Bioshaft Water Technology (BSHF) 10-Q/A 2009 Q2 Quarterly report (amended)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A

(Mark One)

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

For the quarterly period endedOctober 31, 2008

or

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

For the transition period from ____________ to ____________

Commission File Number000-52393

BIOSHAFT WATER TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)

Nevada	98-0494003
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Spectrum Technology Centre, 184 Technology Drive, Suite 201, Irvine CA 92618
(Address of principal executive offices) (zip code)

(949) 748-8050
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting
company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  [   ]		Accelerated filer                    [   ]
Non-accelerated filer    [   ]	(Do not check if a smaller reporting company)	Smaller reporting company  [X]

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

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APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

90,000,000 common shares issued and outstanding as of December 15, 2008

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

	Page Number
Balance Sheets as of October 31, 2008 (Unaudited) and April 30, 2008	4
Statements of Operations for the three and six month periods ended October 31, 2008 and 2007 and for the period from inception to October 31, 2008 (Unaudited)	5
Statement of Stockholder’s Equity for the period from inception to October 31, 2008 (Unaudited)	6
Statements of Cash Flows for the three and six month periods ended October 31, 2008 and 2007 and for the period from inception to October 31, 2008 (Unaudited)	7
Notes to the Financial Statements (Unaudited)	8-15

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
BALANCE SHEETS

		October 31,			April 30,
		2008			2008
		(Unaudited)
ASSETS
Current assets :
Cash and cash equivalents	$	182,314		$	80,200
Other current assets		4,642			5,676
Total current assets		186,956			85,876
Other assets :
Deposits		4,939			4,939
Property, plant and equipment – net		31,764			37,110
Total other assets		36,703			42,049
Total assets	$	223,659		$	127,925
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities :
Credit line payable	$	75,000		$	-
Accounts payable and accrued expenses		173,397			108,137
Loan payable		500,000			-
Total current liabilities		748,397			108,137
Stockholders’ equity (deficit) :-
Common stock, $0.001 par value; 300,000,000 shares authorized, 90,000,000 issued and		90,000			90,000
outstanding
Preferred stock, $0.001 par value; 25,000,000 shares authorized, none issued and outstanding		-			-
Additional paid-in capital		15,179,057			15,151,727
Deficit accumulated during the development stage		(15,793,795	)		(15,221,939	)
Total stockholders’ equity (deficit)		(524,738	)		19,788
Total liabilities and stockholders' equity (deficit)	$	223,659		$	127,925

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

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(UNAUDITED)

														Period From
														Inception
		Three Month			Three Month			Six Month			Six Month			(March 8,
		Period			Period			Period			Period			2006)
		Ended			Ended			Ended			Ended			To
		October 31,			October 31,			October 31,			October 31,			October 31,
		2008			2007			2008			2007			2008
NET REVENUE	$	-		$	-		$	-		$	-		$	-
OPERATING EXPENSES
Depreciation & amortization		4,928			296,712			9,655			296,977			1,795,520
Impairment of assets		-			-			-			-			12,483,903
General & administrative		219,456			155,797			504,486			161,286			1,288,488
Stock based compensation		14,544			-			27,330			-			204,090
Total Operating Expense		222,083			452,509			541,471			458,263			15,772,001
NET LOSS FROM OPERATIONS		(238,928	)		(452,509	)		(541,471	)		(458,263	)		(15,772,001	)
OTHER INCOME (EXPENSE)
Loss on disposal of equipment		-			(15,080	)		-			(15,080	)		-
Interest income		573			2,581			865			2,581			9,456
Interest Expense		(18,750	)		-			(31,250	)		-			(31,250	)
		(18,177	)		(12,499	)		(30,385	)		(12,499	)		(21,794	)
NET LOSS	$	(257,105	)	$	(465,008	)	$	(571,856	)	$	(470,762	)	$	(15,793,795	)
BASIC AND DILUTED NET LOSS PER SHARE	$	(0.003	)	$	(0.000	)	$	(0.006	)	$	(0.003	)
BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING		90,000,000			124,766,667			90,000,000			198,961,957

Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive.

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

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM INCEPTION
(MARCH 8, 2006) TO OCTOBER 31, 2008
(UNAUDITED)

										Deficit
										Accumulated
	Common Stock						Additional			During the			Total
							Paid in			Development			Stockholders'
	Shares			Amount			Capital			Stage			Equity
Inception, March 8, 2006			$	-		$	-		$	-		$	-
Initial capitalization
Sale of common stock	240,000,000			4,000			11,000			-			15,000
Net loss for the period	-			-			-			(4,077	)		(4,077	)
Balance, April 30, 2006	240,000,000			4,000			11,000			(4,077	)		10,923
Sale of common stock	30,000,000			500			49,500			-			50,000
Net loss for year	-			-			-			(35,730	)		(35,730	)
Balance, April 30, 2007	270,000,000			4,500			60,500			(39,807	)		25,193
Effect of forward stock split				265,500			(265,500	)		-			-
Returned to treasury	(210,000,000	)		(210,000	)		210,000			-			-
Shares issued for cash	3,000,000			3,000			1,496,967			-			1,499,967
Shares issued for patent purchase	27,000,000			27,000			13,473,000			-			13,500,000
Stock based compensation	-			-			176,760			-			176,760
Net loss for the year	-			-			-			(15,182,132	)		(15,182,132	)
Balance, April 30, 2008	90,000,000			90,000			15,151,727			(15,221,939	)		19,788
Stock based compensation	-			-			27,330			-			27,330
Net loss for the six months	-			-			-			(571,856	)		(571,856	)
Balance, October 31, 2008	90,000,000		$	90,000		$	15,179,057		$	(15,793,795	)	$	(524,738	)

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

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
STATEMENT OF CASH FLOWS

								Period From
		Six			Six			Inception
		Months Period			Months Period			(March 8,
		Ended			Ended			2006) to
		October 31,			October 31,			October 31,
		2008			2007			2008
CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss	$	(571,856	)	$	(470,762	)	$	(15,793,795	)
Adjustments To Reconcile Net Loss To Net Cash Used In
Operating Activities
Impairment of assets		-			15,080			12,483,903
Depreciation & amortization		9,655			296,977			1,795,520
Stock based compensation		27,330			-			204,090
Change in operating assets & liabilities :-
Decrease in other current assets		1,034			-			(4,642	)
Increase in other assets		-			-			(4,939	)
Increase in accounts payable		65,261			3,549			173,397
Net cash used in operating activities		(468,576	)		(155,156	)		(1,146,466	)
CASH FLOWS FROM FINANCING ACTIVITY
Proceeds from funds drawn on line of credit		75,000			-			75,000
Proceeds from loan payable		500,000			-			500,000
Proceeds from issuance of common stock		-			1,500,000			1,565,000
Net cash provided from financing activities		575,000			1,500,000			2,140,000
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of equipment		(4,310	)		-			(61,137	)
Purchase of patent		-			(750,033	)		(750,083	)
Net cash used in investing activities		(4,310	)		-			(811,220	)
Change in cash and cash equivalents during the period		102,113			594,811			182,314
Cash and cash equivalents, beginning of the period		80,200			17,741			-
Cash and cash equivalents, end of the period	$	182,314		$	612,552		$	182,314
Supplemental disclosure with respect to cash flows:
Cash paid for income taxes	$	-		$	-		$	-
Cash paid for interest	$	-		$	-		$	-

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

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2008 

NOTE 1. GENERAL ORGANIZATION AND BUSINESS

Bioshaft Water Technology, Inc. (formerly known as ‘Pointstar Entertainment Corp.’) (the “Company”, “we”, “our”, “us”) was originally incorporated under the laws of the state of Nevada on March 8, 2006. The Company owns the world wide patented technology and is in the business of designing, manufacturing and installing wastewater (sewage) treatment plants using its technology.

On September 18, 2007, we entered into an asset purchase agreement with Hans Bio Shaft Limited and Hassan Hans Badreddine pursuant to which we purchased U.K. Patent and related U.S. and European patent applications from Hans Bio Shaft Limited. In consideration for the U.K. patent and related U.S. and European patent applications, we issued to Dr. Badreddine, the principal shareholder of Hans Bio Shaft Limited, 27,000,000 restricted shares of our common stock and paid $750,000 in cash. As a result, we changed our name from "Pointstar Entertainment Corp." to "Bioshaft Water Technology, Inc.".

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements contain all necessary adjustments and disclosures to present fairly the financial position as of October 31, 2008 and the results of operations and cash flows for the three and six month periods ended October 31, 2008 and 2007. The results of operations for the three and six month periods ended October 31, 2008 are not necessarily indicative of the results for the full year. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in our Form 10-KSB for the year ended April 30, 2008.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the financial statements in the period they are determined.

Cash and Cash Equivalents

Cash and cash equivalents include cash in hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2008 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (continued)

Intangible Assets

The Company adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations for a Disposal of a Segment of a Business.” The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.

Fair Value of Financial Instruments

Statement of financial accounting standard No. 107, Disclosures about fair value of financial instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.

Stock-Based Compensation

SFAS No. 123R requires companies to measure and recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value. SFAS No. 123R eliminates the ability to account for the award of these instruments under the intrinsic value method proscribed by Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and allowed under the original provisions of SFAS No. 123.

Income Taxes

The Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2008 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (continued)

Basic and Diluted Earnings (Loss) Per Share

Earnings (loss) per share is calculated in accordance with the Statement of financial accounting standards No. 128 (SFAS No. 128), “Earnings per share”. Net income (loss) per share for all periods presented has been restated to reflect the adoption of SFAS No. 128. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

Statement of Cash Flows

In accordance with SFAS No. 95, “Statement of Cash Flows,” cash flows from the Company’s operations is based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.

Property, Plant and Equipment

Equipment consists of computer equipment and an automobile and is recorded at cost.

Amortization is provided using the straight-line method over the estimated useful life of the assets, over the following terms:

Computer Equipment	3 Years
Automobile	3 Years

Recently issued accounting pronouncements

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements”. This Statement amends ARB 51 to establish accounting and reporting standards for the non-controlling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for the Company’s fiscal year beginning October 1, 2009.

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2008 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (continued)

Recently issued accounting pronouncements (continued)

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This Statement replaces SFAS No. 141, Business Combinations. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) will apply prospectively to business combinations for which the acquisition date is on or after Company’s fiscal year beginning October 1, 2009. While the Company has not yet evaluated this statement for the impact, if any, that SFAS No. 141(R) will have on its consolidated financial statements, the Company will be required to expense costs related to any acquisitions after September 30, 2009.

In March, 2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities”. The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The new standard also improves transparency about the location and amounts of derivative instruments in an entity’s financial statements; how derivative instruments and related hedged items are accounted for under Statement 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. FASB Statement No. 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity’s liquidity by requiring disclosure of derivative features that are credit risk-related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important. Based on current conditions, the Company does not expect the adoption of SFAS 161 to have a significant impact on its results of operations or financial position.

In May of 2008, FASB issued SFASB No.162, “The Hierarchy of Generally Accepted Accounting Principles”. The pronouncement mandates the GAAP hierarchy reside in the accounting literature as opposed to the audit literature. This has the practical impact of elevating FASB Statements of Financial Accounting Concepts in the GAAP hierarchy. This pronouncement will become effective 60 days following SEC approval. The Company does not believe this pronouncement will impact its financial statements.

In May of 2008, FASB issued SFASB No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60”. The scope of the statement is limited to financial guarantee insurance (and reinsurance) contracts. The pronouncement is effective for fiscal years beginning after December 31, 2008. The Company does not believe this pronouncement will impact its financial statements.

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2008 

NOTE 3. PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment consisted of the following at October 31, 2008 and April 30, 2008:

		October 31,			April 30,
		2008			2008
Automobile	$	33,776		$	33,776
Computer equipment		11,807			7,497
		45,583			41,273
Accumulated depreciation		(13,819	)		(4,163	)
Total	$	31,764		$	37,110

During the six month period ended October 31, 2008 and 2007, the company recorded depreciation related to fixed assets of $9,655 and $296,977, respectively.

NOTE 4. PATENTS ACQUISITION AND IMPAIREMENT OF PATENT

On September 18, 2007, the Company acquired certain patents for Waste Water Treatment Plant and Method in exchange for $750,083 cash and 27,000,000 shares, during the year-ended April 30, 2008. The shares were valued at $13,500,000 which was the fair market value on the date of acquisition. The patents will be amortized over the useful life of 5 years.

The Company evaluates intangible assets and other long-lived assets for impairment, at a minimum, on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible assets, other long-lived assets and goodwill is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. The Company assessed the carrying value of patents in accordance with the requirements of SFAS #142 "Goodwill and Other Intangible Assets". Based on its assessment, the Company determined that $12,483,903 of patents relating to Waste Water Treatment Plant and Method is impaired at April 30, 2008, due to uncertainty about recovery of projected cash flow from the patent.

NOTE 5. LINE OF CREDIT

During the quarter ended July 31, 2008, we signed a credit facility of $76,000 with a bank. We are obligated to pay the finance charge at a rate of 4.99% per year. The credit facility is unsecured and has no financial requirements to maintain it in good standing. There are no specific terms of repayment as the line of revolving. As of October 31, 2008, the outstanding balance was $75,000.

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2008 

NOTE 6. LOAN PAYABLE

On June 3, 2008, the Company secured a loan payable of $500,000 accruing interest at 15%, secured by the assets of the company, subject to a 3% financing fee and repayable on the one year anniversary date of the agreement being August 11, 2008.

The interest expense for the six month period ended October 31, 2008 was $31,250.

NOTE 7. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has net losses for the period from inception to October 31, 2008 of $15,793,795 . This condition raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management is planning to raise additional funds through an equity offering. There is no guarantee that the Company will be successful in these efforts.

NOTE 8. STOCKHOLDERS’ EQUITY

Authorized

The Company is authorized to issue 300,000,000 shares of $0.001 par value common stock and 25,000,000 shares of $0.001 par value preferred stock. All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company. The preferred shares may be issued in series, with the powers, rights and limitations of the preferred shares to be determined by the Board.

On June 14, 2007, the Nevada Secretary of State accepted for filing a Certificate of Amendment increasing the Company’s authorized common stock from 25,000,000 with a par value of $0.001 to 300,000,000 with a par value of $0.001. The amendment was approved by the shareholders and directors on May 21, 2007.

On July 10, 2007, the Board of Directors approved a 60 for one (1) forward stock split of issued and outstanding shares of common stock. In connection with the forward stock split, the issued and outstanding shares increased from 4,500,000 to 270,000,000.

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2008 

NOTE 8. STOCKHOLDERS’ EQUITY (CONTINUED)

Issued and Outstanding

On March 8, 2006 (inception), the Company issued 4,000,000 shares of its common stock to its Directors for cash of $15,000.

On August 22, 2007, the Company issued 3,000,000 shares of its common stock for cash of $1.5 million. The shares were part of a unit comprising of one share and two warrants. The warrants have exercise prices of $0.55 and $0.60.

On August 24, 2007 the Company cancelled 210,000,000 shares of its common stock and these shares were returned to treasury.

On September 18, 2007, the Company issued 27,000,000 shares of its common stock in exchange for the rights to the Waste Water Treatment Plant and Method. These shares have been valued at the fair market value on the date of acquisition of $0.50 per share for total proceeds of $13,500,000.

Warrants

The following table outlines warrants outstanding as at October 31, 2008:

		Weighted	Total		Weighted
	Total	Average	Weighted		Average	Aggegrate
Exercise	Warrants	Remaining	Average	Warrants	Exercise	Intrinsic
Prices	Outstanding	Life (Years)	Exercise Price	Exercisable	Price	Value
$0.55	3,000,000	0.40	$0.28	3,000,000	$0.28	-
$0.60	3,000,000	1.40	$0.70	3,000,000	$0.70	-

The warrants were valued using the black scholes option pricing model using the following assumptions: term of 2 and 4 years, dividend yield of 0%, risk free interest rate of 3.125% and 3.335%% and volatility of 53%. The fair value of the warrants was adjusted against additional paid in capital.

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2008 

NOTE 8. STOCKHOLDERS’ EQUITY (CONTINUED)

Stock Based Compensation

The Company granted 100,000 options at an exercise price of $0.50 to a consultant in exchange for corporate communications services to be rendered by the consultant. These options were vested on the date of grant. The Company granted another 150,000 options to another consultant for management & marketing services at exercise price of $0.50 which have a vesting schedule extending over a period of 3 years from the date of grant. The Company uses the Black-Scholes option valuation model to value stock options granted. The Black- Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model requires management to make estimates, which are subjective and may not be representative of actual results. Assumptions used to determine the fair value of the stock based compensation is as follows:

Risk free interest rate	3%-4.25%
Expected dividend yield	0%
Expected stock price volatility	58%
Expected life of options	5 years

		Weighted	Total
		Average	Weighted		Weighted
	Total	Remaining	Average		Average	Aggegrate
Exercise	Options	Life	Exercise	Options	Exercise	Intrinsic
Prices	Outstanding	(Years)	Price	Exercisable	Price	Value
$0.50	100,000	1.59	$0.20	100,000	$0.36	53,000
$0.50	150,000	2.54	$0.30	38,904	$0.14	79,500

The grant-date fair value of options granted was $1.15 and $1.62.

Total stock-based compensation for the six month period ended October 31, 2008 was $27,330 (2007: $Nil).

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BIOSHAFT WATER TECHNOLOGY, INC.
(Formerly Pointstar Entertainment Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2008

NOTE 9. RELATED PARTY TRANSACTIONS

On March 8, 2006 (inception), the Company issued 4,000,000 shares of its common stock to its Directors for cash of $15,000.

The Company incurred $90,000, $84,450 and $51,000 in consulting fees to the president, the COO and the COO’s son of the Company consecutively during the six months ended October 31, 2008. As of October 31, 2008, $24,341 and $40,450 were due to the President and the COO of the Company, respectively for their consulting fees and these amounts were included in accounts payable and accrued expenses of the accompanying financial statements.

NOTE 10. COMMITMENTS:

The Company is obligated to pay the Mr. Hans Badreddine (President of the Company) a bonus based upon the following terms:

- $750,000 upon the due execution and delivery, within 365 days of closing, of contracts for the purchase of the Waste Water Systems in the aggregate amount of $6,000,000;

- $1,000,000 upon the due execution and delivery, within 365 days of closing, of contracts for the purchase of the Waste Water Systems in the aggregate amount of $10,000,000.

Operating Leases

The Company leases office facilities under operating lease that terminates in February 2011. Rental expense for the lease consisted of approximately $13,926 for the quarter-ended October 31, 2008. The Company has the following rent commitment for the year ended April 30:

2009	$ 55,704
2010	55,704
2011	46,420

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

Forward Looking Statements

This quarterly report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. 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 these forward-looking statements.

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. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "CDN$" refer to Canadian dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our", and "Bioshaft" mean Bioshaft Water Technology, Inc., unless otherwise indicated.

General

We were incorporated on March 8, 2006, under the laws of the State of Nevada as "Pointstar Entertainment Corp." Effective September 28, 2007, we completed a merger with our subsidiary, "Bioshaft Water Technology, Inc.", also a Nevada corporation. As a result, we changed our name from "Pointstar Entertainment Corp." to "Bioshaft Water Technology, Inc." Our new stock symbol is "BSHF".

Our principal executive offices are located at Spectrum Technology Centre, 184 Technology Drive, Suite 201, Irvine, CA 92618 and our telephone number is (949) 748-8050.

Since our incorporation, we had been in the process of establishing ourselves as a company that seeks to obtain distribution rights for television programming and movies from film studios, television network companies, and independent production houses. However, we were not successful in implementing our business plan and we considered various alternatives to ensure the viability and solvency of our company.

On August 14, 2007, Imad Kamel Yassine replaced Altaf Alimohamed as one of our directors. Subsequent to his appointment, Mr. Yassine focused his efforts on the identification of business alternatives and additional financing.

Effective August 15, 2008, Rafeh Hulays resigned as director and the Chief Financial Officer, Secretary and Treasurer, Mr. Hulays was replaced by Imad Kamel Yassine.

Current Business

On September 18, 2007, we entered into an asset purchase agreement with Hans Bio Shaft Limited and Hassan Hans Badreddine, pursuant to which we acquired from Hans Bio Shaft U.K. Patent GB2390365 titled "Waste Water Treatment Plant and Method" and related United States and European patent applications for the

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design of a certain waste water treatment plant system. In consideration for the U.K. patent and related United States and European patent applications, we issued to Dr. Badreddine, the principal shareholder of Hans Bio Shaft, 27,000,000 restricted common shares of our common stock. In addition to the common shares, we paid Dr. Badreddine, a cash consideration in the amount of $750,000.

Furthermore, pursuant to the asset purchase agreement with Hans Bio Shaft and Dr. Badreddine, we agreed to pay Dr. Badreddine additional amounts of up to $1,750,000 on the following terms:

(a)	$750,000 upon the due execution and delivery, within 90 days from the closing of the transactions contemplated under the asset purchase agreement, of contracts for the purchase of the waste water plant system in the aggregate amount of $6,000,000; and
(b)	$1,000,000 upon the due execution and delivery, within 180 days from closing of the transactions contemplated under the asset purchase agreement, of additional contracts for the purchase of the waste water plant system in the aggregate amount of $10,000,000.

Subsequently, by written consent resolution of our directors effective March 12, 2008, we agreed to extend the date set out in paragraph (a) above to 365 days and the date set out in paragraph (b) above to 365 days.

Pursuant to the Asset Purchase Agreement, on August 2, 2007, we closed a private placement consisting of 3,000,000 units of our securities at a price of $0.50 per unit for aggregate proceeds of $1,500,000. Each unit consisted of: (a) one common share; (b) one common share purchase warrant entitling the holder thereof to purchase one common share for a period of twenty-four months commencing from the closing of the Private Placement at an exercise price of $0.55 per common share; and (c) one common share purchase warrant entitling the holder thereof to purchase one common share for a period of thirty-six months commencing from the closing of the Private Placement at an exercise price of $0.60 per common share. We issued the units to a non-U.S. person (as that term is defined in Regulation S of the 1933 Act) in an offshore transaction relying on Regulation S and/or Section 4(2) of the 1933 Act.

Furthermore, pursuant to the asset purchase agreement with Hans Bio Shaft and Dr. Badreddine, our directors passed resolutions, whereby Dr. Badreddine was appointed as our president and a director as of September 18, 2008, and our corporate name was changed from "Pointstar Entertainment Corp." to "Bioshaft Water Technology, Inc.", effective September 28, 2008.

With the completion of the asset purchase agreement, we changed our business to the business of designing and manufacturing domestic waste water treatment plant systems, using our patented Hans BioShaft unit – the Hans BioShaft System. We are currently engaged in a specific branch of waste water treatment known as domestic waste or sewage treatment. In the future, we plan to expand into the treatment of industrial waste.

On January 31, 2008, we entered into a teaming agreement with Rapid Impact Compaction Contracting LLC (RIC), a company based in Dubai, UAE. The agreement provides the basis for our company and RIC to jointly pursue sewage treatment projects in the Gulf Region, with exclusivity as to association in the UAE. Pursuant to the agreement with RIC, we will perform engineering and manufacturing services, provide our sewage treatment systems, supervise installation, start-up and commissioning thereof and assist RIC over a five-year period to develop a division within RIC that specializes in sewage treatment plants using our patented Hans BioShaft technology. RIC will sell, install and handle all construction matters, provide office space, in-country transportation and assist with business development. We will pay a commission payment to RIC of 5% of the contract value of sewage treatment plant contracts in respect of the Hans BioShaft technology.

On February 11, 2008, we entered into a license agreement with FPS International (FPS) based in the Kuwait. FPS was established in 1977 and is a leading provider in the Middle East of products and services for the water, oil and gas industries.

Pursuant to the license agreement with FPS, we will license the Hans BioShaft System to FPS for marketing and distribution in the Arab Gulf Countries Council and Egypt. In consideration for the grant of the license, FPS will

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pay our company a royalty based on FPS’ annual gross revenues from the Hans BioShaft System, subject to a minimum annual royalty payment of $500,000.

Our company has been chosen by the Mace group, a project management company with offices in Dubai, to bid on the Al Barari housing development in Dubai, UAE. The successful bidder will be required to install a waste water treatment plant capable of treating 32,000,000 cubic meters per day of tertiary and sewage.

We are in the process of bidding on the project as requested by the Mace group, a project management company with offices in Dubai.

The Al Barari development is being developed by Al Barari Development Company, a company founded by Mr. Zaal Mohamed Zaal in 2005 to provide high net worth individuals with innovative housing. Al Barari Development’s mission is to continuously raise the benchmark of the quality of property development in the UAE. through the development of eco-friendly sustainable communities and the implementation and utilization of new standards in estate planning, environment controls, and ongoing quality driven management.

Pursuant to a draft project construction contract between FPS International (FPS) and the municipality of Baghdad, the Hans BioShaft System has been selected as the technology for 13 domestic waste water treatment plants in the municipality of Baghdad in Iraq. The contract between FPS and the municipality of Baghdad is valued at $56 million and manufacturing, construction and installation of the plants by FPS is expected to begin in late-2008.

As at July 31, 2008, our company has impaired the value of our patent to a nominal amount.

On June 12, 2008, we issued a news release announcing that our licensee FPS had submitted a bid to provide seven waste water treatment plans for Kharafi Nation’s housing project in Dubai.

The contract is for seven plants each with a capacity of 633,000 gallons per day per plant.

On August 11, 2008, we entered into a loan agreement with Premier Financial and Marketing Co. Ltd., in respect of the loan in the amount of $500,000 at the rate of interest of 15% per annum payable in full on August 11, 2009. The loan is to be used for general working capital purposes.

Results of Operations

Three Months Summary

		Three Months Ended October 31,
		2008			2007
Operating Expenses	$	238,928		$	452,509
Other Income (Expense)		(18,177	)		(12,499	)
Net Loss	$	257,105		$	465,008

Revenue

We have not had revenue from inception, and do not anticipate earning revenues until such time as we enter into an agreement(s) with our potential customers for the purchase and sale of our products.

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Expenses
		Three Months Ended October 31,
		2008		2007
General and Administrative	$	219,456	$	155,797
Depreciation and amortization		4,928		296,712
Stock based compensation expense		14,544		-
Net Loss from operations	$	238,928	$	452,509

Total operating expenses during the three months ended October 31, 2008 increased (or decreased) as compared to the comparative period in 2007 because of amortization and deprecation related to the purchase of a patent, stock based compensation expense and an increase to general and administrative activity.

Liquidity and Financial Condition

Working Capital
		At October 31,
		2008			2007
Current assets	$	186,956		$	612,552
Current liabilities		748,397			11,525
Working capital	$	(561,441	)	$	601,027

Cash Flows
		Six Months Ended October 31,
		2008			2007
Net cash flows used in operating activities	$	(468,576	)	$	(155,156	)
Net cash flows used in investing activities		(4,310	)		(750,033	)
Net cash flows provided by financing activities		575,000			1,500,000
Net increase in cash during period	$	102,113		$	594,811

Future Financing

Prior to the completion of the Private Placement for $1,500,000 on August 22, 2007, we were insolvent and had no remaining cash. We have not had revenues from inception and cash on hand is currently our only source of liquidity. The ability of our company to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new stockholders and our ability to achieve and maintain profitable operations.

Management believes that our cash and cash equivalents and cash provided by operating activities will not be sufficient to meet our working capital requirements for the next twelve month period. We estimate that we will require an additional $3,000,000 over the next twelve month period to fund our operating cash shortfall. We plan to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirements for the next twelve months primarily through the private placement of our equity securities. There are no assurances that we will be able to obtain funds required for our continued operation. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful and sufficient market acceptance of our products and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a

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significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Capital Expenditures

Other than as required under the terms of the Asset Purchase Agreement with Hans Bio Shaft Limited and Dr. Badreddine, as of September 18, 2007, we do not have any material commitments for capital expenditures and management does not anticipate that we will spend additional material amounts on capital expenditures in the near future.

Employees

We plan to employ a number of executive officers including a vice president of marketing and three sales engineers. We anticipate that we may spend up to $1,650,000 to employ officers and employees and up to $250,000 in payroll taxes.

Other than as disclosed herein, we have no plans to significantly change our number of employees for the next 12 months.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Application of Critical Accounting Estimates

Our financial statements have been prepared in accordance with the U.S. GAAP. 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.

The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of significant accounting policies.

Risk Factors

Much of the information included in this quarterly report includes or is based upon estimates, projections or other forward-looking statements. Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below. We caution readers of this quarterly report that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward-looking statements. In evaluating us, our business and any investment in our business, readers should carefully consider the following factors.

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Risks Related to Our Business

We have a history of losses and no revenues, which raise substantial doubt about our ability to continue as a goingconcern.

From inception to October 31, 2008, we have incurred aggregate net losses of $15,793,795 from operations. We can offer no assurance that we will ever operate profitably or that we will generate positive cash flow in the future. In addition, our operating results in the future may be subject to significant fluctuations due to many factors not within our control, such as the unpredictability of when customers will order products, the size of customers’ orders, the demand for our products, and the level of competition and general economic conditions.

Our company’s operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. No assurance can be given that we may be able to operate on a profitable basis.

Due to the nature of our business and the early stage of our development, our securities must be considered highly speculative. We have not realized a profit from our operations to date and there is little likelihood that we will realize any profits in the short or medium term. Any profitability in the future from our business will be dependent upon the successful commercialization or licensing of our core products, which themselves are subject to numerous risk factors as set forth below.

We expect to continue to incur development costs and operating costs. Consequently, we expect to incur operating losses and negative cash flows until our products gain market acceptance sufficient to generate a commercially viable and sustainable level of sales, and/or additional products are developed and commercially released and sales of such products made so that we are operating in a profitable manner. Our history of losses and no revenues raise substantial doubt about our ability to continue as a going concern.

We have had negative cash flows from operations since inception. We will require significant additional financing, the availability of which cannot be assured, and if our company is unable to obtain such financing, our business may fail.

To date, we have had negative cash flows from operations and have depended on sales of our equity securities and debt financing to meet our cash requirements. We may continue to have negative cash flows. We have estimated that we will require approximately $3,410,000 to carry out our business plan for the next twelve months. There is no assurance that actual cash requirements will not exceed our estimates. We will require additional financing to finance working capital and pay for operating expenses and capital requirements until we achieve a positive cash flow.

Our ability to market and sell our waste water treatment plant system will be dependent upon our ability to raise significant additional financing. If we are unable to obtain such financing, we will not be able to fully develop our business. Specifically, we will need to raise additional funds to:

• support our planned growth and carry out our business plan;
• protect our intellectual property;
• hire top quality personnel for all areas of our business;
• address competing technological and market developments; and
• market and develop our technologies.

We may not be able to obtain additional equity or debt financing on acceptable terms as required. Even if financing is available, it may not be available on terms that are favorable to us or in sufficient amounts to satisfy our requirements. Any additional equity financing may involve substantial dilution to our then existing shareholders. If we require, but are unable to obtain, additional financing in the future, we may be unable to implement our business plan and our growth strategies, respond to changing business or economic conditions, withstand adverse operating results and compete effectively. More importantly, if we are unable to raise further financing when required, we may be forced to scale down our operations and our ability to generate revenues may be negatively affected.

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We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.

We have no history of revenues from operations and have no significant tangible assets. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. We have only recently completed our acquisition of the U.K. patent in respect to the Hans BioShaft System and our company has limited operating history in the business of designing and manufacturing domestic waste water treatment plant system. Accordingly, we must be considered in the development stage. Our success is significantly dependent on a successful commercialization of our waste water treatment plant system. Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to develop a useful waste water treatment system or achieve commercial acceptance of our waste water treatment plant system or operate on a profitable basis. We are in the development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.

If we fail to effectively manage the growth of our company and the commercialization of our products and technology, our future business results could be harmed and our managerial and operational resources may be strained.

As we proceed with the commercialization of our products, technologies and the expansion of our marketing and commercialization efforts internationally, we expect to experience significant growth in the scope and complexity of our business. We will need to add staff to market our services, manage operations, handle sales and marketing efforts and perform finance and accounting functions. We anticipate that we will be required to hire a broad range of additional personnel in order to successfully advance our operations. This growth is likely to place a strain on our management and operational resources. The failure to develop and implement effective systems, or to hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage our potential business, or the failure to manage growth effectively, could have a material adverse effect on our business and financial condition.

We do not have the ability to manufacture our product on a commercial scale and will need to rely on third-party manufacturers and other third parties for production of our products, and our dependence on these manufacturers may impair the development of our product candidates.

Currently, we do not have the ability to internally manufacture our product on a commercial scale. We are in the process of identifying manufacturers for long-term supply contracts of components and subassemblies of our product. There are several potential manufacturers capable of manufacturing components and subassemblies for our waste water treatment plant system. There can be no assurance that we will be able to successfully negotiate long-term agreements with any of such potential manufacturers at a reasonable price and on other acceptable terms.

If our third-party manufacturers fail to deliver our products on a timely basis, with sufficient quality, and at commercially reasonable prices, we may be required to delay, suspend or otherwise discontinue development and production of our product. While we may be able to identify replacement third-party manufacturers or develop our own manufacturing capabilities for our product, this process would likely cause a delay in the availability of our product and an increase in costs. We may also be required to enter into long-term manufacturing agreements that contain exclusivity provisions and/or substantial termination penalties. In addition, third-party manufacturers may have a limited number of facilities in which our product can be produced, and any interruption of the operation of those facilities due to events such as equipment malfunction or failure or damage to the facility by natural disasters could result in the cancellation of shipments, loss of product in the manufacturing process or a shortfall in available product.

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We depend upon a number of third party suppliers for component parts for our products, and any disruption from such suppliers could prevent us from delivering our products to our customers within required timeframes or at scheduled prices, which could result in order cancellations and a decline in sales.

We assemble our products using materials and components procured from a number of third-party suppliers. If we fail to maintain our relationships with these suppliers, we may be unable to assemble our products or our products may be available only at a higher cost or after a long delay. We may be unable to obtain comparable materials and components from alternative suppliers. Our failure to obtain components that meet our quality, quantity, technological and cost requirements in a timely manner may interrupt or impair our ability to assemble our products or it may increase our manufacturing cost. We may be unable to identify new suppliers or qualify their products for use on our production lines in a timely manner and on commercially reasonable terms. Any of these factors could prevent us from delivering our products to our customers within required timeframes, and we may experience order cancellations which would adversely affect our business operations.

We may lose our competitiveness if we are not able to protect our proprietary technology and intellectual property rights against infringement, and any related litigation may be time-consuming and costly.

Our success and ability to compete depends to a significant degree on our proprietary technology. If any of our competitors copy or otherwise gain access to our proprietary technology or develop similar technologies independently, we may not be able to compete as effectively. The measures we have implemented to protect our proprietary technology and other intellectual property rights are currently based upon a combination of a patent, patent applications and trade secrets. These measures, however, may not be adequate to prevent the unauthorized use of our proprietary technology and our other intellectual property rights. Our pending patent applications may not result in the issuance of any patents or any issued patents that will offer protection against competitors with similar technology. Further, the laws of foreign countries may provide inadequate protection of such intellectual property rights. We may need to bring legal claims to enforce or protect such intellectual property rights. Any litigation, whether successful or unsuccessful, may result in substantial costs and a diversion of our company’s resources. In addition, notwithstanding our rights to our intellectual property, other persons may bring claims against us alleging that we have infringed on their intellectual property rights or claims that our intellectual property rights are not valid. Any claims against us, with or without merit, could be time consuming and costly to defend or litigate, divert our attention and resources, result in the loss of goodwill associated with our business or require us to make changes to our technology.

The manufacture, use or sale of our waste water treatment plant system may infringe on the patent rights of others, and we may be forced to litigate if an intellectual property dispute arises.

If we infringe or are alleged to have infringed another party’s patent rights, we may be required to seek a license, defend an infringement action or challenge the validity of the patents in court. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, do not successfully defend an infringement action or are unable to have infringed patents declared invalid, we may:

• incur substantial monetary damages;
• encounter significant delays in marketing our waste water treatment plant system;
• be unable to conduct or participate in the manufacture, use or sale of our waste water treatment plant system;
• lose patent protection for our inventions and products; or
• find that our patents are unenforceable, invalid, or have a reduced scope of protection.

Parties making such claims may be able to obtain injunctive relief that could effectively block our ability to further develop or commercialize our waste water treatment plant system in United States, Central and Eastern Europe, Asia and Middle East and could result in the award of substantial damages. Defense of any lawsuit or failure to obtain any such license could substantially harm our company. Litigation, regardless of outcome, could result in substantial cost to and a diversion of efforts by our company.

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Because our waste water treatment plant system has not been accepted as a recognized form of waste water treatment, we face significant barriers to acceptance of our services.

Our waste water treatment plant system has not been fully utilized in any particular market. The use of equipment such as ours is a relatively new form of waste water treatment. Traditionally, these services are provided through other treatment methodologies, such as chemicals or other aeration methods. Accordingly, we face significant barriers to overcome the consumer preferences of traditionally used treatment programs for the type of waste water treatment products and services that we offer.

Market acceptance of our products and services will depend in large part upon our ability to demonstrate the technical and operational advantages and cost effectiveness of our products and services as compared to alternative, competing products and services, and our ability to train customers concerning the proper use and application of our products. There can be no assurance that our products and services will achieve a level of market acceptance that will be profitable for us.

Our waste water treatment plant system may not achieve market acceptance at a level necessary for us to operate successfully.

Our waste water treatment plant system may not achieve market acceptance at a level necessary to enable production at a reasonable cost, to support the required sales and marketing effort, to effectively service and maintain, and to support continuing research and development costs. In addition, our waste water treatment plant system may:

• be difficult or overly expensive to produce;
• fail to achieve performance levels expected by customers;
• have a price level that is unacceptable in our targeted industries; or
• be precluded from commercialization by the proprietary rights of others or other competitive forces.

We cannot assure you that we will be able to successfully manufacture and market our waste water treatment plant system on a timely basis, achieve anticipated performance levels or throughputs, gain and maintain industry acceptance of our waste water treatment plant system or develop a profitable business. The failure to achieve any of these objectives would have a material adverse effect on our business, financial condition and results of operations.

Because we face intense competition from larger and better-established companies that have more resources than we do, we may be unable to implement our business plan or increase our revenues.

The market for our waste water treatment products and services is intensely competitive and highly fragmented. Many of these competitors may have longer operating histories, greater financial, technical and marketing resources, and enjoy existing name recognition and customer bases. New competitors may emerge and rapidly acquire significant market share. In addition, new technologies likely will increase the competitive pressures we face. Competitors may be able to respond more quickly to technological change, competitive pressures, or changes in consumer demand. As a result of their advantages, our competitors may be able to limit or curtail our ability to compete successfully.

In addition, many of our large competitors may offer customers a broader or superior range of services and technologies. Some of our competitors may conduct more extensive promotional activities and offer lower commercialization and licensing costs to customers than we do, which could allow them to gain greater market share or prevent us from establishing and increasing our market share. Increased competition may result in significant price competition, reduced profit margins or loss of market share, any of which may have a material adverse effect on our ability to generate revenues and successfully operate our business. Our competitors may develop technologies superior to those that our company currently possess. In the future, we may need to decrease our prices if our competitors lower their prices. Our competitors may be able to respond more quickly to new or changing opportunities, technologies and customer requirements. Such competition will potentially affect our chances of achieving profitability, and ultimately affect our ability to continue as a going concern.

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If product liability lawsuits are successfully brought against us, we will incur substantial liabilities and may be required to limit commercialization of our products.

We face an inherent business risk of exposure to product liability claims in the event that an individual is harmed because of the failure of our products to function properly. If we cannot successfully defend ourselves against the product liability claim, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

• decreased demand for our products;
• injury to our reputation;
• costs of related litigation;
• substantial monetary awards to plaintiffs;
• loss of revenues; and
• the inability to commercialize our technologies.

We currently carry no product liability insurance. Although we expect to obtain product liability insurance coverage in connection with the commercialization of our products, such insurance may not be available on commercially reasonable terms or at all, or such insurance, even if obtained, may not adequately cover any product liability claim. A product liability or other claim with respect to uninsured liabilities or in excess of insured liabilities could have a material adverse effect on our business and prospects.

Products which incorporate our waste water treatment technology will be subject to extensive regulation, which can be costly and time-consuming and could subject us to unanticipated delays or prevent us from obtaining the required approvals to commercialize our products.

Before we can market and sell products which incorporate our waste water treatment technology in the United States and abroad, extensive regulatory testing, inspection and approvals may be required. The regulatory process can be costly and time consuming. Our products which incorporate the waste water treatment technology may not receive necessary regulatory approval. Even if these products receive approval, the approval process might delay marketing and sale of our products, which may lead to a failure to meet our sales projections.

We will be subject to laws, regulations and other procedures with respect to government procurement.

Because we plan to sell some of our products to government agencies, we will be subject to laws, regulations and other procedures that govern procurement and contract implementation by those agencies. These agencies are likely to impose vendor qualification requirements, such as requirements with respect to financial condition, insurance and history. We have limited experience with government procurement and cannot assure you that we will be able to meet existing or future procurements laws, regulations and procedures or that we will be able to qualify as a vendor.

Substantially all of our assets and a majority of our directors and officers are outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our directors or officers.

Although we are organized under the laws of the State of Nevada, United States, a majority of our directors and our officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to enforce judgments against us that are obtained in the United States in any action, including actions predicated upon civil liability provisions of federal securities laws. In addition, as the majority of our assets are located outside of the United States, it may be difficult to enforce United States bankruptcy proceedings against us. Under bankruptcy laws in the United States, courts typically have jurisdiction over a debtor’s property, wherever it is located, including property situated in other countries. Courts outside of the United States may not recognize the United States bankruptcy court’s jurisdiction. Accordingly, you may have trouble administering a United States bankruptcy case involving a Nevada company as debtor with most of its property located outside the United States. Any orders or judgments of a bankruptcy court obtained by you in the United States may not be enforceable.

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Our by-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.

Our by-laws contain provisions with respect to the indemnification of our officers and directors against all expenses, liability and loss (including attorneys’ fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him or her in connection with any action, suit or proceeding to which they were made parties by reason of his or her being or having been one of our directors or officers.

Currency translation and transaction risk may negatively affect our net sales, cost of sales and gross margins, and could result in exchange losses.

Although our reporting currency is the United States dollar, we intend to conduct our business and incur costs in the local currency of the other countries in which we intend to operate. Changes in exchange rates between foreign currencies and the United States dollar could affect our net sales and cost of sales figures, and could result in exchange losses. In addition, we incur currency transaction risk whenever we enter into either a purchase or a sales transaction using a dollar currency other than the United States.

Risks Related to Our Common Stock

A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds we require for all of our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

We are authorized to issue up to 300,000,000 shares of common stock and 25,000,000 preferred shares with a par value of $0.001. Our board of directors may choose to issue some or all of such shares to acquire one or more businesses or to provide additional financing in the future. The issuance of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our company.

Trading of our stock may be restricted by the Securities Exchange Commission’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and

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monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority (FINRA), formerly the National Association of Securities Dealers or NASD, has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 4T. Controls and Procedures.

Evaluation of Effectiveness of Disclosure Controls and Procedures

As required by Rule 13a-15 under the 1934 Act, as of the end of the period covered by this quarterly report, being the fiscal quarter ended October 31, 2008, we have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon the results of that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures were effective and provide reasonable assurance that material information related to our company is recorded, processed and reported in a timely manner.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, is responsible for the design of internal controls over financial reporting. The fundamental issue is to ensure all transactions are properly authorized and identified and entered into a well-designed, robust and clearly understood system on a timely basis to minimize risk of inaccuracy, failure to fairly reflect transactions, failure to fairly record transactions necessary to present financial statements in accordance with the U.S. GAAP, unauthorized receipts and expenditures or the inability to provide assurance that unauthorized acquisitions or dispositions of assets can be detected. The small size of our company makes the identification and authorization process relatively simple and efficient and a process for reviewing internal controls over financial reporting has been developed. To the extent possible given our company’s small size, the internal control procedures provide for separation of duties for handling, approving and coding invoices, entering transactions into the accounts, writing cheques and requests for wire transfers and also require two signatures on significant payments. As of October 31, 2008, our Chief Executive Officer and Chief Financial Officer conclude that our system of internal controls is adequate and comparable to those of issuers of a similar size and nature. There were no significant changes to our internal controls or in other factors that could significantly affect these controls during the most recent quarter ended October 31, 2008, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.

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Management’s Report on Internal Controls over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the U.S. GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Inherent Limitations of Internal Controls

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Management does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There were no significant changes to our internal controls during the quarter ended July 31, 2008, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Not Applicable.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information

None.

Item 6. Exhibits

Pursuant to Rule 601 of Regulation SB, the following exhibits are included herein or incorporated by reference.

Exhibit	Description
Number
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2 filed on June 13, 2006)
3.2	By-laws (incorporated by reference from our Registration Statement on Form SB-2 filed on June 13, 2006)
3.3	Certificate of Amendment (incorporated by reference from our Current Report on Form 8-K filed on August 6, 2007)
3.4	Articles of Merger filed with the Secretary of State of Nevada on September 24, 2007 and which is effective September 28, 2007 (incorporated by reference from our Current Report on Form 8-K filed on September 28, 2007)
(10)	Material Contracts
10.1	Form of Subscription Agreement (incorporated by reference from our Current Report on Form 8-K filed on August 24, 2007).
10.2	Affiliate Stock Purchase Agreement dated August 20, 2007 between Imad Yassine, Altaf Alimohamed and Rafeh Hulays (incorporated by reference from Schedule 13D filed on August 24, 2007)
10.3	Asset Purchase Agreement dated September 18, 2007 between Hans Bio Shaft Limited, Hassan Hans Badreddine and our company (incorporated by reference from our Current Report on Form 8-K filed on September 24, 2007)
10.4	Patent Assignment Agreement dated September 18, 2007 between Hans Bio Shaft Limited and our company (incorporated by reference from our Current Report on Form 8-K filed on September 24, 2007)
10.5	Stock Option Plan of our company dated December 15, 2007 (incorporated by reference from our Quarterly Report on Form 10-QSB filed on March 17, 2008)
10.6	Consulting Agreement dated January 21, 2008 between our company and Tom Houston (incorporated from our Annual Report on Form 10-KSB/A filed on August 14, 2008)

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10.7	Teaming Agreement dated January 31, 2008 between our company and Rapid Impact Compaction Contracting LLC (incorporated from our Annual Report on Form 10-KSB/A filed on August 14, 2008)
10.8	License Agreement dated February 14, 2008 between our company and FPS International (incorporated from our Annual Report on Form 10-KSB/A filed on August 14, 2008)
10.9	Draft Project Construction Contract between our company and FPS International (incorporated from our Annual Report on Form 10-KSB/A filed on August 14, 2008)
10.10	Loan Agreement made as of August 11, 2008 between our company and Premier Financial and Marketing Co. Ltd. (incorporated from our Quarterly Report on Form 10-Q filed on September 12, 2008)
10.11	General Security Agreement made as of August 11, 2008 between our company and Premier Financial and Marketing Co. Ltd. (incorporated from our Quarterly Report on Form 10-Q filed on September 12, 2008)
(14)	Code of Ethics
14.1	Code of Ethics and Business Conduct dates effective July 1, 2008 (incorporated from our Annual Report on Form 10-KSB/A filed on August 14, 2008)
(31)	Section 302 Certification
31.1*	Section 302 Certification under Sarbanes-Oxley Act of 2002 of Hassan Hans Badreddine
31.2*	Section 302 Certification under Sarbanes-Oxley Act of 2002 of Imad Kamel Yassine
(32)	Section 906 Certification
32.1*	Section 906 Certification under Sarbanes-Oxley Act of 2002 of Hassan Hans Badreddine
32.2*	Section 906 Certification under Sarbanes-Oxley Act of 2002 of Imad Kamel Yassine

*filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BIOSHAFT WATER TECHNOLOGY, INC.

Date: December 15, 2008	By:/s/ Hassan Hans Badreddine
	Name: Hassan Hans Badreddine
	Title: President and Chief Executive Officer
	(Principal Executive Officer)
Date: December 15, 2008	By:/s/ Imad Kamel Yassine
	Name: Imad Kamel Yassine
	Title: Chief Financial Officer, Secretary and Treasurer
	(Principal Financial Officer and Principal Accounting Officer)