WATAIRE INTERNATIONAL, INC. FORM 10-K (Annual Report) Filed 07/14/10 for the Period Ending 03/31/10 Address 3rd Floor, 21900 Burbank Blvd. Woodland Hills, CA 91367 Telephone 877-602-8985 CIK 0001127007 Symbol WTAR SIC Code 4941 - Water Supply Industry Conglomerates Sector Conglomerates Fiscal Year 03/31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION ~~WASHINGTON,~~

Washington, D.C. 20549

FORM 10-K ~~(X) ANNUAL REPORT UNDER SECTION~~

☒ Quarterly Report Pursuant To Section 13 ORor 15(d) ~~OF THE SECURITIES EXCHANGE ACT OF~~of the Securities Exchange Act Of 1934

For the ~~fiscal year~~quarterly period ended March 31, ~~2010 OR ( ) TRANSITION REPORT UNDER SECTION~~2013

☐ Transition Report Under Section 13 ~~OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF~~or 15(d) of the Securities Exchange Act Of 1934

For the transition period from ~~________to ______~~ ______________ to ______________

Commission File ~~Number : 000 - 49955 WATAIRE INTERNATIONAL,~~Number: 000-49955

WATAIR INC.

(formerly Wataire International , Inc.)

(Exact name of registrant as specified in its charter ) Washington 91-2060082 ------------------------------- ---------------------------- ( State or other jurisdiction of ( I.R.S. Empl. Ident. No. ) incorporation or organization ) 3rd Floor, 21900 Burbank Blvd, Woodlandcharter)

Washington

91-2060082

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

#134-9663 Santa Monica Blvd.,

Beverly Hills, ~~California 91367 ------------------------------------------------------------~~ CA 90210

(Address of principal executive offices, ~~) (~~including Zip ~~Code )~~ Code)

877-602-8985 ~~-------------------------------~~

( ~~Issuer's~~Issuer’s telephone number, ) including area code)

Not applicable

(Former name or former address if changed since last report)

Securities registered ~~under~~pursuant to Section 12(b) of the ~~Exchange Act : None Securities registered under Section 12(g) of the Exchange Act :- Common Stock, $0.0001 par value Check~~Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		N/A		N/A

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

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T ( (§232.405 of this ~~chapter )~~chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ~~( )~~☒ No ( ) Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K ( X ) ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, a smaller reporting company or ~~a small reporting~~an emerging growth company. See the definitions of ~~"large~~“large accelerated filer,~~" "accelerated~~” “accelerated filer,"” “non-accelerated filer,” “smaller reporting company” and ~~"small reporting company"~~“emerging growth company” in Rule ~~12B-2~~12b-2 of the Exchange Act. ~~(Check one) : Large accelerated filer ( ) Accelerated filer ( ) Non-accelerated filer ( )~~

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

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

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

State the number of shares outstanding of each of the ~~voting and non-voting~~issuer’s classes of common equity, ~~held by non-affiliates~~ as of the ~~last business day of the registrant's most recently completed second fiscal quarter was $8,261,662. At July 2010 the Registrant had outstanding 98,710,123~~latest practicable date: 129,716,886 shares of ~~Common Stock, $0.0001 par value per share. WATAIRE INTERNATIONAL, INC. FORM 10-K For the Fiscal Year Ended March 31, 2010~~ common stock as of May 15, 2011.

TABLE OF CONTENTS PART I Page Item 1 Business 6-12 Item 1A Risk Factors 12-18 Item 1B Unresolved Staff Comments 18 Item 2 Properties 19 Item 3 Legal Proceedings 19 Item 4 Submission of Matters to a Vote of 19 Security Holders PART II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 19-22 Item 6 Selected Financial Data 22-23 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 23-26 Item 7A Quantitative and Qualitative Disclosures About Market Risk 26-27 Item 8

		Page
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements	F-1
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operation	4
Item 3	Quantitative and Qualitative Disclosures About Market Risk	6
Item 4	Controls and Procedures	6

PART II	OTHER INFORMATION
Item 1	Legal Proceedings	7
Item 1A	Risk Factors	7
Item 2	Unregistered Sales of equity Securities and Use of Proceeds	7
Item 3	Defaults Upon Senior Securities	7
Item 4	Mine Safety Disclosures	7
Item 5	Other Information	7
Item 6	Exhibits	8
Item 7	Signatures	9

Cautionary Note Regarding Forward Looking Statements and Supplementary Data 27 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 27 Item 9A Controls and Procedures 27-28 Item 9B Other Information 28 PART III Item 10 Directors, Executive Officers and Corporate Governance 29-31 Item 11 Executive Compensation 31-32 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 32-33 Item 13 Certain Relationships and Related Transactions and Director Independence 34-35 Item 14 Principal Accounting Fees and Services 35-36 PART IV Item 15 Exhibits, Financial Statement Schedules 36-55 Signatures PART I

This ~~Annual Report on Form 10-K~~quarterly report contains forward-looking statements ~~that have been made pursuant to~~within the ~~provisions~~meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of ~~1934,~~1934. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “should,” “could,” “will,” “plan,” “future,” “continue, “and other expressions that are predictions of or indicate future events and ~~the Private Securities Litigation Reform Act~~trends and that do not relate to historical matters identify forward-looking statements. These forward-looking statements are based largely on our expectations or forecasts of ~~1995~~future events, can be affected by inaccurate assumptions, and ~~concern matters that involve~~are subject to various business risks and known and unknown uncertainties, ~~that~~a number of which are beyond our control. Therefore, actual results could differ materially from the forward-looking statements contained in this document, and readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs. There can be no assurance that the forward-looking statements contained in this document will, in fact, transpire or prove to be accurate. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by any forward-looking statements.

Important factors that may cause the actual results to differ ~~materially~~ from ~~historical results or from those projected in~~ the forward-looking ~~statements. Discussions containing forward-looking~~ statements, ~~may be found in~~projections or other expectations include, but are not limited to, the material set forth under "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in other sections of this Form 10-K. Words such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" or similar words are intended to identify forward-looking statements, although not all forward-looking statements contain these words. following:

	●	risk that we will not be able to remediate identified material weaknesses in our internal control over financial reporting and disclosure controls and procedures;

	●	risk that we fail to meet the requirements of the agreements under which we acquired our business interests, including any cash payments to the business operations, which could result in the loss of our right to continue to operate or develop the specific businesses described in the agreements;

	●	risk that we will be unable to secure additional financing in the near future in order to commence and sustain our planned development and growth plans;

	●	risk that we cannot attract, retain and motivate qualified personnel, particularly employees, consultants and contractors for our operations;

	●	risks and uncertainties relating to the various industries and operations we are currently engaged in;

	●	results of initial feasibility, pre-feasibility and feasibility studies, and the possibility that future growth, development or expansion will not be consistent with our expectations;

	●	risks related to the inherent uncertainty of business operations including profit, cost of goods, production costs and cost estimates and the potential for unexpected costs and expenses;

	●	risks related to commodity price fluctuations;

	●	the uncertainty of profitability based upon our history of losses;

	●	risks related to failure to obtain adequate financing on a timely basis and on acceptable terms for our planned development projects;

	●	risks related to environmental regulation and liability;

	●	risks related to tax assessments;

	●	other risks and uncertainties related to our prospects, properties and business strategy.

Although we believe that ~~our opinions and~~the expectations reflected in the forward-looking statements are reasonable, ~~as of the date of this Report,~~ we cannot guarantee future results, levels of activity, performance or ~~achievements, and our actual results may differ substantially from~~achievements. You should not place undue reliance on these forward-looking statements, which speak only as of the ~~views and expectations set forth in~~date of this ~~Annual Report on Form 10-K. We expressly disclaim any intent or obligation~~report. Except as required by law, we do not undertake to update or revise any ~~forward- looking~~of the forward-looking statements ~~after the date hereof~~ to conform ~~such~~these statements to actual results, whether as a result of new information, future events or otherwise.

As used in this quarterly report, “Watair Inc,” the “Company,” “we,” “us,” or “our” refer to Watair Inc formerly Wataire International Inc., unless otherwise indicated.

VYRE NETWORK

(formerly Wataire International, Inc.)

March 31, 2013, and 2012

INDEX

	Page
PART I- FINANCIAL INFORMATION	F-1
ITEM 1. Financial Statements	F-1
Consolidated Balance Sheets as of March 31, 2013, and March 31, 2012	F-2
Consolidated Statements of Operations for the year ended March 31, 2013, and 2012	F-3
Consolidated Statements of Stockholders’ Equity for the year ended March 31, 2013, and 2012	F-4
Consolidated Statements of Cash Flows for the year ended March 31, 2013, and 2012	F-5
Notes to Consolidated Financial Statements	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

VYRE NETWORK. (formerly Wataire International, Inc.)

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Vyre Network and its subsidiaries (the ‘Company’) as of December 31, 2013, and 2012, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2013, and 2012, and the related notes (collectively referred to as the “financial statements”). In our ~~opinions or expectations. Readers should carefully review and consider~~opinion, the ~~various disclosures made by us~~consolidated financial statements present fairly, in ~~this Report, set forth in detail in Part I, under~~all material respects, the ~~heading "Risk Factors," as well as those additional risks described in other documents we file from time to time with the Securities and Exchange Commission, which attempt to advise interested parties~~financial position of the ~~risks, uncertainties,~~Company as of December 31, 2013, and ~~other factors that affect our business. We undertake no obligation to publicly release~~ the results of ~~any revisions to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after~~its operations and its cash flows for the date of such statements. 5 Item 1. Business. General Wataire International, Inc. ("Wataire," the "Company," "us," or "we") was incorporated under the laws of the State of Washington on August 17, 2000 and has been a reporting issueryear ended December 31, 2013, in conformity with accounting principles generally accepted in the United States Securities and Exchange Commission (the "SEC") since November 2000. On October 3, 2006, the Company changed its name to Wataire International, Inc. Previously on August 26, 2003, the Company had changed its name from Corporate Development and Innovation, Inc. to Cimbix Corporation. The Company's common stock traded in the Over-the-Counter Bulletin Board Market under the ticker symbol "WTAR". The Company's business is still in its early developmental and promotional stages and to date, the Company's primary activities have involved significant re-structuring and re- organization. After involvement in Petsmobility and MBG businesses, in 2006 the Company entered into license agreement with Ecosafe Innotech Inc., (formerly Wataire Ecosafe Technologies Inc., formerly Wataire Industries Inc.)("Ecosafe") to market and distribute their commercial water generation machines. On April 25, 2007, we entered into an agreement with Ecosafe, Canadian Dew Technologies Inc. ("CanDew"), Terrence Nylander and Roland Wahlgren to acquire all of the intellectual property ("IP") relating to a water treatment process and devices for water-from-air machines. The agreements previously executed between the Company and Ecosafe have been terminated and cancelled and forms part of the current agreement. Mr. Nylander was, at the time, an officer and director of the Company. Consideration for the purchase of the IP was $469,485 (CAD $500,000), which was paid at March 31, 2007 by the issuance of 4,800,000 shares of common stock of the Company, the agreement by the Company to pay a royalty equal to 5% of the gross profits from the sales of all apparatus or products relating to the IP for a period of 30 years from April 25, 2007 and a royalty equal to 5% of gross licensing revenues on the IP. This consideration is in addition to the 11,000,000 shares of common stock previously issued for the license rights. The IP acquisition was completed in July 2007. 6 The IP acquired by the Company includes all copyrights, patent rights, trade secret rights, trade names, trademark rights, process information, technical information, contract rights and obligations, designs, drawings, inventions and all other intellectual and industrial property rights of any sort related to or associated with the water treatment process and devices for water-from-air machines invention. LIQUIDITY AND FINANCIAL RESOURCES Through March 31, 2010, the Company had not carried on any significant operations and had not generated significant revenues. The Company has incurred losses since inception aggregating $11,000,701. America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company suffered an accumulated deficit of $12,904,294 and a net loss of $554,937. These ~~conditions~~matters raise substantial doubt about the ~~Company's~~Company’s ability to continue as a going concern. ~~The~~Management’s plans with regards to these matters are also described in Note 3 to the financial statements. These 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’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. 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 PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material 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. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

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 regarding the amounts and disclosures in the financial statements. 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 statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or are required to be communicated to the audit committee and that (1) relate to accounts or disclosure that are material to the financial statement and (2) involved especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

OLAYINKA OYEBOLA & CO.

(Chartered Accountants)

Lagos, Nigeria

We have served as the Company’s auditor since 2022.

January 16, 2024

VYRE NETWORK

(formerly Wataire International, Inc.)

CONSOLIDATED BALANCE SHEETS

March 31, 2013, and March 31, 2012

	March 31, 2013			March 31, 2012
	(Audited)			(Audited)

ASSETS
CURRENT ASSETS
Cash	$	109		$	1,184
Account Receivables		-			-
Other receivables		-			-
Inventory		22,268			36,781
Total current assets		22,377			37,965
OTHER ASSETS
Capital assets		1,098			1,098
Patents and trademarks		-			-
Acquisitions of intangible assets		1,527,637			2,036,849

Total assets	$	1,551,112		$	2,075,912

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

CURRENT LIABILITIES
Accounts payable	$	100,753		$	91,857
Provision and accrued liabilities		24,365			3,124
Notes payable		90,000			90,000
Convertible note payables		125,000			125,000
Convertible debenture		300,000			300,000

Total current liabilities		640,118			609,981

Total liabilities		609,981			609,981
		609,981			609,981
STOCKHOLDERS’ (DEFICIENCY)
Common shares, $0.0001 par value, 100,000,000 shares authorized, 479,720,000 and 479,720,000 shares issued and outstanding at March 31, 2013 and March 31, 2012 respectively.		47,972			47,972
Preferred stock; $0.0001 par value, redeemable at $0.005, 20,000,000 shares authorized, 27,501 shares issued and outstanding		3			3
Additional paid-in capital		13,767,313			13,767,313
Deferred stock-based compensation		-			-
Accumulated deficit		(12,904,294	)		(12,349,357	)

Total stockholders’ (deficiency)		910,994			1,465,931
Total liabilities and stockholders’ (deficiency)	$	1,551,112		$	2,075,912

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

VYRE NETWORK

(formerly Wataire International, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

For the year ended March 31, 2013, and 2012

	March 31, 2013			March 31, 2012

Revenue		14,626			6,809
Cost of sales		14,513			5,719
Gross profit/ (loss)		113			1,090

Operating Expenses:

Management fees		-			10,000
Marketing and promotion		-			6,350
Professional fees		6,607			5,871
General and administrative		548,443			672,317
Total operating expenses		555,050			694,538

Income (loss) from operations		(554,937)			(693,448)

Other income (expenses):
Gain from discontinued operation		-			-
Amortization of debt discounts		-			-
Total other income (expenses)		-			-

Income (loss) before provision for income taxes		(554,937	)		(693,448	)


Net loss	$	(554,937	)	$	(693,448	)

Basic and diluted income (loss) per common share	$	(0.00	)	$	(0.00	)
Weighted average common shares outstanding-basic and diluted		479,720,000			479,720,000

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

VYRE NETWORK

(formerly Wataire International, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

For the year Ended March 31, 2013, and 2012

	Common				Series A				Additional		Deferred			Accumulated
	Common				Preferred				Additional		Deferred			Accumulated
	stock				stock				Paid in		Stock
For the three months ended	Shares		Amount		Shares		Amount		Capital		Compensation		Deficit			Total

Balances at April 1, 2011		129,716,886	$	12,972		27,501	$	3	$	13,358,071	$	94,242	$	(11,655,909)	$	1,809,379
Common stock issued		350,003,114		35,000		-		-		409,242		-		-		444,242
Deferred Stock Based compensation		-		-		-		-		-		(94,242)		-		(94,242)
Net loss for the year ended March 31, 2012		-		--		-		-		-		-		(693,448)		(693,448)

Balances at March 31, 2012		479,720,000	$	47,972		27,501	$	3	$	13,767,313	$	-	$	(12,349,357)	$	1,465,931

Balances at April 1, 2012		479,720,000	$	47,972		27,501	$	3	$	13,767,313	$	-	$	(12,349,357)	$	1,465,931
Net loss for the year ended March 31, 2013		-		--		-		-		-		-		(554,937)		(554,937)
				-				-		-		-
Balances at March 31, 2013		479,720,000	$	47,972		27,501	$	3	$	13,767,313	$	-	$	(12,904,294)	$	910,994

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

VYRE NETWORK

(formerly Wataire International, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the year ended March 31, 2013, and 2012

	March 31, 2013			March 31, 2012

OPERATING ACTIVITIES
Net income (loss)	$	(554,937	)	$	(693,448	)
Adjustments to reconcile net income (loss) to net cash provided (used) in operating activities:
Amortization		509,212			509,212
Impairment of assets		40,082			40,082
Shares issued for service
Stock-based compensation		-			-
Changes in operating assets and liabilities:
Accounts receivable		-			-
Prepaid expenses		-			-
Deferred revenue		-			-
Advance on marketing		-			-
Inventory		14,513			5,719
Accounts payable and accrued liabilities		30,137			(597,469)

Net cash used in operating activities		(1,075)			(735,904)

INVESTING ACTIVITIES
		-			-
Net cash used in investing activities		-			-

FINANCING ACTIVITIES
Note payables		-			(38,000)
Proceed from convertible debenture		-			300,000
Note payables		-			(38,000)
Shares issued for debt		-			350,000
Convertible notes		-			125,000
Net cash provided by financing activities		-			737,000

NET INCREASE (DECREASE) IN CASH		(1,075)			1,096

CASH BALANCE, BEGINNING OF PERIOD		1,183			87

CASH BALANCE, END OF PERIOD	$	109		$	1,183

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

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013 and March 31, 2012

NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

The company was incorporated in August 17, 2000 in the State of Washington, USA and the Company’s common shares are publicly traded on the OTC Bulletin Board. On September 26, 2006, the Company approved a name change from Cimbix Corporation to Wataire International, Inc. On March 11, 2010, the Company approved a name change from Wataire International, Inc. to Watair Inc.

The Company markets and distributes atmospheric water generator machines. It also owns all of the intellectual property relating to a water treatment process and devices for water-from-air machines. Management plans to further evaluate, develop and manage the commercialization, sub-license and/or commercial sale of these products.

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At March 31, 2011, the Company had not yet achieved profitable operations, has accumulated losses of $11,870,065 since its inception and expects to incur further losses in the development of its business, all of which cast substantial doubt about the Company's ability to continue as a going concern.

The Company's ability to continue as a going concern is dependent upon future profitable operations and/or the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has obtained additional funds by related party advances, however there is no assurance that this additional funding is adequate and further funding may be necessary.

The consolidated financial statements have been prepared by Watair, Inc. formerly known as Wataire International Inc., pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations.

The financial statements have, in management's opinion, been properly prepared within the framework of the significant accounting policies summarized below:

(a) Development Stage Company

The Company is a development stage company as defined in the Statements of Financial Accounting Standards (“SFAS”) No. 7. The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced. All losses accumulated since inception has been considered as part of the Company’s development stage activities.

(b) Financial Instruments

The carrying values of cash, accounts receivable, accounts payable, promissory notes payable and due to related parties approximate fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013, and March 31, 2012

Inventory, which consists of finished goods, is valued at the lower of cost and net realizable value using the first in first out (FIFO) method.

(d) Website Development Costs

Under the provisions of Statement of Position No. 98-1 "Accounting for the Costs of Computer Software Development or Obtained for Internal Use," the Company previously capitalized costs of design, configuration, coding, installation and testing of the Company's website up to its initial implementation. Costs are amortized to expense over an estimated useful life of three years using the straight-line method. Ongoing website post-implementation cost of operations, including training and application, are expensed as incurred. The Company evaluates the recoverability of website development costs in accordance with Financial Accounting Standards No. 121 "Accounting of the Impairment of Long Lived Assets."

(e) Intangible Assets and Amortization

The Company has adopted SFAS No. 142 "Goodwill and Other Intangible Assets", which requires that goodwill not be amortized, but that goodwill and other intangible assets be tested annually for impairment. Intangible assets with a finite life will be amortized over the estimated useful life of the asset. The Company's operational policy for the assessment and measurement of any impairment in the intangible assets, which primarily relates to contract-based intangibles such as license agreements and extensions, is to evaluate annually, the recoverability and remaining life of its intangible assets to determine the fair value of these assets.

(f) Revenue Recognition

The Company receives revenues from the sale of water generator machines. The Company recognizes revenues when persuasive evidence of an arrangement exists, the product is delivered and collection is reasonably assured. A one-year warranty is provided by the Company on all its products.

(g) Income Taxes

The Company accounts for income tax using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

(h) Basic and Diluted Loss Per Share

Basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed in the same way as basic loss per common share except that the denominator is increased to include the number of additional common shares that would be outstanding if all potential common shares had been issued and if the additional common shares were dilutive.

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013, and March 31, 2012

(i) Stock-based Compensation

The Company adopted ASC 718, Compensation – Stock-Based Compensation, to account for its stock options and similar equity instruments issued. Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. ASC 718 requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.

(j) Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

(k) Reclassifications

Certain items in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation in the current period's presentation. These reclassifications have no effect to the previously reported income (loss).

(l) Change in Reporting Year

The Company adopted March 31 as its fiscal year end from September 30 in 2008.

(m) Recently Issued Accounting Pronouncements

Cash and Cash Equivalents

Investments having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. For the periods presented, the Company had no in cash equivalents.

Notes and Accounts Receivable

The Company maintains an allowance for doubtful accounts for estimated losses from the failure of its customers to make required payments for products and other consideration delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of the financial condition of customers, review of historical receivables and reserve trends and other pertinent information. If the financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances may be required. Historically, the Company’s reserves have approximated actual experience.

Income Taxes

In accordance with Accounting Standards Codification (ASC) 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. The asset and liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013, and March 31, 2012

We expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of March 31, 2011, we had no uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We currently have ~~minimal cash reserves.~~no foreign federal or state tax examinations nor have we had any foreign federal or state examinations since our inception. To date, we have not incurred any interest or tax penalties.

Use of Estimates

The preparation of financial statements in conformity 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 disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Financial Instruments and Fair Value of Financial Instruments

We follow ASC Topic 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013, and March 31, 2012

Level 1:		Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2:		Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3:		Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. Except for derivative liabilities, we had no financial assets or liabilities carried and measured on a recurring or nonrecurring basis during the reporting periods.

Derivative Liabilities

We evaluate convertible notes payable, stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity.

The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.

Long-lived Assets

Long-lived assets such as property and equipment and intangible assets are periodically reviewed for impairment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013, and March 31, 2012

Equity Instruments Issued to Non-Employees for Acquiring Goods or Services

Issuances of our common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete.

Although situations may arise in which counter performance may be required over a period of time, the equity award granted to the party performing the service may be fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist if the instruments are fully vested on the date of agreement, we determine such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to expense over the contract period. When it is appropriate for us to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values.

Related Parties

A party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013, and March 31, 2012

Revenue Recognition

Revenue recognition:

The Company adopted Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC 606”) on January 1, 2018. In accordance with ASC 606, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, in accordance with the following five-step process:

	●	Identify the contract(s) with a customer
	●	Identify the performance obligations
	●	Determine the transaction price
	●	Allocate the transaction price
	●	Recognize revenue when the performance obligations are met

During the periods presented, all revenue was from sales of cannabis products. The Company has ~~covered operating deficits primarily~~determined the sole performance obligation to be the delivery of the purchased goods to the customers, and as such, recognizes revenue at the time the customer takes possession.

Loss per Share

We compute net loss per share in accordance with FASB ASC 260. The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.

Basic loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed on the basis of the weighted average number of common shares and dilutive securities (such as stock options, warrants and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net loss per share are excluded from the calculation. For the periods presented, the Company excluded --------- shares relating to the Series A Convertible Preferred Stock, shares relating to convertible notes payable to third parties

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013, and March 31, 2012

Recently Enacted Accounting Standards

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. We are currently evaluating the impact of the adoption of ASU 2020-06 on our financial statements.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through ~~its financing activities. Accordingly,~~net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our financial statements.

Other standards not presented are not deemed to be material.

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013, and March 31, 2012

NOTE 2: GOING CONCERN

Under ASC 205-40, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to ~~pursue~~meet our ~~plan of operations is contingent on~~future obligations as they become due within one year after the date the financial statements are issued. As required by this standard, our ~~being able to obtain funding for~~evaluation shall initially not take into consideration the ~~development, marketing and commercialization~~potential mitigating effects of our ~~products and services.~~plans that have not been fully implemented as of the date the financial statements are issued.

In performing the first step of this assessment, we concluded that the following conditions raise substantial doubt about our ability to meet our financial obligations as they become due. As ~~a result~~ of ~~its lack of operating success,~~March 31, 2012, the Company ~~may not be able~~had cash of $1,184, total current liabilities of $609,981, and negative working capital of $572,016. We expect to ~~raise additional financing~~continue to ~~cover operating deficits. BUSINESS Our~~incur negative cash flows until such time as our business ~~plan is~~generates sufficient cash inflows to ~~fully exploit~~finance our ~~products~~operations and ~~technology by marketing and distributing~~debt service requirements.

In performing the second step of this assessment, we are required to evaluate whether our ~~commercial and home/office water generation machines as well as their under- the-counter/over-the-counter units, and~~plans to mitigate the ~~water-producing greenhouse. Our atmospheric water generator produces purified water from~~conditions above alleviate the atmosphere by using a condensing surface and a special filtration system that removes dust, airborne particles and bacteria to generate clean drinking water and simultaneously cleaning the air. This method of extracting water vapor has been in use for many years. Some similar applications include air conditioners and dehumidifiers. The actual water production and cost per gallon varies with the humidity and temperature of the atmosphere at the specific site in which the unit is employed. 7 The Wataire water generation equipment is a water-from-air technology system developed by a team of specialized technicians incorporating patent pending technologies that control bacterial contamination. The Company currently sells two types of atmospheric units: (i) small-scale home/office units, which include a full-sized upright model and a countertop model and which can produce between four to six gallons of water per day depending on humidity and temperature levels of the location of the unit, and (ii) commercial/industrial units capable of producing more than 5,000 liters (1320 gallons) of safe drinking water each day depending upon ambient conditions. The home/office units are designed to replace bottled water and purified water dispensers, eliminating the need for replenishment and storage of plastic bottles. These units are intended for usage in residences, schools, offices, hospitals and restaurants. They can also serve as a personal disaster relief unit for consumers in circumstances such as hurricane Katrina where residents in the affected area had no drinking water. The industrial units are intended for use in military camps, industrial applications such as factories, commercial applications such as hotels, humanitarian and disaster relief applications where fresh drinking water is scarce. The water generation equipment is a water-from-air technology system developed by a team of specialized technicians incorporating patent pending technologies that control bacterial contamination. The water generating units are equipped with an electronic control system that turns the machine on and off when full and can circulate the water to maintain clean drinking water 24 hours a day, 365 days a year. The equipment has a dynamic display to allow for monitoring the machine's operation, showing when a new filter is required. The system provides an independent, sustainable, safe water source for a wide variety of possible circumstances such as mining and petroleum exploration camps, bottled water and beverage manufacturers, food manufacturers, military camps, non-government organizations, humanitarian assistance organizations, emergency and disaster relief situations. According to field trials recently held in Belize and Thailand, the system performed well in a tropical environment producing the design projected volume of water and achieving the desired water quality standards. While we believe the unit is also economically viable in temperate climates, the Wataire units work best in the tropics due to the high humidity levels, which make possible the highest rate of water production at the lowest cost per gallon. 8 The patent pending water treatment system is comprised of a three-stage water treatment design that cleans watersubstantial doubt about our ability to meet World Health Organization guidelines. The unit consists of a filtration system, a food-grade dehumidifier water producing module, and a water treatment module. The water treatment process is proprietary and may be subject of various patent applications already filed. The process basically involves taking filtered moist air fromour obligations as they become due within one year after the atmosphere and dehumidifying it for treatment by the water treatment module. This produced water is then processed through sediment filters, ultra-fine filters, activated charcoal filters and ultraviolet light treatment that eliminate virtually all biological contaminants including bacteria, viruses, and pollutants that are in the air. Atmospheric water vapor is an abundant resource that can be used with virtually no negative environmental impacts. The machine should be situated in a space that can provide fresh flowing air to the machine intake as it dehumidifies the space. The water-from-air technology has received broad acceptance around the world as a new and sustainable source of potable water. COMPETITION Water purification and bottled water industries are highly competitive. According to past internal research, there were possibly nine entities experimenting with the technology of water generation, of which two or three were direct active competitors. Some of those companies have limited or no business activities while others have entered into strategic alliances with one another. The relatively high energy cost associated with changing water from its vapor phase in the air to the liquid phase appears to be an obstacle to making sales for a number of these competitors. Control of bacteria and viruses in the field of atmospheric water generation creates a technological challenge that our patent pending water treatment module has resolved. The atmospheric water generator and filtration system industry is new, rapidly evolving and can compete with more traditional water treatment systems that rely on surface and ground water supplies. In the future, our competitors can and may duplicate or surpass in efficacy many of the products or services offered by us. 9 REGULATORY ENVIRONMENT The manufacturing, processing, testing, packaging, labeling and advertising of the products 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 CSA and UL in North America, the United States Department of Agriculture, the Environmental Protection Agency, the standards provided by the United States Public Health authority and the World Health Organization for Drinking Water. These activities may also be regulated by various agencies of the states, localities and foreign countries in which consumers reside. CERTIFICATION AND TESTING All the products that we sell and plan to sell will go through stringent testing that will have the appropriate UL, CE or CSA certifications on the products. The CSA Mark is an internationally recognized mark that appears on over one billion products worldwide. CSA International is a leader in standards development, certification and testing, and quality management registration. The CSA International marks are accepted by many electrical inspectors, gas inspectors, building inspectors and other governmental authorities that approve projects and products that are sold in Canada, the United States and all over the world. The Company uses the services of CSA International because they test, certify and ensure that products comply with applicable safety and/or performance standards applicable to the products for the sale in that country. These standards include UL, CSA, ANSI (American National Standards Institute), ASTM, NSF, OSHA (Occupational Safety and Health Administration under the US Department of Labor), NVLAP (National Voluntary Laboratory Accreditation Program), SCC (Standards Council of Canada), IAS (International Accreditation Service Inc.) and others. At this time, the products carry the markings of CE and we are currently seeking CSA markings for Canada and UL markings for the United States. These markings on the products indicate to governmental officials and consumersdate that the ~~products may be legally placed on the market in the country for sale. It also indicates that the products met all safety requirements and tests, and such products~~financial statements are in conformity with the applicable standards. 10 RESEARCH AND DEVELOPMENTS The Company does not have its own research and development department and will rely on Canadian Dew Technologies Inc. to furnish the Company with new technology and improvements on its existing applications, efficiency and theories of the underlying atmospheric water generators and filtration systems. MARKET ANALYSIS AND STRATEGY We believe a market opportunity exists for our atmospheric water generators and filtration systems.issued. Our technology provides an alternative solution to the world's shortage of fresh water and can provide clean, safe drinking water in various geographical settings. Today, governments and health professionals are increasingly conscious of the negative health effects of pollution, chemicals used to disinfect water supplies, and residual salt in desalinated water, and how they affect human health. Our target markets for the water-from-air systems are businesses, governments, and people who are situated in the humid tropics. To date, our products have been sold in over 30 different countries and have received positive response from system users. Our systems, units and/or applications target various markets including military applications, oil and mining operations, new and existing tourist resorts, beverage bottling plants, new condominium developments and humanitarian missions. The development of our marketing planfuture plans include securing additional funding sources.

There is still in its early stages; however, we anticipate having an outline of our marketing strategy in the fall of 2010. Management plans, as soon as finances permit, to hire additional management and staff for its US-based operations especially in the areas of finance, sales, marketing, and investor/public relations. The Company may also choose to outsource some of its marketing requirements by utilizing a series of independent contractors based on the projected size of the market and the compensation necessary to retain qualified employees. EMPLOYEES The Company currently has no employees but has contract staff. The Company anticipates entering into an employment contract with Robert Rosner, our Chief Executive Officer, but can provide no assurance that wesufficient funds required during the next year or thereafter will ~~come~~be generated from operations or that funds will be available through external sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material effect on the business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms ~~for such employment agreement.~~ or that they will not have a significant dilutive effect on the Company’s existing shareholders. We have therefore concluded there is substantial doubt about our ability to continue as a going concern through March 2012.

The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of the uncertainty related to our ability to continue as a going concern.

NOTE 3: INCOME TAXES

The Company ~~looks to its directors~~accounts for income tax using the asset and ~~officers for their combined entrepreneurial skills~~liability method in accordance with ASC 740, Income Taxes. The asset and ~~talents,~~liability method provides that deferred tax assets and ~~to outside subcontracted consultants. Management plans to use consultants, attorneys and accountants as necessary until the Company has sufficient funds to execute strategies~~liabilities are recognized for the ~~Company.~~expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The ~~Company's performance~~Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

VYRE NETWORK

(formerly Wataire International, Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended March 31, 2013, and success is dependent on management's ability to raise the necessary funds required to develop and promote the sale of its products. 11 PATENTS AND TRADEMAKS The patent pending and/or trademarks and copyrights from Ecosafe, Terry Nylander, Roland Wahlgren and CanDew have now been transferred to our name. March 31, 2012

NOTE 4: SUBSEQUENT EVENTS

The Company has ~~also~~evaluated subsequent events through the date the financial statements were available to be issued. On May 18, the Company accepted the resignation of Thomas Braid as Director and officer of the Company.

PART II- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company received an alleged claim in January 2009 from one of its former distributors for failing to deliver merchandise ordered and paid for by the Plaintiff. The Company has subsequently filed ~~other patents, trademarks~~a motion to dismiss the claim and ~~copyrights in other countries. Item~~is considering separate legal recourse. On July 20, 2009, the Company filed a cross-complaint for breach of contract, intentional interference with contractual relationship, intentional interference with prospective economic relationship and accounting.

On February 2, 2010 a confidential settlement agreement and release was effected between the parties. The Complaint and cross complaint have been dismissed by the parties with prejudice.

ITEM 1A. ~~Risk Factors.~~ RISK FACTORS

We have sought to identify what we believe to be the most significant risks to our business. However, we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise.

We are dependent on external financing.

It is imperative that we raise additional capital to complete our operational plan to promote and commercialize our newly acquired business combinations and activities. We will also require funds to sustain our business operations if we are not successful in earning revenues from our product sales and sub-licensing. We estimate that we would require additional funding of ~~$8,000,000~~$2,000,000 to pursue our business strategy. If we are unable to obtain equity financing upon terms that our management deems sufficiently favorable, or at all, it would have a material adverse impact upon our ability to expand our current operational plan. Any sale of share capital will result in dilution to existing shareholders.

To date, we have generated some revenues from sales but not enough to sustain our business operations. The success of our business depends on us receiving inventory and advertising materials from our suppliers and manufacturers. The exact amount of our current and future capital requirements will depend on numerous factors, some of which are not within our control, including the progress of our development efforts, the costs of testing, supply of our products, demand of our products and changes in governmental regulation. Our ability to raise additional financing depends on many factors beyond our control, including the state of capital markets, the market price of our common stock and the development or prospects for development of competitive technology by others. The necessary additional financing may not be available to us or may be available only on terms that would result in further dilution to the current owners of our Common Stock. If we are unable to raise additional funds when we need them, we may have to curtail or discontinue our operations, in which case you could lose the entire amount of your investment in the Company. 12

We are in our early stages of development and face a risk of business failure.

We are in our early stages of development. We have no way to evaluate the likelihood that we will be able to operate our business successfully. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the technology and sales industries. We recognize that if we are unable to generate significant revenues from our sales, we will not be able to earn profits or continue operations. There is only a limited history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any additional operating revenues or ever achieve profitable operations from our current business initiatives. If we are unsuccessful in addressing these risks, our business will most likely fail.

We are competing against larger and better-financed companies.

We operate in a highly competitive market with financial rewards pending on market performance. Some of our competitors are multi-million dollar enterprises with more resources for marketing, distribution and development. We may be in a disadvantage if any of our competitors focused on similar products we sell. Because we ~~don't~~don’t have the infrastructure and personnel in place to adequately implement our business plans and operations, our business may fail.

Our business and the success of our products could be harmed if we are unable to maintain our brand image.

Our success is heavily dependent upon the market acceptance of our ~~Wataire~~Watair branded lines of atmospheric water generators. If we are unable to timely and appropriately respond to changing consumer demand, the brand ~~Wataire~~Watair distributes may be impaired. Even if we react appropriately to changes in consumer preferences, consumers may consider those brand images to be outdated. Lack of acceptance of our brands will have a material impact on the performance of the Company. ~~13 We are dependent~~

Dependence on our suppliers

Our success is highly dependent upon the continued support and services of suppliers. We are solely dependent on their support to provide enough inventories to meet our purchase orders. If our suppliers are not able to manufacture enough products to meet the demands of our purchase orders, our business will most likely fail.

Demand for our products and services may fail to materialize

Our growth and success will depend on our success in introducing and selling our products. The market for the products and services we plan to offer is relatively new and there is little hard data to validate market demand or predict how this demand will be segmented. There could be much lower demand than believed, or interest in our products and services could decline or die out, which could adversely affect our ability to sustain our operations.

There is substantial doubt as to our ability to continue as a going ~~concern.~~ concern

Our financial results for the ~~fiscal year ending March 31, 2010~~period ended September 30, 2011 show substantial losses. The accompanying financial statements have been prepared in conformity with the generally accepted accounting principles in the United States of American which contemplates the Company as a going concern. The Company has sought out additional investment to raise additional funds. However, there are no assurances that the Company will continue as a going concern without the successful completion of additional funding. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Our independent auditors, Gruber & Company LLC, have expressed substantial doubt about our ability to continue as a going concern given our recurring losses from operations and net stockholder's deficit. This opinion could materially limit our ability to raise additional funds by issuing new debt or equity securities or otherwise. 14

Dependence on key management and personnel

Our success is highly dependent upon the continued services of Robert Rosner, our Chief Executive Officer. If he were to leave us this could have a materially adverse effect upon our business and operations. We anticipate entering into employment contract with Mr. Rosner but can provide no assurance that we will come to terms for such employment agreement.

Our business also requires additional staff in all areas to successfully bring our products to market. Our success depends on our ability to attract and retain technical and management personnel with expertise and experience in the technology field. If we are unable to attract and retain qualified technical and management personnel, we will suffer diminished chances of future success.

We may be subject to product liability or breach of contract claim if our products do not work as ~~represented.~~ promised from our Inventor(s) and predecessor

The atmospheric water generators are designed to facilitate potable safe drinking water. If the technology fails to work as manufactured by our inventor(s) and predecessor, customers may bring claims against us. Despite limitations on such claims, such claims can be costly and time consuming which could have a material adverse effect on our operations, even if we are found not to have been at fault. We currently do not have liability insurance and anticipate that we will seek some coverage in the future if such coverage is available at a reasonable cost.

Significant repair and/or replacement with respect to product warranty claims or product recalls could have a material adverse impact on the results of operations.

We provide a limited warranty for our products for a period of one year. Significant warranty claims could have a material adverse effect on our results of operations. ~~We are subject to governmental regulation~~

Government Regulation

Regulation by government authorities in the United States, Canada and foreign countries may be a factor in the development, manufacture and marketing of our products and in our research and product development activities. The process of obtaining these approvals and the subsequent compliance may require time and financial resources. ~~15 We have limited~~

Limited experience ~~in marketing~~to market our products

Even if we are able to develop our products and obtain the necessary regulatory approvals, we have limited experience or capabilities in marketing or commercializing our products. We currently have some sales and just engaged a marketing agency. We do not have a distribution infrastructure in place. Accordingly, we are dependent on our ability to find collaborative marketing partners or contract sales companies for commercial sale of any of our products. Even if we find a potential marketing partner, we may not be able to negotiate an advertising and/or licensing contract on favorable terms to justify our investment or achieve adequate revenues.

Our business is subject to risks associated with offshore manufacturing.

We import some of our products into the United States and Canada from foreign countries for resale. All of our import operations are subject to tariffs and quotas set by the U.S. and other ~~countries'~~countries’ governments through mutual agreements or bilateral actions. Adverse changes in these import costs and restrictions, or our ~~suppliers'~~suppliers’ failure to comply with customs regulations or similar laws, could harm our business. Our operations are also subject to the effects of international trade agreements and regulations such as the North American Free Trade Agreement, the Caribbean Basin Initiative and the European Economic Area Agreement, and the activities and regulations of the World Trade Organization. Trade agreements can also impose requirements ~~that~~which adversely affect our business, such as setting quotas on products that may be imported from a particular country into our key market, the United States. In fact, some trade agreements can provide our competitors with an advantage over us, or increase our costs, either of which could have an adverse effect on our business and financial condition.

In addition, the recent elimination of quotas on World Trade Organization member countries by 2005 could result in increased competition from developing countries which historically have lower labor costs, including China. This increased competition, including from competitors who can quickly create cost and sourcing advantages from these changes in trade arrangements, could have an adverse effect on our business and financial condition. 16

Our ability to import products in a timely and cost-effective manner may also be affected by problems at ports or issues that otherwise affect transportation and warehousing providers, such as labor disputes or increased U.S. homeland security requirements. These issues could delay importation of products or require us to locate alternative ports or warehousing providers to avoid disruption to our customers. These alternatives may not be available on short notice or could result in higher transit costs, which could have an adverse impact on our business and financial condition.

Our international operations expose us to political, economic and currency risks.

All of our products came from sources outside of the United States. As a result, we are subject to the risks of doing business abroad, including: ~~- currency fluctuations; - changes in tariffs and taxes; - political and economic instability; and - disruptions or delays in shipments.~~

Currency fluctuations;

Changes in tariffs and taxes;

Political and economic instability; and

Disruptions or delays in shipments.

Changes in currency exchange rates may affect the relative prices at which we are able to manufacture products and may affect the cost of certain items required in our operation, thus possibly adversely affecting our profitability.

There are inherent risks of conducting business internationally. Language barriers, foreign laws and customs and duties issues all have a potential negative effect on our ability to transact business in the United States. We may be subject to the jurisdiction of the government and/or private litigants in foreign countries where we transact business, and we may be forced to expend funds to contest legal matters in those countries in disputes with those governments or with customers or suppliers.

We may suffer from infringements or piracy of our trademarks, designs, brands or products.

We may suffer from infringements or piracy of our trademarks, designs, brands or products in the U.S. or globally. Some jurisdictions may not honor our claims to our intellectual properties. In addition, we may not have sufficient legal resources to police or enforce our rights in such circumstances. 17

Unfair trade practices or government subsidization may impact our ability to compete profitably.

In an effort to penetrate markets in which the Company competes, some competitors may sell products at very low margins, or below cost, for sustained periods of time in order to gain market share and sales. Additionally, some competitors may enjoy certain governmental subsidies that allow them to compete at substantially lower prices. These events could substantially impact our ability to sell our product at profitable prices.

If we market and sell our products in international markets, we will be subject to additional regulations relating to export requirements, environmental and safety matters, and marketing of the products and distributorships, and we will be subject to the effects of currency fluctuations in those markets, all of which could increase the cost of selling products and substantially impair the ability to achieve profitability in foreign markets. As a part of our marketing strategy, we plan to market and sell our products internationally. In addition to regulation by the U.S. government, those products will be subject to environmental and safety regulations in each country in which we market and sell. Regulations will vary from country to country and will vary from those of the United States. The difference in regulations under U.S. law and the laws of foreign countries may be significant and, in order to comply with the laws of these foreign countries, we may have to implement manufacturing changes or alter product design or 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 Company.

Additionally, we may be required to obtain certifications or approvals by foreign governments to market and sell the products in foreign countries. We may also be required to obtain approval from the U.S. government to export the products. If we are delayed in receiving, or are unable to obtain import or export clearances, or if we are unable to comply with foreign regulatory requirements, we will be unable to execute our complete marketing strategy. ~~Item 1B. Unresolved Staff Comments.~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable. 18 Item 2. Properties. Our principal executive offices are located at 3rd Floor, 21900 Burbank Blvd., Woodland Hills, California 91367. The Company's phone number is 877-602-8985. Item 3. Legal Proceedings. Aquaduct International, LLC v. Wataire International, Inc. etal. This litigation was commenced on December 11, 2008 by

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No.		Description
31.1		Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith).
31.2		Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith).
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

SIGNATURES

Pursuant to the Company's former distributor over the alleged purchase of certain atmospheric water machines. On July 20, 2009, the Company answered the lawsuit and filed a cross-complaint against the plaintiff for Breach of Contract and Intentional Interference. On February 2, 2010 a confidential settlement agreement and release was effectuated between the parties. The Complaint and cross complaint have been dismissed by the parties with prejudice. Item 4. (Reserved.) PART II Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company's common stock is traded in the Over-the- Counter Bulletin Board Market and on the "Pink Sheets" market under the ticker symbol "WTAR". The following table sets forth for each period indicated the high and the low bid prices per share for the Company's Common Stock. Bid Prices Quarter Ended High Low March 31, 2010 0.0265 0.01 December 31, 2009 0.135 0.015 September 30, 2009 0.197 0.015 June 30, 2009 0.04 0.005 March 31, 2009 0.025 0.007 December 31, 2008 0.045 0.005 September 30, 2008 0.095 0.030 June 30, 2008 0.220 0.050 19 There were approximately 109 holders of record of the common stock as of July 6 2010. The Company believes that an undefined number of shares of its common stock are held in either nominee name or street name brokerage accounts. Consequently, the Company is unable to determine the exact number of beneficial owners of its common stock. The Company has never paid a cash dividend on its Common Stock and does not anticipate paying dividends in the foreseeable future. It is the present policy of the Company's Board of Directors to retain earnings, if any, to finance the expansion of the Company's business. The payment of dividends in the future will depend on the results of operations, financial condition, capital expenditure plans and other cash obligations of the Company and will be at the sole discretion of the Board of Directors Section 15(g) of the Securities Exchange Act of 1934: The Company's shares are covered by Section 15(g)requirements of the Securities Exchange Act of 1934, ~~as amended that imposes additional sales practice requirements~~the Registrant has duly caused this report to be signed on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by this Section 15(g), the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, Section 15(g) may affect the ability of broker/dealers to sell the Company's securities and also may affect your ability to sell your shares in the secondary market. 20 Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to an understanding of the function of the penny stock market, such as "bid" and "offer" quotes, a dealers "spread" and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the NASD's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons. RECENT SALES OF UNREGISTERED SECURITIES On April 8, 2008, the Company entered into an agreement to issue 1,600,000 units at $0.05 per unit with Darfield Financial Corp. for an aggregate amount of $80,000. Each unit consists of one common share and one half warrant exercisable at $0.05 per share on or before April 7, 2011. On May 30, 2008, the Company entered into a private placement agreement to issue 1,111,112 common stock at $0.09 per share for proceeds of $100,000 to two accredited investors and to issued 555,556 common stock to each investor. On June 17, 2008, the Company approved the issuance of 1,000,000 units at $0.06 per share to settle amounts due to a director of the Company totaling $60,000. Each unit contains one common share and one share warrant exercisable at $0.06 per share on or before June 16, 2011. On July 8, 2008, the Company approved the issuance of 1,000,000 units at $0.05 per share to settle amounts due to a director of the Company totaling $50,000. Each unit contains one common share and one share warrant exercisable at $0.05 per share on or before July 7, 2011. On January 9, 2009, the Company approved the issuance of 8,000,000 common shares at $0.005 per share to settle amounts due to a director of the Company totaling $40,000. On February 26, 2009, the Company has signed agreement with existing warrant options holders to cancel all existing warrant options available to the Company. 21 On April 22, 2009, the Company approved the issuance of 4,000,000 common shares at $0.005 per share to settle amounts due to a debtor of the Company totaling $20,000. On July 31, 2009, the Company approved the issuance of 7,600,000 common shares at $0.02 per share for services provided by several professionals for a 12 months period totaling $152,000. On September 14, 2009, the Company entered into a definitive agreement with the Chief Executive Officer and director of the Company for the issuance of share purchase warrants for executive compensation, with a term of five years expiring September 14, 2014, exercisable at $0.01 per share, for 7,500,000 shares of common stock with a cashless exercise provision. The Company recognized $94,242 in stock based compensation expense for the issuance of these warrants. On September 14, 2009, the Company received $304,534 in convertible subordinated notes from investors and a related party. These notes carries an 5% annual interest rate with both principle and accrued interest payable on October 1, 2011. At the holders discretion these notes and any accrued interest may be converted into common shares at $0.01 per share. The above issuances to lenders, consultants and investors are viewedbehalf by the Company as exempt from registration under the Securities Act of 1933, as amended ("Securities Act"), alternatively, as transactions either not involving any public offering, or as exempt under the provisions of Regulation D, Regulation S or Rule 701 promulgated by the SEC under the Securities Act. Item 6. Selected Financial Data. The following selected financial data has been derived from our audited financial statements and should be read in conjunction with such financial statements included herein. For the year ended March 31, 2010 2009 Statement of operations data: Operating revenues 15,000 174,540 Gross profit (3,000) 24,816 Gain (loss)- continuing operations (552,634) (714,182) Gain (loss)- continuing operations (0.01) (0.01) 22 Balance sheet data: Total assets 3,096,516 3,088,061 Long-term debt 321,449 - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and the other financial information included elsewhere in this report. Certain statements contained in this report, including, without limitation, statements containing the words "believes," "anticipates," "expects" and words of similar import, constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions. Overview Wataire is a Washington corporation incorporated on August 17, 2000. Wataire is currently in the development stage and has completed its acquisition of all of the intellectual property relating a water treatment process and devices for water-from-air machines. The agreements previously executed between the Company and Ecosafe have been terminated and cancelled and forms part of the current agreement. To this end, the Company's future results of operation will be highly dependent upon the success of its efforts to sell and market its products and technologies. The Company plans to sell its products to distributors and also through multiple indirect channels, such as resellers. Results of Operations for the Years ended March 31, 2010 Our audited operating results and cash flows are presented for the year ended March 31, 2010 and March 31, 2009 and for the period of inception to March 31, 2010. 23 Revenues. For the year ended March 31, 2010, we had total revenue of $15,000 compared to $174,540 for the year ended March 31, 2009. Operating Expenses. For the year ended March 31, 2010, we had total operating expenses of $599,634 as compared to $738,998 for the year ended March 31, 2009. The decrease was mainly due to the absence of "Advances Written Off" and "Research & Development" expenses in the former year, which was offset by the incurrence of "Amortization of notes discount", "Stock-based compensation" and "Website development costs" of $28,505, $94,242 and $37,449 respectively in the former year but not in the latter. Professional Fees. For the year ended March 31, 2010, we had professional fees of $144,363 as compared to $54,126, an increase of $90,237. Net Loss. The net loss for the year ended March 31, 2010 was $598,994 as compared to $714,182 for the year ended March 31, 2009, a decrease of $115,188. The decrease was generally due to the overall decrease in total expenditures amounting to $139,364. Plan of Operation We currently have minimal cash reserves and a significant working capital deficit. Accordingly, our ability to pursue our plan of operations is contingent on our being able to obtain funding for the development, marketing and commercialization of our products and services. Management plans, as soon as finances permit, to hire additional management and staff for its US-based operations especially in the areas of finance, sales, marketing, and investor/public relations. The Company may also choose to outsource some of its marketing requirements by utilizing a series of independent contractors based on the projected size of the market and the compensation necessary to retain qualified employees. To achieve our new operational plan, we will need to raise substantial additional capital for our operations through licensing fees and product sales, sale of equity securities and/or debt financing. We have no cash to fund our operations at this time, so we plan to sell licenses and products, offer common stock in private placements as well as seeking debt financing during the next 12 months to raise up to $8,000,000. We believe the proceeds from such efforts will enable us to expand our operations, buy inventory and start our marketing campaign. 24 Due to the "start up" nature of the Company's business, the Company expects to incur losses as the Company conducts its ongoing research, product and systems development programs. We will require additional funding to continue our operations, for marketing expenses, to pursue regulatory approvals for our products, for any possible acquisitions or new technologies, and we may require additional funding to establish manufacturing capabilities in the future. We may seek to access the public or private equity markets whenever conditions are favorable. We may also seek additional funding through strategic alliances or collaborate with others. We cannot assure you that adequate funding will be available on terms acceptable to us, if at all. Because we are presently in the early stages of development and promotional stages of our business, we can provide no assurance that we will be successful with our efforts to establish any revenue. In order to pursue our existing operational plan, we are dependent upon the continuing sales and financial support of creditors and stockholders until such time when we are successful in raising debt/equity capital to finance the operations and capital requirements of the Company or until such time that we can generate sufficient revenue from our various divisions. Liquidity and Financial Resources The Company remains in the development stage since inception. Operations were financed through proceeds from sales and the issuance of equity and loans from directors. The directors have also advanced funds into the Company to cover cash flow deficiencies. The advances have no stated repayment terms. These funds were used to pay inventory, services, legal and accounting expenses along with several other miscellaneous operational infrastructure costs. The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. At March 31, 2010, we have had little success in raising additional capital to meet our plan of operations. Our cash position as of March 31, 2010 was $57. Since inception, we have recognized no significant revenue. We have accumulated operating losses of $11,000,701. At the present time, and over the next twelve months, our primary focus will be to develop our marketing plan, new initiatives and operational plan to establish sales and to explore various methods for raising additional funds. 25 Critical Accounting Issues The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires the Company to make estimates and judgments that affect the reported amount of assets, liabilities, and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to intangible assets, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. NEW FINANCIAL ACCOUNTING STANDARDS For a summary of new financial accounting standards applicable to the Company, please refer to the accompanying notes to the financial statements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We are primarily exposed to foreign currency risk, interest rate risk and credit risk. Foreign Currency Risk - We import products from foreign countries into the United States and market our products in North America. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or, if we initiate our planned international operations, weak economic conditions in foreign markets. Because our revenues are currently denominated in U.S. dollars, a strengthening of the dollar could make our products less competitive in foreign markets that we plan to enter. We have not hedged foreign currency exposures related to transactions denominated in currencies other than U.S. dollars. We do not engage in financial transactions for trading or speculative purposes. 26 Interest Rate Risk - Interest rate risk refers to fluctuations in the value of a security resulting from changes in the general level of interest rates. Investments that are classified as cash and cash equivalents have original maturities of three months or less. Our interest income is sensitive to changes in the general level of U.S. interest rates. We do not have significant short-term investments, and due to the short-term nature of our investments, we believe that there is not a material risk exposure. Credit Risk - Our accounts receivables are subject, in the normal course of business, to collection risks. We regularly assess these risks and have established policies and business practices to protect against the adverse effects of collection risks. As a result we do not anticipate any material losses in this area. Item 8. Financial Statements and Supplementary Data. The financial statements and supplementary data are located at the end of this report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable Item 9A (T). Controls and Procedures. As supervised by our board of directors and our principal executive and principal financial officers, management has established a system of disclosure controls and procedures and has evaluated the effectiveness of that system. The system and its evaluation are reported on in the below Management's Annual Report on Internal Control over Financial Reporting. Our principal executive and financial officer has concluded that our disclosure controls and procedures (as defined in the 1934 Securities Exchange Act Rule 13a-15(e)) as of March 31, 2010, are effective, based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15. 27 Management's Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange Act of 1934 (the "Exchange Act"). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Management assessed the effectiveness of internal control over financial reporting as of March 31, 2010. We carried out this assessment using the criteria of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm, pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report. Management concluded in this assessment that as of March 31, 2010, our internal control over financial reporting is effective. There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a- 15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of our 2010 fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. 28 PART III Item 10. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance. Directors and Executive Officers The following sets forth certain information with respect to the directors and executive officers of Wataire: Name Age Office Held Robert Rosner (1) 45 CEO, Secretary, Director, Chairman of the Board Thomas M. Braid (2) 48 Treasurer, CFO, Director Notes: (1) Mr. Robert Rosner was appointed a Director in August 2003, Chief Executive Officer and Chairman of the Board on August 19, 2005 and Corporate Secretary on March 13, 2007. Mr. Thomas M. Braid was appointed as Treasurer, Chief Financial Officer and Director on June 12, 2009. Set forth below is a brief description of the background and business experience of each of our executive officers and directors for the past five years. Mr. Robert Rosner - Chief Executive Officer, Corporate Secretary, Director and Chairman of the Board Mr. Rosner has served as a Director since August 2003, the Company's Chairman and Chief Executive Officer since August 2005. He was the Vice President of Regulatory Affairs and Compliance and Corporate Secretary from August 2003 until August 2005. He was President from August 2005 to April 2007. He was re-appointed Corporate Secretary in March 2007. Mr. Rosner was the president and director of Fortuna Silver Mines Inc., a company listed on the Canadian Venture Exchange, from June 1996 to January 2005. Mr. Thomas M. Braid - Treasurer, Chief Financial Officer and Director 29 Mr. Braid was appointed as Director, Chief Financial Officer and Treasurer on June 12, 2009. He has had over 30 years of experience in the newspaper industry and is a widely respected and multi-award winning photojournalist, photo department manager, college instructor, workshop leader and community volunteer. In October of 2002, he was awarded the Queen's Golden Jubilee Medal by the Governor General of Canada and the Canadian Government. In 2007, he was awarded the Edmonton Sun's highest award by being honored with the Douglas Creighton Award. TERM OF OFFICE Our directors are elected for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board. ADVISORY BOARD MEMBERS The Company's advisory board members are appointed by the Board of Directors to help oversee and provide support relating to the Company's business affairs. The advisory board members meet in person or via telephone conferencing with the Board of Directors. In May 2007, the Company initiated its Advisory Board consisting of Professor James Marsden, PhD and Mr. Brian Baker, BA. Since Mr. Brian Baker passed away, Dr. James Marsden, a distinguished scientist and food safety and security expert, has been the Company's Chairman of the Scientific Advisory Board. Dr. Marsden currently serves as Regent's Distinguished Professor and Associate Director of the Biosecurity Institute at Kansas State University ("KSU"). KSU has placed a major emphasis on food safety and security. The research and educational activities at KSU address issues that directly impact human health, agricultural security and the economy. The university is the site of the Biosecurity Research Institute and the National Agricultural Biosecurity Center. Dr. Marsden will advise us on issues relating to the production of water for consumer products; products sized for large commercial applications; government and military systems; remote systems designed to produce drinking water and sanitation in developing countries. 30 Committees We do not have an audit committee, although we intend to establish such a committee, with an independent "audit committee financial expert" member as defined in the rules of the SEC. Corporate Code of Conduct We are reviewing a proposed corporate code of conduct, which would provide for internal procedures concerning the reporting and disclosure of corporate matters that are material to our business and to our stockholders. The corporate code of conduct would include a code of ethics for our officers and employees as to workplace conduct, dealings with customers, compliance with laws, improper payments, conflicts of interest, insider trading, company confidential information, and behavior with honesty and integrity. Section 16(A) Beneficial Ownership Reporting Compliance ------------------------------------------------------- Section 16(a) of the Securities Act of 1934 requires the Company's officers and directors, and greater than 10% stockholders, to file reports of ownership and changes in ownership of its securities with the SEC. Copies of the reports are required by SEC regulation to be furnished to the Company. Based solely upon a review of the Forms 3, 4, and 5 furnished to us for the fiscal year ended March 31, 2010, we have determined that our directors, officers, and greater than 10% beneficial owners complied with all applicable Section 16 filing requirements. Item 11. Executive Compensation. The following table sets forth information for the years ended March 31, 2010, 2009 and 2008 concerning the compensation paid or awarded to the Directors and Executive Officers of WTAR. FILL IN FOR LAST THREE FISCAL YEARS 31 SUMMARY COMPENSATION TABLE EXECUTIVE COMPENSATION POLICIES Other Restricted Securities All Name and annual stock underlying LTIP other principal Year Salary Bonus compen- awards Options/ payouts compen- position sation SARs sation ($) ($) ($) ($) (#) ($) ($) (a) (b) (c) (d) (e) (f) (g) (h) (i) Robert 2010 180,000 nil nil nil nil nil nil Rosner 2009 180,000 nil nil nil nil nil nil 2008 75,000 nil nil nil nil nil nil CEO, Secretary & Director Richard 2010 nil nil nil nil nil nil nil Jordan 2009 nil nil nil nil nil nil nil 2008 nil nil nil nil 200,000 nil nil Treasurer, CFO & Director Terrence 2008 nil nil nil nil nil nil nil Nylander Former President & Former Director The Company anticipates entering into an employment contract with Robert Rosner, our Chief Executive Officer, but can provide no assurance that we will come to terms for such employment agreement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table sets forth certain information regarding the beneficial ownership of the Company's common stock as of June 30, 2010, by (a) each person known by the Company to own beneficially more than 5% of the Company's common stock, (b) each director of the Company who beneficially owns common stock, and (c) all officers and directors of the Company as a group. Each named beneficial owner has sole voting and investment power with respect to the shares owned. 32 As of July 14, 2010, there were 98,710,123 shares of common stock outstanding. Name and Address Amount and Nature of Beneficial Position of Beneficial Percentage of Owner Ownership Common Stock (1) Robert Rosner CEO, 21,498,328 shares 21.78% 134-9663 Santa Secretary, (2) Monica Blvd., Director Beverly Hills, California Wataire Ecosafe Shareholder 13,400,000 shares 13.58% Technologies Inc. 3033 King George Hwy Suite 24 Surrey, BC Canada All Directors and 21,498,328 shares 21.78% Officers as a group (1 person) Beneficial ownership of common stock has been determined for purposes of the above table in accordance with Rule 13d-3 under the Exchange Act, under which a person is deemed to be the beneficial owner of securities if such person has or shares voting power or investment power with respect to such securities, has the right to acquire beneficial ownership within 60 days or acquires such securities with the purpose or effect of changing or influencing the control of the Company.. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date of this information statement upon the exercise of warrants or options. Each beneficial owner's percentage ownership is determined by assuming that options and warrants that are held by such person (but not those held by any other person) and that are exercisable within 60 days from the date of this Annual Report have been exercised. For purposes of calculating beneficial ownership, the total issued and outstanding common stock of the Company as at the date of this Annual Report was 98,710,123. Voting and dispositive power over the shares held of record by Ecosafe Innotech Inc., (formerly, Wataire Ecosafe Technologies Inc., formerly Wataire Industries Inc.) is exercised by its board of directors. 33 Item 13. Certain Relationships and Related Transactions, and Director Independence. In January 2007, the Company agreed to issue to Robert Rosner, our Chief Executive Officer, up to 200,000 units, each unit consisting of a share of common stock and a warrant to purchase a share of common stock, in consideration for the forgiveness of up to $150,000 of indebtedness of the Company to Mr. Rosner ($.75 per unit). The warrants stock expire December 31, 2008 and are exercisable at $.85 per share if the warrant is exercised on or before June 30, 2007, at $1.00 if the warrant is exercised on or before December 31, 2007, and at $1.15 if the warrant is exercised on or before December 31, 2008. 195,334 units were issued to Mr. Rosner. In October 2007, the Company agreed to issue to Robert Rosner, our Chief Executive Officer, 696,494 units, each unit consisting of a share of common stock and a warrant to purchase a share of common stock, in consideration for the forgiveness of up to $118,404 of indebtedness of the Company to Mr. Rosner ($.17 per unit). The warrants stock will expire on September 30, 2010 and are exercisable at $0.17 per share. In March 2008, the Company agreed to issue to Robert Rosner, our Chief Executive Officer, 4,400,000 units, each unit consisting of a share of common stock and one half of a warrant whereby each whole warrant entitles the holder to purchase a share of common stock, in consideration for the forgiveness of $220,000 of indebtedness of the Company to Mr. Rosner ($0.05 per unit). The warrants stock will expire on March 18, 2011 and are exercisable at $0.05 per share. As of the date of this annual report, the shares have not been issued. In March 2008, the Company agreed to issue to Robert Rosner, our Chief Executive Officer, 25,000 shares of Preferred stock, in consideration for the forgiveness of $5,000 of indebtedness of the Company to Mr. Rosner ($0.20 per share). As of the date of this annual report, the shares have not been issued. In June 2008, the Company agreed to issue to Robert Rosner, our Chief Executive Officer, 1,000,000 units, each unit consisting of a share of common stock and a warrant to purchase a share of common stock, in consideration for the forgiveness of $60,000 of indebtedness of the Company to Mr. Rosner ($0.06 per unit). The warrants stock will expire June 16, 2011 and exercisable at $0.06 per share. As of the date of this annual report, the shares have not been issued. 34 In July 2008, the Company agreed to issue to Robert Rosner, our Chief Executive Officer, 1,000,000 units, each unit consisting of a share of common stock and a warrant to purchase a share of common stock, in consideration for the forgiveness of $50,000 of indebtedness of the Company to Mr. Rosner ($0.05 per unit). The warrants stock will expire July 7, 2011 and exercisable at $0.05 per share. As of the date of this annual report, the shares have not been issued. In January 9, 2009, the Company agreed to issue to Robert Rosner, our Chief Executive Officer, 8,000,000 common shares at $0.005 per share, in consideration for the forgiveness of $40,000 of indebtedness of the Company to Mr. Rosner. On February 26, 2009, the Company signed agreements with existing warrant options holders to cancel all existing outstanding warrants and options to purchase securities of the Company. Our management is involved in other business activities and may, in the future become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between our business and their other business interests. In the event that a conflict of interest arises at a meeting of our directors, a director who has such a conflict will disclose his interest in a proposed transaction and will abstain from voting for or against the approval of such transaction. Item 14. Principal Accountant Fees and Services. Audit Fees . Audit fees expected to be billed to us by Gruber & Company, LLC for the audit of financial statements included in our Annual Reports on Form 10-K for the years ended March 31, 2010 and 2009 are approximately $10,000 and $10,000, respectively. These fees include auditing fees and review of quarterly financial statements for the fiscal years ended March 31, 2010 and 2009 respectively. Tax Fees . We have been billed an aggregate of $Nil for the fiscal years ended March 31, 2010 and March 31, 2009, respectively, for tax services. All Other Fees . We have been billed an aggregate of $Nil for the fiscal years ended March 31, 2010 and 2009 respectively, for permitted non-audit services. Other Matters . N.A. 35 To our knowledge, there have been no persons, other than Gruber & Company's full time, permanent employees who have worked on the audit or review of our financial statements. PART IV Item 15. Exhibits and Financial Statement Schedules. (3) Exhibits. Exhibit Number Description of Exhibit --------- ------------------------------------------------- 3.3 Amendment of Articles of Incorporation (Incorporated by reference to Exhibit 8.01 to the Company's Current Report on Form 8-K, filed October 17, 2006) 10.1 License Agreement between the Company and Wataire Industries Inc. dated July 10, 2006 (Incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K, filed July 14, 2006). 10.2 License Agreement between the Company and Wataire industries Inc. dated September 12, 2006 ((Incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K, filed September 15, 2006). 10.3 Amended License Agreement between the Company and Wataire Industries Inc. dated October 19, 2006 ((Incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed October 23, 2006). 10.4 Amended License Agreement between the Company and Wataire Industries Inc. dated October 19, 2006 ((Incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed October 23, 2006). 10.5 2006 Stock Option Plan (Incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed October 10, 2006). 10.6 Form of Stock Option Agreement at $0.50 (Incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed October 10, 2006). 36 10.7 Form of Stock Option Agreement at $0.62 (Incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed November 13, 2006). 10.8 Amended 2006 Stock Option Plan*. 10.9 Consulting Agreement between Cucoloris Films Inc. and the Company dated December 11, 2006 (Incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K, filed December 15, 2006). 10.10 Consulting Agreement between Cucoloris Films Inc. and the Company dated December 11, 2006 (Incorporated by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K, filed December 15, 2006). 10.12 Warrant issued to P204 Enterprises Ltd. on October 17, 2006 (Incorporated by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K, filed October 20, 2006). 10.13 License Agreement between Airborne Water Company and the Company dated January 25, 2007 (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed January 31, 2007). 10.14 IP Transfer Agreements between the Company, Wataire Industries Inc., Canadian Dew Technologies Inc., Terrence Nylander and Roland Wahlgren (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed April 30, 2007). 10.15 Form of Stock Option Agreement at $0.57 (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed April 10, 2007). 10.16 Form of Stock Option Agreement at $0.65 (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed May 9, 2007). 10.17 Compensation Agreement between Cucoloris Films Inc. and the Company dated May 23, 2007 10.18 Amendment to Agreement between Airborne Water Company and the Company dated June 20, 2007 (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed June 20, 2007). 10.19 Agreement between Access Energy Technologies and the Company dated June 14, 2007 37 10.20 Amendment to Agreement between Access Technologies and the Company dated June 20, 2007 (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed June 18, 2007). 10.21 Amendment to Agreement between Aquaduct and the Company dated June 20, 2007 (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed June 20, 2007). 10.22 Exclusive Marketing Agency Agreement, dated June 13, 2007, between the Company and Access Energy Technologies Ltd. (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed June 18, 2007). 10.23 Form of 5% Convertible Subordinated Debenture due October 1, 2011. (Incorporated by reference to Exhibit 10.16 to the Company's Current Report on Form 8-K, filed January 15, 2010 10.24 Form of Subscription Agreement for Convertible Subordinated Debentures due October 1, 2011. (Incorporated by reference to Exhibit 10.17 to the Company's Current Report on Form 8-K, filed January 15, 2010. 10.25 Form of 5-year Warrants issued September 14, 2009, to purchase an aggregate of 7,500,000 shares of Common Stock. (Incorporated by reference to Exhibit 10.18 to the Company's Current Report on Form 8-K/A, filed March 12, 2010. 31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 32.1 Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. 32.1 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. 99.1 License Agreement between the Company and On4 Communications Inc., formerly 38 Petsmobility Network (Canada) Inc. (Incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K, filed June 17, 2005). 99.2 Asset Purchase Agreement between the Company, Petsmobility Inc. and On4 Communications, Inc. (Incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K, filed February 6, 2006). 99.3 Rescission Agreement between the Company and On4 Communications, Inc. (Incorporated by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K, filed February 6, 2006). 99.4 Articles of Correction (Incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K, filed February 6, 2006). SIGNATURES In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Dated: July 14, 2010 WATAIRE INTERNATIONAL, INC. By: /s/ Robert Rosner Robert Rosner Chief Executive Officer, Director July 14, 2010 By: /S/ Thomas M. Braid Thomas M. Braid Chief Financial Officer, Director 39 Item 8 Financial Statements. WATAIRE INTERNATIONAL, INC. (A Development Stage Company) CONSOLIDATED FINANCIAL STATEMENTS March 31, 2010 (Stated in US Dollars) 40 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF WATAIRE INTERNATIONAL, INC. We have audited the accompanying consolidated balance sheets of Wataire International, Inc. (a Developmental Stage Company) as of March 31, 2010 and 2009, and the related statement of operations, stockholders equity and cash flows for the periods then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Wataire International, Inc. (a Developmental Stage Company) as of March 31, 2010 and 2009, the results of its' operations and its' stockholders equity and cash flows for the periods 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. The Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. These factors raise substantial doubt as to the Company's ability to continue as a going concern. Management's plan in regard to these matters is described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Gruber & Company, LLC Saint Louis, Missouri July 14, 2010 41 WATAIRE INTERNATIONAL, INC. (Formerly Cimbix Corporation) (A Development Stage Company) BALANCE SHEETS (Stated in US Dollars) March 31, March 31, 2010 2009 Assets Current Assets Cash $ 57 $ 35 Accounts receivable 9,000 - Prepaid expenses & retainer 456 9,766 Sales deposit 10,000 - Advance on marketing agreements 250,000 250,000 Inventory 249,506 250,456 Total Current Assets 519,019 510,257 Capital assets, net 1 308 Patents, Trademarks 31,434 31,434 Acquisitions of intangibles 2,546,062 2,546,062 ______________________________ Total Assets $ 3,096,516 $ 3,088,061 ______________________________ Liabilities Current Liabilities Accounts payable $ 472,896 $ 353,854 Provision and accrued liabilities 9,255 - Shareholder loan and interest - 106,589 Due to related parties 84,140 1,280 Deferred revenue 154,924 189,067 Total Current Liabilities 721,215 650,790 Long Term Liabilities Derivative liability 197,158 - 5% Converible Debentures 90,888 - Convertible debenture, net 33,403 - ______________________________ Total Liabilities 1,042,664 650,790 Stockholders' Equity Preferred shares, $0.0001 par value, redeeemable at $0.005 Authorized 20,000,000 shares Issued and outstanding, 27,501 (March 31, 2009: 27,501) 3 3 Common shares, $0.0001 par value: Authorized 100,000,000 shares Issued and outstanding, 98,710,123 (March 31, 2009: 87,110,123) 9,871 8,711 Additional paid-in capital 13,145,346 12,880,264 Deferred Stock-Based Comp. (50,667) - Deficit accumulated during the development stage (11,050,701) (10,451,707) ______________________________ Total Equity $ 2,053,852 $ 2,437,271 ______________________________ Total Liabilities and Stockholders' Equity $ 3,096,516 $ 3,088,061 ______________________________ The accompanying notes are an integral part of the financial statements 42 WATAIRE INTERNATIONAL, INC. (Formerly Cimbix Corporation) (A Development Stage Company) STATEMENTS OF OPERATIONS (Stated in US Dollars) August 17, 2000 (Inception) Year ended March 31, to March 31, 2010 2009 2010 Sales $ 15,000 $ 174,540 $ 503,102 Cost of sales (18,000) (149,724) (394,292) ______________________________________________ Gross margin (3,000) 24,816 108,810 Other income - - 9,500 ______________________________________________ (3,000) - 118,310 Expenses Advances written off - 149,542 234,542 Amortization 306 307 71,049 Amortization of notes discount 28,505 - 28,505 Bad debt written off - 2,800 2,800 Donated services - - 11,250 Foreign exchange (gain)/loss - 21,399 (42,356) General and administrative 98,102 195,132 892,862 Incorporation costs - - 2,005 Management fees 180,000 180,000 826,883 Marketing and promotion 54,116 30,692 218,717 Professional fees 144,363 54,126 503,218 Research & Development - 105,000 202,143 Settlement of accounts payable - - (3,250) Stock-based compensation 94,242 - 8,104,292 ______________________________________________ Total Expenses 599,634 738,998 11,057,660 Loss from continuing operations (602,634) (714,182) (10,939,350) Gain/(Loss) from discontinued operations 3,640 - (111,351) ______________________________________________ Net loss for the year $ (598,994) $ (714,182) $ (11,050,701) Basic and diluted loss per share (0.01) (0.01) Weighted average number of shares outstanding 95,960,534 80,863,905 The accompanying notes are an integral part of the financial statements 43 WATAIRE INTERNATIONAL, INC. (Formerly Cimbix Corporation) (A Development Stage Company) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) for the period August 17, 2000 (Inception) to March 31, 2010 (Stated in US Dollars) Shares Total Subscrip Additional Stock- Common -tions Preferred Paid-in Accum. holders' Shares Amount Received Shares Amount Capital Deficit Equity Common shares issued 200 - - - 10 10 Shares subscrip -tion 150,280 150,280 Net loss for the period (216,896) (216,896) _______________________________________________________________________________ Bal,Sep 30, 2001 200 - 150,280 - - 10 (216,896) (66,608) Shares subscrip -tion 76,105 76,105 Net loss for the year (29,313) (29,313) _______________________________________________________________________________ Bal,Sep 30, 2002 200 - 226,385 - - 10 (246,209) (19,814) Shares subscrip -tion 5,000 5,000 Common shares issued 80,160 8 (231,385) 232,542 1,165 Adj to number of shares out- standing as a result of the acqui- sition of Millen -nium Business Gp. USA Inc. (80,160) (8) (232,542) 232,560 Cimbix Corp. 170,240 17 232,543 (232,560) Fair value of shares issued in conn- ection with the acqui- sition of Millen -nium Business Gp. USA Inc. 80,360 8 2,501 1 (9) Net asset deficiency of legal parent at date of reverse take-over transaction (20,167) (20,167) Common shares issued 2,772 - 13,810 13,810 Common shares issued 1,000 - 7,500 7,500 Donated services 2,250 2,250 Net loss for the year (98,849) (98,849) _____________________________________________________________________________ Bal,Sep 30, 2003 254,372 25 2,501 1 256,094 (365,225)(109,105) The accompanying notes are an integral part of the financial statements 44-45 WATAIRE INTERNATIONAL, INC. (Formerly Cimbix Corporation) (A Development Stage Company) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) for the period August 17, 2000 (Inception) to March 31, 2010 (Stated in US Dollars) (Audited) Deferred Total Additional Stock- stock- Common Preferred Paid-in based Accum. holders' shares Amount shares Amount Capital Comp. Defict Equity Bal,sep 254,372 25 2,501 1 256,094 - (365,225) (109,105) 30,2003 ___________________________________________________________________________ Common shares issued 5,000 1 49,999 - 50,000 Common shares issued 600,000 60 29,940 - 30,000 Net loss for the year (227,180) (227,180) ____________________________________________________________________________ Bal,sep 30,2004 859,372 86 2,501 1 336,033 - (592,405) (256,285) Common shares issued 160,000 16 484 500 Common shares issued 36,000,000 3,600 86,400 90,000 Common shares issued 8,960,000 896 94,304 95,200 Common shares issued 2,440,000 244 121,756 122,000 Common shares issued 250,000 25 11,225 11,250 Disposal of MBG (140,949) (140,949) Net loss for the year (79,243) (79,243) ____________________________________________________________________________ Bal,Sep 30,2005 48,669,372 4,867 2,501 1 509,253 - (671,648)(157,527) Common shares issued 336,000 34 15,086 15,120 Common shares issued 10,000,000 1,000 619,000 620,000 Common shares issued 440,000 44 109,956 110,000 Common shares issued 1,000,000 100 559,900 560,000 Inventory donated 9,945 9,945 Net loss for the year (297,661)(297,661) _____________________________________________________________________________ Bal,Sep 30,2006 60,445,372 6,045 2,501 1 1,823,140 - (969,309) 859,877 Common shares issued 272,536 27 204,375 204,402 Common shares issued 1,834,045 183 880,157 880,340 Common shares issued 1,000,000 100 409,900 410,000 Common shares issued 4,800,000 480 959,520 960,000 Stock- based compen- sation 8,010,050 8,010,050 Net loss for the year (8,430,656)(8,430,656) _____________________________________________________________________________ Bal,Sep 30,2007 68,351,953 6,835 2,501 1 12,287,142 -(9,399,965) 2,894,013 Common shares issued 2,058,823 205 349,795 350,000 Common shares issued 588,235 60 99,940 100,000 Common shares issued 4,400,000 440 219,560 220,000 Cancel- lation of shares (1,000,000) (100) (409,900) (410,000) Preferred shares issued 25,000 2 4,998 5,000 Net loss for the period (337,560) (337,560) _____________________________________________________________________________ Bal,Mar 31,2008 74,399,011 7,440 27,501 3 12,551,535 -(9,737,525)2,821,453 Common shares issued 1,600,000 160 79,840 81,000 Common shares issued 1,111,112 111 99,889 100,000 Common shares issued 1,000,000 100 59,900 60,000 Common shares issued 1,000,000 100 49,900 50,000 Common shares issued 8,000,000 800 39,200 40,000 Net loss for the year (714,182)(714,182) _____________________________________________________________________________ Bal,Mar 31,2009 87,110,123 8,711 27,501 3 12,880,264 -(10,451,707)2,437,271 Common shares issued 4,000,000 400 19,600 20,000 common shares issued for service 7,600,000 760 151,240 (152,000) - Amortization of stock based comp 101,333 101,333 Warrant issued for comp 94,242 94242 Net loss for the year (598,994)(598,994) _______________________________________________________________________________ Bal,Mar. 31, 2010 98,710,123 9,871 27,501 3 13,145,346 (50,667)(11,050,701)2,053,852 The accompanying notes are an integral part of the financial statements 45-46 WATAIRE INTERNATIONAL, INC. (Formerly Cimbix Corporation) (A Development Stage Company) STATEMENTS OF CASH FLOWS (Stated in US Dollars) August 17, 2000 For the year ended (Inception) March 31, to March 31, 2010 2009 2010 _______________________________________ Operating Activities Loss from operations $ (598,994) $ (714,182) $ (11,050,701) Adjustments to reconcile loss to cash used in operating activities : Amortization 306 307 71,049 Amortization of notes discounts 28,505 - 28,505 Donated services - - 11,250 Website development costs written off - - 8,700 Shares issued for services 152,000 - 454,070 Stock-based compensation 43,576 - 8,053,626 Advances written off - 149,542 199,542 Change in non-cash working capital items : Accounts receivable (9,000) 2,800 (9,000) Prepaid expenses and retainers (690) (7,486) (10,456) Deferred revenue (34,143) 34,527 154,924 Advance on marketing agreements - - (250,000) Inventory 950 82,965 (394,952) Accounts payable and accrued liabilities 128,297 32,546 482,151 ______________________________________ Net cash used in operating activities (289,193) (418,981) (2,251,292) ______________________________________ Investing Activities License payment advanced - - (50,000) Capital assets - - (922) Advanced to subsidiaries - - (115,091) Acquisition of intangibles-net - (10,688) (1,467,624) Website development costs - - (8,700) Proceeds from disposition of subsibiaries - - 100 _____________________________________ Net cash used in investing activities - (10,688) (1,642,237) _____________________________________ Financing Activities Bank indebtedness - (5,885) - Shareholder loan & interest (106,589) 106,589 - Due to related parties 82,860 (1,000) 84,140 Shares issued for cash - 330,000 2,937,189 Shares issued for debt 20,000 - 579,313 Proceeds from Convertible debentures 292,944 - 292,944 ____________________________________ Net cash provided by financing activities 289,215 429,704 3,883,586 ____________________________________ Increase/(Decrease) in Cash 22 35 57 Cash, beginning 35 - - ____________________________________ Cash, ending 57 35 57 _____________________________________ Supplemental Disclosure of Cash Flow Information Cash paid during the period for interest - - - Cash paid during the period for income taxes - - - Supplemental Disclosure of Non-Cash Items: Shares issued for Debt 20,000 110,000 579,313 Deferred stock-based compensation (50,667) - (50,667) Shares issued for Promissory Notes - - 365,087 Shares issued for intangibles - - 960,000 Exchange of shareholder loan for Convertible Debt 125,000 - 125,000 The accompanying notes are an integral part of the financial statements 47-48 WATAIRE INTERNATIONAL, INC. (Formerly Cimbix Corporation) (A Development Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS March 31, 2010 (Stated in US Dollars) (Audited) Note 1. General Organization And Business The Company was incorporated on August 17, 2000 in the State of Washington, USA and the Company's common shares are publicly traded on the OTC Bulletin Board. On September 26, 2006, the Company approved a name change from Cimbix Corporation to Wataire International, Inc. The Company markets and distributes atmospheric water generator machines. It also owns all of the intellectual property relating to a water treatment process and devices for water-from-air machines. Management plans to further evaluate, develop and manage the commercialization, sub-license and/or commercial sale of these products. These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At March 31, 2010, the Company had not yet achieved profitable operations, has accumulated losses of $11,000,701 since its inception and expects to incur further losses in the development of its business, all of which cast substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon future profitable operations and/or the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has obtained additional funds by related party advances, however there is no assurance that this additional funding is adequate and further funding may be necessary. Note 2. Significant Accounting Policies These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are stated in US dollars. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may differ from these estimates. The financial statements have, in management's opinion, been properly prepared within the framework of the significant accounting policies summarized below : (a) Development Stage Company The Company is a development stage company as defined in the Statements of Financial Accounting Standards ("SFAS") No. 7. The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced. All losses accumulated since inception has been considered as part of the Company's development stage activities. 49 (b) Consolidation These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Petsmo Inc. and Aqua Technologies, Inc. All inter-company transactions and balances have been eliminated. (c) Financial Instruments The carrying values of cash, accounts receivable, accounts payable, promissory notes payable and due to related parties approximate fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. (d) Inventory Inventory, which consists of finished goods, is valued at the lower of cost net realizable value using the first in first out (FIFO) method. (e) Website Development Costs Under the provisions of Statement of Position No. 98-1 "Accounting for the Costs of Computer Software Development or Obtained for Internal Use," the Company previously capitalized costs of design, configuration, coding, installation and testing of the Company's website up to its initial implementation. Costs are amortized to expense over an estimated useful life of three years using the straight-line method. Ongoing website post- implementation cost of operations, including training and application, are expensed as incurred. The Company evaluates the recoverability of website development costs in accordance with Financial Accounting Standards No. 121 " Accounting of the Impairment of Long Lived Assets." (f) Intangible Assets and Amortization The Company has adopted SFAS No. 142 "Goodwill and Other Intangible Assets", which requires that goodwill not be amortized, but that goodwill and other intangible assets be tested annually for impairment. Intangible assets with a finite life will be amortized over the estimated useful life of the asset. The Company's operational policy for the assessment and measurement of any impairment in the intangible assets, which primarily relates to contract- based intangibles such as license agreements and extensions, is to evaluate annually, the recoverability and remaining life of its intangible assets to determine the fair value of these assets. The patents are pending and the Company has determined that the assets have an infinite life. (g) Revenue Recognition The Company receives revenues from the sale of water generator machines. The Company recognizes revenues when persuasive evidence of an arrangement exists, the product is delivered and collection is reasonably assured. A one-year warranty is provided by the Company on all its products. (h) Income Taxes The Company follows SFAS No. 109, "Accounting for Income Taxes" which requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. 50 (i) Basic and Diluted Loss Per Share The Company computes net loss per share in accordance with SFAS No. 128. "Earnings Per Share". SFAS 128 requires presentation of both basic and diluted earnings per share ("ESP") on the face of the income statement. Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilative potential common shares outstanding during the year including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the year is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilative potential common shares if their effect is anti dilative. (j) Stock-based Compensation In December 2004, the Financial Accounting Standards Board issued FAS 123R "Share-Based Payment", a revision to FAS 123. FAS 123R replaces existing requirements under FAS 123 and APB 25, and requires public companies to recognize the cost of employee services received in exchange for equity instruments, based on the grant-date fair value of those instruments, with limited exceptions. FAS 123R also affects the pattern in which compensation cost is recognized, the accounting for employee share purchase plans, and the accounting for income tax effects of share-based payment transactions. For small business filers, FAS 123R is effective for interim or annual periods beginning after December 15, 2005. The Company adopted FAS 123R on October 1, 2006. (k) Foreign Currency Translation The Company translates foreign currency transactions and balances to its reporting currency, United States dollars, in accordance with SFAS No. 52, "Foreign Currency Translation". Monetary assets and liabilities are translated into the functional currency at the exchange rate in effect at the end of the year. Non-monetary assets and liabilities are translated at the exchange rate prevailing when the assets were acquired or the liabilities assumed. Revenues and expenses are translated at the rate approximating the rate of exchange on the transaction date. All exchange gains and losses are included in the determinination of net income (loss) for the year. (l) Reclassifications Certain items in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation in the current period's presentation. These reclassifications have no effect to the previously reported income (loss). (m) Change in Reporting Year The Company adopted March 31 as its fiscal year end from September 30 in 2008. 51 (n) Recently Issued Accounting Pronouncements In May 2008, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles that are presented in conformity with generally accepted accounting principles in the United States. SFAS No. 162 is effective 60 days following the Securities and Exchange Commission's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company does not believe SFAS No. 162 will have a material impact on its financial statements. In March 2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133. SFAS No. 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement No. 133 and its related interpretations and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company does not believe SFAS No. 161 will have a material impact on its financial statements. In December 2007, the FASB issued SFAS No. 141(R), Business Combinations. SFAS No. 141(R) retains the fundamental requirements in SFAS No. 141, Business Combinations, that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS No. 141(R) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions specified in SFAS No. 141(R). In addition, SFAS No. 141(R) requires acquisition costs and restructuring costs that the acquirer expected but was not obligated to incur to be recognized separately from the business combination, therefore, expensed instead of part of the purchase price allocation. SFAS No. 141(R) will be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Early adoption is prohibited. The Company expects to adopt SFAS No. 141(R) to any business combinations with an acquisition date on or after January 1, 2009. The Company does not believe SFAS No. 141(R) will have a material impact on its financial statements In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment to ARB No. 51. SFAS No. 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The Company does not believe SFAS No. 160 will have a material impact on its financial statements. In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits an entity to irrevocably elect fair value on a contract-by-contract basis as the initial and subsequent measurement attribute for many financial assets and liabilities and certain other items including insurance contracts. Entities electing the fair value option would be required to recognize changes in fair value in earnings and to expense upfront cost and fees associated with the item for which the fair value option is elected. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of SFAS No. 157, Fair Value Measurements. The Company does not expect the adoption of SFAS No. 159 to have a material impact on its financial condition or results of operations. Note 3. Related Party Transactions During the year ended March 31, 2010, directors of the company charged the following expenses to the Company: Management fees $180,000 Loan interest $5,000 52 Note 4. Common Stock For the Year Ended March 31, 2009 Share Subscriptions On April 8, 2008, the Company entered into an agreement to issued 1,600,000 units at $0.05 per unit with Darfield Financial Corp. for an aggregate amount of $80,000. Each unit consists of one common share and one half warrant exercisable at $0.05 per share on or before April 7, 2011. On May 30, 2008 the Company entered into a private placement agreement to issued 1,111,112 common stock at $0.09 per share for proceeds of $100,000 to two accredited investors and to issued 555,556 common stock to each investor. Share For Debt Settlements On June 17, 2008, the Company approved the issuance of 1,000,000 units at $0.06 per share to settle amounts due to a director of the Company totaling $60,000. Each unit contain one common share and one share warrant exercisable at $0.06 per share on or before June 16, 2011. On July 8, 2008, the Company approved the issuance of 1,000,000 units at $0.05 per share to settle amounts due to a director of the Company totaling $50,000. Each unit contain one common share and one share warrant exercisable at $0.05 per share on or before July 7, 2011. On January 9, 2009, the Company approved the issuance of 8,000,000 common shares at $0.005 per share to settle amounts due to a director of the Company totaling $40,000. On February 26, 2009, the Company have signed agreement with existing warrant options holders to cancel all existing warrant options available to the Company. For the Year Ended March 31, 2010 Shares For Debt and Service Settlements On April 22, 2009, the Company approved the issuance of 4,000,000 common shares at $0.005 per share to settle amounts due to a debtor of the Company totaling $20,000. On July 31, 2009, the Company approved the issuance of 7,600,000 common shares at $0.02 per share for services provided by several professionals for a 12 months period totaling $152,000. On September 14, 2009, the Company entered into a definitive agreement with the Chief Executive officer and director of the Company for the issuance of share purchase warrants for executive compensation, with a term of five years expiring September 14, 2014, exercisable at $0.01 per share, for 7,500,000 shares of common stock with a cashless exercise provision. The Company recognized $94,242 in stock based compensation expense for the issuance of these warrants. Note 5. Warrants During February 2009, the Company received signed consent agreements with all existing warrant holders that cancel the entire balance of 7,058,823 outstanding warrants as of February 2009. 53 Note 6. Stock Options and Stock Based Compensation During 2006, the Company authorized a share option plan under which employees were granted options to purchase shares of authorized but unissued, common shares. During the years ended March 31, 2010 and 2009, all options issued in this plan were either forfeited as options went unexercised due to employee terminations or cancelled via signed consent agreements with all remaining option holders. There was no compensation charge associated with stock options included in the statement of operations for the year ended March 31, 2010 and 2009. Note 7. Contingencies Agreement On December 11, 2006 and December 12, 2006, the Company entered into two marketing agreements in which the Company would pay $1,000,000 and issue 1,000,000 common shares. During the year ended March 31, 2008, the Company paid $250,000 in respect to the cash portion of the agreements and had issued 1,000,000 common shares of the Company. The 1,000,000 shares issued were not released to the marketing company as it has not commenced its branding and marketing efforts and the contract has expired. The 1,000,000 shares have been returned back to treasury. The $250,000 is classified as an Advance on Marketing Agreements on the balance sheet. The Company is currently re-negotiating new terms on this agreement. Legal On October 11, 2006, the Company was named as a co-defendant in a lawsuit whereby the plaintiffs were claiming general damages, with respect to funds totalling approximately $94,000 which were allegedly misappropriated, interest, costs and such further and other relief as the court may deem just. Management of the Company believed the claim was without merit and was unlikely to succeed. The Company filed a statement of defence denying the allegations and a counterclaim for defamation. The court ordered a severance of the action, and required the plaintiffs to prove their damages, before proceeding to trial on issues of liability. The lawsuit by the plaintiffs was dismissed on October 6, 2008. Aquaduct International. LLC v. Wataire International, Inc. et. AI. This litigation was commenced on December 11, 2008 by the Company's former distributor over the alleged purchase of certain atmospheric water machines. On July 20, 2009, the Company answered the lawsuit and filed a cross-complaint against the plaintiff for Breach of Contract and Intentional Interference. On February 2, 2010 a confidential settlement agreement and release was effectuated between the parties. The Complaint and cross complaint have been dismissed by the parties with prejudice. Note 8. Inventory At March 31, 2010 and 2009, inventories are comprised of finished water- from-air machines totaling $249,506, and $250,456, respectively. Note 9. Intangibles On April 25, 2007, the Company entered into an agreement to acquire all of the intellectual property ("IP") relating to a water treatment process and related devices for water-from-air machines from Wataire Industries Inc., Canadian Dew Technologies Inc., Terrence Nylander and Roland Wahlgren. Mr. Nylander was at the time of signing the agreement and currently, the President of the Company. Consideration for the purchase of the IP was $476,190 (CAD $500,000), which was paid on March 31, 2007, the issuance of 4,800,000 shares of common stock of the Company, the agreement by the Company to pay a royalty equal to 5% of the gross profits from the sales of all apparatus or products relating to the IP for a period of 30 years from April 25, 2007 and a royalty equal to 5% of gross licensing revenues on the IP. This consideration is in addition to the 11,000,000 shares of common stock previously issued for the license rights as disclosed in the Company's annual September 30, 2006 audited consolidated financial statements. The IP acquisition was completed in July 2007. 54 The IP acquired by the Company includes all copyrights, patent rights, trade secret rights, trade names, trademark rights, process information, technical information, contract rights and obligations, designs, drawings, inventions and all other intellectual and industrial property rights of any sort related to or associated with the invention. The intangibles consist of patents and trademark applications of $31,434 and the cost of the acquisition of IP Technology of $2,546,062 as described above. Patents, Trademark applications $ 31,434 4,800,000 shares issued to Wataire Ecosafe and Canadian Dew Technologies $ 960,000 Cash consideration 476,190 Remaining license rights including 11,000,000 shares issued to Wataire Ecosafe 1,109,872 $ 2,546,062 Note 10. Deferred Revenue As of March 31, 2010 and 2009, deferred revenue totaled $Nil and $189,067, respectively, consisting of cash payments made by customers in advance of product shipment. Revenue will be recognized when finished goods are shipped to the customer. Note 11. Shareholder Loan Note 12. Subsequent Events Subsequent to March 31, 2010: Note 13. Income Taxes The Company has losses for tax purposes totaling $11,000,701 which may be applied against future taxable income. These losses begin to expire in 2027. The potential tax benefit arising from these losses has not been recorded in the consolidated financial statements. The Company evaluates its valuation allowance requirements on an annual basis based on projected future operations. When circumstances change and this causes a change in management's judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations. 55

undersigned hereunto duly authorized.

	On behalf of: WATAIR, INC.

January 26, 2024	/s/ David Hill
	Chief Executive Officer, Vyre Network
	(Principal executive officer).