WATAIRE INTERNATIONAL, INC.
FORM 10-Q/A
(Quarterly Report)
Filed 08/26/10 for the Period Ending 06/30/10
Address #134, 9663 Santa Monica Blvd.,
Beverly Hills, CA 90210
Telephone 877-602-8985
CIK 0001127007
Symbol WTAR
SIC Code 4941 - Water Supply
Industry Conglomerates
Sector Conglomerates
Fiscal Year 03/31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period
ended June 30, 2010
OR
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the transition
period from __________ to ________
Commission File Number : 000 - 49955
WATAIRE INTERNATIONAL, INC.
( Exact name of registrant as specified in its charter )
Washington 91-2060082
------------- -----------
( State or other jurisdiction ( I.R.S. Empl. Ident. No.)
incorporation or organization)
#134-9663 Santa Monica Blvd., Beverly Hills, CA 90210
( Address of principal executive offices ) ( Zip Code )
877-602-8985
( Issuer's telephone number )
Check whether the issuer (1) filed all reports required
to be filed by Section 13 or 15 (d) of the Exchange Act
during the past 12 months (or for such shorter period
that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for
the past 90 days.
YES ( X ) NO ( )
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, or a non-
accelerated filer, or a small reporting company. See
definitions of "large accelerated filer," "accelerated
filer," and "small reporting company" in Rule 12B-2 of
the Exchange Act. (Check one) :
Large accelerated filer ( ) Accelerated filer( )
Non-accelerated filer ( ) 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 ( X )
No
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding the issuer's common
stock, $0.0001 par value, was 98,710,123 as of August 18,
2010.
WATAIRE INTERNATIONAL, INC.
FORM 10-Q/A
For the Period Ended June 30, 2010
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Pages
Item 1. Financial Statements 5 - 23
Item 2 Management's Discussion and Analysis
of Financial Condition And Results of
Operations 24 - 28
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 28 - 29
Item 4 Controls and Procedures 29
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 30
Item 1A.Risk Factors 30 - 37
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds 37
Item 3. Defaults Upon Senior Securities 38
Item 4. Submission of Matters to a Vote of
Security Holders 38
Item 5. Other Information 38
Item 6. Exhibits and Certifications 39 - 44
Signatures 45
WATAIRE INTERNATIONAL, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
(Unaudited)
June 30, March 31,
2010 2010
Assets $ $
Current Assets
Cash 131,257 57
Accounts receivable 9,000
Prepaid expenses & retainer 349 456
Sales deposit 10,000
Advance on marketing agreements 250,000 250,000
Inventory 245,265 249,506
------- -------
Total Current Assets 626,872 519,019
Capital assets, net 1 1
Patents, Trademarks 31,434 31,434
Acquisitions of intangibles 2,546,062 2,546,062
--------- ---------
Total Assets 3,209,424 3,096,516
========= =========
Liabilities
Current Liabilities
Advances payable 99,480 472,896
Advances on sales 99,539 -
Accounts payable 220,986 382,157
Provision and accruals 7,500 9,255
Shareholder loan and interest - -
Due to related parties 358,560 84,140
Deferred revenue 121,971 154,924
------- -------
Total Current Liabilities 908,036 721,215
Long Term Liabilities
Derivative liability 197,158 197,158
5% Convertible Debentures 90,888 90,888
Convertible debenture, net 33,403 33,403
--------- -------
Total Liabilities 1,229,485 1,042,664
Stockholders' Equity
Preferred shares,
$0.0001 par value,
redeemable at $0.005
Authorized 20,000,000 shares
Issued and outstanding, 27,501
(June 30, 2009: 27,501) 3 3
Common shares, $0.0001 par value:
Authorized 100,000,000 shares
Issued and outstanding,
98,710,123(June 30, 2009:
91,110,123) 9,871 9,871
Additional paid-in capital 13,145,346 13,145,346
Deferred Stock-Based Comp. (12,667) (50,667)
Deficit accumulated during
the development stage (11,162,615) (11,050,701)
------------ -----------
Total Equity 1,979,939 2,053,852
Total Liabilities and
Stockholders' Equity 3,209,424 3,096,516
========= =========
The accompanying notes are an integral part of the
financial
statements
WATAIRE INTERNATIONAL, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter Ended August 17, 2000
June 30, (Inception) to
2010 2009 June 30, 2010
Sales 3,322 - 506,424
Cost of sales (16,241) - (410,533)
------- -------- ---------
Gross margin (12,919) - 95,891
Other income - - 9,500
------- -------- --------
(12,919) - 105,391
Expenses
Advances written off - - 234,542
Amortization - 77 71,049
Amortization of
notes discount - - 28,505
Bad debt written off - - 2,800
Donated services - - 11,250
Foreign exchange
(gain)/loss - - (42,356)
General and
administrative 6,624 3,745 288,146
Consulting fees - - 430,970
Rent 481 - 58,865
Travel 1,427 976 76,844
Website development
Costs 12,358 - 58,507
Incorporation costs - - 2,005
Management fees 45,000 45,000 871,883
Marketing and promotion 19,500 - 238,217
Professional fees 14,024 4,920 522,242
Research & Development - - 202,143
Settlement of accounts
payable - - (3,250)
Stock-based compensation - - 8,104,292
-------- ------ ----------
Total Expenses 98,995 54,718 11,156,655
Loss from continuing
operations (111,914) (54,718) (11,051,264)
Gain/(Loss) from
discontinued operations - - (111,351)
-------- -------- ------------
Net loss for
the period (111,914) (54,718) (11,162,615)
========= ======== ============
Basic and diluted
loss per share (0.00) (0.00)
Weighted average
number of shares
outstanding 95,960,534 87,877,246
The accompanying notes are an integral part of the
financial
statements
WATAIRE INTERNATIONAL, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Quarter Ended 08.17.2000
June 30, (Inception)to
2010 2009 June 30, 2010
Operating Activities
Loss from continuing
Operations (111,914)(54,718) (11,162,615)
Adjustments to reconcile
loss to cash used
in operating activities :
Amortization - 77 71,049
Amortization of
notes discounts - - 28,505
Donated services - - 11,250
Website development
costs written off - - 8,700
Shares issued
for services - - 454,070
Stock-based
Compensation 38,000 - 8,091,626
Advances written off - - 199,542
Change in non-cash
working capital items :
Accounts receivable 19,000 - 10,000
Prepaid expenses
and retainers 107 - (10,349)
Deferred revenue (32,953) - 121,971
Advance on marketing
Agreements - - (250,000)
Inventory 4,241 - (390,711)
Accounts payable
and accruals (54,646) 48,303 427,505
-------- ------- -----------
Net cash used in
operating activities (138,165) (6,338) (2,389,457)
-------- ------- -----------
Investing Activities
Patents and trademarks (5,054) - (5,054)
License payment advanced - - (50,000)
Capital assets - - (922)
Advanced to subsidiaries - - (115,091)
Acquisition of
intangibles-net - - (1,467,624)
Website development costs- - (8,700)
Proceeds from disposition
of subsidiaries - - 100
------- ------ -----------
Net cash used in
investing activities (5,054) - (1,647,291)
------- ------ -----------
Financing Activities
Bank indebtedness - - -
Shareholder loan
& interest - 1,246 -
Due to related
Parties 274,419 5,057 358,559
Shares issued
for cash - - 2,937,189
Shares issued
for debt - - 579,313
Proceeds from
Convertible debentures - - 292,944
------- ----- ---------
Net cash provided by
financing activities 274,419 6,303 4,168,005
------- ------ ---------
Increase/(Decrease)
in Cash 131,200 (35) 131,257
Cash, beginning 57 35 -
Cash, ending 131,257 - 131,257
Supplemental Disclosure of Cash Flow Information
Quarter Ended 08.17.2000
June 30, (Inception)to
2010 2009 June 30, 2010
Cash paid during
period for interest - - -
Cash paid during
period for income taxes - - -
Non-Cash Items:
Shares issued for Debt - - 579,313
Deferred stock-based
Compensation - - (50,667)
Shares issued for
Promissory Notes - - 365,087
Shares issued for
Intangibles - - 960,000
Exchange of shareholder
loan for Convertible
Debt - - 125,000
The accompanying notes are an integral part of the
financial
statements
WATAIRE INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2010 (Unaudited)
Note 1.
General Organization and Business
The Company was incorporated on August 17, 2000 in the
State of Washington, USA and the Company's common shares
are publicly traded on the OTC Bulletin Board. On
September 26, 2006, the Company approved a name change
from Cimbix Corporation to Wataire International, Inc. On
March 11, 2010, the Company approved a name change from
Wataire International, Inc. to Wataire 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 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 June 30, 2010, the Company had not yet
achieved profitable operations, has accumulated losses of
$11,162,615 since its inception and expects to incur
further losses in the development of its business, all of
which cast substantial doubt about the Company's ability
to continue as a going concern.
The Company's ability to continue as a going concern is
dependent upon future profitable operations and/or the
necessary financing to meet its obligations and repay its
liabilities arising from normal business operations when
they come due. Management has obtained additional funds by
related party advances, however there is no assurance
that this additional funding is adequate and further
funding may be necessary.
Note 2.
Significant Accounting Policies
These consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles in the United States of America and are stated
in US dollars. Because a precise determination of many
assets and liabilities is dependent upon future events,
the preparation of financial statements for a period
necessarily involves the use of estimates which have been
made using careful judgment. Actual results may differ
from these estimates.
The financial statements have, in management's opinion,
been properly prepared within the framework of the
significant accounting policies summarized below :
(a) Development Stage Company
The Company is a development stage company as defined
in the Statements of Financial Accounting Standards
("SFAS") No. 7. The Company is devoting substantially
all of its present efforts to establish a new business
and none of its planned principal operations have
commenced. All losses accumulated since inception has
been considered as part of the Company's development
stage activities.
(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.
(c) Inventory
Inventory, which consists of finished goods, is valued
at the lower of cost net realizable value using the
first in first out (FIFO) method.
(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. The patents are pending and
the Company has determined that the assets have an
infinite life.
(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 follows SFAS No. 109, "Accounting for
Income Taxes" which requires the use of the asset and
liability method of accounting for income taxes. Under
the asset and liability method of SFAS 109, deferred
tax assets and liabilities are recognized for future
tax consequences attributable to temporary differences
between the financial statements carrying amounts of
existing assets and liabilities and loss carry forwards
and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates
expected to apply to taxable income in the year in
which those temporary differences are expected to be
recovered or settled.
(h) Basic and Diluted Loss Per Share
The Company computes net loss per share in accordance
with SFAS No. 128. "Earnings Per Share". SFAS 128 requires
presentation of both basic and diluted earnings per share
("ESP") on the face of the income statement. Basic loss
per share is computed by dividing the net loss available to
common shareholders by the weighted average number of
common shares outstanding during the year. Diluted EPS gives
effect to all dilative potential common shares outstanding
during the year including stock options, using
the treasury stock method, and convertible preferred
stock, using the if-converted method. In computing diluted EPS,
the average stock price for the year is used in
determining the number of shares assumed to be purchased
from the exercise of stock options or warrants. Diluted
EPS excludes all dilative potential common shares if
their effect is anti dilative.
(i) Stock-based Compensation
In December 2004, the Financial Accounting Standards
Board issued FAS 123R "Share-Based Payment", a revision
to FAS 123. FAS 123R replaces existing requirements
under FAS 123 and APB 25, and requires public companies
to recognize the cost of employee services received in
exchange for equity instruments, based on the grant-
date fair value of those instruments, with limited
exceptions. FAS 123R also affects the pattern in which
compensation cost is recognized, the accounting for
employee share purchase plans, and the accounting for
income tax effects of share-based payment transactions.
For small business filers, FAS 123R is effective for
interim or annual periods beginning after December 15,
2005. The Company adopted FAS 123R on October 1, 2006.
(j) Foreign Currency Translation
The Company translates foreign currency transactions
and balances to its reporting currency, United States
dollars, in accordance with SFAS No. 52, "Foreign
Currency Translation". Monetary assets and liabilities
are translated into the functional currency at the
exchange rate in effect at the end of the quarter. Non-
monetary assets and liabilities are translated at the
exchange rate prevailing when the assets were acquired
or the liabilities assumed. Revenues and expenses are
translated at the rate approximating the rate of
exchange on the transaction date. All exchange gains
and losses are included in The determination of net
income (loss) for the quarter.
(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
on 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
The Company has evaluated recent accounting
pronouncements and their adoption has not had or is
not expected to have a material impact on the Company's
financial position, or statements.
Note 3. Related Party Transactions
During the quarter ended June 30, 2010, directors of the
company charged the following expenses to the company:
Management fees $45,000
Note 4. Common Stock
For the Year Ended March 31, 2008
Share Subscriptions
The Company entered into a private placement agreement to
issue 588,235 common stock at $0.17 per share for
proceeds of $100,000 on December 5, 2007 to an accredited
investor.
Share For Debt Settlements
On October 5, 2007, the Company approved the issuance of
2,058,823 units at $0.17 per unit to settle amounts due
to a director of the Company and a shareholder of the
Company totaling $350,000. Each unit contained one
common share and one share purchase warrant exercisable
at $0.17 per share on or before September 30, 2010.
On March 19, 2008 the Company approved the issuance of
4,400,000 units at $0.05 per unit to settle amounts due
to a director of the Company totaling $220,000. Each
unit contained one common share and one half share
purchase warrant exercisable at $0.05 per share on or
before March 18, 2011.
On March 19, 2008 the Company approved the issuance of
25,000 preferred shares at $0.20 per share to settle
amounts due to a director of the Company totaling $5,000.
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 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 signed agreement with
existing warrant options holders to cancel all existing
warrant options available to the Company.
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.
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 agreements with all remaining option holders.
There was no compensation charge associated with stock
options included in the statement of operations for the
quarters ended June 30, 2010 and 2009.
Note 7. Convertible Note
On September 14, 2009, the Company received $197,158 in
convertible subordinated notes from investors and a
related party. These notes carry an 5% annual interest
rate with both principle and accrued interest payable on
October 1, 2011. At the holders discretion these notes
and any accrued interest may be converted into common
shares at $0.01 per share.
Under FASB ASC Topic 815, "Derivatives and Hedging", this
convertible note does not meet the definition of a
"conventional convertible debt instrument" since the debt
has a beneficial conversion feature. Therefore, the
convertible debenture is considered "non-conventional",
which means that the conversion feature must be
bifurcated from the debt and shown as a separate
derivative liability. The Company recognized a
derivative liability of $197,158 during the period, with
an offset to debt discount in the same amount.
Note 8. 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. Al. 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 9. Inventory
At June 30, 2010 and 2009, inventories were comprised of
finished water-from-air machines totaling $245,265, and
$250,456 respectively.
Note 10. 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 $2,546,062 as described above.
Patents, Trademark applications $ 36,488
4,800,000 shares issued to Wataire Ecosafe and
Canadian Dew Technologies $ 960,000
Cash consideration 476,190
Remaining license rights including 11,000,000 shares
issued to Wataire Ecosafe 1,109,872
--------------
$ 2,546,062
Note 11. Deferred Revenue
As of June 30, 2010 and 2009, deferred revenue totaled
$121,971 and $189,067, respectively, consisting of cash
payments made by customers in advance of product
shipment. Revenue will be recognized when finished
goods are shipped to the customer.
Note 12. Shareholder Loan
During the period ended March 31, 2008, the Company's CEO
loaned the Company $100,000. This loan is payable on
demand with interest accruing at 5% per annum. Accrued
interest at March 31, 2009 and 2008, totaled $6,589 and
$1,589, respectively, and is included in the loan.
Note 13. Subsequent Events
Subsequent to June 30, 2010:
A Special Meeting of Stockholders was held on July 27,
2010 wherein the amendment to Article II of the Company's
Articles of Incorporation was approved , providing that
the authorized Common Stock shares of $0.0001 each, be
increased to 500,000,000. The Company subsequently filed
the Form 8-K in respect thereof, on July 30, 2010.
Note 14. Income Taxes
The Company has losses for tax purposes totaling
$11,139,615 which may be applied against future taxable
income. These losses begin to expire in 2027. The
potential tax benefit arising from these losses has not
been recorded in the consolidated financial statements.
The Company evaluates its valuation allowance
requirements on an annual basis based on projected future
operations. When circumstances change and this causes a
change in management's judgement about the realizability
of deferred tax assets, the impact of the change on the
valuation allowance is reflected in current operations.
PART I
This Interim Report on Form 10-Q contains forward-
looking statements that have been made pursuant to the
provisions of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934, and
the Private Securities Litigation Reform Act of 1995 and
concern matters that involve risks and uncertainties that
could cause actual results to differ materially from
historical results or from those projected in the
forward-looking statements. Discussions containing
forward-looking statements may be found in the material
set forth under "Business," "Management's Discussion and
Analysis of Financial Condition and Results of
Operations" and in other sections of this Form 10-Q.
Words such as "may," "will," "should," "could," "expect,"
"plan," "anticipate," "believe," "estimate," "predict,"
"potential," "continue" or similar words are intended to
identify forward-looking statements, although not all
forward-looking statements contain these words. Although
we believe that our opinions and expectations reflected
in the forward-looking statements are reasonable as of
the date of this Report, we cannot guarantee future
results, levels of activity, performance or achievements,
and our actual results may differ substantially from the
views and expectations set forth in this Interim Report
on Form 10-Q. We expressly disclaim any intent or
obligation to update any forward-looking statements after
the date hereof to conform such statements to actual
results or to changes in our opinions or expectations.
Readers should carefully review and consider the various
disclosures made by us in this Report, set forth in
detail in Part I, under the heading "Risk Factors," as
well as those additional risks described in other
documents we file from time to time with the Securities
and Exchange Commission, which attempt to advise
interested parties of the risks, uncertainties, and other
factors that affect our business. We undertake no
obligation to publicly release the results of any
revisions to any forward-looking statements to reflect
anticipated or unanticipated events or circumstances
occurring after the date of such statements.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
General
Wataire is a Washington corporation incorporated on
August 17, 2000. Wataire is currently in the development
stage and has completed its acquisition of all of the
intellectual property relating a water treatment process
and devices for water-from-air machines. The agreements
previously executed between the Company and Ecosafe have
been terminated and cancelled and forms part of the
current agreement. To this end, the Company's future
results of operation will be highly dependent upon the
success of its efforts to sell and market its products
and technologies. The Company plans to sell its products
to distributors and also through multiple indirect
channels, such as resellers.
Results of Operations for the three months periods ended
June 30, 2010 and 2009.
The operating results and cash flows are presented for
the three months periods ended June 30, 2010 and 2009 and
for the period of inception to June 30, 2010.
Revenues. For the three months period ended June 30,
2010, we had total $3,322 in revenue, compared to Nil for
the three months period ended June 30, 2009, an increase
of $3,322 from our sales of products.
Operating Expenses. For the three months period ended
June 30, 2010, we had total operating expenses of $98,995
as compared to $54,718 for the three months period ended
June 30, 2009, showing an increase of $44,277.
Management Fees. For the three months periods ended June
30, 2010 and 2009, we had same amount of management fees
of $45,000.
Professional Fees. For the three months period ended
June 30, 2010, we had professional fees of $14,024 as
compared to $4,920 for the three months period ended June
30, 2009, an increase of $9,104.
Net Loss. The net loss for the three months period ended
June 30, 2010 was $111,914 as compared to $54,718 for the
three months period ended June 30, 2009, an increase of
$57,196.
Plan of Operation
We currently have minimal cash reserves. Accordingly,
our ability to pursue our plan of operations is
contingent on our being able to obtain funding for the
development, marketing and commercialization of our
products and services. Management plans, as soon as
finances permit, to hire additional management and staff
for its US-based operations especially in the areas of
finance, sales, marketing, and investor/public relations.
The Company may also choose to outsource some of its
marketing requirements by utilizing a series of
independent contractors based on the projected size of
the market and the compensation necessary to retain
qualified employees. The Company engaged a marketing
firm to handle the Company's branding, marketing,
advertising, media and public relations for the planned
upcoming 2008 North American launch of its consumer
product line of atmospheric water generators. The term
of the engagement is for one year, and the Company has
paid the marketing firm $250,000 and issued 1,000,000
shares of common stock that has been registered on Form
S-8 for their services. The marketing agreements expired
and the Company has not commenced its branding and
marketing efforts and therefore the shares were not
released by the Company. The Company is currently re-
negotiating the terms of its agreements with the
marketing firm.
To achieve our new operational plan, we will need to
raise substantial additional capital for our operations
through licensing fees and product sales, sale of equity
securities and/or debt financing. We have no cash to
fund our operations at this time, so we plan to sell
licenses and products, offer common stock in private
placements as well as seeking debt financing during the
next 12 months to raise up to $8,000,000. We believe the
proceeds from such efforts will enable us to expand our
operations, buy inventory and start our marketing
campaign.
Due to the "start up" nature of the Company's business,
the Company expects to incur losses as the Company
conducts its ongoing research, product and systems
development programs. We will require additional funding
to continue our operations, for marketing expenses, to
pursue regulatory approvals for our products, for any
possible acquisitions or new technologies, and we may
require additional funding to establish manufacturing
capabilities in the future. We may seek to access the
public or private equity markets whenever conditions are
favorable. We may also seek additional funding through
strategic alliances or collaborate with others. We cannot
assure you that adequate funding will be available on
terms acceptable to us, if at all. Because we are
presently in the early stages of development and
promotional stages of our business, we can provide no
assurance that we will be successful with our efforts to
establish any revenue. In order to pursue our existing
operational plan, we are dependent upon the continuing
sales and financial support of creditors and stockholders
until such time when we are successful in raising
debt/equity capital to finance the operations and capital
requirements of the Company or until such time that we
can generate sufficient revenue from our various
divisions.
Liquidity and Financial Resources
The Company remains in the development stage since
inception. Operations were financed through proceeds
from sales and the issuance of equity and loans from
directors. The directors have also advanced funds into
the Company to cover cash flow deficiencies. The advances
have no stated repayment terms. These funds were used to
pay inventory, services, legal and accounting expenses
along with several other miscellaneous operational
infrastructure costs.
The Company's financial statements are presented on a
going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the
normal course of business. At June 30, 2010, we have
been unsuccessful in our efforts to raise additional
capital to meet our plan of operations. Our cash position
as of June 30, 2010 was $131,257. Since inception, we
have recognized no significant revenue. We have
accumulated operating losses of $11,139,615. At the
present time, and over the next twelve months, our
primary focus will be to develop our marketing plan, new
initiatives and operational plan to establish sales and
to explore various methods for raising additional funds.
Critical Accounting Policies
The Company's discussion and analysis of its financial
condition and results of operations are based upon the
Company's financial statements, which have been prepared
in accordance with accounting principles generally
accepted in the United States of America. The preparation
of the financial statements requires the Company to make
estimates and judgments that affect the reported amount
of assets, liabilities, and expenses, and related
disclosures of contingent assets and liabilities. On an
on-going basis, the Company evaluates its estimates,
including those related to intangible assets, income
taxes and contingencies and litigation. The Company bases
its estimates on historical experience and on various
assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for
making judgments about carrying values of assets and
liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates
under different assumptions or conditions.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk.
We are primarily exposed to foreign currency risk,
interest rate risk and credit risk.
Foreign Currency Risk - We import products from foreign
countries into the United States and market our products
in North America. As a result, our financial results
could be affected by factors such as changes in foreign
currency exchange rates or, if we initiate our planned
international operations, weak economic conditions in
foreign markets. Because our revenues are currently
denominated in U.S. dollars, a strengthening of the
dollar could make our products less competitive in
foreign markets that we plan to enter. We have not
hedged foreign currency exposures related to transactions
denominated in currencies other than U.S. dollars. We do
not engage in financial transactions for trading or
speculative purposes.
Interest Rate Risk - Interest rate risk refers to
fluctuations in the value of a security resulting from
changes in the general level of interest rates.
Investments that are classified as cash and cash
equivalents have original maturities of three months or
less. Our interest income is sensitive to changes in the
general level of U.S. interest rates. We do not have
significant short-term investments, and due to the short-
term nature of our investments, we believe that there is
not a material risk exposure.
Credit Risk - Our accounts receivables are subject, in
the normal course of business, to collection risks. We
regularly assess these risks and have established
policies and business practices to protect against the
adverse effects of collection risks. As a result we do
not anticipate any material losses in this area.
Item 4T. Controls and Procedures.
The Company's Chief Executive Officer and its Chief
Financial Officer are primarily responsible for the
accuracy of the financial information that is presented
in this quarterly Report. These officers have as of the
close of the period covered by this Quarterly Report,
evaluated the Company's disclosure controls and
procedures (as defined in Rules 13a-4c and 15d-14c
promulgated under the Securities Exchange Act of 1934 and
determined that such controls and procedures were
effective in ensuring that material information relating
to the Company was made known to them during the period
covered by this Quarterly Report. There have been no
changes in our internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the third quarter of our 2009 fiscal
year that have materially affected, or are reasonably
likely to materially affect, our internal control over
financial reporting.
PART II
Item 1. Legal Proceedings.
The Company received an alleged claim in January 2009
from one of its former distributors for failing to
deliver merchandise ordered and paid for by the
Plaintiff. The Company has subsequently filed a motion to
dismiss the claim and is considering separate legal
recourse.
On July 20, 2009, the Company filed a cross-
complaint for breach of contract, intentional
interference with contractual relationship, intentional
interference with prospective economic relationship and
accounting.
On February 2, 2010 a confidential settlement agreement
and release was effectuated between the parties. The
Complaint and cross complaint have been dismissed by the
parties with prejudice.
Item 1A. Risk Factors
We have sought to identify what we believe to be the most
significant risks to our business. However, we cannot
predict whether, or to what extent, any of such risks may
be realized nor can we guarantee that we have identified
all possible risks that might arise.
We are dependent on external financing.
It is imperative that we raise additional capital to
complete our operational plan to promote and
commercialize our newly acquired business combinations
and activities. We will also require funds to sustain our
business operations if we are not successful in earning
revenues from our product sales and sub-licensing. We
estimate that we would require additional funding of
$8,000,000 to pursue our business strategy. If we are
unable to obtain equity financing upon terms that our
management deems sufficiently favorable, or at all, it
would have a material adverse impact upon our ability to
expand our current operational plan. Any sale of share
capital will result in dilution to existing shareholders.
To date, we have generated some revenues from sales but
not enough to sustain our business operations. The
success of our business depends on us receiving inventory
and advertising materials from our suppliers and
manufacturers. The exact amount of our current and
future capital requirements will depend on numerous
factors, some of which are not within our control,
including the progress of our development efforts, the
costs of testing, supply of our products, demand of our
products and changes in governmental regulation. Our
ability to raise additional financing depends on many
factors beyond our control, including the state of
capital markets, the market price of our common stock and
the development or prospects for development of
competitive technology by others. The necessary
additional financing may not be available to us or may be
available only on terms that would result in further
dilution to the current owners of our Common Stock. If we
are unable to raise additional funds when we need them,
we may have to curtail or discontinue our operations, in
which case you could lose the entire amount of your
investment in the Company.
We are in our early stages of development and face a risk
of business failure.
We are in our early stages of development. We have no way
to evaluate the likelihood that we will be able to
operate our business successfully. The likelihood of
success must be considered in light of the problems,
expenses, difficulties, complications and delays
encountered in connection with the technology and sales
industries. We recognize that if we are unable to
generate significant revenues from our sales, we will not
be able to earn profits or continue operations. There is
only a limited history upon which to base any assumption
as to the likelihood that we will prove successful, and
we can provide investors with no assurance that we will
generate any additional operating revenues or ever
achieve profitable operations from our current business
initiatives. If we are unsuccessful in addressing these
risks, our business will most likely fail.
We are competing against larger and better-financed
companies.
We operate in a highly competitive market with financial
rewards pending on market performance. Some of our
competitors are multi-million dollar enterprises with
more resources for marketing, distribution and
development. We may be in a disadvantage if any of our
competitors focused on similar products we sell. Because
we don't have the infrastructure and personnel in place
to adequately implement our business plans and
operations, our business may fail.
Our business and the success of our products could be
harmed if we are unable to maintain our brand image.
Our success is heavily dependent upon the market
acceptance of our Wataire branded lines of atmospheric
water generators. If we are unable to timely and
appropriately respond to changing consumer demand, the
brand Watair distributes may be impaired. Even if we
react appropriately to changes in consumer preferences,
consumers may consider those brand images to be outdated.
Lack of acceptance of our brands will have a material
impact on the performance of the Company.
Dependence on our suppliers
Our success is highly dependent upon the continued
support and services of suppliers. We are solely
dependent on their support to provide enough inventories
to meet our purchase orders. If our suppliers are not
able to manufacture enough products to meet the demands
of our purchase orders, our business will most likely
fail.
Demand for our products and services may fail to
materialize
Our growth and success will depend on our success in
introducing and selling our products. The market for the
products and services we plan to offer is relatively new
and there is little hard data to validate market demand
or predict how this demand will be segmented. There
could be much lower demand than believed, or interest in
our products and services could decline or die out, which
could adversely affect our ability to sustain our
operations.
There is substantial doubt as to our ability to continue
as a going concern
Our financial results for the quarter ended June 30, 2010
show substantial losses. The accompanying financial
statements have been prepared in conformity with the
generally accepted accounting principles in the United
States of American which contemplates the Company as a
going concern. The Company has sought out additional
investment to raise additional funds. However, there are
no assurances that the Company will continue as a going
concern without the successful completion of additional
funding. The accompanying consolidated financial
statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going
concern.
Our independent auditors, Gruber & Company LLC, have
expressed substantial doubt about our ability to continue
as a going concern given our recurring losses from
operations and net stockholder's deficit. This opinion
could materially limit our ability to raise additional
funds by issuing new debt or equity securities or
otherwise.
Dependence on key management and personnel
Our success is highly dependent upon the continued
services of Robert Rosner, our Chief Executive Officer.
If he were to leave us this could have a materially
adverse effect upon our business and operations. We
anticipate entering into employment contract with Mr.
Rosner but can provide no assurance that we will come to
terms for such employment agreement.
Our business also requires additional staff in all areas
to successfully bring our products to market. Our success
depends on our ability to attract and retain technical
and management personnel with expertise and experience in
the technology field. If we are unable to attract and
retain qualified technical and management personnel, we
will suffer diminished chances of future success.
We may be subject to product liability or breach of
contract claim if our products do not work as promised
from our Inventor(s) and predecessor
The atmospheric water generators are designed to
facilitate potable safe drinking water. If the technology
fails to work as manufactured by our inventor(s) and
predecessor, customers may bring claims against us.
Despite limitations on such claims, such claims can be
costly and time consuming which could have a material
adverse effect on our operations, even if we are found
not to have been at fault. We currently do not have
liability insurance and anticipate that we will seek
some coverage in the future if such coverage is available
at a reasonable cost.
Significant repair and/or replacement with respect to
product warranty claims or product recalls could have a
material adverse impact on the results of operations.
We provide a limited warranty for our products for a
period of one year. Significant warranty claims could
have a material adverse effect on our results of
operations.
Government Regulation
Regulation by government authorities in the United
States, Canada and foreign countries may be a factor in
the development, manufacture and marketing of our
products and in our research and product development
activities. The process of obtaining these approvals and
the subsequent compliance may require time and financial
resources.
Limited experience to market our products
Even if we are able to develop our products and obtain
the necessary regulatory approvals, we have limited
experience or capabilities in marketing or
commercializing our products. We currently have some
sales and just engaged a marketing agency. We do not
have a distribution infrastructure in place. Accordingly,
we are dependent on our ability to find collaborative
marketing partners or contract sales companies for
commercial sale of any of our products. Even if we find
a potential marketing partner, we may not be able to
negotiate an advertising and/or licensing contract on
favorable terms to justify our investment or achieve
adequate revenues.
Our business is subject to risks associated with offshore
manufacturing.
We import some of our products into the United States and
Canada from foreign countries for resale. All of our
import operations are subject to tariffs and quotas set
by the U.S. and other countries' governments through
mutual agreements or bilateral actions. Adverse changes
in these import costs and restrictions, or our suppliers'
failure to comply with customs regulations or similar
laws, could harm our business.
Our operations are also subject to the effects of
international trade agreements and regulations such as
the North American Free Trade Agreement, the Caribbean
Basin Initiative and the European Economic Area
Agreement, and the activities and regulations of the
World Trade Organization. Trade agreements can also
impose requirements that adversely affects our business,
such as setting quotas on products that may be imported
from a particular country into our key market,
the United States. In fact, some trade agreements can
provide our competitors with an advantage over us,
or increase our costs, either of which could have an
adverse effect on our business and financial condition.
In addition, the recent elimination of quotas on World
Trade Organization member countries by 2005 could result
in increased competition from developing countries which
historically have lower labor costs, including China.
This increased competition, including from competitors
who can quickly create cost and sourcing advantages from
these changes in trade arrangements, could have an
adverse effect on our business and financial condition.
Our ability to import products in a timely and cost-
effective manner may also be affected by problems at
ports or issues that otherwise affect transportation and
warehousing providers, such as labor disputes or
increased U.S. homeland security requirements. These
issues could delay importation of products or require us
to locate alternative ports or warehousing providers to
avoid disruption to our customers. These alternatives may
not be available on short notice or could result in
higher transit costs, which could have an adverse impact
on our business and financial condition.
Our international operations expose us to political,
economic and currency risks.
All of our products came from sources outside of the
United States. As a result, we are subject to the risks
of doing business abroad, including:
* Currency fluctuations;
* Changes in tariffs and taxes;
* Political and economic instability; and
* Disruptions or delays in shipments.
Changes in currency exchange rates may affect the
relative prices at which we are able to manufacture
products and may affect the cost of certain items
required in our operation, thus possibly adversely
affecting our profitability.
There are inherent risks of conducting business
internationally. Language barriers, foreign laws
and customs and duties issues all have a potential
negative effect on our ability to transact business
in the United States. We may be subject to the
jurisdiction of the government and/or private litigants
in foreign countries where we transact business, and we
may be forced to expend funds to contest legal matters in
those countries in disputes with those governments or
with customers or suppliers.
We may suffer from infringements or piracy of our
trademarks, designs, brands or products.
We may suffer from infringements or piracy of our
trademarks, designs, brands or products in the U.S. or
globally. Some jurisdictions may not honor our claims to
our intellectual properties. In addition, we may not have
sufficient legal resources to police or enforce our
rights in such circumstances.
Unfair trade practices or government subsidization may
impact our ability to compete profitably.
In an effort to penetrate markets in which the Company
competes, some competitors may sell products at very low
margins, or below cost, for sustained periods of time in
order to gain market share and sales. Additionally, some
competitors may enjoy certain governmental subsidies that
allow them to compete at substantially lower prices.
These events could substantially impact our ability to
sell our product at profitable prices.
If we market and sell our products in international
markets, we will be subject to additional regulations
relating to export requirements, environmental and
safety matters, and marketing of the products and
distributorships, and we will be subject to the
effects of currency fluctuations in those markets,
all of which could increase the cost of selling
products and substantially impair the ability to achieve
profitability in foreign markets.
As a part of our marketing strategy, we plan to market
and sell our products internationally. In addition to
regulation by the U.S. government, those products will
be subject to environmental and safety regulations in
each country in which we market and sell. Regulations
will vary from country to country and will vary from
those of the United States. The difference in regulations
under U.S. law and the laws of foreign countries may be
significant and, in order to comply with the laws of
these foreign countries, we may have to implement
manufacturing changes or alter product design or
marketing efforts. Any changes in our business
practices or products will require response to
the laws of foreign countries and will result in
additional expense to the Company.
Additionally, we may be required to obtain certifications
or approvals by foreign governments to market and sell
the products in foreign countries. We may also be
required to obtain approval from the U.S. government to
export the products. If we are delayed in receiving, or
are unable to obtain import or export clearances, or if
we are unable to comply with foreign regulatory
requirements, we will be unable to execute our complete
marketing strategy.
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds.
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.
Item 3. Defaults Upon Senior Securities.
Not Applicable.
Item 4. Submission of Matters to a Vote of Security
Holders.
Not Applicable.
Item 5. Other Information.
None
Item 6. Exhibits
Exhibit 31.01
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
RULE 13A-14(A) OF THE SECURITIES EXCHANGE ACT AND
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert Rosner, Director and Chief Executive Officer of
Wataire International, Inc. certify that :
1. I have reviewed this Quarterly Report on Form 10-Q of
Wataire International, Inc.;
2. Based on my knowledge, this report does not contain
any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in
light of the circumstances under which such statements
were
made, not misleading with respect to the period covered
by
this report;
3. Based on my knowledge, the financial statements, and
other financial information included in this report,
fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over
financial
reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have :
a. Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, to ensure that made known
to us by others within those entities, particularly
during
the period in which this report is being prepared;
b. Designed such internal control over financial
reporting,
or caused such internal control over financial reporting
to
be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial
reporting
and the preparation of financial statements for
external purpose in accordance with general accepted
accounting principles;
c. Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation;
and
d. Disclosed in this report any change in the
registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an
annual
report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal
control over financial reporting.
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of
internal
control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's
board
of directors (or persons performing
the equivalent functions ):
a. All significant deficiencies and material weaknesses
in
the design or operation of internal control over
financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarized
and
report financial information; and
b. Any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal control over financial
reporting.
Dated : August 23, 2010
Signature : /s/ Robert Rosner
Robert Rosner
Director and Chief
Executive Officer
EXHIBIT 32 .01
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS
ADOPTED
PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Wataire
International, Inc. (the "Company") on Form 10-Q for the
period ended June 30, 2010 as filed with the Securities
and
Exchange Commission on the date hereof (the "Report"),
I, Robert Rosner, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002,
that to the best of my knowledge:
(1) The Report fully complies with the
requirements
of section 13(a) or 15(d) of the Securities Exchange Act
of
1934; and
(2) The information contained in the Report
fairly presents, in all material respects, the
financial condition and result of operations of the
Company.
/s/ Robert Rosner
------------
Robert Rosner
Chief Executive Officer
August 23, 2010
Exhibit 31.02
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
RULE 13A-14(A) OF THE SECURITIES EXCHANGE ACT AND
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas M. Braid, Chief Financial Officer of Wataire
International, Inc. certify that :
1. I have reviewed this Quarterly Report on Form 10-Q of
Wataire International, Inc.;
2. Based on my knowledge, this report does not contain
any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in
light of the circumstances under which such statements
were
made, not misleading with respect to the period covered
by
this report;
3. Based on my knowledge, the financial statements, and
other financial information included in this report,
fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over
financial
reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have :
a. Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, to ensure that made known
to us by others within those entities, particularly
during
the period in which this report is being prepared;
b. Designed such internal control over financial
reporting,
or caused such internal control over financial reporting
to
be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial
reporting
and the preparation of financial statements for external
purpose in accordance with general accepted accounting
principles;
c. Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation;
and
d. Disclosed in this report any change in the
registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an
annual
report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal
control over financial reporting.
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of
internal
control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's
board
of directors (or persons performing the equivalent
functions
):
a. All significant deficiencies and material weaknesses
in
the design or operation of internal control over
financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarized
and
report financial information; and
b. Any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal control over financial
reporting.
Dated : August 23, 2010
Signature : /s/ Thomas M. Braid
Thomas M. Braid
Chief Financial Officer
EXHIBIT 32 .02
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS
ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Wataire
International, Inc. (the "Company") on Form 10-Q for the
period ended June 30, 2010 as filed with the Securities
and
Exchange Commission on the date hereof (the "Report"),
I, Thomas M. Braid, Chief Financial Officer of the
Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002,
that to the best of my knowledge:
(1) The Report fully complies with the
requirements
of section 13(a) or 15(d) of the Securities Exchange Act
of
1934; and
(2) The information contained in the Report
fairly presents, in all material respects, the
financial condition and result of operations of the
Company.
/s/ Thomas M. Braid
-------------
Thomas M. Braid
Chief Financial Officer
August 23, 2010
SIGNATURES
In accordance with the Securities Exchange Act of 1934,
this report has been signed below by the following
persons on behalf of the registrant and in the capacities
and on the dates indicated.
Dated: August 26, 2010
WATAIRE INTERNATIONAL, INC.
By: /S/ Robert Rosner
Robert Rosner
Chief Executive Officer
& Director
By: /S/ Thomas M. Braid
Thomas M. Braid
Chief Financial Officer
& Director