UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended September 30, 2014
or
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ______________ to ______________
Commission
file number 333-168895
QUEST
WATER GLOBAL, INC.
(Exact
name of registrant as specified in its charter)
Delaware |
|
27-1994359 |
(State or other
jurisdiction
of incorporation or organization) |
|
(I.R.S. Employer
Identification No.) |
|
|
|
1590
Bellevue Avenue, Suite 203
West
Vancouver, British Columbia, Canada |
|
V7V
1A7 |
(Address of principal
executive offices) |
|
(Zip Code) |
(604)
281-2446
(Registrant’s
telephone number, including area code)
N/A
(Former
name, former address and former fiscal year, if changed since last report)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 [X]
No [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
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 [ ] No
[X]
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ]
No [ ]
APPLICABLE
ONLY TO CORPORATE ISSUERS:
As
of November 14, 2014, the registrant’s outstanding common stock consisted of 92,163,194 shares.
TABLE
OF CONTENTS
PART
I – FINANCIAL INFORMATION
Item
1. Financial Statements
QUEST
WATER GLOBAL, INC.
Consolidated
Financial Statements
September 30, 2014
(Expressed
in US dollars)
(unaudited)
QUEST
WATER GLOBAL, INC.
Consolidated
Balance Sheets
(Expressed
in US dollars)
| |
September 30, 2014 | | |
December 31, 2013 | |
| |
$ | | |
$ | |
| |
(unaudited) | | |
| |
| |
| | | |
| | |
ASSETS | |
| | | |
| | |
| |
| | | |
| | |
Current assets | |
| | | |
| | |
| |
| | | |
| | |
Cash | |
| 184 | | |
| 1,605 | |
Amounts receivable | |
| – | | |
| 1,293 | |
Prepaid expenses and deposits | |
| 1,913 | | |
| 7,835 | |
Total current assets | |
| 2,097 | | |
| 10,733 | |
Equipment (Note 3) | |
| 8,144 | | |
| 11,269 | |
Total assets | |
| 10,241 | | |
| 22,002 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
| |
| | | |
| | |
Current liabilities | |
| | | |
| | |
| |
| | | |
| | |
Accounts payable | |
| 385,908 | | |
| 360,766 | |
Accrued liabilities | |
| – | | |
| 3,344 | |
Convertible notes payable, net of unamortized discount of $nil (2013 - $22,292)
(Note 4) | |
| 175,000 | | |
| 152,708 | |
Due to related parties (Note 5) | |
| 670,846 | | |
| 980,248 | |
Total liabilities | |
| 1,231,754 | | |
| 1,497,066 | |
| |
| | | |
| | |
Nature of operations and continuance of business (Note 1) | |
| | | |
| | |
Commitments (Note 9) | |
| | | |
| | |
| |
| | | |
| | |
Stockholders’ deficit | |
| | | |
| | |
| |
| | | |
| | |
Preferred stock, 5,000,000 shares authorized, $0.000001 par value, 2 shares
issued and outstanding | |
| 1 | | |
| 1 | |
Common stock, 95,000,000 shares authorized, $0.000001 par value, 92,163,194
and 85,749,860 shares issued and outstanding, respectively | |
| 5,147 | | |
| 5,140 | |
Additional paid-in capital | |
| 6,127,686 | | |
| 4,749,609 | |
Common stock issuable (Note 6) | |
| 40,025 | | |
| 23,000 | |
Deferred compensation (Note 6) | |
| (31,945 | ) | |
| – | |
Deficit | |
| (7,362,427 | ) | |
| (6,252,814 | ) |
Total stockholders’ deficit | |
| (1,221,513 | ) | |
| (1,475,064 | ) |
Total liabilities and stockholders’ deficit | |
| 10,241 | | |
| 22,002 | |
(The
accompanying notes are an integral part of these consolidated financial statements)
QUEST
WATER GLOBAL, INC.
Consolidated
Statements of Operations
(Expressed
in US dollars)
(unaudited)
| |
Three months
ended
September 30, 2014 | | |
Three months
ended
September 30, 2013 | | |
Nine months
ended
September 30, 2014 | | |
Nine months
ended
September 30, 2013 | |
| |
$ | | |
$ | | |
$ | | |
$ | |
| |
| | |
| | |
| | |
| |
Expenses | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Advertising and promotion | |
| 664 | | |
| 261 | | |
| 43,315 | | |
| 28,216 | |
Amortization | |
| 1,053 | | |
| 14,641 | | |
| 3,125 | | |
| 43,925 | |
Automotive | |
| 6,419 | | |
| 5,008 | | |
| 17,469 | | |
| 14,774 | |
Consulting fees (Notes 6 and 8) | |
| 47,251 | | |
| 3,121 | | |
| 354,932 | | |
| 21,338 | |
Foreign exchange loss (gain) | |
| (12,119 | ) | |
| 5,246 | | |
| (11,348 | ) | |
| (2,783 | ) |
Management fees (Notes 5 and 8) | |
| 75,000 | | |
| 75,000 | | |
| 557,731 | | |
| 225,000 | |
Office and miscellaneous | |
| 4,875 | | |
| 10,257 | | |
| 17,291 | | |
| 21,411 | |
Professional fees | |
| 15,271 | | |
| 12,649 | | |
| 71,622 | | |
| 84,035 | |
Rent | |
| 5,815 | | |
| 3,333 | | |
| 16,717 | | |
| 18,313 | |
Telephone | |
| 3,619 | | |
| 4,116 | | |
| 9,379 | | |
| 12,028 | |
Transfer agent and filing fees | |
| 3,273 | | |
| 1,595 | | |
| 9,949 | | |
| 2,414 | |
Travel | |
| 226 | | |
| 9,673 | | |
| 483 | | |
| 29,501 | |
Total expenses | |
| 151,347 | | |
| 144,900 | | |
| 1,090,665 | | |
| 498,172 | |
Loss before other income (expense) | |
| (151,347 | ) | |
| (144,900 | ) | |
| (1,090,665 | ) | |
| (498,172 | ) |
Other income (expense) | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Accretion of discounts on convertible notes payable | |
| (1,042 | ) | |
| (15,937 | ) | |
| (22,292 | ) | |
| (47,815 | ) |
Gain on settlement of debt | |
| – | | |
| – | | |
| 3,344 | | |
| – | |
Interest expense | |
| – | | |
| (1,260 | ) | |
| – | | |
| (3,428 | ) |
Total other income (expense) | |
| (1,042 | ) | |
| (17,197 | ) | |
| (18,948 | ) | |
| (51,243 | ) |
Net loss | |
| (152,389 | ) | |
| (162,097 | ) | |
| (1,109,613 | ) | |
| (549,415 | ) |
Net loss per share, basic and diluted | |
| – | | |
| – | | |
| (0.01 | ) | |
| (0.01 | ) |
Weighted average number of shares outstanding, basic and diluted | |
| 91,234,570 | | |
| 85,182,360 | | |
| 87,951,154 | | |
| 85,151,598 | |
(The
accompanying notes are an integral part of these consolidated financial statements)
QUEST
WATER GLOBAL, INC.
Consolidated
Statements of Cash Flows
(Expressed
in US dollars)
(unaudited)
| |
Nine months
ended
September 30, 2014 | | |
Nine months
ended
September 30, 2013 | |
| |
$ | | |
$ | |
| |
| | |
| |
Operating Activities: | |
| | | |
| | |
| |
| | | |
| | |
Net loss for the period | |
| (1,109,613 | ) | |
| (549,415 | ) |
| |
| | | |
| | |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Accretion of discounts on convertible notes payable | |
| 22,292 | | |
| 47,815 | |
Amortization | |
| 3,125 | | |
| 43,925 | |
Gain on settlement of debt | |
| (3,344 | ) | |
| – | |
Stock-based compensation | |
| 703,164 | | |
| 2,700 | |
| |
| | | |
| | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Amounts receivable | |
| 1,293 | | |
| – | |
Prepaid expenses and deposits | |
| 5,922 | | |
| – | |
Accounts payable | |
| 25,142 | | |
| 68,888 | |
Accrued liabilities | |
| – | | |
| (5,490 | ) |
Due to related parties | |
| 303,971 | | |
| 360,055 | |
Net cash used in operating activities | |
| (48,048 | ) | |
| (31,522 | ) |
Financing Activities: | |
| | | |
| | |
Advances from related parties | |
| 46,627 | | |
| – | |
Proceeds from issuance of common stock | |
| – | | |
| 30,000 | |
Net cash provided by financing activities | |
| 46,627 | | |
| 30,000 | |
Decrease in cash | |
| (1,421 | ) | |
| (1,522 | ) |
Cash, beginning of period | |
| 1,605 | | |
| 1,732 | |
Cash, end of period | |
| 184 | | |
| 210 | |
Non-cash investing and financing activities: | |
| | | |
| | |
Common stock issued to settle amounts due to related
parties | |
| 660,000 | | |
| – | |
Supplemental disclosures: | |
| | | |
| | |
Interest paid | |
| – | | |
| – | |
Income tax paid | |
| – | | |
| – | |
(The
accompanying notes are an integral part of these consolidated financial statements)
QUEST
WATER GLOBAL, INC.
Notes to
the Consolidated Financial Statements
September
30, 2014
(Expressed
in US dollars)
(unaudited)
The
accompanying consolidated interim financial statements of Quest Water Global, Inc. (the “Company”) should be read
in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission
in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. In the opinion of management, the
accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s
financial position and the results of its operations and its cash flows for the periods shown.
The
preparation of the consolidated interim financial statements in accordance with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ
materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative
of the results to be expected for the full year.
These
consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize
its assets and discharge its liabilities in the normal course of business. As at September 30, 2014, the Company has a working
capital deficiency of $1,229,657 of which $670,846 is owed to the two principal shareholders (Note 5), and an accumulated deficit
of $7,362,427. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders,
the ability of the Company to obtain necessary equity financing to continue to develop its business and ultimately on the attainment
of profitable operations. The Company is in the process of arranging additional capital financing that may assist in addressing
these issues; however, these factors continue to raise substantial doubt regarding the Company’s ability to continue as
a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. |
Significant Accounting
Policies |
|
(a) |
Principles of
Consolidation |
These
consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted
in the United States (“US GAAP”), and are expressed in US dollars. These consolidated financial statements include
the accounts of the Company, its wholly-owned subsidiary, Quest; Quest’s wholly owned subsidiary, Quest Water Solutions
Inc., a company incorporated under the laws of the Province of British Columbia, Canada; and its 88% owned inactive subsidiaries
Agua Cuilo Lda., Cuilo Embalnages, Lda., and Cuilo Comercial, Lda. All inter-company balances and transactions have been eliminated
on consolidation.
|
(b) |
Recent Accounting
Pronouncements |
The
Company has limited operations and is considered to be in the development stage. In the period ended September 30, 2014, the Company
elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain
Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information
and all references to development stage.
The
Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact
on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other
new accounting pronouncements that have been issued that might have a material impact on its financial position or results of
operations.
QUEST
WATER GLOBAL, INC.
Notes to
the Consolidated Financial Statements
September
30, 2014
(Expressed
in US dollars)
(unaudited)
| |
Cost | | |
Accumulated
Amortization | | |
Net Carrying
Value
September 30, 2014 | | |
Net Carrying
Value
December 31, 2013 | |
| |
$ | | |
$ | | |
$ | | |
$ | |
| |
| | |
| | |
| | |
| |
Computer equipment | |
| 25,971 | | |
| 20,866 | | |
| 5,105 | | |
| 7,696 | |
Furniture and equipment | |
| 7,426 | | |
| 4,387 | | |
| 3,039 | | |
| 3,573 | |
| |
| 33,397 | | |
| 25,253 | | |
| 8,144 | | |
| 11,269 | |
4. |
Convertible Notes
Payable |
|
(a) |
On
May 9, 2012, the Company received proceeds of $150,000 and issued a convertible note which is non-interest bearing, unsecured,
and due on May 9, 2014. The unpaid amount can be converted at any time at the holder’s option at $0.50 per share of
common stock, which must not be less than $25,000 of unpaid principal. In accordance with ASC 470-20, “Debt with Conversion
and Other Options” (“ASC 470-20”), the Company recognized the intrinsic value of the embedded beneficial
conversion feature of $90,000 as additional paid-in capital and an equivalent discount which will be charged to operations
over the term of the convertible note up to its face value of $150,000. For the nine months ended September 30, 2014, $15,000
(2013 - $33,750) had been accreted, increasing the carrying value to $150,000 (December 31, 2013 - $135,000). |
|
(b) |
On
July 30, 2012, the Company received proceeds of $25,000 and issued a convertible note which is non-interest bearing, unsecured,
and due on July 30, 2014. The unpaid amount can be converted at any time at the holder’s option at $0.50 per share of
common stock. In accordance with ASC 470-20, the Company recognized the intrinsic value of the embedded beneficial conversion
feature of $25,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term
of the convertible note up to its face value of $25,000. For the nine months ended September 30, 2014, $7,292 (2013 - $9,375)
had been accreted, increasing the carrying value to $25,000 (December 31, 2013 - $17,708). |
5. |
Related Party
Transactions |
|
(a) |
As
at September 30, 2014, a total of $207,642 (December 31, 2013 - $404,193) is owed to the President of the Company, which is
non-interest bearing, unsecured, and due on demand. Refer to Note 6(d). |
|
|
|
|
(b) |
As
at September 30, 2014, a total of $463,204 (December 31, 2013 - $576,055) is owed to the Vice President of the Company, which
is non-interest bearing, unsecured, and due on demand. Refer to Note 6(d). |
|
|
|
|
(c) |
For
the nine months ended September 30, 2014, the Company incurred a total of $225,000 (2013 - $225,000) in management fees to
the President and the Vice President of the Company. The Company also incurred stock-based compensation of $332,731 (2013
- $nil) for stock options granted to the President and the Vice President of the Company during the nine months ended September
30, 2014, which is included in management fees. |
|
(a) |
On
February 18, 2014, the Company issued 30,000 shares of common stock with a fair value of $6,900 pursuant to a consulting agreement. |
|
|
|
|
(b) |
On
February 18, 2014, the Company issued 500,000 shares of common stock with a fair value of $110,000 pursuant to a consulting
agreement, of which $78,055 (2013 - $nil) was expensed as consulting fees which reflects the pro-rata portion of the services
provided to September 30, 2014. As of September 30, 2014, the remaining amount of $31,945 was recorded as deferred compensation
and will be expensed as consulting fees pro-rata over the term of the agreement which ends on January 14, 2015. The fair value
of the shares was determined based on the closing price of the Company’s common stock at $0.22 per share on February
18, 2014. |
|
|
|
|
(c) |
On
February 18, 2014, the Company issued 200,000 shares of common stock with a fair value of $38,280 pursuant to a consulting
agreement, of which 100,000 shares of common stock with a fair value of $18,000 was included in common stock issuable as at
December 31, 2013. |
QUEST
WATER GLOBAL, INC.
Notes to
the Consolidated Financial Statements
September
30, 2014
(Expressed
in US dollars)
(unaudited)
6. |
Common Stock (continued) |
|
(d) |
On
July 14, 2014, the Company issued 5,500,000 shares of common stock with a fair value of $0.12 per share to settle accrued
management fees of $660,000 owing to the President and the Vice President of the Company. |
|
|
|
|
(e) |
On
August 5, 2014, the Company issued 100,000 shares of common stock with a fair value of $7,000 pursuant to a consulting agreement.
Refer to Note 9(f). |
|
|
|
|
(f) |
On
August 27, 2014, the Company issued 83,334 units at a price of $0.06 per share for proceeds of $5,000, which was included
in common stock issuable as at December 31, 2013. Each unit consisted of one share of common stock and one non-transferable
share purchase warrant to purchase an additional share of common stock at a price of $0.20 per share until July 2, 2016. |
|
|
|
|
(g) |
As
at September 30, 2014, the Company had 250,000 shares of common stock issuable with a fair value of $27,500 pursuant to a
marketing agreement. Refer to Note 9(e). |
|
|
|
|
(h) |
As
at September 30, 2014, the Company had 250,000 shares of common stock issuable with a fair value of $12,525 pursuant to a
consulting agreement. Refer to Note 9(g). |
7. |
Share Purchase
Warrants |
The
following table summarizes the continuity of share purchase warrants:
| |
Number of
warrants | | |
Weighted average
exercise price
$ | |
Balance, December 31, 2013 | |
| 3,056,500 | | |
| 0.53 | |
Granted | |
| 83,334 | | |
| 0.20 | |
Balance, September
30, 2014 | |
| 3,139,834 | | |
| 0.52 | |
As
at September 30, 2014, the following share purchase warrants were outstanding:
Number of
warrants
outstanding | | |
Exercise
price
$ | | |
Expiry date |
2,398,000 | | |
| 0.50 | | |
January 6, 2015 |
310,000 | | |
| 0.50 | | |
February 10, 2015 |
286,000 | | |
| 0.75 | | |
July 15, 2015 |
62,500 | | |
| 0.65 | | |
October 15, 2015 |
83,334 | | |
| 0.20 | | |
July 2, 2016 |
3,139,834 | | |
| | | |
|
| |
Number
of options | | |
Weighted average
exercise price
$ | |
Outstanding, December 31,
2013 | |
| 5,050,000 | | |
| 0.90 | |
Granted | |
| 3,750,000 | | |
| 0.19 | |
Forfeited | |
| (3,500,000 | ) | |
| 0.90 | |
Outstanding,
September 30, 2014 | |
| 5,300,000 | | |
| 0.19 | |
QUEST
WATER GLOBAL, INC.
Notes to
the Consolidated Financial Statements
September
30, 2014
(Expressed
in US dollars)
(unaudited)
8. |
Stock Options
(continued) |
Additional
information regarding stock options outstanding as at September 30, 2014 is as follows:
| | |
Outstanding and exercisable | |
Range of
exercise prices
$ | | |
Number of
shares | | |
Weighted average
remaining
contractual life
(years) | | |
Weighted average
exercise price
$ | |
| 0.19 | | |
| 5,300,000 | | |
| 0.7 | | |
| 0.19 | |
On
February 25, 2014, the Company amended the exercise price of 1,550,000 stock options granted on May 30, 2012 from $0.90 to $0.19
per share. Modifications to the terms of an award are treated as an exchange of the original award for a new award. Incremental
compensation cost is measured as the excess, if any, of the fair value of the original award immediately before its terms are
modified, measured on the share price and other pertinent factors at that date. The Company recognized an incremental compensation
cost of $97,240 for these modified stock options, which is included in consulting fees.
The
fair values for stock options granted have been estimated using the Black-Scholes option pricing model assuming no expected dividends
and the following weighted average assumptions:
| |
Nine months
ended
September 30, 2014 | | |
Nine months
ended
September 30, 2013 | |
| |
| | |
| |
Risk-free Interest rate | |
| 0.11 | % | |
| – | |
Expected life (in years) | |
| 1.3 | | |
| – | |
Expected volatility | |
| 162 | % | |
| – | |
During
the nine months ended September 30, 2014, the Company recorded stock-based compensation of $453,664 (2013 - $nil) for stock options
granted, of which $332,731 was included in management fees and $120,933 was included in consulting fees.
The
weighted average fair value of the stock options granted during the nine months ended September 30, 2014 was $0.12 (2013 - $nil)
per option.
As
at September 30, 2014, the aggregate intrinsic value of stock options outstanding is $nil.
|
(a) |
On
November 1, 2011, the Company entered into a management agreement with the President of the Company whereby it is obligated
to pay $12,500 per month starting on October 3, 2011 to November 1, 2016. |
The
agreement may be terminated by written notice. Upon termination, the President shall receive a termination fee equal to the sum
of:
|
(i) |
Buy-out
of any outstanding stock options for a price equal to the fair market value of the Company’s common stock multiplied
by the number of shares under options and less the exercise price; plus |
|
|
|
|
(ii) |
The
greater of: |
|
● |
The aggregate
remaining fees for the unexpired remainder of the term; or |
|
|
|
|
● |
One annual fee
plus one month fee for each year served after November 1, 2011. |
QUEST
WATER GLOBAL, INC.
Notes to
the Consolidated Financial Statements
September
30, 2014
(Expressed
in US dollars)
(unaudited)
9. |
Commitments (continued) |
|
(b) |
On
November 1, 2011, the Company entered into a management agreement with the Vice-President of the Company whereby it is obligated
to pay $12,500 per month starting on October 3, 2011 to November 1, 2016. |
The
agreement may be terminated by written notice. Upon termination, the Vice-President shall receive a termination fee equal to the
sum of:
|
(i) |
Buy-out
of any outstanding stock options for a price equal to the fair market value of the Company’s common stock multiplied
by the number of shares under options and less the exercise price; plus |
|
|
|
|
(ii) |
The
greater of: |
|
● |
The
aggregate remaining fees for the unexpired remainder of the term; or |
|
|
|
|
● |
One
annual fee plus one month fee for each year served after November 1, 2011. |
|
(c) |
On
November 19, 2013, the Company entered into a one year agreement for consulting services whereby the Company agreed to pay
an annual fee of $45,000 in shares of common stock based on a 40% monthly workload. In connection with this fee, the Company
issued 225,000 shares of common stock with a fair value of $49,500. This fee will be reviewed on a monthly basis and will
be increased proportionately if the consultant’s workload increases on behalf of the Company. The Company also agreed
to pay the consultant a finder’s fee at the following rates: |
|
(i) |
Based
on equity investment: |
|
● |
10%
on funds received from finder investors up to $1,000,000; |
|
|
|
|
● |
7.5%
on funds received from finder investors between $1,000,001 to $2,000,000; |
|
|
|
|
● |
5%
on funds received from finder investors over $2,000,000. |
| (ii) | Based
on debt investment: |
|
● |
5%
on funds received from finder investors up to $1,000,000; |
|
|
|
|
● |
3.75%
on funds received from finder investors between $1,000,001 to $2,000,000; |
|
|
|
|
● |
2.5%
on funds received from finder investors over $2,000,000. |
The
finder’s fee shall be paid in cash, or as elected by the finder, a combination of cash and common stock of the Company at
the same price per share as the Company’s current financing round.
| (d) | On
February 11, 2014, the Company signed a lease for office premises and agreed to pay annual
basic rent of Cdn$16,248 plus operating costs up to February 11, 2017. Minimum lease
payments over the remaining term of the lease is as follows: |
Year | | |
Cdn$ | |
2014 | | |
| 4,062 | |
2015 | | |
| 16,248 | |
2016 | | |
| 16,248 | |
2017 | | |
| 2,031 | |
| | |
| 38,589 | |
| (e) | On
May 22, 2014, the Company entered into a joint venture (“JV”) marketing agreement
with a consultant for marketing services whereby the Company agreed to issue 250,000
restricted shares of common stock to the consultant as a signing bonus. Refer to Note
6(g). The Company also agreed to issue 5,000,000 restricted shares of common stock on
an earnout basis based on the JV achieving $20,000,000 in gross sales revenue over the
initial three-year period, to be assessed and paid semi-annually. Pursuant to the agreement,
ownership of the JV is divided into 55% equity ownership by the Company and 45% equity
ownership by the consultant. The Company is committed to contributing $250,000 in a combination
of cash and value of demonstration units to the JV. The demonstration units will remain
the ownership of the Company until such time that the consultant contributes its $250,000,
after which the ownership of the demonstration units become that of the JV. The initial
term of the agreement is for three years plus a day from the date the first demonstration
unit is installed and properly functioning. The term will renew for three subsequent
one year periods unless terminated by either party. |
QUEST
WATER GLOBAL, INC.
Notes to
the Consolidated Financial Statements
September
30, 2014
(Expressed
in US dollars)
(unaudited)
9. | Commitments
(continued) |
| (f) | On
July 29, 2014, the Company entered into a six month agreement for consulting services
whereby the Company agreed to pay a fee of $8,000 in shares of common stock in consideration
for investor relations services. In connection with this fee, the Company issued 100,000
shares of common stock with a fair value of $7,000. Refer to Note 6(e). |
| | |
| (g) | On
September 10, 2014, the Company entered into a nine month agreement for consulting services
whereby the Company agreed to issue 1,000,000 restricted shares of common stock to the
consultant as consideration of which 25% are deemed earned upon receipt. Refer to Note
6(h). The remaining restricted shares of common stock are deemed earned on a monthly
basis with periods ending the 1st day of each month until the end of the contract. |
PRESENTATION
OF INFORMATION
As
used in this quarterly report, the terms “we”, “us”, “our” and the “Company” mean
Quest Water Global, Inc. and its consolidated subsidiaries, unless otherwise indicated.
This
quarterly report includes our interim unaudited consolidated financial statements as at and for the period ended September 30,
2014. These financial statements have been prepared in accordance with generally accepted accounting principles in the United
States (“US GAAP”). All financial information in this quarterly report is presented in U.S. dollars, unless otherwise
indicated, and should be read in conjunction with the financial statements and the notes thereto included in this quarterly report.
As
disclosed in our current report on Form 8-K dated January 10, 2012, on January 6, 2012, we completed a share exchange with Quest
Water Solutions, Inc. (“Quest”), a Nevada corporation that is now our wholly owned subsidiary and operating business
(the “Share Exchange”). The Share Exchange was treated as a recapitalization effected through a share exchange, with
Quest as the accounting acquirer and the Company as the accounting acquiree. Our consolidated financial statements are therefore,
in substance, those of Quest.
FORWARD-LOOKING
STATEMENTS
This
quarterly report, any supplement to this quarterly report, and any documents incorporated by reference in this quarterly report,
include “forward-looking statements”. To the extent that the information presented in this quarterly report discusses
financial projections, information or expectations about our business plans, results of operations, products or markets, or otherwise
makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by
the use of words such as “intends”, “anticipates”, “believes”, “estimates”, “projects”,
“forecasts”, “expects”, “plans” and “proposes”. Although we believe that the expectations
reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties
that could cause actual results to differ materially from such forward-looking statements.
The
forward-looking statements made in this quarterly report relate only to events or information as of the date on which the statements
are made. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
You should read this quarterly report and the documents that we reference in this quarterly report and have filed as exhibits
with the understanding that our actual future results may be materially different from what we expect. You should not rely upon
forward-looking statements as predictions of future events.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The
following discussion and analysis of our results of operations and financial condition has been derived from and should be read
in conjunction with our interim unaudited consolidated financial statements and the related notes thereto that appear elsewhere
in this quarterly report, as well as the “Presentation of Information” section that appears at the beginning of this
quarterly report.
Corporate
History and Background
We
were incorporated under the laws of Delaware on February 25, 2010. From our inception until the closing of the Share Exchange,
we sought to provide dental and other medical professionals with turn-key marketing solutions to generate referrals from existing
clients and new business from the general public through our wholly owned subsidiary RPM Dental Systems, LLC (“RPM Kentucky”).
RPM Kentucky was formed on September 15, 2009, under the laws of the Commonwealth of Kentucky, and we acquired RPM Kentucky on
March 23, 2010.
Prior
to the Share Exchange, we had minimal revenue and our operations were limited to capital formation, organization and development
of our business plan. As a result of the Share Exchange, we ceased our prior operations and, through Quest, we now operate as
an innovative water technology company that provides sustainable and environmentally sound solutions to water-scarce regions.
Quest
was incorporated under the laws of Nevada on October 20, 2008 and commenced operations on February 20, 2009. Its operations to
date have consisted of business formation, strategic development, marketing, technologies development, negotiations with technologies
companies and capital raising activities. Quest has not generated any revenues since its inception.
Acquisition
of Quest
On
January 6, 2012, we completed the Share Exchange whereby we acquired all of the issued and outstanding capital stock of Quest
in exchange for 2,568,493 shares of our common stock (on a pre-forward split basis), or approximately 62.74% of our issued and
outstanding common stock as of the consummation of the Share Exchange. Subsequent to the Share Exchange, we completed a 20 for
1 forward split of our common stock (the “Forward Split”) that became effective on March 1, 2012. Pursuant to the
Forward Split, the 2,568,493 shares described above increased to 51,369,860 shares.
As
a result of the Share Exchange, Quest became our wholly owned subsidiary and John Balanko and Peter Miele became our principal
stockholders. The Share Exchange was treated as a recapitalization effected through a share exchange, with Quest as the accounting
acquirer and the Company as the accounting acquiree.
In
connection with and effective upon the closing of the Share Exchange, Josh Morita, our former President, Chief Executive Officer,
director and principal stockholder, and Dr. Laura Sloan, our former director, resigned as members of our Board of Directors and
Mr. Morita resigned as our sole officer. Also effective upon the closing of the Share Exchange, John Balanko and Peter Miele were
appointed to fill the vacancies on our Board of Directors created by the resignations of Mr. Morita and Ms. Sloan. In addition,
our Board of Directors appointed Mr. Balanko as our President and Chief Executive Officer and Mr. Miele as our Vice President
and Secretary, all effective upon the closing of the Share Exchange. On April 13, 2012, we also appointed Mr. Miele as our Chief
Financial Officer.
As
a result of our acquisition of Quest, Quest became our wholly owned subsidiary and we assumed the business and operations of Quest.
We then changed our name from RPM Dental, Inc. to Quest Water Global, Inc. to more accurately reflect our new business operations.
Business
Overview
We
provide sustainable and environmentally sound solutions to water scarce regions. Our goal is to address the vital issue of water
quality and water supply by providing an alternative, sustainable source of pure water at the smallest possible environmental
cost to global areas in need, while becoming a leading company in providing turn-key solutions using alternative energy for the
purification, desalination and distribution of clean drinking water.
We
have developed a proprietary community drinking water station consisting of a self-contained water purification system using either
a reverse osmosis membrane or ultrafiltration membrane, powered by photovoltaic solar panels and hosted in modified shipping containers.
Each AQUAtapTM unit is energy self-sufficient with minimal operational and maintenance costs. We believe that this product represents
the first truly environmentally sound solution to drinking water shortages as it is autonomous, decentralized and sustainable,
and because each unit is capable of converting brackish, sea or contaminated surface water into 20,000 litres of high quality
drinking water each day, suitable for 1,000 people.
In
addition to the solar-powered water purification systems, we have also developed a technology known as WEPSTM (water extraction
and purification system) that produces potable water from humidity in the atmosphere. WEPSTM technology works by converting humidity
into water, otherwise known as atmospheric water extraction.
To
date, we have focused our activities on the fifteen countries of the Southern African Development Community (“SADC”),
with specific attention to Angola. There is a vast and increasing demand for a sustainable, cost-effective and decentralized continuous
supply of clean drinking water in most areas of the SADC. We provide clean drinking water to end-users utilizing various formats
of our water purification and distribution systems that include inexpensive bulk drinking water and government-subsidized community
level drinking water. Applications of our systems include rural and urban community water supply, water supply for household needs,
remote work site camps and water supply for disaster relief.
We
are in the process of negotiating a formal agreement with the Ministry of Industry and Ministry of Energy & Water regarding
becoming an official registered supplier for the government of Angola’s $650 million “Water for All” program
and for the construction of a facility to assemble the AQUAtap™ stations in that country. In June 2012, our management met
with the African Development (“AfDB”) to discuss financing the proposed AQUAtap™ assembly plant(s) to be built
in Angola and the level of funding required to carry out such an undertaking. These discussions established that we would require
between $5.5-6 million per facility, including construction, inventory and working capital. As a result of the meetings, we received
a non-binding letter of intent from the AfDB regarding the funding of the proposed project and the Angolan government indicated
that once an agreement had been consummated, they would in turn submit a request for funding to the AfDB on our behalf.
Our
operations to date have consisted of business formation, strategic development, marketing, technologies development, negotiations
with technology companies and capital raising activities.
Results
of Operations
For
the Three Months Ended September 30, 2014
Revenue
We
have not generated any revenues since our inception. We anticipate that we will incur substantial losses for the foreseeable future
and our ability to generate any revenues in the next 12 months continues to be uncertain.
Expenses
During
the three months ended September 30, 2014, we incurred $151,347 in total expenses, including $75,000 in management fees, $47,251
in consulting fees, $15,271 in professional fees, $6,419 in automotive expenses, $5,815 in rent, $4,875 in office and miscellaneous
expenses, $3,619 in telephone expenses, $3,273 in transfer agent and filing fees, $1,053 in amortization, $664 in advertising
and promotion expenses and $226 in travel expenses, as offset by a foreign exchange gain of $12,119. During the same period in
the prior year, we incurred $144,900 in total expenses, including $75,000 in management fees, $3,121 in consulting fees, $12,649
in professional fees, $5,008 in automotive expenses, $3,333 in rent, $10,257 in office and miscellaneous expenses, $4,116 in telephone
expenses, $1,595 in transfer agent and filing fees, $14,641 in amortization, $261 in advertising and promotion expenses, $9,673
in travel expenses and $5,246 in foreign exchange loss. The 4% increase in our total expenses during the most recent period resulted
primarily from a significant increase in our consulting fees. However, during the three months ended September 30, 2014 our amortization
and travel expenses both decreased substantially on a period-to-period basis.
Net
Loss
During
the three months ended September 30, 2014, we incurred a loss before other expense of $151,347 and a net loss of $152,389, whereas
we incurred a loss before other expense of $144,900 and a net loss of $162,097 during the same period in the prior year. The majority
of our other expense during each of those periods was related to the accretion of discounts on our convertible notes payable.
We did not experience any net loss per share during the three months ended September 30, 2014 or 2013.
For the
Nine Months Ended September 30, 2014
Expenses
During
the nine months ended September 30, 2014, we incurred $1,090,665 in total expenses, including $557,731 in management fees, $354,932
in consulting fees, $71,622 in professional fees, $43,315 in advertising and promotion expenses, $17,469 in automotive expenses,
$17,291 in office and miscellaneous expenses $16,717 in rent, $9,949 in transfer agent and filing fees, $9,379 in telephone expenses,
$3,125 in amortization and $483 in travel expenses, as offset by a foreign exchange gain of $11,348. During the same period in
the prior year, we incurred $498,172 in total expenses, including $225,000 in management fees, $21,338 in consulting fees, $84,035
in professional fees, $28,216 in advertising and promotion expenses, $14,774 in automotive expenses, $21,411 in office and miscellaneous
expenses, $18,313 in rent, $2,414 in transfer agent and filing fees, $12,028 in telephone expenses, $43,925 in amortization and
$29,501 in travel expenses, as offset by a foreign exchange gain of $2,783. The 119% increase in our total expenses during the
most recent period resulted primarily from significant increases in two major expense categories, management fees and consulting
fees. However, during the nine months ended September 30, 2014 our amortization and travel expenses also both decreased substantially
on a period-to-period basis.
Net
Loss
During
the nine months ended September 30, 2014, we incurred a loss before other expense of $1,090,665 and a net loss of $1,109,613,
whereas we incurred a loss before other expense of $498,172 and a net loss of $549,415 during the same period in the prior year.
During the nine months ended September 30, 2014 and 2013 we experienced a net loss per share of $0.01.
Liquidity
and Capital Resources
As
of September 30, 2014, we had $184 in cash, $10,241 in total assets, $1,231,754 in total liabilities and a working capital deficiency
of $1,229,657. As of September 30, 2014 we had an accumulated deficit of $7,362,427.
To
date, we have experienced negative cash flows from operations and we have been dependent on sales of our common stock and capital
contributions to fund our operations. We expect this situation to continue for the foreseeable future, and we anticipate that
we will experience negative cash flows during the year ended December 31, 2014.
During
the nine months ended September 30, 2014, we spent $48,048 in cash on operating activities, compared to $31,522 in cash spending
on operating activities during the same period in the prior year. The 52% increase in our cash spending on operating activities
during the nine months ended September 30, 2014 was primarily attributable to the increase in our net loss as described above
as well as certain changes in our operating assets and liabilities and a significant stock-based compensation adjustment.
We
did not spend any cash on investing activities during the nine months ended September 30, 2014 or 2013.
We
received $46,627 in cash from financing activities during the nine months ended September 30, 2014, all of which was in the form
of advances from related parties. During the nine months ended September 30, 2013, we received $30,000 in cash from financing
activities, all of which was in the form of proceeds from the issuance of our common stock.
During
the nine months ended September 30, 2014, our cash decreased by $1,421 as a result of our operating, investing and financing activities,
from $1,605 to $184. As of September 30, 2014, we did not have sufficient cash resources to meet our operating expenses for the
next month based on our current burn rate.
Plan
of Operations
Our
plan of operations over the next 12 months is to continue to address water quality and supply issues in Angola through the installation
of our AQUAtapTM community drinking water stations as well as the employment of our WEPSTM technology, and we anticipate that
we will require a minimum of $745,000 to pursue those plans. However, as described above, we are currently in the process of negotiating
a formal agreement with the Angolan Ministry of Industry and Ministry of Energy & Water regarding becoming an official registered
supplier for the “Water for All” program and for the construction of a facility to assemble our AQUAtap™ stations.
Our cash requirements will change substantially if we are able to successfully enter into such an agreement, but we expect that
the AfDB will fund a large portion of the construction, inventory and working capital costs of the proposed project in those circumstances.
We
intend to meet the balance of our cash requirements for the next 12 months through a combination of debt financing and equity
financing through private placements. Currently we are active in contacting broker/dealers in Canada and elsewhere regarding possible
financing arrangements. However, we do not currently have any arrangements in place to complete any further private placement
financings and there is no assurance that we will be successful in completing any such financings. If we are unsuccessful in obtaining
sufficient funds through our capital raising efforts, we may review other financing options.
During the
next 12 months, we estimate that our planned expenditures will include the following:
Description | |
Amount
($) | |
Equipment purchases | |
| 10,000 | |
Rent | |
| 30,000 | |
Management fees | |
| 300,000 | |
Consulting fees | |
| 150,000 | |
Professional fees | |
| 130,000 | |
Advertising and promotion expenses | |
| 15,000 | |
Travel and automotive expenses | |
| 60,000 | |
General and administrative expenses | |
| 50,000 | |
Total | |
| 745,000 | |
Going
Concern
Our
financial statements have been prepared on a going concern basis, which implies we will continue to realize our assets and discharge
our liabilities in the normal course of business. As at September 30, 2014, we had a working capital deficiency of $1,229,657
and an accumulated deficit of $7,362,427. Our continuation as a going concern is dependent upon the continued financial support
from our shareholders, our ability to obtain necessary equity financing to continue operations, and the attainment of profitable
operations. These factors raise substantial doubt regarding our ability to continue as a going concern. Our financial statements
do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities
that might be necessary should we be unable to continue as a going concern.
Off-Balance
Sheet Arrangements
We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that is material to investors.
Critical
Accounting Policies
We
have identified certain accounting policies, described below, that are important to the portrayal of our current financial condition
and results of operations.
Basis
of Presentation and Consolidation
Our
consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted
in the United States, and are expressed in US dollars. Our consolidated financial statements include the accounts of the Company,
its wholly-owned subsidiary, Quest; Quest’s wholly owned subsidiary, Quest Water Solutions Inc., a company incorporated
under the laws of the province of British Columbia, Canada; and its 88% owned inactive subsidiaries Agua Cuilo Lda., Cuilo Embalnages,
Lda., and Cuilo Comercial, Lda. All inter-company balances and transactions have been eliminated on consolidation. Our fiscal
year-end is December 31.
Foreign
Currency Translation
Our
functional currency is US dollars. Transactions in foreign currencies are translated into the currency of measurement at the exchange
rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into US dollars
at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in income.
Our
integrated foreign subsidiaries are financially or operationally dependent on us. We use the temporal method to translate the
accounts of our integrated operations into US dollars. Monetary assets and liabilities are translated at the exchange rates in
effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses
are translated at average rates for the period, except for amortization, which is translated on the same basis as the related
asset. The resulting exchange gains or losses are recognized in income.
Item
3. Quantitative and Qualitative Disclosures About Market Risk
Not required.
Item
4. Controls and Procedures
Disclosure
Controls and Procedures
We
maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act
of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports
that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
As
of the end of the period covered by this report, management, with the participation of our Chief Executive and Chief Financial
Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation,
management concluded that our disclosure controls and procedures were not effective due to certain deficiencies in our internal
control over financial reporting.
Internal
Control over Financial Reporting
There
were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange
Act) during the period ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
PART
II – OTHER INFORMATION
Item
1. Legal Proceedings
We
are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition
or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries,
threatened against or affecting us, our common stock, any of our subsidiaries or our officers or directors of those of our subsidiaries’
in their capacities as such, in which an adverse decision could have a material adverse effect.
Item
1A. Risk Factors
Not applicable.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item
3. Defaults Upon Senior Securities
None.
Item
4. Mine Safety Disclosures
Not applicable.
Item
5. Other Information
None.
Item
6. Exhibits
The following
documents are filed as a part of this quarterly report.
Exhibit
Number |
|
Description
of Exhibit |
2.1 |
|
Share
Exchange Agreement dated January 6, 2012 with Josh Morita, Quest Water Solutions, Inc. and the shareholders of Quest Water
Solutions, Inc. (1) |
3.1 |
|
Articles
of Incorporation (2) |
3.2 |
|
Bylaws
(2) |
3.3 |
|
Certificate
of Designation for Series A Voting Preferred Stock (1) |
3.4 |
|
Certificate
of Amendment filed with the Delaware Secretary of State on February 21, 2012 (3) |
10.1 |
|
Agreement
of Sale with Josh Morita dated January 6, 2012 (1) |
10.2 |
|
Subscription
Agreement dated January 6, 2012 (1) |
10.3 |
|
Form
of Warrant dated January 6, 2012 (1) |
10.4 |
|
Registration
Rights Agreement dated January 6, 2012 (1) |
10.5 |
|
Form
of Lock-Up Agreement dated January 6, 2012 (1) |
10.6(a) |
|
Lock-Up/Leak
Out Agreement with John Balanko dated January 6, 2012 (1) |
10.6(b) |
|
Lock-Up/Leak
Out Agreement with Peter Miele dated January 6, 2012 (1) |
10.7 |
|
Management
Agreement with John Balanko dated November 1, 2011 (1) |
10.8 |
|
Management
Agreement with Peter Miele dated November 1, 2011 (1) |
10.9 |
|
Global
Cooperation Partner Agreement between Quest Water Solutions, Inc. and Trunz Water Systems AG, dated June 29, 2011 (1) |
31.1
|
|
Certification
of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2
|
|
Certification
of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1
|
|
Certification
of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 |
32.2
|
|
Certification
of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 |
99.1 |
|
Audit
Committee Charter (4) |
|
|
|
101.INS |
|
XBRL
Instance Document |
101.SCH |
|
XBRL
Taxonomy Extension Schema |
101.CAL |
|
XBRL
Taxonomy Extension Calculation Linkbase |
101.DEF |
|
XBRL
Taxonomy Extension Definition Linkbase |
101.LAB |
|
XBRL
Taxonomy Extension Label Linkbase |
101.PRE |
|
XBRL
Taxonomy Presentation Linkbase |
(1) |
Incorporated by
reference from our Current Report on Form 8-K filed with the SEC on January 10, 2012. |
|
|
(2) |
Incorporated by
reference from our Registration Statement on Form S-1 filed with the SEC on August 17, 2010. |
|
|
(3) |
Incorporated by
reference from our Current Report on Form 8-K filed with the SEC on March 7, 2012. |
|
|
(4) |
Incorporated by
reference from our Annual Report on Form 10-K filed with the SEC on April 16, 2012. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: November
14, 2014 |
QUEST
WATER GLOBAL, INC. |
|
|
|
|
By: |
/s/
John Balanko |
|
|
John Balanko |
|
|
Chairman, President,
Chief Executive Officer, Director |
Exhibit
31.1
Certification
of the Chief Executive Officer pursuant to Rule 13a-14(A) or 15d-14(A) under
the Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the
Sarbanes-Oxley Act of 2002
I, John
Balanko, certify that:
1. |
I
have reviewed this quarterly report on Form 10-Q of Quest Water Global, Inc. (the “Registrant”); |
|
|
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
in order 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(s) 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 material information relating to the Registrant, including its consolidated subsidiaries, is 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 purposes in accordance with generally 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; and |
5. |
The
Registrant’s other certifying officer(s) 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, summarize 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: November
14, 2014
By: |
/s/
John Balanko |
|
|
John
Balanko |
|
|
Chairman,
President, Chief Executive Officer, Director |
|
Exhibit
31.2
Certification
of the Chief Financial Officer pursuant to Rule 13a-14(A) or 15d-14(A) under
the Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the
Sarbanes-Oxley Act of 2002
I, Peter
Miele, certify that:
1. |
I
have reviewed this quarterly report on Form 10-Q of Quest Water Global, Inc. (the “Registrant”); |
|
|
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
in order 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(s) 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 material information relating to the Registrant, including its consolidated subsidiaries, is 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 purposes in accordance with generally 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; and |
5. |
The
Registrant’s other certifying officer(s) 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, summarize 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: November
14, 2014
By: |
/s/
Peter Miele |
|
|
Peter
Miele |
|
|
Vice
President, Chief Financial Officer, Secretary, Director |
|
Exhibit
32.1
Certification
of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection
with the quarterly report of Quest Water Global, Inc. (the “Registrant”) on Form 10-Q for the period ended September
30, 2014 as filed with the Securities and Exchange Commission (the “Report”), I, John Balanko, certify pursuant to
18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to 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 results of operations
of the Registrant. |
Dated: November
14, 2014
By: |
/s/
John Balanko |
|
|
John
Balanko |
|
|
Chairman,
President, Chief Executive Officer and Director |
|
Exhibit
32.2
Certification
of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection
with the quarterly report of Quest Water Global, Inc. (the “Registrant”) on Form 10-Q for the period ended September
30, 2014 as filed with the Securities and Exchange Commission (the “Report”), I, Peter Miele, certify pursuant to
18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to 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 results of operations
of the Registrant. |
Dated: November
14, 2014
By: |
/s/
Peter Miele |
|
|
Peter
Miele |
|
|
Vice
President, Chief Financial Officer, Secretary, Director |
|
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