Amortization of advance of services rendered  127,500   - 
Changes in operating assets and liabilities:        
Prepaids and other current assets  (3,151)  (12,155)
Accounts payable and accrued expenses  81,923   108,314 
Due to affiliate  211,594   (80,841)
Due to officers  210,908   205,283 
Net cash used in operating activities  (281,088)  (534,095)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Advances to affiliate  (56,134)  - 
Net cash used in investing activities  (56,134)  - 
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Advances on stock subscribed  42,000   238,650 
Proceeds from the sales of common stock  307,683   316,475 
Net cash provided by financing activities  349,683   555,125 
         
NET CHANGE IN CASH  12,461   21,030 
         
CASH AT THE BEGINNING OF THE PERIOD  -   8,118 
CASH AT THE END OF THE PERIOD $12,461  $29,148 
         
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:        
Cash paid during the period for:        
Income taxes $-  $- 
Interest $-  $- 
NON-CASH INVESTING AND FINANCING TRANSACTION:        
Common stock issued to retire debt $-  $65,403 
Issuance of stock subscribed $149,750  $- 
Issuance of stock in advance of services rendered $255,000  $- 
Issuance of stock to satisfy obligations to affiliate (SWATE) $549,030  $- 

See accompanying notes to the condensed consolidated financial statements (unaudited).

F-19

Table of Contents

Eurosport Active World Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Incorporation, Reverse Merger and Nature of Operations

Eurosport Active World Corp. (formerly Eagle International Holdings Group Inc.”) (the “Company”, “EIH” or “EAWC”), was incorporated under the laws of the State of Florida on August 23, 2000. The Company was a shell entity that was in the market to merge with an operating company.

On March 17, 2008, EIH entered into an Agreement and Plan of Acquisition (the “Merger Agreement”) with Inko Sport America, LLC (“ISA”), a Florida privately-held limited liability company. In connection with the closing of the Merger Agreement, ISA merged with and into EIH effective May 07, 2008, with the filing of the Merger Agreement with the Florida Secretary of State.

Pursuant to the terms and conditions of the Merger Agreement:

As a precondition of the consummation of the merger transaction, a reverse stock split of EIH common stock was consummated on a one for 1,000 basis pursuant to which each 1,000 outstanding shares of EIH common stock was converted into one share of EIH common stock. After giving effect to the reverse stock split, the authorized capital stock of EIH immediately prior to the closing of the Merger Agreement consisted of one billion shares of EIH common stock, of which 106,214 shares (as a result of the reverse stock split) was issued and outstanding.
After the reverse stock split, the Company agreed to acquire 100% of the ownership interest in ISA, in exchange for the issuance of 20,500,000 shares of common stock (approximately 99% of the issued and outstanding common stock of the Company).
Concurrent with the closing of the Merger Agreement, 4,394,044 shares of common stock were issued to EIH’s majority shareholder and officer, for the satisfaction of obligations payable to him; and
Immediately after the closing of the Merger Agreement, ISA merged with EIH, and EIH adopted ISA’s business plan and changed its name to Eurosport Active World Corp. (“EAWC”). Further, upon completion of the merger, the prior officers and directors of EIH resigned and the current officers and directors of the Company were appointed to their positions.

This transaction was accounted for as a recapitalization effected by a share exchange, wherein ISA was considered the acquirer for accounting and financial reporting purposes.

ISA was a development stage company, incorporated on February 24, 2005 in the State of Florida. Through December 31, 2012, the Company had been primarily engaged in the promotion, development and commercialization of green technologies. In view of the increased demand of water and energy, the Company began to focus on water generation, water purification, and green energy production (Waste to Energy); acquiring and licensing the rights to sell and produce related technologies and securing through collaboration with Green Tech research and developments centers in Europe, the research and development, technical maintenance, education and training related to the technology.

During 2012, the Company agreed to issue an aggregate of 25,300,000 shares of common stock in connection with its acquisitions of Powermax Energy & Business Solution, Inc. (“Powermax Energy”), Powermax Green Technologies, LLC (“Powermax Green Technologies”), Green Environmental Management LLC (“GEM”); Swiss Green Solutions, Srl (“Swiss Green Solutions”) and International Supply & Support-African Sunlight-Solstrom (“African Sunlight”). The latter entities were inactive and except for “African Sunlight” were acquired from current officers and directors of the Company, consequently, any net assets acquired were recorded at a nominal amount, which approximated the transferor’s historical cost basis.

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Table of Contents

Eurosport Active World Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(continued)

Note 2. Summary of Significant Accounting Policies

Principles of2016-02, Consolidation

The condensed consolidated financial statements include the accounts of EAWC and its wholly-owned subsidiaries, Powermax Energy, Powermax Green Technologies, GEM, Swiss Green Solutions and African Sunlight. All significant inter-company transactions and accounts have been eliminated in consolidation.

Interim Condensed Consolidated Financial Statements

The interim condensed consolidated financial statements presented herein have been prepared pursuant to the rules and regulations of the US Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The interim condensed consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements. In the opinion of management, all adjustments (consisting only of those of a normal recurring nature) which are necessary to provide a fair presentation of financial position as of September 30, 2015 and the related operating results and cash flows for the interim periods presented have been made. The results of operations for the period presented are not necessarily indicative of the results to be expected for future periods or for the year ending December 31, 2015.

Use of Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. Estimates which are particularly significant to the consolidated financial statements include estimates relating to the determination of impairment of assets, the useful life of property and equipment, the determination of the fair value of stock-based payments, and the recoverability of deferred income tax assets.

Development Stage Company

Effective June 10, 2014, the Financial Accounting Standards Board (“FASB”) changed its reporting requirements with respect to Development Stage Entities with the issuance of Accounting Standards Update (“ASU”) 2014-10. As a result, certain additional disclosures, previously applicable under Accounting Standards Codification (“ASC”) 915-205 “Development Stage Companies”, will no longer be required for annual reporting periods beginning after December 15, 2014 for public entities. Since the literature does permits early adoption of these new provisions, the Company has elected early adoption for all periods presented. Consequently, the Company does not present results of operations and changes in equity since inception and does not identify its financial statements as those of a development stage company.

Property and Equipment

Property and equipment consists of furniture and office equipment, and is stated at cost less accumulated depreciation. Depreciation is determined by using the straight-line method over the estimated useful lives of the related assets, generally five to seven years.

Long-Lived Assets

The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. There were no impairment charges during the nine months ended September 30, 2015 and 2014.

Fair Value of Financial Instruments

The fair values of the Company’s assets and liabilities that qualify as financial instruments approximate their carrying amounts presented in the accompanying condensed consolidated financial statements at September 30, 2015 and December 31, 2014.

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Table of Contents

Eurosport Active World Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(continued)

Note 2. Summary of Significant Accounting Policies (continued)

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use of the valuation allowance. A valuation allowance is applied when in management’s view it is more likely than not (50%) that such deferred tax will not be utilized.

In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. A liability for uncertain tax positions would then be recorded if the Company determined it is more likely than not that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable.

As of September 30, 2015 and December 31, 2014, the Company does not believe any uncertain tax positions exist that would result in the Company having a liability to the taxing authorities. The Company’s policy is to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of interest expense and general and administrative expense, respectively, in the consolidated statements of operations. The Company’s tax returns for the years ended 2012 through 2014 are subject to examination by the federal and state tax authorities.

Stock-Based Payments

The Company applies the fair value method of ASC 718, “Share Based Payment” in accounting for its stock based compensation. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Company values stock based compensation at the markets price for the Company’s common stock and other pertinent factors at the grant date.

The Company accounts for transactions in which services are received in exchange for stock based on the fair value of such services received from non-employees, in accordance with ASC 505-50, "Equity Based Payments to Non-employees."

The Company measures the fair value of the equity instruments issued based on the market price of the Company’s stock at the time services or goods are provided.

Loss Per Common Share

Basic EPS amounts are calculated using the weighted-average number of common shares outstanding during each period.  Diluted EPS assumes the exercise of all stock options, warrants and convertible securities having exercise prices less than the average market price of the common stock during the periods, using the treasury stock method. When a loss from operations exists, potential common shares are excluded from the computation of diluted EPS because their inclusion would result in an anti-dilutive effect on per share amounts.

For the nine months ended September 30, 2015 and 2014, an aggregate of 2,200,000 stock options to purchase shares of common stock were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive.

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Table of Contents

Eurosport Active World Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(continued)

Note 3. Recently Issued Accounting Standards

Accounting standards promulgated by the FASB are subject to change.  Changes in such standards may have an impact on the Company’s future consolidated financial statements.  The following are a summary of recent accounting developments.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810)—Amendments to the Consolidation Analysis (“ASU 2015-02”2016-02”), which provides guidance on evaluating whether a reporting entity should consolidate certain legal entities. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities. Further, the amendments eliminate the presumption that a general partner should consolidate a limited partnership, as well as affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. ASU 2015-022016-02 is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. A reporting entity may apply the amendments using a modified retrospective approach or a full retrospective application.


On March 30, 2016, the FASB issued ASU No. 2016-09,Compensation – Stock Compensation(Topic 718): Improvements to Employee Share-Based Payment Accounting(“ASU 2016-09”). This update requires that all excess tax benefits and tax deficiencies arising from share-based payment awards should be recognized as income tax expense or benefit on the income statement. The Companyamendment also states that excess tax benefits should be classified along with other income tax cash flows as an operating activity. In addition, an entity can make an entity-wide accounting policy election to either estimate the number of awards expected to vest or account for forfeitures as they occur. The provisions of this update are effective for annual and interim periods beginning after December 15, 2016. Adoption of ASU 2016-09 will not have any impact on the Company’s consolidated financial statements.


In August 2016, the FASB issued ASU No. 2016-15,Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)(“ASU 2016-15”), which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Among other clarifications, the guidance requires that cash proceeds received from the settlement of corporate-owned life insurance (COLI) policies be classified as cash inflows from investing activities and that cash payments for premiums on COLI policies may be classified as cash outflows for investing activities, operating activities or a combination of both. The guidance is currentlyeffective for fiscal years beginning after December 15, 2017, with early adoption permitted. Retrospective application is required. The Corporation is evaluating the guidance and has not yet determined the impact if any, that adopting ASU 2015-02 will have on its consolidated financial statements.




F-17



Eurosport Active World Corp.

Notes to the Consolidated Financial Statements

December 31, 2017 and 2016


Note 3.  Recently Issued Accounting Standards (continued)


In May 2014,November 2016, the FASB issued ASU 2014-09, “Revenue from Contracts with CustomersAccounting Standards Update (“ASU”) No. 2016-17,Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU 2014-09”2016-17”). The core principleASU 2016-17 simplifies the presentation of ASU 2014-09 is that an entity should recognize revenue to depictdeferred income taxes by eliminating the transferseparate classification of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: identify the contract(s) with a customer; identify the performance obligationsdeferred income tax liabilities and assets into current and noncurrent amounts in the contract; determine the transaction price; allocate the transaction price to the performance obligationsconsolidated balance sheet statement of financial position. The amendments in the contract;update require that all deferred tax liabilities and recognize revenue when (or as)assets be classified as noncurrent in the entity satisfies a performance obligation. ASU 2014-09 supersedes the revenue-recognition requirementsconsolidated balance sheet. The amendments in ASC Topic 605, “Revenue Recognition”, and most industry-specific guidance throughout the industry topics of the accounting standards codification. ASU 2014-09 isthis update are effective for interim and annual reporting periods beginning after December 15, 2017.2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. Adopting ASU 2016-17 will have no effect on its financial statements.


In November 2016, the FASB issued ASU 2016-18 requiring that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described, as restricted cash would be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This amendment is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods. Early adoption is permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company is currently evaluating the approach for implementation and the potential impact of adopting this guidance on its consolidated financial statements.

Note 4. Going Concern


The Companynew guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. There were various other accounting standards and interpretations issued in 2016, none of which are expected to have a material impact on the Corporation’s financial position, operations or cash flows.


Note 4.Going Concern


The Corporation has accumulated operating losses since inception (June 24, 2005) through September 30, 2015 of $14,263,280.. During the nine monthsyears ended September 30, 2015December 31, 2017 and 2014,2016, the CompanyCorporation incurred net losses of $1,903,957$777,913 and $921,093,$897,474, respectively, and had working capital deficits of $1,765,566$3,651,153 and $2,061,033$2,873,240 as of September 30, 2015 and December 31, 2014,2017 and 2016, respectively.


These factors raise substantial doubt regarding the Company’sCorporation’s ability to continue as a going concern. The ability of the CompanyCorporation to continue as a going concern depends upon its ability to obtain funding to finance operating losses until the CompanyCorporation is profitable. The CompanyCorporation expects to be financed through equity capital, debt financing or from deposits related to future purchase orders.purchases orders on proposals pending customer acceptance.

 

In the event the CompanyCorporation does not generate sufficient funds from issuance of common stock, debt financing or purchase orders, it may be unable to fully implement its business plan and pay its obligations as they become due, any of which circumstances would have a material adverse effect on its business prospects, financial condition, and results of operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.




F-23

Table of ContentsF-18



Eurosport Active World Corp.

Notes to Condensedthe Consolidated Financial Statements

(Unaudited)

(continued)December 31, 2017 and 2016

 


Note 5.Related Party Transactions and Balances


Due to officers


Amounts due to officers as of September 30, 2015 and December 31, 20142017 and 2016 are comprised of the following:


 2015 2014 

 

2017

 

2016

 

Ralph Hofmeier:     

 

 

 

 

 

Unsecured advances due to officer $8,411  $24,161 

 

$

17,678

 

$

17,678

 

Accrued salaries  537,500   425,000 

 

 

875,000

 

 

 

725,000

 

Total due to Ralph Hofmeier  545,911   449,161 

 

 

892,678

 

 

 

742,678

 

        

 

 

 

 

 

Irma Velazquez:        

 

 

 

 

 

Unsecured advances due to officer  41,767   40,109 

 

38,490

 

38,573

 

Accrued salaries  537,500   425,000 

 

 

763,000

 

 

 

725,000

 

Total due to Irma Velazquez  579,267   465,109 

 

 

801,490

 

 

 

763,573

 

 $1,125,178  $914,270 

 

$

1,694,168

 

 

$

1,506,251

 


Unsecured advances due to officers represent unreimbursed CompanyCorporation expenses paid by the officers on behalf of the Company.Corporation. These advances are non-interest bearing and are due on demand.


Accrued salaries represent amounts accrued in accordance with the employment agreements for the Company’sCorporation’s Chief Executive Officer and Chief Operating Officer (See Note(see note 8).


Due to affiliate


Due to affiliate is comprised of the following as of September 30, 2015 and December 31, 2014:2017 and 2016:


 

 

2017

 

 

2016

 

Swiss Water Tech Research and Development, S.A.

 

 

 

 

 

 

Royalty fees under Technology Transfer and License Agreement

 

$

 

 

$

 

International Service Contract fees

 

 

712,070

 

 

 

712,070

 

 

 

$

712,070

 

 

$

712,070

 

  2015  2014 
Swiss Water Tech Research and Development, S.A.      
Royalty fees under Technology Transfer and License Agreement $-  $- 
International Service Contract fees  192,000   529,436 
  $192,000  $529,436 


Effective February 1, 2013, and as amended on June 29, 2015, the CompanyCorporation entered into an exclusive Technology Transfer Agreement and License Agreement (the “Technology Transfer and License Agreement”) for a period of ten years with Swiss Water Tech Research & Development S.A. (SWATE), an entity owned and controlled by the Company’sCorporation’s Chief Executive Officer and Chief Operating Officer who are the primary beneficiaries. Under the terms of the agreement, SWATE: (a) will transfer to the CompanyCorporation the license to manufacture products developed by SWATE; (b) all know-how and technical assistance necessary for the exploitation of their licensed patents and the manufacture of certain products; and (c) will grant the CompanyCorporation the use of certain related trademarks. If the CompanyCorporation generates revenue as a result of the products and licenses related to the Technology Transfer and License Agreement, the CompanyCorporation is to pay to SWATE a minimum annual royalty fee stipulated in the agreement plus five percent of revenue generated. Since the Corporation has not generated revenues, during 2013 the Corporation accrued the minimum fee of approximately $542,000 in accordance with the terms of the agreement. On April 15, 2015, SWATE agreed to waive licenses fees for the years ended December 31, 2014 and 2015, accordingly,2015. On January 29, 2016, SWATE agreed to waive licenses fees for the Company does not oweyears ended 2016 and 2017.




F-19



Eurosport Active World Corp.

Notes to the Consolidated Financial Statements

December 31, 2017 and 2016


Note 5.Related Party Transactions (continued)


As part of the exclusive Technology Transfer and License Agreement, on February 1, 2013, the Corporation was required to pay a non-refundable initial license feesfee of $6 million in exchange for the use of newly developed systems, concepts and license of patent and trademark. The Corporation satisfied the required payment in February 2013 through the issuance of 6 million shares of its common stock, valued at $1.00 per share. The value of the licensed technology rights acquired was recorded as an intangible asset and scheduled for amortization over the ten-year life of the Technology Transfer and License Agreement. During 2013, the Corporation amortized $550,000. On December 31, 2013 the Corporation evaluated the unamortized asset for impairment and determined that due to SWATE pursuantits inability to secure revenue generating commercial contracts, the recoverability of this agreement.asset in future periods was doubtful. Accordingly, the Corporation fully impaired the remaining unamortized value of the licensed technology rights of $5,450,000.


Effective February 1, 2013, the CompanyCorporation also entered into an International Service Contract with SWATE (the “SWATE Service Contract”). Under this agreement, SWATE will provide operations management, engineering and technical services to the Company.Corporation. The SWATE Service Contract has a term of five years, and provides for a monthly service fee of $35,000, plus out-of-pocket expenses. During 2017 and 2016, the nine months ended September 30, 2015Corporation has accrued $0 and 2014 the Company accrued $315,000. During the nine months ended September 30, 2015 the Company paid $687,436 ($138,406 in cash and $549,030 in common stock)$420,000, respectively, pursuant to this agreement.

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Table of Contents

Eurosport Active World Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(continued)

Note 5. Related Party Transactions and Balances (continued)


On April 1, 2013, the CompanyCorporation signed an agreement with SWATE, which authorizes SWATE to collect on behalf of the Company,Corporation, payments made by investors on sales of CompanyCorporation stock. According to the agreement, the proceeds collected by SWATE can be used by SWATE to pay down amounts due from the CompanyCorporation for royalties and or service fees pursuant to the above agreements. During the nine months ended September 30, 2015 and the yearyears ended December 31, 2014,2017 and 2016, SWATE collected and applied againstdid not collect any amounts due from the Company approximately $0 and $120,400 respectively from amounts received from investors.


On November 1, 2016, SWATE isand the Corporation executed a Swiss researchTermination of its International Services Contract effective from December 31, 2016. The termination cited default of important obligations, in particular the payment within an agreed period of time and development companythe person responsible for the Service Provider, would no longer be employed.


It was further agreed that the outstanding balance at December 31, 2016 of $712,070 would be settled with access to patents and certain scientific and technical resources. As a resultthe issuance of the above agreements, the Company has a variable implicit interest in SWATE, however it is not its primary beneficiary, does not provide any explicit or implicit financial support and therefore does not consolidate SWATE’s financial statements in its condensed consolidated financial statements.712,070 EAWC restricted common shares valued at $1.00 per share, which EAWC issued on February 2, 2018.


Due from affiliate


During the nine months ended September 30, 2015 and the year ended December 31,In August 2014, the Company advancedbegan advancing funds to its affiliate EAWC Technologias Verdes, S.A. The amounts(“EAWC-TV”). As of December 31, 2015, the Company had advanced $151,715. EAWC TV is an exclusive distributor of $56,134EAWC for the region of Mexico and $80,758, respectively,Latin America and also a provider of professional administration services to EAWC. During the year ended December 31, 2016, the Company advanced an additional $71,616 which includes $8,896 of accrued interest, bringing the total funds advanced to its affiliate at December 31, 2016 to $223,331. Due to uncertainties concerning the future of EAWC-TV’s operations, the advances made through 2016 have been partially offset by an allowance for doubtful collection sinceof $26,667 resulting in a net receivable of $196,664 at December 31, 2016. During 2017, its operations began to stabilize, and effective January 2017 the affiliate does not currentlyCompany engaged EAWC-TV to provide its management services, including disbursement processing for $25,000 per month totaling $300,000. Also during 2017, EAWC-TV processed $461,925 of cash proceeds received from EAWC convertible notes and disbursed $237,947 for EAWC operational expenses. The foregoing plus other small EAWC expenses brought the total due from EAWC-TV at December 31, 2017 to $155,790 which includes $21,377 of accrued interest which have also been partially offset by an allowance for doubtful collection of $39,148 resulting in a net receivable of $116,642 at December 31, 2017.


Accordingly, EAWC-TV has reduced its obligation to the Company from $223,331 at December 31, 2016 to $155,790 at December 31, 2017. These outstanding balances are partially reserved until EAWC-TV demonstrates the ability to generate revenues or repaysufficient and sustained revenue to assure full repayment. The funds advanced in 2017 and 2016 resulted in a bad debt expense of $0 for both periods.





F-20



Eurosport Active World Corp.

Notes to the Company.Consolidated Financial Statements

December 31, 2017 and 2016

 


Note 6. Stockholders’ Deficit Convertible Loans Payable


Common Stock

During the nine months ended September 30, 2015As of December 31, 2017 and 2016, the Company had issued 11,695,555 sharesin aggregate of $566,825 and $88,500, respectively, in convertible debentures. The convertible debentures are due on demand unsecured, have no maturity date and are generally non-interest bearing although some of the notes have 2% interest. The holders of the instrument have the option to convert these convertible debentures into common stock at conversion prices ranging from $1.00 to $.10 per share upon Securities Exchange Commission’s (SEC) approval and registration of the Corporation’s Form S-1 for one year after issuance. The Corporation plans to file the Form S-1 with the Securities Exchange Commission in 2018.


The above debentures were determined to be solely debt without an equity portion as follows:the Company has determined that these conversion options are not beneficial. As such, these convertible debentures have no equity portion and are presented as loans payables in the financial statements. The transaction price for these loans payable reflects the fair value of the instruments issued.


1,886,040 shares to various investors at prices ranging from $0.05 to $1 per share for a total of $457,433. Of the stock issued, $146,750 was received prior to December 31, 2014; $152,500 was collected during the three months ended March 31, 2015; $135,683 was collected during the three months ended June 30, 2015 and $22,500 was collected during the three months ended September 30, 2015.
535,000 shares to various consultants for services at $0.50 to $0.70 per share for a total of $272,510. The services are paid in advance and are rendered over 12 months commencing April 2015.
9,000,000 shares were issued to a founder and officer at $0.10 for a value of $900.000.
274,515 shares were issued to SWATE, an affiliate, during the three months ended September 30, 2015 in satisfaction of outstanding debt of $549,030.

Note 7. Stock Option Plan


On January 2, 2012, the Company’sCorporation’s Board of Directors approved the creation of the 2012 Non-Qualified Stock Option Plan (the “2012 Plan”). The 2012 Plan provides for the issuance of incentive stock options to designated employees, certain key advisors and non-employees members of the Board of Directors with the opportunity to receive grant awards to acquire, in the aggregate, up to 5,000,000 shares of the Company’sCorporation’s common stock.

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Table of Contents

Eurosport Active World Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(continued)

Note 7. Stock Option Plan (continued)


A summary of information regarding the Company’sCorporation’s common stock options outstanding is as follows for the periods presented:follows:


        Weighted 
        Average 
     Weighted  Remaining 
  Number of  Average  Contractual 
  Shares  Exercise Price  Term (Years) 
2015         
Outstanding at December 31, 2014  2,200,000   0.10   6.0 
Issued  -   -   - 
Exercised  -   -   - 
Outstanding at September 30, 2015  2,200,000  $0.10   5.3 
             
2014            
Outstanding at December 31, 2013  2,200,000  $0.10   7.0 
Issued  -   -   - 
Exercised  -   -   - 
Outstanding at September 30, 2014  2,200,000  $0.10   6.3 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

Weighted

 

 

Remaining

 

 

 

Number of

 

 

Average

 

 

Contractual

 

 

 

Shares

 

 

Exercise Price

 

 

Term (Years)

 

Outstanding at December 31, 2015

 

 

2,200,000

 

 

$

0.10

 

 

 

5.0

 

Issued

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

 

 

 

 

 

 

Outstanding at December 31, 2016

 

 

2,200,000

 

 

 

0.10

 

 

 

4.0

 

Issued

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

 

 

 

 

 

 

Outstanding at December 31, 2017

 

 

2,200,000

 

 

$

0.10

 

 

 

3.0

 


The above outstanding options were granted on January 1, 2012, to a former CompanyCorporation’s executive. Of theseThe options 1,900,000 sharesvest @ 20,000 options per month and 2,200,000 were vested and exercisable at September 30, 2015.December 31, 2017. During the nine monthsyears ended September 30, 2015December 31, 2017 and 2014,2016, the CompanyCorporation recognized stock-based compensation expense of approximately $9,000,$0 and $11,998, respectively, related to stock options. The weighted-average grant date fair value of each option was estimated to approximate $.05 per share$0.05 using the Black Scholes valuation methodology. As of September 30, 2015 and 2014,December 31, 2017, there was approximately $15,000 and $27,000 respectively of total$0, unrecognized compensation costs related to non-vested stock options, which is to be recognized over the next two years.options.


The fair value of stock options granted of $0.05 per share was calculated using the Black-Scholes option pricing model based on the following assumptions; risk free interest rate of 1.89%, expected volatility of 317.38%, expected option terms of 9.08 years and no expected dividend yield.


Expected volatility is based on historical volatility of the CompanyCorporation and other comparable companies. Short Term U.S. Treasury rates were utilized. The expected term of the options was calculated using the alternative simplified method permitted by ASC 718 (Stock-based compensation) , which defines the expected life as the average of the contractual term of the options and the weighted average vesting period for all option tranches.




F-26

Table of ContentsF-21



Eurosport Active World Corp.

Notes to Condensedthe Consolidated Financial Statements

(Unaudited)

(continued)December 31, 2017 and 2016

 


Note 7. Stock Option Plan (continued)


The following table summarizes the activity of non-vested employee stock options for the periods presented:years ended December 31, 2017 and 2016:


 Number of
Non-Vested Shares
 Weighted- Average
Grant Date Fair Value
 
2015        
Outstanding at December 31, 2014  480,000  $24,000 

 

Number of

 

Weighted-Average

 

 

Non-Vested
Shares

 

Grant Date
Fair Value

 

Outstanding at December 31, 2015

 

240,000

 

$

12,000

 

Granted  -   - 

 

 

 

Vested  180,000   9,000 

 

240,000

 

12,000

 

Forfeited  -   - 

 

 

 

 

 

 

Outstanding at September 30, 2015  300,000  $15,000 
        
2014        
Outstanding at December 31, 2013  720,000  $36,000 

Outstanding at December 31, 2016

 

 

$

 

Granted  -   - 

 

 

 

Vested  180,000   9,000 

 

 

 

Forfeited  -   - 

 

 

 

 

 

 

Outstanding at September 30, 2014  540,000  $27,000 

Outstanding at December 31, 2017

 

 

 

 

$

 


Note 8. Commitments and Contingencies


Commitments


AgreementsTechnology Transfer and License Agreement with SWATE


As discussed in Note 5, effective February 1, 2013, the CompanyCorporation entered into a ten year Technology Transfer and License Agreement with SWATE. In accordance with the Technology Transfer and License Agreement, if the CompanyCorporation generates revenue as a result of the products and licenses related to the agreement, the CompanyCorporation is to pay SWATE an annual fee stipulated in the agreement plus 5% of revenue generated. If revenue is not generated, future minimum royalty fees are as follows: during the first year: $542,000; during the second year: $1,000,000; and during the third and succeeding years: $2,000,000. On April 15, 2015,2016, SWATE agreed to waive licenses fees for 2014 and 2015. On February 1, 2013, the Company also entered into a five year international service agreement with2015 and on January 29, 2016, SWATE agreed to waive licenses fees for a monthly fee of $35,000, plus out-of-pocket expenses2016 and 2017.


Employment Agreements

 

The CompanyCorporation entered into employment agreements with its Chief Executive Officer, Mr. Ralph Hofmeier, and its Chief Operating Officer, Ms. Irma Velazquez (collectively the “Employment Agreements”), effective January 1, 2012. Under the Employment Agreements, the CompanyCorporation will pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the Company’sCorporation’s Board of Directors. The Employment Agreements each havehas initial terms of ten (10) years and areis automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew.


Lease


The Corporation leased US office space at 2000 Ponce de Leon Blvd. Coral Gables FL 33134 USA for monthly rent payments of $700 until March 1, 2016 when the lease was terminated. The Company then rented office space from its corporate counsel for $300 per month in Miami Florida. Rent was waived through July 2017. Rent expense in the years ending December 31, 2017 and 2016 amounted to $1,500 and $1,400 respectively.




F-22



Eurosport Active World Corp.

Notes to the Consolidated Financial Statements

December 31, 2017 and 2016

 


Note 8. Commitments and Contingencies (continued)


Contingencies


From time to time, the CompanyCorporation may be a defendant in pending or threatened legal proceedings arising in the normal course of its business. While the outcome and impact of currently pending legal proceedings cannot be predicted with certainty, the Company’sCorporation’s management and legal counsel believe that the resolution of these proceedings through settlement or adverse judgment will not have a material adverse effect on its consolidated operating results, financial position or cash flows.


Litigation


Aquasphere - There is a pending litigation based on the complaint filed by Aquasphere Greentech Solutions Pvt., Ltd against Powermax Green Technologies, LLC and Eurosport Active World Corp. The case No. 20148179-CA is pending in the Circuit Court of the Eleventh Judicial Circuit for Miami-Dade County, Florida. The plaintiff is alleging breach of contract date on March 24, 2011; for purchase of an AM65 water generator with a purchase price of $ 70,000.00, a deposit was received for a total of $42,000.00. Purchase contract clearly indicates that requires full payment for release of shipment. The plaintiff is seeking refund of deposits made. Legal counsel has filed answer to complain and discovery is in process and pending. On February 28, 2018 the case was dismissed without prejudice.


Norwood - Action proceeding on concluded litigation, Case Number 10-58982 CA 09 – Miami-Dade County, FL Circuit Court. Nick Norwood vs. Eurosport Active World Corp. and Ralph Hofmeier. The case is resolved. A stipulation for final judgement was entered into by the plaintiff, Nick Norwood and the Company and Ralph Hofmeier on November 2013 in the total amount (as of that date) of $107,872.38, which has been entered in the public records against the Company.


CocoGrove – The nature of the litigation was for breach of a lease agreement. This case is concluded with a judgement against the Company in July 2010 for $84,393 plus 6% interest. There have been no efforts to seek collection of this judgement. Management intends to settle this judgement when it is in a financial position to make a payment.


Note 9.  Subsequent EventsIncome Taxes


On December 22, 2017, the US Congress enacted the Tax Cuts and Jobs Act (Tax Reform Legislation), which made significant changes to US federal income tax law affecting us including a reduction in the corporate tax rate to 21% for tax years beginning with 2018. These changes will impact changes in our valuation allowance, components of our tax rate reconciliation and realization of loss carryforwards.


Deferred income taxes reflect the net tax effect of tax carry forward items and the temporary differences between the recognition of income and expenses for financial reporting purposes and for tax purposes.


The income tax (provision) benefit as of December 31, 2017 and 2016 are as follows:


 

 

2017

 

 

2016

 

Deferred tax assets

 

 

 

 

 

 

Federal

 

$

272,028

 

 

$

312,397

 

State

 

 

27,785

 

 

 

31,909

 

 

 

 

 

 

 

 

 

 

Total deferred tax assets

 

 

299,813

 

 

 

344,307

 

Valuation allowance

 

 

(299,813

)

 

 

(344,307

)

 

 

 

 

 

 

 

 

 

Net deferred tax assets

 

$

 

 

$

 


Net operating loss carry-forwards in the amount of approximately $7.6 million will expire beginning December 31, 2033.




F-23



Eurosport Active World Corp.

Notes to the Consolidated Financial Statements

December 31, 2017 and 2016

 


Note 9.  Income Taxes (continued)


The Company has evaluated these financial statements for subsequent events through February 12, 2016, the date these financial statements were available to be issued. Management is not aware of any events that have occurred subsequent to the balance sheet date that would require adjustment to or disclosurenet change in the financial statements.valuation allowance for the years ended December 31, 2017 and 2016 was an increase of $299,813 and $344,307, respectively


Note 10.  Subsequent Events


On February 2, 2018 the Company issued 712,070 restricted common shares valued at $1.00 per share in satisfaction of its outstanding obligation to SWATE. See Note 5


On April 25, 2018, EAWC-TV presented their monthly invoice for administrative services of $25,000 which was offset/paid on April 25, 2018 which exceeded the amount owed by EAWC-TV to EAWC at the time. Therefore, at that moment EAWC-TV no longer owed any funds to EAWC and since such time, EAWC owes money to EAWC-TV.





F-27

Table of Contents






 


EUROSPORT ACTIVE WORLD CORPORATIONCORP.

21,747,34821,747,352 SHARES OF COMMON STOCK

_____________________

 

PROSPECTUS

_____________________


YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

Until February 10, 2016, December __, 2018, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus.Prospectus. This is in addition to the dealer’sdealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.


The Date of Thisthis Prospectus is February 12, 2016 December ___, 2018

 

 

 

 

 





 

 

 

 

Table of Contents

 








PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS

 

Item 13. Other Expenses of Issuance and Distribution

 

Securities and Exchange Commission Registration Fee $220.05 

 

$

2,707.54

 

Transfer Agent Fees* $800.00 

 

$

800.00

 

Accounting fees and expenses* $3.000.00 

 

$

3,000.00

 

Legal fees and expenses* $3.500.00 

 

$

35,000.00

 

Blue Sky fees and expenses* $ 

 

$

 

Total* $7.520,05 

 

$

41,507.54

 

———————

* Estimated

 

Item 14. Indemnification of Directors and Officers.

 

Our directors and officers are indemnified as provided by the Florida corporate law and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act.Act of 1933, as amended (the “Securities Act”). Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SECSecurities and Exchange Commission (the “SEC”) such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

We have been advised that in the opinion of the SEC indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.

 

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Table of Contents

Item 15. Recent Sales of Unregistered Securities.

 

The Company claimed an exemption from the registration requirementsIn 2015, we issued a total of 11,695,555 shares, with 1,886,040 shares being issued in exchange for cash totaling $1,278,973 and 457,433; 274,515 shares issued in satisfaction of 549,030 of outstanding debt and 535,000 shares being issued in consideration of services rendered, which was negotiated on a private basis with each of the Securities Actindividuals and/or entities that provided such services. The breakdown of 1933, as amended (the “Act”)11,695,555 shares issued in 2015 was:


1,886,040 shares issued to investors for these securities pursuantcash

   274,515 shares issued to SWATE in lieu of cash payment on outstanding balance due

   510,000 shares to Pillow Hog Ventures for services rendered

     25,000 shares to Green Dimensions for consulting services rendered

9,000,000 shares to Irma Velazquez to respond to management’s intent, equal ownership.


These issuances were exempt from registration under Section 4(2)4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactionthereunder.


We did not involve a public offering, the Investor was a “sophisticated investor”, an “accredited investor” and/issue any unregistered securities in 2016 or qualified institutional buyers, the Investor had access to information about2017, and between January 1, 2018 and February 1, 2018, and between February 3, 2018 and December 14, 2018, we did not issue any unregistered securities.

On February 2, 2018 the Company andissued 712,070 restricted common shares valued at $1.00 per share in satisfaction of its investment, the Investor took the securities for investment and not resale, and we took appropriate measuresoutstanding obligation to restrict the transfer of the securities

Between 2012 and 2015 we issued a total of 28,126,863 shares to a total of 67 shareholders in exchange for cash, services and products. These issuances wereSWATE. This issuance was exempt from registration under Section 4(2).4(a)(2) of the Securities Act.





II-1



 

Table Regarding Recent Sales of Unregistered Securities

Date of Sale(1) Title of Security Amount of
Securities Sold/Issued
  Aggregate
Offering Price(2)
  Consideration
Other Than
Cash(3&4)
 Total Value of Services
Rendered(5)
 
              
2012 Common Stock  25,646,197  $275,170  Services Assets $143,670 
             $50,000 
                 
2013 Common Stock  18,772,527  $6,6569,673  Services Assets $33,668 
             $6,050,000 
                 
2014 Common Stock  793,116  $983,603  Services Assets $325,128 
             $0 
                 
2015 Common Stock  11,695,555  $1,278,973  Services Assets $272,510 
             $549,030 

(1)The sale of unregistered securities occurred in a series of transactions in the years 2012, 2013, 2014 and 2015. Accordingly, we have included the information required by Item 701 by totals for such periods as suggested by the Instructions to Item 701.
(2)The number of shares of our common stock that were issued for cash is: 153,197 - 2012; 1,689,916 - 2013; 431,713 - 2014; and 1,886,040 - 2015.

(3)The number of shares of our common stock that were issued for services rendered to the Company is: 193,000 - 2012; 32,611 – 2013; 361,403 - 2014; and 9,809,515 - 2015.
(4)The number of shares of our common stock that were issued for assets rendered to the Company is: 25,300,000 - 2012; 17,050,000 – 2013; 0 - 2014; and 274,515 - 2015.
(5)The value of the services rendered in exchange for the issuance of our shares of common stock was negotiated on a private basis with each of the individuals and/or entities that provided such services.

Item 16. Exhibits and Financial Statement Schedules.

 

Exhibit Number

Description

3.1

Articles of Incorporation (Previously file)and Amendments thereto (incorporated by reference to Exhibit 3.1 of the registrant’s registration statement on Form S-1 filed with the Commission on August 1, 2018).

3.2

By-Laws (Previously file)(incorporated by reference to Exhibit 3.2 to the registrant’s registration statement on Form S-1 filed with the Commission on October 7, 2015).

5.1

4.1

Opinion

Form of Hunt Law – Law OfficeCommon Stock Certificate (incorporated by reference to Exhibit 4.1 of Clifford J. Hunt, P.A. (Previously file)the registrant’s registration statement on Form S-1 filed with the Commission on August 1, 2018).

10.01

5.1

Legal opinion of Jonathan D. Leinwand, P.A. (incorporated by reference to Exhibit 5.1 of the registrant’s registration statement on Form S-1 filed with the Commission on November 13, 2018).

10.1

License Agreement with Swiss Water Tech Research and Development S.A. (Previously file)(incorporated by reference to Exhibit 10.1 to the registrant’s registration statement on Form S-1 filed with the Commission on October 7, 2015).

10.02

10.2

International Services Contract with Swiss Water Tech Research and Development S.A. (Previously file)(incorporated by reference to Exhibit 10.2 to the registrant’s registration statement on Form S-1 filed with the Commission on October 7, 2015).

10.03

10.3

Employment Agreement with Ralph M. Hofmeier (Previously file)(incorporated by reference to Exhibit 10.3 to the registrant’s registration statement on Form S-1 filed with the Commission on October 7, 2015).

10.04

10.4

Employment Agreement with Irma Velazquez (Previously file)(incorporated by reference to Exhibit 10.4 to the registrant’s registration statement on Form S-1 filed with the Commission on October 7, 2015).

23.1

10.5

Amendment dated June 29, 2015 to License Agreement with Swiss Water Tech Research and Development S.A. (incorporated by reference to Exhibit 10.5 of the registrant’s registration statement on Form S-1 filed with the Commission on August 1, 2018).

10.6

Amendment dated January 29, 2016 to License Agreement with Swiss Water Tech Research and Development S.A. (incorporated by reference to Exhibit 10.6 of the registrant’s registration statement on Form S-1 filed with the Commission on August 1, 2018).

10.7

Termination of International Services Contract with Swiss Water Tech Research and Development S.A. dated November 1, 2016 (incorporated by reference to Exhibit 10.7 of the registrant’s registration statement on Form S-1 filed with the Commission on August 1, 2018).

10.8

Management and Administrative Services Agreement with EAWC Tecnologias Verdes SA DE CV dated January 1, 2017 (incorporated by reference to Exhibit 10.8 of the registrant’s registration statement on Form S-1 filed with the Commission on August 1, 2018).

10.9

Non-Qualified Stock Option Agreement for Brian Misiunas (incorporated by reference to Exhibit 10.9 of the registrant’s registration statement on Form S-1 filed with the Commission on August 1, 2018).

10.10

March 15, 2015 Commercial Agreement with EAWC Tecnologias Verdes SA de CV (incorporated by reference to Exhibit 10.10 of the registrant’s registration statement on Form S-1/A filed with the Commission on October 15, 2018).

10.11

March 15, 2017 revised agreement with EAWC Tecnologias Verdes SA de CV (incorporated by reference to Exhibit 10.11 of the registrant’s registration statement on Form S-1/A filed with the Commission on October 15, 2018).

10.12

November 2nd, 2017, contract Award Confirmation for Arriyadh Development Authority (ADA) of Saudi Arabia (incorporated by reference to Exhibit 10.12 of the registrant’s registration statement on Form S-1/A filed with the Commission on October 15, 2018).

10.13

March 23, 2017 representation letter agreement with HIS WILL Innovations, LTD a South Africa based company (incorporated by reference to Exhibit 10.13 of the registrant’s registration statement on Form S-1/A filed with the Commission on October 15, 2018).

10.14

Termination Agreement with SWATE of the License and Research Agreement (incorporated by reference to Exhibit 10.14 of the registrant’s registration statement on Form S-1/A filed with the Commission on October 15, 2018).

10.15

Convertible Debentures (incorporated by reference to Exhibit 10.15 of the registrant’s registration statement on Form S-1/A filed with the Commission on October 15, 2018).

21.1

List of Subsidiaries (incorporated by reference to Exhibit 21.1 of the registrant’s registration statement on Form S-1 filed with the Commission on August 1, 2018).

23.1

Consent of Mallah Furman, Independent Registered Public Accounting FirmMaloneBailey

23.2

Consent of Counsel (to be filed asJonathan D. Leinwand, P.A. (included in Exhibit 5.1).

 

II-2

Table of Contents



II-2



 


Item 17. Undertakings.

 

(A) The undersigned Registrant hereby undertakes:

 

(1) To file, during any period in which offers, or sales are being made, a post-effective amendment to this registration statement:

 

i. To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

 

ii. To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.


iii. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 

 

(4) That, for purposes of determining liability under the Securities Act to any purchaser: (i) If the registrant is relying on Rule 430B: (A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and (B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) (§ 230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) (§ 230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. (ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. (b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be



II-3




governed by the final adjudication of such issue. (c) The undersigned registrant hereby undertakes that: (1) For the purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) or under the securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities as that time shall be deemed to be the initial bona fide offering thereof.


(5) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.



II-4




SIGNATURES

 

II-3

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 4 to the registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized in the State of Florida, on February 12, 2016. December 14, 2018.

 

EUROSPORT ACTIVE WORLD CORPORATIONCORP.

By:

/s/ Ralph Hofmeier

Ralph Hofmeier

President and Chief Executive Officer
(Principal Executive Officer)

 

Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 4 to the registration statement on Form S-1 has been signed by the following persons in the capacities indicated on February 12, 2016. December 14, 2018.

 

Signature

Signature

Title

/s/ Ralph Hofmeier

President, Chief Executive Officer, Director, and

Ralph Hofmeier

Chairman (Principal Executive Officer)

/s/ Irma Velazquez

Chief Operating Officer Director(Principal Financial Officer and

Irma Velazquez

Principal Accounting Officer), Director and Vice-Chairman

 

 

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II-5