UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 10-Q

_________________

XQUARTERLY REPORT PURSUANT TO 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 quarterly period ended: December 31, 2010

orended June 30, 2012

 TRANSITION REPORT PURSUANT TO SECTION

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

For the transition period from: _____________from ______________ to ___________________________

_________________

Commission File Number: 000-49955

WATAIR INC.

(formerly Wataire International , Inc.)

(Exact name of registrant as specified in its charter)

_________________

#134-9663 Santa Monica Blvd.,

Beverly Hills, CA 90210

(Address of Principal Executive Offices) (Zipprincipal executive offices, including Zip Code)

877-602-8985

(Registrant’sIssuer’s telephone number, including area code)

 N/A

Not applicable

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

_________________

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the precedingpast 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☒ 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) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒No☐

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

If an emerging growth company, 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 NO  X☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS

IndicateState the number of shares outstanding of each of the issuer’s classes of common stock,equity, as of the latest practicable date: 129,716,886 shares of $0.0001 par value common stock issued as of May 15, 2011.

WATAIR INC.

FORM 10-Q

For the Period Ended September 30, 2010

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Cautionary Note Regarding Forward Looking Statements

PART II — OTHER INFORMATIONThis quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 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 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 future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, 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 from the forward-looking statements, projections or other expectations include, but are not limited to, the following:

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, we do not undertake to update or revise any of the forward-looking statements to conform these statements to actual results, whether as a result of new information, future events or otherwise.

 WATAIR INC.

VYRE NETWORK

(formerly Wataire International, Inc.)

(A Development Stage Company)

Consolidated Balance Sheets

The accompanying notes are an integral part of the financial statementsJune 30, 2012, and March 31, 2012

WATAIR INC.

(formerly Wataire International, Inc.)

(A Development Stage Company)

Consolidated Income Statements

(Unaudited)INDEX

The accompanying notes are an integral part of the financial statements

WATAIR INC.

(formerly Wataire International, Inc.)

(A Development Stage Company)

Consolidated Cash Flow Statements

(Unaudited) 

The accompanying notes are an integral part of the financial statements

WATAIR INC.

VYRE NETWORK

(formerly Wataire International, Inc.)

(A Development Stage Company)

Statement of Stockholders’ Equity (Deficit)CONSOLIDATED BALANCE SHEETS

For the period August 17, 2000 (Inception) to DecemberThe Quarter Ended June 30, 2012, and March 31, 20102012

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

Share Subscription												Additional				Deferred Stock Based								Total
		Common Shares				Amount				Received				Preferred Shares				Amount				Paid-in Capital				Compensation				Accumulated Deficit				Stockholders’Equity
Common shares issued			600,000				60																29,940							��				30,000
Net loss for the year																															(227,180	)		(227,180)
Balance Sept 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	)										(140,929)
Net loss for the year																															(79,243	)		(79,243)
Balance Sept 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)
Balance Sept 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 compensation																							8,010,050											8,010,050
Net loss for the year																															(8,430,656	)		(8,430,656)
Balance Sept 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
Shares cancelled			(1,000,000	)			(100	)															(409,900	)										(410,000)
Preferred shares issued															25,000				2				4,998											5,000
Net loss for the year																															(337,560	)		(337,560)
Balance March 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											80,000
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)
Balance March 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 compensation																											101,333							101,333
Warrants issued for compensation																							94,242											94,242
Net loss for the year																															(598,994	)		(598,994)
Balance March 31, 2010			98,710,123				9,871								27,501				3				13,145,346				(50,667	)			(11,050,701	)		2,0533,852
Common shares issued for converted debentures			31,006,763				3,101																306,967											310,068
Amortization of stock based compensation																											50,667							50,667
Net loss for the period																															(391,540	)		(391,540)
Balance Dec 31, 2010			129,716,886				12,972								27,501				3				13,452,313				—				(11,442,241	)		2,023,047

WATAIR INC.VYRE NETWORK

(formerly Wataire International, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

For the quarter ended June 30, 2012, and 2011

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

VYRE NETWORK

(A Development Stage Company)formerly Wataire International , Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

For the quarter ended June 30, 2012 and 2011

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 quarter ended June 30, 2012, and 2011

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

 VYRE NETWORK

(formerly Wataire Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2010

(Stated in US Dollars)

(Unaudited)For the Three Months Ended June 30, 2012, and 2011

Note 1. General Organization and BusinessNOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

The Companycompany was incorporated onin August 17, 2000 in the State of Washington, USA and the Company'sCompany’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 December 31, 2010,June 30, 2012, the Company had not yet achieved profitable operations, has accumulated losses of $11,442,241$12,484,066 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

The unaudited 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. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K. The results for the nine months ended December 31, 2010, are not necessarily indicative of the results to be expected for the full year ending March 31, 2011.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended June 30, 2012, and 2011

(c) Inventory

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 Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended June 30, 2012, and 2011

(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 January 2010, the FASB issuedaccordance with Accounting Standards Update (ASU) No. 2010-06, Improving Disclosures aboutCodification (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 Three Months Ended June 30, 2012, and 2011

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 June 30, 2012, 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 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 Measurements, which amends theof Financial Instruments

We follow ASC Topic 820, Fair Value Measurements and Disclosures. ASU No. 2010-06 amendsDisclosures, 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 ASC to require disclosureuse of transfers into and out of Level 1 and Level 2 fair value measurements that establishes a framework for measuring fair value and also requires more detailedexpands disclosure about the activity within Level 3such 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 Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended June 30, 2012, and 2011

The new disclosurescarrying value of financial assets and clarificationsliabilities 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 existing disclosures are effectivethose contracts qualify as derivatives to be separately accounted for interimunder the relevant sections of ASC Topic 815-40, Derivative Instruments and annual reporting periods beginning after December 15, 2009, except forHedging: Contracts in Entity’s Own Equity.

The result of this accounting treatment could be that the disclosures concerning purchases, sales, issuances,fair value of a financial instrument is classified as a derivative instrument and settlementsis 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 roll forwardstatement of activity in Level 3operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value measurements. Those disclosuresat the conversion date and then that fair value is reclassified to equity. Financial instruments that are effectiveinitially 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 fiscal years beginning after December 15, 2010,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 for interim periods withinused 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 fiscal years. The adoption of this amendment is not expected toestimated by management which could have a material effect of the Company’son our reporting results and financial statements.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.

Note 3. Related Party Transactions

VYRE NETWORK

(formerly Wataire Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended June 30, 2012, and 2011

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.

During the ninethree months ended December 31, 2010,June 30, 2012, directors of the company charged the Company with Management fees of $135,000.$10,000.

On November 15, 2010, in exchange for debt,During the three months ended June 30, 2012, The Company issued a Convertible Debenture in the amountadditional capital of $38,000 to the President and CEO of the Company. The Convertible Debenture is non-dilutive and has a due date of November 30, 2012. The holder has the right to convert the outstanding principal and accrued interest into common shares of the Company at a price of $0.01 per share.

On July 27, 2010, the Company issued 12,500,000 shares of common250,000,000 Common stock to the Company’s Chief Executive Officer and Director in the conversion of $125,000 subordinated convertible debenture.

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 issue 1,111,112 common stock at $0.09 per share for proceeds of $100,000 to two accredited investors and to issue 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.

For the Nine Months Ended December 31, 2010

On November 8, 2010, in exchange for cash proceeds, the Company issued a Convertible Debenture in the amount of $65,000 to an accredited investor under Regulation S rules. The Convertible Debenture is non-dilutive and has a due date of November 30, 2012. The holder has the right to convert the outstanding principal and accrued interest into common shares of the Company at a price of $0.01 per share.

On July 27, 2010, the Company issued 31,006,763 shares of common stock in the conversion of $304,534 principal amount of convertible subordinated debentures. 30,453,400 of these shares were issued in conversion of the principal amount of the debentures and 553,363 shares were issued in conversion of accrued interest thereon of $5,533.63.

On June 21, 2010, in exchange for cash proceeds of $25,000, the Company issued a Convertible Debenture to an accredited investor. The Convertible Debenture has a due date of October 31, 2011. The holder has the right to convert the outstanding principal and accrued interest into common shares of the Company at a price of $0.01 per share.

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.

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 nine months ended December 31, 2010 and the year ended March 31, 2010.

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

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 December 31, 2010 and March 31, 2010, inventories are comprised of finished water-from-air machines totaling $352,946, and $249,506, 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.

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 $36,488 and the cost of the acquisition of IP Technology of $2,547,161 as described above.

Note 10. Deferred Revenue

As of December 31, 2010 and March 31, 2010, deferred revenue totaled $100,776 and $154,924, spectively, 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. Subsequent Events

On May 18

VYRE NETWORK

(formerly Wataire Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Company accepted the resignation of Thomas Braid as directorThree Months Ended June 30, 2012, and officer of the Company.2011

Revenue Recognition

Note 12. Income Taxes

Revenue recognition: 

The Company has lossesadopted 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 tax purposes totaling $11,442,241 which may be applied against future taxable income. These losses begin to expirethose goods or services, in 2027. The potential tax benefit arisingaccordance with the following five-step process:

During the periods presented, all revenue was from these losses has not been recorded in the consolidated financial statements.sales of cannabis products. The Company evaluates its valuation allowancehas 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 annual basis basedanti-dilutive effect on projected future operations. When circumstances changediluted 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