Quarterly Report (10-q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended September 30, 2022

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

For the transition period from ________ to ________

Commission file number: 000-56030

ENERGY and WATER DEVELOPMENT CORP.

(Exact Name of Registrant as Specified in Its Charter)

Florida		30-0781375
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

7901 4th Street N STE #4174, St Petersburg, Florida 33702

(Address of Principal Executive Offices, including Zip Code)

Tel No.: 305-517-7330

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

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

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 ☒ No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

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

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

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

The number of shares outstanding of the registrant’s classes of common stock as November 3, 2022 was 178,447,235 shares.

INDEX

		Page
	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021 (Unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders' Deficit for the three and nine months ended September 30, 2022 and 2021 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4.	Controls and Procedures	25

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
SIGNATURES		28

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

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

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

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. The following discussion should be read in conjunction with our financial statements and the related notes included in this Report.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Energy and Water Development Corp.

Condensed Consolidated Balance Sheets


	September 30,			December 31,
	2022			2021
	(Unaudited)
ASSETS

CURRENT ASSETS
Cash	$	56,983		$	589,668
Accounts receivable		54,822			55,169
Inventory		416,509			196,553
Prepaid expenses and other current assets		300,790			432,082
TOTAL CURRENT ASSETS		829,104			1,273,472

Property and equipment, net		69,862			3,834
Operating lease right-of-use asset		77,697			49,432

TOTAL ASSETS	$	976,663		$	1,326,738

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	975,159		$	941,309
Accounts payable – related party		53,275			124,370
Convertible loans payable, net of discounts		39,999			176,703
Due to officers		105,020			17,485
Derivative liability		—			354,160
Current portion of operating lease liability		68,740			39,148
Common stock subscriptions liability		—			377,350
TOTAL CURRENT LIABILITIES	$	1,242,193		$	2,030,525

Operating lease liability, net of current portion		8,957			10,283
TOTAL LIABILITIES		1,251,150			2,040,808

COMMITMENTS AND CONTINGENCIES (Note 14)		—			—

STOCKHOLDERS' DEFICIT:
Preferred stock, par value $.001 per share; 500,000,000 shares authorized, 9,780,976 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		9,781			9,781
Common stock, par value $.001 per share; 1,000,000,000 shares authorized, 177,870,062 and 143,840,643 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		177,870			143,840
Common stock subscriptions, 0 and 15,855,000 shares at September 30, 2022 and December 31, 2021, respectively		—			792,745
Additional paid in capital		23,386,295			20,777,401
Accumulated deficit		(23,940,116	)		(22,395,393	)
Accumulated other comprehensive income (loss)		91,683			(42,444	)
TOTAL STOCKHOLDERS' DEFICIT		(274,487	)		(714,070	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	976,663		$	1,326,738

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

Energy and Water Development Corp.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021

GENERAL and ADMINISTRATIVE EXPENSES
Marketing fees	$	129,714		$	1,357		$	223,313		$	168,832
Officers’ salaries and payroll taxes		128,545			68,195			364,818			225,472
Professional fees		106,853			68,272			398,593			159,538
Travel and entertainment		5,920			13,696			24,368			13,696
Other general and administrative expenses		146,268			56,356			384,559			103,169
TOTAL GENERAL and ADMINISTRATIVE EXPENSES		517,300			207,876			1,395,651			670,707

LOSS FROM OPERATIONS		(517,300	)		(207,876	)		(1,395,651	)		(670,707	)

OTHER INCOME (EXPENSE)
Change in fair value of derivative liability		—			(178,673	)		243,653			4,820
Other expense		(134,599	)		—			(267,013	)		—
Interest income (expense), net		—			(115,506	)		(125,712	)		(673,701	)
TOTAL OTHER INCOME (EXPENSE)		(134,599	)		(294,179	)		(149,072	)		(668,881	)

LOSS BEFORE TAXES		(651,899	)		(502,055	)		(1,544,723	)		(1,339,588	)

TAXES		—			—			—			—

NET LOSS	$	(651,899	)		(502,055	)		(1,544,723	)		(1,339,588	)

OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments		76,694			(10,027	)		134,127			(13,933	)
TOTAL OTHER COMPREHENSIVE LOSS		76,694			(10,027	)		134,127			(13,933	)

COMPREHENSIVE LOSS	$	(575,205	)	$	(512,082	)	$	(1,410,596	)	$	(1,353,521	)

Net loss per common share - Basic	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Net loss per common share - Diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

Weighted average number of common shares outstanding - Basic		175,760,253			139,144,989			165,908,048			134,931,518
Weighted average number of common shares outstanding - Diluted		175,760,253			139,144,989			165,908,048			134,931,518

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

Energy and Water Development Corp.

Condensed Statements of Changes in Stockholders’ Deficit

(Unaudited)


	Preferred Stock				Common Stock				Common Stock Subscriptions						Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Stockholders'
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Loss			Deficit

BALANCE AT DECEMBER 31, 2021		9,780,796	$	9,781		143,840,643	$	143,840		15,855,000		$	792,745		$	20,777,401		$	(22,395,393	)	$	(42,444	)	$	(714,070	)
Sale of Common Stock		—		—		17,453,000		17,453		(14,953,000	)		(747,650	)		1,030,197			—			—			300,000
Common stock issued for services		—		—		520,000		520		—			—			88,080			—			—			88,600
Common stock issued to satisfy convertible debt		—		—		540,716		541		—			—			49,459			—			—			50,000
Stock issued for interest and fees		—		—		34,842		35		—			—			3,187			—			—			3,222
Subscriptions liability reclassification to subscriptions		—		—		—		—		7,547,000			377,350			—			—			—			377,350
Derivative settled upon conversion of debt		—		—		—		—		—			—			110,507			—			—			110,507
Subscription deposits received		—		—		—		—		1,875,000			300,000			—			—			—			300,000
Costs associated with equity line of credit		—		—		—		—		—			—			(24,000	)		—			—			(24,000	)
Net loss		—		—		—		—		—			—			—			(358,710	)		—			(358,710	)
Other comprehensive loss		—		—		—		—		—			—			—			—			13,970			13,970
BALANCE AT March 31, 2022		9,780,796	$	9,781		162,389,201	$	162,389		10,324,000		$	722,445		$	22,034,831		$	(22,754,103	)	$	(28,474	)	$	146,869
Sale of Common Stock		—		—		10,402,947		10,403		(10,324,000	)		(722,445	)		727,042			—			—			15,000
Common stock issued for services		—		—		227,273		227		—			—			49,773			—			—			50,000
Subscription deposits received		—		—		—		—		1,000,000			150,000			—			—			—			150,000
Net loss		—		—		—		—		—			—			—			(534,114	)		—			(534,114	)
Other comprehensive loss		—		—		—		—		—			—			—			—			43,463			43,463
BALANCE AT June 30, 2022		9,780,796	$	9,781		173,019,421	$	173,019		1,000,000		$	150,000		$	22,811,646		$	(23,288,217	)	$	14,989		$	(128,782	)
Sale of Common Stock		—		—		4,023,368		4,023		(1,000,000	)		(150,000	)		445,977			—			—			300,000
Common stock issued for services		—		—		827,273		828		—			—			128,672			—			—			129,500
Net loss		—		—		—		—		—			—			—			(651,899	)		—			(651,899	)
Other comprehensive loss		—		—		—		—		—			—			—			—			76,694			76,694
BALANCE AT September 30, 2022		9,780,796	$	9,781		177,870,062	$	177,870		—		$	—		$	23,386,295		$	(23,940,116	)	$	91,683		$	(274,487	)

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

Energy and Water Development Corp.

Condensed Statements of Changes in Stockholders’ Deficit (Continued)

(Unaudited)

																				Accumulated
	Preferred Stock				Common Stock				Common Stock Subscriptions						Additional Paid-in		Accumulated			Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Loss			Deficit

BALANCE AT DECEMBER 31, 2020		9,780,976	$	9,781		123,316,886	$	123,316		10,040,000		$	1,504,000		$	16,153,038	$	(19,357,927	)		—		$	(1,567,792	)
Sale of common stock		—		—		471,433		471		200,000			20,000			139,550		—						160,021
Common stock issued for services		—		—		500,000		500		—			—			164,500		—						165,000
Common stock issued to satisfy convertible loans payable		—		—		690,606		691		—			—			65,309		—						66,000
Common stock issued for interest and fees on convertible loans payable		—		—		38,690		39		—			—			3,402		—						3,441
Derivative liability settled upon conversion of loans payable		—		—		—		—		—			—			67,350		—						67,350
Common stock issued on subscriptions		—		—		10,040,000		10,040		(10,040,000	)		(1,504,000	)		1,493,960		—						—
Net loss		—		—		—		—		—			—			—		(434,052	)					(434,052	)
Other comprehensive loss		—		—		—		—		—			—			—		—			(2,501	)		(2,501	)
BALANCE AT MARCH 31, 2021		9,780,976	$	9,781		135,057,615	$	135,057		200,000		$	20,000		$	18,087,109	$	(19,791,979	)	$	(2,501	)	$	(1,542,533	)
Sale of common stock		—		—		2,091,662		2,092		1,562,322			212,100			238,908		—			—			453,100
Common stock issued on subscriptions		—		—		150,000		150		(150,000	)		(15,000	)		14,850		—			—			—
Net loss		—		—		—		—		—			—			—		(403,481	)		—			(403,481	)
Other comprehensive loss		—		—		—		—		—			—			—		—			(1,405	)		(1,405	)
BALANCE AT JUNE 30, 2021		9,780,976	$	9,781		137,299,277	$	137,299		1,612,322		$	217,100		$	18,340,867	$	(20,195,460	)	$	(3,906	)	$	(1,494,319	)
Sale of common stock		—		—		666,594		667		78,033			27,350			99,323		—			—			127,340
Common stock issued on subscriptions		—		—		1,612,322		1,612		(1,612,322	)		(217,100	)		215,488		—			—			—
Net loss		—		—		—		—		—			—			—		(502,055	)		—			(502,055	)
Other comprehensive loss		—		—		—		—		—			—			—		—			(10,027	)		(10,027	)
BALANCE AT SEPTEMBER 30, 2021		9,780,976	$	9,781		139,578,193	$	139,578		78,033		$	27,350		$	18,655,678	$	(20,697,515	)	$	(13,933	)	$	(1,879,061	)

Energy and Water Development Corp.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	For the Nine Months Ended
	September 30,
	2022			2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,544,723	)	$	(1,339,588	)
Reconciliation of net loss to net cash used in operating activities
Amortization of debt discount and deferred financing costs		63,296			621,240
Depreciation expense		7,778			124
Change in fair value of derivative liability		(243,653	)		(4,821	)
Stock issued for services		268,100			165,000
Foreign currency (gain) loss		265,444			—
Changes in operating assets and liabilities:
Inventory		(272,143	)		(403,932	)
Prepaid expenses and other current assets		75,370			(183,532	)
Accounts payable and accrued expenses		47,883			196,462
Due to related party		(71,095	)		—
Due to officers		85,169			(68	)
CASH USED IN OPERATING ACTIVITIES		(1,318,574	)		(949,115	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(78,123	)		(4,301	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible loans payable		—			369,500
Payments of convertible loans payable		(150,000	)		(95,500	)
Costs associated with equity line of credit		(24,000	)
Proceeds from sale of common stock		765,000			740,461
Proceeds from common stock subscriptions		300,000			—
CASH PROVIDED BY FINANCING ACTIVITIES		891,000			1,014,461

Effect of exchange rate changes on cash		(26,988	)		(13,933	)

Net change in cash		(532,685	)		47,112

Cash beginning of period		589,668			12,047

Cash end of period	$	56,983		$	59,159

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	67,940		$	28,864
Cash paid for taxes	$	—		$	—

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common shares issued for interest and fees	$	3,222		$	3,441
Reclassification of common stock subscriptions to common stock	$	747,650		$	1,736,100
Common shares issued for conversion of loans payable	$	50,000		$	66,000
Increase in derivative liability	$	—		$	730,280
Derivative settled upon conversion of debt	$	110,507		$	67,350
Reclassification of common stock subscription liability to common stock subscriptions	$	377,350		$	—
Right of use asset exchanged for lease liability	$	—		$	79,214

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

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Note 1. Incorporation and Nature of Operations

Energy and Water Development Corp. (the “Corporation”, “Company” or “EAWD”), was incorporated under the laws of the State of Florida on December 12, 2007. In September 2019, the Company changed its name from Eurosport Active World Corp. to Energy and Water Development Corp. to better present the Company’s purpose and business sector. We are an engineering services company formed as an outsourcing green tech platform, seeking to exploit renewable energy and water technologies.

On May 7^th, 2021, the Company established an official Branch to initiate operations and assist on the establishment of an official subsidiary. On November 9, 2021, the Company established an official Subsidiary of EAWD in Germany to ensure the company is positioned to service its growing business in one of the EU’s most environmentally progressive countries. This subsidiary was incorporated under the name of Energy and Water development Deutschland GmbH (“EAWD Deutschland”), in Hamburg, Germany.

On May 19, 2022, the Company initiated the process for the establishment of an additional Subsidiary of EAWD in Germany to provide logistics services for EAWD Deutschland. This subsidiary has been now fully incorporated under the name of EAWD Logistik GmbH (“EAWD Logistik”), in Frankfurt, Germany.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements include the accounts of EAWD and its subsidiary. All intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated financial statements (unaudited) include the accounts of Energy and Water Development Corp. and have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements of Energy and Water Development Corp. for the fiscal year ended December 31, 2021, have been omitted.

Foreign currency translation

The United States dollar (“USD”) is the Company’s reporting currency. The Company has a subsidiary located in Germany. The net sales generated, and the related expenses directly incurred from the operations, if any, are denominated in local currency, Euro (“Euro”). The functional currency of the subsidiary is generally the same as the local currency.

Assets and liabilities measured in Euros are translated into USD at the prevailing exchange rates in effect as of the financial statement date and the related gains and losses, net of applicable deferred income taxes, are reflected in accumulated other comprehensive loss in its balance sheets. Income and expense accounts are translated at the average exchange rate for the period. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. During the three and nine months ended September 30, 2022 the Company used a spot rate of 1.07 and an average rate of 0.97 when converting EURO to USD.

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Use of Estimates

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

Leases

Effective January 1, 2019, the Company adopted ASC 842- Leases (“ASC 842”). The lease standard provided a number of optional practical expedients in transition. The Company elected the package of practical expedients. As such, the Company did not have to reassess whether expired or existing contracts are or contain a lease; did not have to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases. The lease standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption under which the Company will not recognize right-of-use (“ROU”) assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases. The Company elected the practical expedient to not separate lease and non-lease components for certain classes of assets (facilities).

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and short-term and long-term lease liabilities, as applicable.

Cash

The Company considers short-term interest-bearing investments with initial maturities of three months or less to be cash equivalents. The Company has $56,983 and $589,668 cash at September 30, 2022 and December 31, 2021, respectively.

Inventory

Inventory is stated at the lower of cost or net realizable value using the first in, first out (FIFO) method. A reserve is established if necessary to reduce excess or obsolete inventories to their net realizable value.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets include prepaid inventory, purchase deposits, miscellaneous prepaid expenses, value added tax receivable, and a security deposit.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation. Depreciation is recognized over an asset’s estimated useful life using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Estimated useful lives of the Company’s Property and Equipment are as follows:

Schedule of estimated useful lives
	Useful Life (in years)
Office equipment	5
Furniture and fixtures	7
Automobile	8
Machinery and equipment	5

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Deferred Financing Costs

The Company has recorded deferred financing costs as a result of fees incurred by the Company in conjunction with its debt financing activities. These costs are amortized to interest expense using the straight-line method which approximates the interest rate method over the term of the related debt. As of September 30, 2022 and December 31, 2021, unamortized deferred financing costs were $0 and $6,663, respectively and are netted against the related debt.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services.

To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a measurement date. A fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.

Described below are the three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities,

Level 2 – Observable prices that are based on inputs not quoted on active markets, but corroborated by market data,

Level 3 – Unobservable inputs are used when little or no market data is available.

The application of the three levels of the fair value hierarchy under ASC Topic 820-10-35, our derivative liabilities as of September 30, 2022 and December 31, 2021, were $0 and $354,160, respectively and measured on Level 3 inputs.

Certain assets and liabilities are required to be recorded at fair value on a recurring basis. The Company adjusts derivative financial instruments to fair value on a recurring basis. The fair value for other assets and liabilities such as cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses, deferred cost and deferred revenue have been determined to approximate carrying amounts due to the short maturities of these instruments. The Company believes that its indebtedness approximates fair value based on current yields for debt instruments with similar terms.

Loss Per Common Share

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

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As discussed more fully in Note 10, convertible note holders have the option of converting their loans into common shares subject to the terms and features offered by the specific convertible notes. Some note holders were also granted purchase options to purchase additional shares subject to the features of each purchase option. If the convertible note holders of unexercised convertible notes exercised their conversion feature and the additional purchase options, they would represent 0 for the three and nine months ended September 30, 2022, and 10,114,286 in additional common shares for the three and nine months ended September 30, 2021. The potential shares from both the conversion feature and the rights to purchase additional shares were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive.

Related Party Transactions

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

	(i)	any person that holds 10% or more of the Company’s securities including such person’s immediate families,
	(ii)	the Company’s management,
	(iii)	someone that directly or indirectly controls, is controlled by or is under common control with the Company, or
	(iv)	anyone who can significantly influence the financial and operating decisions of the Company.

Note 3. Recently Issued Accounting Standards

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

On January 1, 2022, the Company adopted ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). This standard eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The adoption of ASU 2020-06 did not have a material impact on the Company’s condensed consolidated financial statements.

On January 1, 2022, the Company adopted ASU No. 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modification or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”), which will clarify and reduce diversity in practice. Specifically, the new standard includes a recognition model comprising four categories of transactions and corresponding accounting treatment for each category. The category that would apply to a modification or an exchange of an equity-classified warrant would depend on the substance of the modification transaction (e.g., a financing transaction to raise equity versus one to raise debt). This recognition model is premised on the idea that the accounting for the transaction should not differ from what it would have been had the issuer of the warrants paid cash instead of modifying the warrants. The adoption of ASU 2021-04 did not have a material impact on the Company’s condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” and ASU No. 2019-05, “Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief” which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s financial statements and disclosures.

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Note 4. Going Concern

The Company has incurred operating losses since it began operations (December 2012) totaling $23,386,295 at September 30, 2022. During the three and nine months ended September 30, 2022, the Corporation incurred net losses of $651,899 and $1,544,723, respectively. The Company had a working capital deficit of $413,089 at September 30, 2022.

The Company’s ability to transition to profitable operations is dependent upon achieving a level of revenues adequate to support its cost structure. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business and availability to sufficient resources.

Management expects sales operations to continue to expand. If necessary, the Company will need to raise additional funds during 2022. Management of the Company intends to raise additional funds through the issuance of equity securities or debt, credit lines or advances from suppliers. The ability of the Company to continue as a going concern depends upon its ability to generate sales or obtain additional funding to finance operating losses until the Corporation is profitable.

These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 5. Accounts Receivable

At September 30, 2022 and December 31, 2021, accounts receivable was $54,822 and $55,169, respectively, and determined to be fully collectible.

Note 6. Inventory

The components of inventory at September 30, 2022 and December 31, 2021, consisted of the following:

Schedule Of Inventories
	September 30,		December 31,
	2022		2021
	(Unaudited)
Work in progress	$	416,509	$	196,553
Inventory, net	$	416,509	$	196,553

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Note 7. Prepaid Expenses and Other Current Assets

The components of prepaid expenses and other current assets at September 30, 2022 and December 31, 2021, consisted of the following:


	September 30, 2022		December 31, 2021
	(Unaudited)
Prepayment on inventory not received	$	—	$	225,979
Prepaid expenses		160,907		113,600
Value added tax receivable		130,000		83,602
Security deposit		9,883		7,394
Purchase deposits		—		1,507
Prepaid expenses and other current assets	$	300,790	$	432,082

Note 8. Property and Equipment, net

The components of property and equipment at September 30, 2022 and December 31, 2021 consisted of the following:

Schedule Of Property And Equipment
	September 30,			December 31,
	2022			2021
	(Unaudited)
Office equipment	$	3,831		$	1,526
Furniture and fixtures		2,231			2,607
Machinery and equipment		39,832			—
Automobile		32,000			—
Property and equipment, gross		77,894			4,133
Less: Accumulated depreciation		(8,032	)		(299	)
Property and equipment, net	$	69,862		$	3,834

Depreciation expense for the three months ended September 30, 2022 and 2021 was $3,011 and $124, respectively, and for the nine months ended September 30, 2022 and 2021 was $7,778 and $124, respectively, and is included in other general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

Note 9. Accounts Payable and Accrued Expenses and Accounts payable – Related Party

Significant components of accounts payable and accrued expenses at September 30, 2022 and December 31, 2021 are as follows:


	September 30, 2022		December 31, 2021
	(Unaudited)

Accounts payable	$	239,467	$	251,404
Accounts payable – related party		53,275		124,370
Accrued expenses		272,916		385,776
Accrued legal costs		349,726		253,901
Accrued salary		113,050		50,228
Accounts payable and accrued expenses and accounts payable – related party	$	1,028,434	$	1,065,679

As of September 30, 2022 and December 31, 2021, the Company owed Virhtech GmbH, a related party of the Company, $53,275 and $124,370, respectively, for services performed for the Company and is classified as accounts payable – related party on the condensed consolidated balance sheets.

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Note 10. Convertible Loans Payable

As of September 30, 2022 and December 31, 2021, the balance of convertible loans payable net of discount was $39,999 and $176,703, respectively.

During the year ended December 31, 2021, the Company issued two convertible loans in the aggregate amount of $404,000. The notes bear interest at 8% per annum and all mature within one year. On October 21, 2021, the Maturity Date of the $304,000 loan was extended from March 25, 2022 to April 21, 2022. The embedded beneficial conversion features in the notes meet the definition of a derivative and requires bifurcation and liability classification, at fair value. The fair value of the derivative liability as of the date of issuance was $746,672 and was recorded as a discount of the notes.

Schedule of Notes Payable
	Amount
Balance of convertible loan payables, net of discounts on December 31, 2020	$	149,241
Issuances of debt		404,000
Settlement of debt		(95,500	)
Amortization of debt discount		402,125
Debt discount		(406,500	)
Deferred financing costs		(6,663	)
Conversions		(270,000	)
Balance of convertible loan payables, net of discounts on December 31, 2021	$	176,703
Amortization of debt discount		63,296
Settlement of debt		(150,000	)
Conversions		(50,000	)
Balance of convertible loan payables, net of discounts on September 30, 2022 (Unaudited)	$	39,999

Derivative Liability

The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted, and all additional convertible debentures and warrants are included in the value of the derivative liabilities. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and revalued at each reporting period.

Based on the various convertible notes described above, the fair value of applicable derivative liabilities on notes and change in fair value of derivative liability are as follows as of September 30, 2022 and December 31, 2021:

Outstanding Derivative Liability
	Total
Balance of derivative liability as of December 31, 2020	$	310,641
Change due to issuances		746,672
Change due to exercise / redemptions		(1,972,419	)
Change in fair value		1,269,266
Balance of derivative liability as of December 31, 2021	$	354,160
Change due to exercise / redemptions		(110,507	)
Change in fair value		(243,653	)
Balance of derivative liability as of September 30, 2022 (Unaudited)	$	—

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s derivative liabilities that are categorized within Level 3 of the fair value hierarchy for the periods ended September 30, 2022 and December 31, 2021 is as follows:

Summary of Quantitative Information
	September 30, 2022	December 31, 2021
	(Unaudited)
Stock price	$0.19 - 0.20	$0.16 – 0.45
Exercise price	$0.09 0.11	$0.03 – 0.20
Contractual term (in years)	0.64 – 0.68	0.27 – 1
Volatility (annual)	1,313% – 1,368%	149% – 2,095%
Risk-free rate	0.51% – 0.78%	0.04% – 0.39%

The foregoing assumptions are reviewed quarterly and are subject to change based primarily on management’s assessment of the probability of the events described occurring. Accordingly, changes to these assessments could materially affect the valuations.

Financial Liabilities Measured at Fair Value on a Recurring Basis

Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet under Derivative liability – warrants and derivative liabilities:

Fair Value measured at September 30, 2022 (Unaudited)

Quoted prices in

Significant other

Significant

Fair value at

active markets

observable inputs

unobservable inputs

September 30,

(Level 1)

(Level 2)

(Level 3)

2022

Derivative liability

—

Total

—

	Fair value measured at December 31, 2021
	Quoted prices in		Significant other		Significant		Fair value at
	active markets		observable inputs		unobservable inputs		December 31
	(Level 1)		(Level 2)		(Level 3)		2021
Derivative liability	$	—	$	—	$	354,160	$	354,160
Total	$	—	$	—	$	354,160	$	354,160

There were no transfers between Level 1, 2 or 3 during the three months ended September 30, 2022 and 2021.

During the three and nine months ended September 30, 2022 the Company recorded losses of $0 and $243,653, respectively, and for the three and nine months ended September 30, 2021, the Company recognized $178,673 and $4,820, respectively, from the change in fair value of derivative liability.

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Note 11. Leases

The Company’s leases do not provide an implicit rate that can be readily determined. Therefore, the Company uses discount rates based on the incremental borrowing rate of its current external debt of 8%.

The Company’s weighted-average remaining lease term relating to its operating leases is 1.02 years, with a weighted-average discount rate of the 8.00%.

The Company incurred lease expense for its operating leases of $23,087 and $10,813, which was included in general and administrative expenses in the statements of operation for the three months ended September 30, 2022 and 2021, respectively, and $46,043 and $21,885 for the nine months ended September 30, 2022 and 2021, respectively. During the three months ended September 30, 2022 and 2021, the Company made cash lease payments of $23,087 and $10,813, and for the nine months ended September 30, 2022 and 2021, the Company made cash lease payments in the amount of $46,043 and $21,885, respectively. At September 30, 2022 and December 31, 2021, the operating lease right-of-use asset was $77,697 and $49,432, respectively, the current portion of operating lease liability was $68,740 and $39,148, respectively, and the noncurrent portion of the operating lease liability was $8,957 and $10,283, respectively.

The following table presents information about the future maturity of the lease liability under the Company’s operating leases as of September 30, 2022.

Schedule of maturity of lease liability
Maturity of Lease Liability	Amount
2022 (remainder of the year)	$	22,488
2023		58,675
Total undiscounted lease payments		81,163
Less: Imputed interest		(3,466	)
Present value of lease liabilities	$	77,697
Weighted Average Remaining lease term (in years)		1.02

Note 12. Related Party Transactions

Due to officers

Amounts due to officers as of September 30, 2022 and December 31, 2021 are comprised of the following:

Due to Officers
	September 30, 2022		December 31, 2021
	(Unaudited)
Irma Velazquez:
Accrued salaries	$	46,480	$	—
Accrued expenses		—		—
Total due to Irma Velazquez		46,480		—

Ralph Hofmeier:
Accrued salaries	$	45,304	$	17,485
Accrued expenses		13,236		—
Total due to Ralph Hofmeier		58,540		17,485
Total due to officers	$	105,020	$	17,485

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

Officer Compensation

Accrued salaries represent amounts accrued in accordance with the employment agreements for Mr. Hofmeier, the Company’s Chief Technology Officer and Chairman of the Board, and Ms. Velazquez, the Company’s Chief Executive Officer and Vice-Chairman of the Board. Mr. Hofmeier and Ms. Velazquez are also significant stockholders.

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Customer deposit

EAWC-TV functions as a distributor of EAWD product. In 2019, EAWC-TV, having secured EAWD’s first customer, has placed a $550,000 order for a solar powered atmospheric water generator (“AWG”) for one of its customers. EAWC-TV and the Company on December 13, 2019 agreed to accept a $303,742 reduction in the balance owed by EAWD to EAWC-TV as a deposit with EAWD related to this order. The deposit was satisfied through delivery of the equipment. The equipment was built in Germany.

In 2020, manufacture of the unit was delayed due to Covid-19 related issues. The Company and EAWC-TV agreed as it had done in 2019, to clear the outstanding balances in the D/T/F EAWC-TV and the outstanding balance it carried in its accounts payable account for administrative services, which it did on December 26, 2020 which resulted in an additional down payment of $193,497. EAWC-TV has an unpaid balance on the equipment of $54,822 and 55,169 as of September 30, 2022 and December 31, 2021, respectively, which represents the balance of the Company’s outstanding accounts receivable as of September 30, 2022 and December 31, 2021.

Virhtech GmbH

Investor deposit

As of December 31, 2021, the Company recorded $792,745, or 15,855,000 common shares to be issued, as common stock subscriptions within stockholders’ deficit and $377,350, or 7,547,000 common shares to be issued, as a common stock subscription liability for stock issuance transactions in process. The $1,170,095 is part of pending stock sales for 23,402,000 shares that has been funded and is waiting issuance to complete the sale at December 31, 2021. The common stock subscription liability consists of cash received for future share issuances in which a sales and purchase agreement was not signed and returned from the investor.

For the nine months ended September 30, 2022, the Company recorded no common stock subscriptions for stock issuance transactions in process.

Note 13. Stockholders’ Equity (Deficit)

Preferred Stock

Authorized: 500,000,000 shares of voting preferred stock with a par value of $0.001.

Common Stock

Authorized: 1,000,000,000 shares of voting common stock with a par value of $0.001.

During the nine months ended September 30, 2022 the Company engaged in the following equity events:

Sale of Common Stock and Subscriptions

On February 18, 2022, the Company received a deposit in the amount of $300,000 for 1,875,000 common shares to be issued pursuant to a securities purchase agreement.

From January 1, 2022 through March 31, 2022, the Company has issued 14,953,000 common shares related to subscriptions outstanding at December 31, 2021.

From April 1, 2022 through June 30, 2022, the Company has issued 10,324,000 common shares related to subscriptions outstanding at March 31, 2022.

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

On April 18, 2022, the Company has issued 78,947 common shares pursuant to security purchase agreement with one investor.

Shares issued pursuant to ELOC

On January 26, 2022 the Company entered into a two year equity line of credit (“ELOC”) with an investor to provide up to $5 million. As of March 31, 2022, 500,000 common shares had been issued pursuant to this agreement as the commitment fee.

On January 26, 2022, the Company entered into a Securities Purchase Agreement with an investor. As of March 31, 2022, 2,000,000 common shares were issued pursuant to this agreement for a purchase price of $300,000. In June 2022, the Company received payment in the amount of $150,000 in exchange for 1,000,000 common shares. As of July 6, 2022, these shares have been issued. Through July 1, 2022 to September 30, 2022 an additional 1,620,581 common shares were issued pursuant to this agreement for a purchase price of $300,000.

Shares issued upon conversion of convertible debt

On January 14, 2022, the Company completed a conversion of our outstanding convertible debt by exchanging $53,222 cash for retiring $50,000 in convertible debt along with $3,222 in interest for a total of 575,558 common shares.

Shares issued for services

On February 2, 2022, the Company issued 20,000 shares of the Company’s common stock to a vendor for services valued at $3,600.

On February 3, 2022, the Company issued 500,000 shares of the Company’s common stock to a vendor for services valued at $85,000.

On April 27, 2022, the Company issued 227,273 shares of the Company’s common stock to a vendor for services valued at $50,000.

On August 11, 2022, the Company issued 600,000 shares of the Company’s common stock to a vendor for services valued at $79,500.

On September 9, 2022, the Company issued 227,273 shares of the Company’s common stock to a vendor for services valued at $50,000.

Warrants

On February 17, 2021, the Company entered into an agreement with a consultant to provide Business Development advisement and analysis services. In consideration, the consultant will be issued 1,000,000 warrant shares. 500,000 warrants were issued on February 17, 2021, and the remaining 500,000 will be issued on the six-month anniversary of initial issuance. On August 31, 2021, due to a failure by the consultant to provide the services as required by the agreement, the Company terminated the agreement, and the warrants were canceled.

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Note 14. Commitments and Contingencies

Commitments

Equity Line of Credit

The Company entered into a two-year Equity Line of Credit pursuant to an Equity Purchase Agreement with Tysadco Partners, LLC, dated January 26, 2022. Pursuant to the agreement, Tysadco Partners agreed to invest up to $5,000,000 to purchase the Company’s Common Stock, par value $0.001 per share, and upon execution of the ELOC the Company issued an additional 500,000 shares of common stock to Tysadco Partners as commitment shares in accordance with the closing conditions within the ELOC. Requests are limited to the lesser of $1,000,000 or 500% of the average shares traded for the 10 days prior the Closing Request Date. The purchase price shall be 85% of the two lowest individual daily VWAP during the five (5) trading days immediately prior to the date the Request Notice is delivered (in each case, to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction that occurs on or after the date of this Agreement). In addition, the Company and Tysadco Partners entered into a Registration Rights Agreement, whereby the Company shall register the securities on a registration statement covering the Offering Amount with the Securities and Exchange Commission (“SEC”) within forty-five days of filing its 10-K for the year ended December 31, 2021. The Company’s Registration Statement on Form S-1 registering 25,000,000 shares in connection with the ELOC was declared effective on July 5, 2022.

Employment Agreements

The Company entered into employment agreements with its Chief Executive Officer, Mr. Ralph Hofmeier, and its Chief Operating Officer, Ms. Irma Velazquez (collectively the “Employment Agreements”), effective January 1, 2012. Under the Employment Agreements, the Corporation will pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the Corporation’s Board of Directors. The Employment Agreements each had initial terms of ten (10) years and is automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew. These contracts expired on August 4, 2022.

Effective as of August 4, 2022, Mr. Ralph M. Hofmeier has resigned as Chief Executive Officer and President of Energy and Water Development Corp. (the "Company"), and has been appointed as Chief Technology Officer of the Company. Mr. Hofmeier’s resignation is not a result of any disagreement with the Company or its independent auditors on any matter relating to the Company’s accounting, strategy, management, operations, policies, regulatory matters, or practices (financial or otherwise).

Effective as of August 4, 2022, Ms. Irma Velazquez has resigned as Chief Operating Officer of the Company, and has been appointed as Chief Executive Officer of the Company. Ms. Velazquez’s resignation is not a result of any disagreement with the Company or its independent auditors on any matter relating to the Company’s accounting, strategy, management, operations, policies, regulatory matters, or practices (financial or otherwise).

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

On August 4, 2022, per a board of directors resolution, the Company entered into employment agreements with its Chief Technology Officer, Mr. Ralph Hofmeier, and its Chief Executive Officer, Ms. Irma Velazquez (collectively the “2022 Employment Agreements”). Effective for the fiscal year ended December 31, 2022, under the 2022 Employment Agreements, the base salary will be €200,000 prorated for any partial period of employment and payable in arrears in accordance with the Company’s ordinary payroll policies and procedures. Additionally, in recognition of the employees’ past services, the Company shall pay each employee a lump sum cash signing bonus of €28,812, less payroll deductions and withholdings, and each individual will be eligible to receive a yearly bonus based on yearly profitability. Additionally, if certain performance milestones are met, each employee will be granted options to purchase shares of the Company’s common stock, No options had been granted as of September 30, 2022. Any increase to the annual base is subject to approval by the Company’s Board of Directors. The 2022 Employment Agreements each have an indefinite term.

Lease

Our registered office is located at 7901 4th Street N STE #4174, St. Petersburg, Florida 33702. Our telephone number is +1 (727) 677-9408. Office services are contracted for on a month-to-month basis in this Address. In October 2020, the Company established its official registered Branch in Hamburg Germany; the office Address until March 31, 2021 was Offakamp 9f- 2.17. On April 1, 2021, the Company entered into two lease agreements for a workshop located at Industriestraße 17, 25462 Relligen and an office located at Ballindam 3 20095 Hamburg, Germany. On May 23, 2022, after expiration of the office located in Ballindam, the Company signed a new lease agreement for the same office space. Additionally, on May 20, 2022, the Company signed a new lease agreement for additional office space in Frankfurt, Germany.

Our Telephone number is +49 40 809081354. Rent expense in the three months ending September 30, 2022 and 2021 amounted to $27,403 and $17,472, respectively, and rent expense for the nine months ended September 30, 2022 and 2021 amounted to $69,171 and $37,552.

Contingencies

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

Energy and Water Development Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Litigation

EAWD vs Packard and Co-Defendant Nick Norwood – Case number 18-031011 CA-01 Miami-Dade County Circuit Court. The Company is requesting the proof of payment for shares issued in 2008.

Note 15. Subsequent Events

On October 7, 2022 The Company engaged RIVER Communications Inc, to manage the communications for public relations and marketing services of the Company beginning on October 7, 2022 and ending on October 5, 2023. The monthly fee for these services will be $12,500 per month.

On October 28, 2022, in connection with the Company’s ELOC, an additional 577,173 shares of the Company’s common stock was issued to Tysadco partners.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

INTRODUCTORY STATEMENT

The following discussion should be read in conjunction with our condensed financial statements and the notes to those condensed financial statements that are included elsewhere in this Report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. See “Forward-Looking Statements.”

RESULTS of OPERATIONS

Results of Operations for the Three Months ended September 30, 2022 Compared to the three Months ended September 30, 2021

The following table sets forth our operations for each of the periods presented.

	For the Three Months Ended
	September 30,
	2022			2021
	(unaudited)			(unaudited)
GENERAL and ADMINISTRATIVE EXPENSES
Marketing fees	$	129,714		$	1,357
Officers’ salaries and payroll taxes		128,545			68,195
Professional fees		106,853			68,272
Travel and entertainment		5,920			13,696
Other general and administrative expenses		146,268			56,356
TOTAL GENERAL and ADMINISTRATIVE EXPENSES		517,300			207,876

LOSS FROM OPERATIONS		(517,300	)		(207,876	)

OTHER INCOME (EXPENSE)
Change in fair value of derivative liability		—			(178,673	)
Other expense		(134,599	)		—
Interest income (expense), net		—			(115,506	)
TOTAL OTHER INCOME (EXPENSE)		(134,599	)		(294,179	)

NET LOSS	$	(651,899	)		(502,055	)

Revenue

The Company recognized no revenue during the three months ended September 30, 2022 and 2021.

Cost of equipment sold

The Company recognized no cost of equipment sold during the three months ended September 30, 2022 and 2021.

General and Administrative Expense

General and administrative expense increased by $309,424 to $517,300 for the three months ended September 30, 2022 from $207,876 for the three months ended September 30, 2021.

The increase in general and administrative expenses was primarily due to an increase in professional fees of $38,581, officer’s salaries of $60,350, other general and administrative expenses by $89,912, and marketing fees of $128,357.

Other Income (Expense)

The Company had other expense of $134,599 for the three months ended September 30, 2022 compared to other expense of $294,179 for the three months ended September 30, 2021. The decrease in expense is primarily the result of a reduction in interest expense of $115,506 and reduction in change in fair value of derivative by $178,673 offset by an increase in other expense of $134,599, which mostly consists of foreign currency gains and losses.

Net Loss

Net loss increased by $149,844 to $651,899 for the three months ended September 30, 2022 from $502,055 for the three months ended September 30, 2021. This increase was attributable to the net increases and decreases as discussed above.

Results of Operations for the Nine Months ended September 30, 2022 Compared to the Nine Months ended September 30, 2021

The following table sets forth our operations for each of the periods presented.

	For the Nine Months Ended
	September 30,
	2022			2021
	(unaudited)			(unaudited)
GENERAL and ADMINISTRATIVE EXPENSES
Marketing fees	$	223,313		$	168,832
Officers’ salaries and payroll taxes		364,818			225,472
Professional fees		398,593			159,538
Travel and entertainment		24,368			13,696
Other general and administrative expenses		384,559			103,169
TOTAL GENERAL and ADMINISTRATIVE EXPENSES		1,395,651			670,707

LOSS FROM OPERATIONS		(1,395,651	)		(670,707	)

OTHER INCOME (EXPENSE)
Change in fair value of derivative liability		243,653			4,820
Other expense		(267,013	)		—
Interest income (expense), net		(125,712	)		(673,701	)
TOTAL OTHER INCOME (EXPENSE)		(149,072	)		(668,881	)

NET LOSS		(1,544,723	)		(1,339,588	)

Revenue

The Company recognized no revenue during the nine months ended September 30, 2022 and 2021.

Cost of equipment sold

The Company recognized no cost of equipment sold during the nine months ended September 30, 2022 and 2021.

General and Administrative Expense

General and administrative expense increased by $724,944 to $1,395,651 for the nine months ended September 30, 2022 from $670,707 for the nine months ended September 30, 2021.

The increase in general and administrative expenses was primarily due to an increase in professional fees of $239,055, officer’s salaries of $139,346, other general and administrative expenses by $281,390, and marketing fees of $54,481.

Other Income (Expense)

The Company had other expense of $149,072 for the nine months ended September 30, 2022 compared to other expense of $668,881 for the nine months ended September 30, 2021. The decrease in expense is primarily the result of a reduction in interest expense of $547,989 and an increase in the gain on change in fair value of derivative by $238,833 offset by an increase in other expense of $267,013, which mostly consists of foreign currency gains and losses.

Net Loss

Net Loss increased by $205,135 to a $1,544,723 net loss for the nine months ended September 30, 2022 from a $1,339,588 net loss for the nine months ended September 30, 2021. This increase in net loss was attributable to the net increases and decreases as discussed above.

LIQUIDITY and CAPITAL RESOURCES

We had $56,983 cash and a working capital deficit of $413,089 at September 30, 2022. Our operating and capital requirements in connection with supporting our operations will continue to be significant. Since inception, our losses from operations and working capital requirements have been satisfied through the deferral of payment for services performed by our founders and related parties discussed more fully below.

We have sustained operating losses since our operations began. At September 30, 2022, we had an accumulated deficit of $23,940,116. The Company cannot predict how long it will continue to incur further losses or whether it will ever become profitable as this is dependent upon the reduction of certain expenses and success in obtaining more project contracts, among other things. These conditions raise substantial doubt about the entity’s ability to continue as a going concern.

We have satisfied our cash and working capital requirements in the nine months ended September 30, 2022, through the sale of common stock.

Comparison of Cash Flows for the Nine Months Ended September 30, 2022 and 2021

	Nine Months Ended September 30,
	2022			2021
Net cash used in operating activities	$	(1,318,574	)	$	(949,115	)
Net cash used in investing activities		(78,123	)		(4,301	)
Net cash provided by financing activities		891,000			1,014,461
Effect of exchange rate changes on cash		(26,988	)		(13,933	)
Net (decrease) increase in cash	$	(532,685	)	$	47,112

Net cash used in operating activities

We used $1,318,574 of cash in our operating activities in 2022 compared to $949,115 used in 2021. The increase in cash used of $369,459 includes a net loss of $1,544,723, offset by non-cash expenses of $360,965 principally related to amortization of debt discount and deferred financing costs of $63,296, depreciation expense of $7,778, foreign transaction adjustments of $264,444, and common stock issued for services of $268,100, offset by a change in fair value of derivative liability of $243,653, as well as cash used in working capital items in the amount of $134,816 principally related to an increase in inventory of $272,143 and a decrease in accounts payable and accrued expenses and due to related party of $23,212, offset by an increase in due to officers of $85,169, a decrease in prepaid expenses and other current assets of $75,370.

Cash Flows from Investing Activities

The Company used $78,123 and $4,301 in cash from financing activities to purchase property and equipment during the nine months ended September 30, 2022 and 2021, respectively.

Cash Flows from Financing Activities

We received $891,600 (2022) and $1,014,461 (2021) in cash provided from financing activities. The net decrease of $122,861 is due primarily to a $369,500 decrease in financing through issuance of convertible loans, a $54,500 increase in payments of convertible loans payable, and a $24,000 decrease due to costs associated entering the equity line of credit, offset by an increase of $324,539 from proceeds from the sale of stock and subscriptions.

Financial Position

Total Assets – At September 30, 2022 the Company had $976,663 representing $56,983 in cash, $54,822 in accounts receivable, $416,509 in inventory, $300,790 in prepaid expenses and other current assets, $69,862 in property and equipment, and $77,697 in operating lease right-of-use asset.

PLAN OF OPERATION AND FUNDING

We expect to generate more revenues which should, grow in time and lead to a positive cash flow. In the near future, we expect that working capital requirements will continue to be funded through lines of credit, convertible loans and/or further issuances of other securities in sufficient quantities that we will be able to meet our working capital requirement from these possible sources. Additional issuances of equity or convertible debt will result in dilution to our current shareholders.

We seek to focus on three main aspects of the water and energy business: (1) generation, (2) supply, and (3) maintenance. We seek to assist private companies, government entities and NGO’s to build profitable and sustainable supplies/generation capabilities of water and energy as required, by selling them the required technology or technical service to enhance their productivity/operability. With its outsourced technical arm and its commission-based global network of vendors, the Company expects to create sustainable added value to each project it takes on while generating revenue from its engineering and technical consultancy services, project management, sale of our patent filed Self Sufficient Power Supply Atmosphere Water Generation Systems (eAWGs) Solar Energy Generation Systems and Energy Management Systems, royalties from the commercialization of energy and water in certain cases, and revenues from the licensed innovated technologies.

Through our BlueTech Alliance for Water Generation established in December 2020, we have state of the art technology partners, technology transfer agreements, and technology representation agreements in place relating to aspects of renewable energy and water supply. These unique key relationships offer important selling features and capabilities that differentiated EAWD from its competitors.

The Company plans to generate revenue from its engineering and technical consultancy services, project management, sale of our Patent filed Self Sufficient Power Supply Atmosphere Water Generation Systems (eAWGs), Solar Energy Generation Systems, and Energy Management Systems, royalties from the commercialization of energy and water in certain cases, and revenues from the licensed innovated technologies.

MATERIAL COMMITMENTS

Employment Agreements

The Company entered into employment agreements with each of Mr. Hofmeier, its President, Chief Executive Officer and Chairman of the Board, and Ms. Velazquez, its Chief Operating Officer and Vice-Chairman (together, the “Employment Agreements”), effective January 1, 2012. Under the Employment Agreements, the Company agreed to pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the company’s Board of Directors. Each Employment Agreement has an initial term of ten (10) years and is automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew. The Company also entered into employment agreement with 4 other employees, effective on the 3rd quarter of 2021. These contracts expired on August 4, 2022.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

GOING CONCERN

The next operational step to accomplish is to achieve sufficient sales volume to yield positive a net income. Due to the timing of the project build out, the Company has not currently recorded any revenue and consequently has incurred operating losses since it began operations (December 2012) totaling $23,940,116 at September 30, 2022. During the three and nine months ended September 30, 2022, the Corporation incurred net losses of $651,899 and $1,544,723, respectively. The Company also had a working capital deficit of $413,089 at September 30, 2022.

The Company’s ability to transition to profitable operations is dependent upon achieving a level of revenue adequate to support its cost structure. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business and availability to sufficient resources.

At the filling date of this report, management plans to conclude the sales in Germany and in other regions of the world further the received approved proposals, which would bring a growing revenue. Managements plans to expand the sales operations by greater market penetration of the Agriculture, Industrial and Community development market with its water and energy generation, innovative solution, this to make sales operations to continue to expand. Management also plans to raise additional funds during 2022; through the issuance of equity securities and from deposits related to purchases orders on proposals pending customer acceptance as well, if necessary, loans from management and third-party lender. Management also plans to defer expenses by centralizing assembling, logistic and administration operations expenses. By doing so, the company would identify a bigger place to use as self-sufficient energy supply warehouse to be able to centralize the storage of supplies, while securing its inventory, this would reduce the costs of the assembling and the administrative operations, the company would acquire its own electrical trucks as well, to reduce cost of transportation of supplies.

The ability of the Company to continue as a going concern depends upon its ability to generate sales or obtain additional funding to finance operating losses until the Corporation is profitable.

ADDRESSING CHALLENGES POST-COVID-19

COVID-19 is an incomparable global public health emergency that has affected almost every industry and has caused the worst global economic contraction of the past 80 years (IMF). The concerted global efforts achieved the development of vaccines that have helped to reduce a person´s risk of contracting the virus. However, the current war in Ukraine lead us as well to considering the changes in consumer behavior and demand, purchasing patterns, re-routing of the supply chain, dynamics of current market forces, and the significant interventions of governments; Disruptive activities could include the temporary closure of our manufacturing facilities and those used in our supply chain processes, restrictions on the export or shipment of our products, significant cutback of ocean container delivery from Germany, business closures in impacted areas, and restrictions on our employees’ and consultants’ ability to travel and to meet with customers. The extent to which COVID-19 impacts our results will depend on future developments, which still uncertain and cannot be predicted, including new information which may emerge concerning the severity of the current conflict as well as virus variants and the actions to contain it or treat its impact, among others. COVID-19 and the war in Ukraine could also continue to result in social, economic and labor instability in the countries in which we or our customers and suppliers operate.

If workers at one or more of our offices or the offices of our suppliers or manufacturers become ill or are quarantined and in either or both events are therefore unable to work, our operations could be subject to disruption. Further, if our manufacturers become unable to obtain necessary raw materials or components, we may incur higher supply costs or our manufacturers may be required to reduce production levels, either of which may negatively affect our financial condition or results of operations.

In light of these challenges, the Company is focusing its efforts on supporting key areas of our business that will help us to stabilize in the new environment and strategize for what comes next. Those key areas are: crisis and management response, workforce, operation and supply chain, finance and liquidity, tax, trade and regulatory, as well as strategy and brand.

CRITICAL ACCOUNTING POLICIES

Our critical accounting policies are set forth in Note 2 to the condensed financial statements.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

We do not expect the adoption of recently issued accounting pronouncements as discussed in Note 3 to have a significant impact on our results of operations, financial position or cash flow.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) as of December 31, 2021. This evaluation was carried out by our Principal Executive Officer and our Principal Finance Officer. Based on that evaluation, our Principal Executive Officer and our Principal Finance Officer concluded that, as of September 30, 2022, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses, which have caused management to conclude that, as of September 30, 2022, our disclosure controls and procedures were not effective:

	·	Inadequate segregation of duties, due to lack of human resources
	·	Limited level of multiple reviews among those tasked with preparing the financial statements,
	·	Lack of a more formal internal control environment.

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

We intend to implement changes to strengthen our internal controls in addition to the enhanced controls discussed above. We are in the process of implementing a remediation plan for the identified material weaknesses and we expect that work on the plan will continue throughout 2022, as financial resources permit. Specifically, to address the material weaknesses arising from insufficient accounting personnel, the Company plans to hire a full-time Chief Financial Officer and has secured the services of additional accounting personnel on a consulting basis which begins to address segregation of duties. The Company is currently formalizing its policies and procedures in writing and to improve the integration of its financial reporting system into non accounting departments. Where appropriate, the Company is receiving advice and assistance from third-party experts as it implements and refines its remediation plan.

Additional measures may be necessary, and the measures we expect to take to improve our internal controls may not be sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that such material weakness or other material weaknesses would not result in a material misstatement of our annual or interim financial statements. In addition, other material weaknesses or significant deficiencies may be identified in the future. If we are unable to correct deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected. This failure could negatively affect the market price and trading liquidity of our common stock, cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties, and generally materially and adversely impact our business and financial condition.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2022 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Internal Controls

Management’s conclusion that our disclosure controls and procedures were not effective means that if a fraud or material misstatement of the company’s annual or interim financial statements were to occur; there is a reasonable possibility that they will not be prevented or detected on a timely basis. 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 controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

EAWD vs Packard and Co-Defendant Nick Norwood – Case number 18-031011 CA-01 Miami-Dade County Circuit Court. The company is requesting the proof of payment for shares issued in 2008.

ITEM 1A. RISK FACTORS

We are a smaller reporting company and are not required to provide the information under this item.

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

The Company issued the following common shares during the nine months ended September 30, 2022:

Sale of Common Stock and Subscriptions

On February 18, 2022, the Company received a deposit in the amount of $300,000 for 1,875,000 common shares to be issued pursuant to a securities purchase agreement.

From January 1, 2022 through March 31, 2022, the Company has issued 14,953,000 common shares related to subscriptions outstanding at December 31, 2021.

From April 1, 2022 through September 30, 2022, the Company has issued 10,324,000 common shares related to subscriptions outstanding at March 31, 2022.

On April 18, 2022, the Company has issued 78,947 common shares pursuant to security purchase agreement with one investor.

Shares issued pursuant to ELOC

Shares issued upon conversion of convertible debt

Shares issued for services

On February 2, 2022, the Company issued 20,000 shares of the Company’s common stock to a vendor for services valued at $3,600.

On February 3, 2022, the Company issued 500,000 shares of the Company’s common stock to a vendor for services valued at $85,000.

On April 27, 2022, the Company issued 227,273 shares of the Company’s common stock to a vendor for services valued at $50,000.

On August 11, 2022, the Company issued 600,000 shares of the Company’s common stock to a vendor for services valued at $68,000.

On September 9, 2022, the Company issued 227,273 shares of the Company’s common stock to a vendor for services valued at $50,000.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

N/A

ITEM 5. OTHER INFORMATION

N/A

ITEM 6. EXHIBITS

EXHIBIT INDEX

Incorporated by Reference

Filed or Furnished

Exhibit #

Exhibit Description

Form

Date Filed

Exhibit #

Herewith

31.1

Certification of Principal Executive Officer (Section 302)

31.2

Certification of Principal Financial Officer (Section 302)

32.1

Certification of Principal Executive Officer and Principal Financial Officer (Section 906)

101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	Energy and Water Development Corp.

Date: November 7, 2022	By:	/s/ Irma Velazquez
		Irma Velazquez
		Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements of 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.

Signature	Title	Date

/s/ Ralph Hofmeier	Chief Technology Officer, Director, and	November 7, 2022
Ralph Hofmeier	Chairman of the Board of Directors

/s/ Irma Velazquez	Chief Executive Officer (Principal Executive Officer)	November 7, 2022
Irma Velazquez	Director and Vice-Chairman of the Board of Directors


/s/ Gary Rodney	Interim Chief Financial Officer	November 7, 2022
Gary Rodney	(Principal Financial and Accounting Officer)

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