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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

(Mark One)

[X]Quarterly Report Under Section 13 Or 15(d) Of The
Securities Exchange Act Of 1934

For the quarterly period ended March 31, 2007

[   ] Transition Report Under Section 13 Or 15(d) Of
The Securities Exchange Act

For the transition period from ________ to ________

COMMISSION FILE NUMBER000-50163

AQUA SOCIETY, INC.(Exact
name of small business issuer as specified in its charter)

|NEVADA                                           | 52-2357931                       
|------------------------------------------------ | ---------------------------------
|(State or other jurisdiction of incorporation or | (IRS Employer Identification No.)
|organization)                                    |                                  

Konrad - Adenauer Strasse 9-13 45699 Herten, Germany(Address of principal executive offices)

011-49-6031-791-760Issuer's telephone number

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

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

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

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the 
  latest practicable date: As of May21, 2007 the Issuer had
  118,178,323 Shares of Common Stock 
  outstanding.

Transitional Small Business Disclosure Format (check one): Yes
[   ] No [X]

1

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PART I - FINANCIAL INFORMATION

ITEM
1.           FINANCIAL
STATEMENTS.







2

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AQUA SOCIETY, INC.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

(Stated in US Dollars)

(Unaudited)



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AQUA SOCIETY, INC.INTERIM CONSOLIDATED BALANCE SHEETS 
  March 31, 2007 and September 30, 2006 
  (Stated in US Dollars) 
  (Unaudited)

|                                                                     |   | March 31,   |   |   | September 30, |  
|-------------------------------------------------------------------- | - | ----------- | - | - | ------------- | -
|                                                                     |   | 2007        |   |   | 2006          |  
|                                                                     |   |             |   |   |               |  
|**ASSETS**                                                           |   |             |   |   |               |  
|                                                                     |   |             |   |   |               |  
|Current                                                              |   |             |   |   |               |  
|Cash                                                                 | $ | 710,180     |   | $ | 187,432       |  
|Accounts receivable  trade                                          |   | 78,371      |   |   | 143,039       |  
|
      other  Note 4                                               |   | 60,000      |   |   | -             |  
|Government value added tax receivable                                |   | 86,304      |   |   | 217,919       |  
|Inventory                                                            |   | 295,097     |   |   | 306,569       |  
|Loans receivable                                                     |   | 1           |   |   | 1             |  
|                                                                     |   |             |   |   |               |  
|                                                                     |   | 1,229,953   |   |   | 854,960       |  
|                                                                     |   |             |   |   |               |  
|Investments  Note 3                                                 |   | 2           |   |   | 2             |  
|Patents and patent rights                                            |   | 193,485     |   |   | 193,485       |  
|Equipment                                                            |   | 55,096      |   |   | 65,343        |  
|                                                                     |   |             |   |   |               |  
|                                                                     | $ | 1,478,536   |   | $ | 1,113,790     |  
|                                                                     |   |             |   |   |               |  
|LIABILITIES                                                          |   |             |   |   |               |  
|                                                                     |   |             |   |   |               |  
|Current                                                              |   |             |   |   |               |  
|Accounts payable and accrued liabilities 
      Note 4              | $ | 446,023     |   | $ | 537,271       |  
|Loans payable  Notes 4 and
      5                                  |   | 4,532,836   |   |   | 2,377,099     |  
|                                                                     |   |             |   |   |               |  
|                                                                     |   | 4,978,859   |   |   | 2,914,370     |  
|                                                                     |   |             |   |   |               |  
|STOCKHOLDERS DEFICIENCY                                             |   |             |   |   |               |  
|                                                                     |   |             |   |   |               |  
|Common stock, $0.001 par value  Note
      6                        |   |             |   |   |               |  
|300,000,000 shares authorized                                        |   |             |   |   |               |  
|118,178,323
      shares issued and outstanding (September 30, 2006: |   |             |   |   |               |  
|118,178,323 shares)                                                  |   | 118,179     |   |   | 118,179       |  
|Additional paid-in capital                                           |   | 29,256,028  |   |   | 28,609,612    |  
|Accumulated other comprehensive loss                                 |   | (288,116    | ) |   | (150,368      | )
|Accumulated deficit                                                  |   | (32,586,414 | ) |   | (30,378,003   | )
|                                                                     |   |             |   |   |               |  
|                                                                     |   | (3,500,323  | ) |   | (1,800,580    | )
|                                                                     |   |             |   |   |               |  
|                                                                     | $ | $ 1,478,536 |   | $ | 1,113,790     |  

SEE ACCOMPANYING NOTES

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AQUA SOCIETY, INC.INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS 
  for the three and six months ended March 31, 2007 and 2006 
  (Stated in US Dollars) 
  (Unaudited)

|                                              |   | Three months ended |   |   | Six months ended |  
|--------------------------------------------- | - | ------------------ | - | - | ---------------- | -
|                                              |   | March 31,          |   |   | March 31         |  
|                                              |   | 2007               |   |   | 2006             |  
|                                              |   |                    |   |   |                  |  
|Sales                                         | $ | 69,903             |   | $ | 1,023,827        |  
|Less: cost of goods sold                      |   | 58,053             |   |   | 738,398          |  
|                                              |   |                    |   |   |                  |  
|                                              |   | 11,850             |   |   | 285,429          |  
|                                              |   |                    |   |   |                  |  
|General and administrative expenses:          |   |                    |   |   |                  |  
|Accounting and audit fees                     |   | 55,997             |   |   | 74,870           |  
|Advertising and promotion                     |   | 22,596             |   |   | 46,749           |  
|Amortization                                  |   | 6,565              |   |   | 11,263           |  
|Bad debts                                     |   | 32,500             |   |   | 16,022           |  
|Bank charges and interest                     |   | 221                |   |   | 408              |  
|Consulting fees                               |   | 11,393             |   |   | 68,867           |  
|Development costs  Note
      4              |   | 119,252            |   |   | 480,259          |  
|Filing fees                                   |   | 1,420              |   |   | 1,846            |  
|Interest                                      |   | 52,251             |   |   | 42,262           |  
|Legal fees  Note 4                           |   | 69,517             |   |   | 62,402           |  
|Management fees  Note 4                      |   | 187,949            |   |   | 393,038          |  
|Office and miscellaneous                      |   | 20,338             |   |   | 60,935           |  
|Rent                                          |   | 32,797             |   |   | 36,445           |  
|Salaries and benefits                         |   | 119,542            |   |   | 116,568          |  
|Stock-based compensation 
      Note 6       |   | 515,174            |   |   | -                |  
|Transfer agent                                |   | 875                |   |   | 370              |  
|Travel  Note 4                               |   | 16,006             |   |   | 20,226           |  
|                                              |   |                    |   |   |                  |  
|                                              |   | (1,264,393         | ) |   | (1,432,530       | )
|                                              |   |                    |   |   |                  |  
|Operating loss before other item              |   | (1,252,543         | ) |   | (1,147,101       | )
|                                              |   |                    |   |   |                  |  
|Other items:                                  |   |                    |   |   |                  |  
|Interest income                               |   | -                  |   |   | 1,822            |  
|Write down of patents                         |   | -                  |   |   | (97              | )
|Write down of investment and loan             |   | -                  |   |   | (697             | )
|Loss on disposal of equipment                 |   | (1,151             | ) |   | -                |  
|                                              |   |                    |   |   |                  |  
|Net loss for the period                       |   | (1,253,694         | ) |   | (1,146,073       | )
|                                              |   |                    |   |   |                  |  
|Other comprehensive loss:                     |   |                    |   |   |                  |  
|Foreign currency adjustment                   |   | (41,411            | ) |   | (15,870          | )
|                                              |   |                    |   |   |                  |  
|Comprehensive loss for the period             | $ | (1,295,105         | ) | $ | (1,161,943       | )
|                                              |   |                    |   |   |                  |  
|Basic loss per share                          | $ | (0.01              | ) | $ | (0.01            | )
|                                              |   |                    |   |   |                  |  
|Weighted average number of shares outstanding |   | 118,178,323        |   |   | 116,416,966      |  

SEE ACCOMPANYING NOTES

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AQUA SOCIETY, INC.INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS 
  for the six months ended March 31, 2007 and 2006 
  (Stated in US Dollars) 
  (Unaudited)

|                                               |   | 2007       |   |   | 2006       |  
|---------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                               |   |            |   |   |            |  
|Cash flows used in Operating Activities        |   |            |   |   |            |  
|Net loss for the period                        | $ | (2,208,411 | ) | $ | (2,271,375 | )
|Items not affecting cash:                      |   |            |   |   |            |  
|Amortization                                   |   | 12,464     |   |   | 17,847     |  
|Stock-based
      compensation                 |   | 572,416    |   |   | -          |  
|Write-down of patents                          |   | -          |   |   | 9,091      |  
|Write-down
      of inventory                  |   | -          |   |   | 64,625     |  
|Interest imputed on loans
      payable        |   | 74,000     |   |   | -          |  
|Loss on disposal
      of equipment            |   | 1,151      |   |   | -          |  
|Changes in non-cash working capital items:     |   |            |   |   | (194,278   | )
|Accounts
      receivable                      |   | 12,501     |   |   | (225,253   | )
|Government value added tax
      receivable    |   | 139,074    |   |   | (210,365   | )
|Inventory                                      |   | 26,429     |   |   | (14,188    | )
|Accounts payable and accrued
      liabilities |   | (106,510   | ) |   | 774,486    |  
|                                               |   |            |   |   |            |  
|                                               |   | (1,476,886 | ) |   | (2,049,410 | )
|                                               |   |            |   |   |            |  
|Cash flows used in Investing Activities        |   |            |   |   |            |  
|Investment                                     |   | -          |   |   | (15,327    | )
|Cash acquired in investment in TMR GmbH        |   | -          |   |   | 15,327     |  
|Patents                                        |   | -          |   |   | (97        | )
|Equipment disposal (purchases)                 |   | (2,217     | ) |   | 32,526     |  
|Increase in loans receivable                   |   | -          |   |   | (70,260    | )
|                                               |   |            |   |   |            |  
|                                               |   | (2,217     | ) |   | (37,831    | )
|                                               |   |            |   |   |            |  
|Cash flows from Financing Activities           |   |            |   |   |            |  
|Issuance of common stock for cash              |   | -          |   |   | 1,207,398  |  
|Common stock subscriptions                     |   | -          |   |   | 1,095,930  |  
|Increase in loans payable                      |   | 2,016,324  |   |   | 204,307    |  
|                                               |   |            |   |   |            |  
|                                               |   | 2,016,324  |   |   | 2,507,635  |  
|                                               |   |            |   |   |            |  
|Effect of exchange rates on cash               |   | (14,473    | ) |   | (16,230    | )
|                                               |   |            |   |   |            |  
|Increase in cash during the period             |   | 522,748    |   |   | 404,164    |  
|                                               |   |            |   |   |            |  
|Cash, beginning of the period                  |   | 187,432    |   |   | 658,949    |  
|                                               |   |            |   |   |            |  
|Cash, end of the period                        | $ | 710,180    |   | $ | 1,063,113  |  

SEE ACCOMPANYING NOTES

---

AQUASOCIETY,INC. 
  INTERIM STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY) 
  for the period May 13, 2004 (Date of Inception) to March 31, 2007 
  (Stated in US Dollars) 
  (Unaudited )

|                                                       |  | Common
      Stock |   |   |           |   |   |            |  |  | Accumulated      |   |   |               |   |   |                   |  
|------------------------------------------------------ |  | ------------------ | - | - | --------- | - | - | ---------- |  |  | ---------------- | - | - | ------------- | - | - | ----------------- | -
|                                                       |  |                    |   |   |           |   |   | Additional |  |  |                  |   |   |               |   |   | Other             |  
|                                                       |  |                    |   |   |           |   |   | Paid-in    |  |  | Special Warrants |   |   | Comprehensive |   |   | Accumulated       |  
|                                                       |  | Number             |   |   | Par Value |   |   | Capital    |  |  | Number           |   |   | Amount        |   |   | Gain
      (Loss) |  
|                                                       |  |                    |   |   |           |   |   |            |  |  |                  |   |   |               |   |   |                   |  
|                                                       |  |                    |   |   |           |   |   |            |  |  |                  |   |   |               |   |   |                   |  
|Capital stock issued for cash                          |  | 1                  |   | $ | 31,042    |   | $ | -          |  |  | -                |   | $ | -             |   | $ | -                 |  
|Contribution of assets                                 |  | -                  |   |   | -         |   |   | 25,056     |  |  | -                |   |   | -             |   |   | -                 |  
|Pursuant to the acquisition of Aqua Society
      GmbH |  | 10,000,000         |   |   | 10,000    |   |   | -          |  |  | 34,000,000       |   |   | 34,000        |   |   | -                 |  
|Exchange of shares                                     |  | (1                 | ) |   | (31,042   | ) |   | -          |  |  | -                |   |   | -             |   |   | -                 |  
|Outstanding shares of Company prior to acquisition     |  | 69,908,000         |   |   | 69,908    |   |   | -          |  |  | -                |   |   | -             |   |   | -                 |  
|Unrealized loss on translation                         |  | -                  |   |   | -         |   |   | -          |  |  | -                |   |   | -             |   |   | (997              | )
|Net loss for the period                                |  | -                  |   |   | -         |   |   | -          |  |  | -                |   |   | -             |   |   | -                 |  
|                                                       |  |                    |   |   |           |   |   |            |  |  |                  |   |   |               |   |   |                   |  
|Balance, September 30, 2004                            |  | 79,908,000         |   |   | 79,908    |   |   | 25,056     |  |  | 34,000,000       |   |   | 34,000        |   |   | (997              | )
|                                                       |  |                    |   |   |           |   |   |            |  |  |                  |   |   |               |   |   |                   |  
|Issued for cash:                                       |  |                    |   |   |           |   |   |            |  |  |                  |   |   |               |   |   |                   |  
|Pursuant to private placement      -
      at $2.40    |  | 416,666            |   |   | 417       |   |   | 999,583    |  |  | -                |   |   | -             |   |   | -                 |  
|- at $1.98                                             |  | 1,232,322          |   |   | 1,233     |   |   | 2,438,766  |  |  | -                |   |   | -             |   |   | -                 |  
|Pursuant to exercise of options - at $1.70             |  | 215,000            |   |   | 215       |   |   | 365,285    |  |  | -                |   |   | -             |   |   | -                 |  
|Conversion of special warrants                         |  | 34,000,000         |   |   | 34,000    |   |   | -          |  |  | (34,000,000      | ) |   | (34,000       | ) |   | -                 |  
|Stock-based compensation                               |  | -                  |   |   | -         |   |   | 22,480,000 |  |  | -                |   |   | -             |   |   | -                 |  
|Unrealized gain on translation                         |  | -                  |   |   | -         |   |   | -          |  |  | -                |   |   | -             |   |   | 89,594            |  
|Net loss for the year                                  |  | -                  |   |   | -         |   |   | -          |  |  | -                |   |   | -             |   |   | -                 |  
|                                                       |  |                    |   |   |           |   |   |            |  |  |                  |   |   |               |   |   |                   |  
|Balance, September 30, 2005                            |  | 115,771,988        |   |   | 115,773   |   |   | 26,308,690 |  |  | -                |   |   | -             |   |   | 88,597            |  
|                                                       |  |                    |   |   |           |   |   |            |  |  |                  |   |   |               |   |   |                   |  
|Issued for cash:                                       |  |                    |   |   |           |   |   |            |  |  |                  |   |   |               |   |   |                   |  
|Pursuant to private placement     -
      at $1.04     |  | 1,160,960          |   |   | 1,161     |   |   | 1,206,237  |  |  | -                |   |   | -             |   |   | -                 |  
|- at $0.88                                             |  | 1,245,375          |   |   | 1,245     |   |   | 1,094,685  |  |  | -                |   |   | -             |   |   | -                 |  
|Unrealized loss on translation                         |  | -                  |   |   | -         |   |   | -          |  |  | -                |   |   | -             |   |   | (238,965          | )
|Net loss for the period                                |  | -                  |   |   | -         |   |   | -          |  |  | -                |   |   | -             |   |   | -                 |  
|                                                       |  |                    |   |   |           |   |   |            |  |  |                  |   |   |               |   |   |                   |  
|Balance, September 30, 2006                            |  | 118,178,323        |   |   | 118,179   |   |   | 28,609,612 |  |  | -                |   |   | -             |   |   | (150,368          | )

SEE ACCOMPANYING NOTES

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| | AQUA SOCIETY, INC.                                                      | Continued
| | ----------------------------------------------------------------------- | ---------
| | INTERIM STATEMENTS OF STOCKHOLDERS EQUITY
      (DEFICIENCY)           |          
| | for the period May 13, 2004 (Date of Inception)
      to March 31, 2007 |          
| | (Stated in US Dollars)                                                  |          
| | (Unaudited)                                                             |          

|                                  |  | Common
      Stock |  |   |           |  |   |            |  |  | Accumulated      |  |   |               |  |   |                   |  
|--------------------------------- |  | ------------------ |  | - | --------- |  | - | ---------- |  |  | ---------------- |  | - | ------------- |  | - | ----------------- | -
|                                  |  |                    |  |   |           |  |   | Additional |  |  |                  |  |   |               |  |   | Other             |  
|                                  |  |                    |  |   |           |  |   | Paid-in    |  |  | Special Warrants |  |   | Comprehensive |  |   | Accumulated       |  
|                                  |  | Number             |  |   | Par Value |  |   | Capital    |  |  | Number           |  |   | Amount        |  |   | Gain
      (Loss) |  
|                                  |  |                    |  |   |           |  |   |            |  |  |                  |  |   |               |  |   |                   |  
|                                  |  |                    |  |   |           |  |   |            |  |  |                  |  |   |               |  |   |                   |  
|Stock-based compensation          |  | -                  |  |   | -         |  |   | 572,416    |  |  | -                |  |   | -             |  |   | -                 |  
|Unrealized loss on translation    |  | -                  |  |   | -         |  |   |            |  |  | -                |  |   | -             |  |   | (137,748          | )
|Contribution of interest  Note 5 |  | -                  |  |   | -         |  |   | 74,000     |  |  | -                |  |   | -             |  |   | -                 |  
|Net loss for the period           |  | -                  |  |   | -         |  |   | -          |  |  | -                |  |   | -             |  |   | -                 |  
|                                  |  |                    |  |   |           |  |   |            |  |  |                  |  |   |               |  |   |                   |  
|Balance, March 31, 2007           |  | 118,178,323        |  | $ | 118,179   |  | $ | 29,256,028 |  |  | -                |  | $ | -             |  | $ | (288,116          | )

SEE ACCOMPANYING NOTES

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AQUA SOCIETY, INC.NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  March 31, 2007 
  (Stated in US Dollars) 
  (Unaudited)

|Note 1 | Interim Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | While information presented
        in the accompanying interim consolidated financial statements is unaudited,
        it includes all adjustments, which are, in the opinion of management,
        necessary to present fairly the financial position, results of operations
        and cash flows for the interim periods presented. All adjustments are
        of a normal recurring nature. The accompanying interim consolidated financial
        statements do not include all information and footnote disclosures required
        for an annual set of financial statements prepared under generally accepted
        accounting principles in the United States of America. The accompanying
        interim consolidated financial statements should be read in conjunction
        with the Companys September 30, 2006 audited consolidated financial
        statements. Operating results for the period ended March 31, 2007 are
        not necessarily indicative of the results that can be expected for the
        year ending September 30, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 2 | Nature and Continuance of
        Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | These interim consolidated
        financial statements have been prepared in accordance with generally accepted
        accounting principles applicable to a going concern, which assumes that
        the Company will be able to meet its obligations and continue its operations
        for the next twelve months. Realization values may be substantially different
        from carrying values as shown and these financial statements do not give
        effect to adjustments that would be necessary to the carrying values and
        classification of assets and liabilities should the Company be unable
        to continue as a going concern. At March 31, 2007, the Company had not
        yet achieved profitable operations, has accumulated losses of $32,586,414
        since its inception, has a working capital deficiency of $3,748,906 and
        expects to incur further losses in the development of its business, all
        of which casts substantial doubt about the Company’s ability to
        continue as a going concern. The Company’s ability to continue as
        a going concern is dependent upon its ability to generate future profitable
        operations and/or to obtain the necessary financing to meet its obligations
        and repay its liabilities arising from normal business operations when
        they come due. Management considers that the Company will be able to obtain
        additional funds by equity financing and/or related party advances; however,
        there is no assurance of additional funding being available.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 3 | Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| | i) | UFI Tec GmbH                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | By an agreement dated November 30, 2004 and effective
        December 10, 2004, the Company acquired a 33% interest in UFI-Tech GmbH
        (UFI), a German limited company, for consideration of EUR
        25,565 (US $32,476). During the year ended September 30, 2005, the Company
        wrote down the $32,476 investment and related loans receivable of $67,227
        to their net realizable value of $1. During the year ended September 30,
        2006, the Company sold 13.1% of their 33% interest (19.9% interest remains)
        for proceeds of EUR 10,072 (US $12,237) and wrote down an additional loan
        receivable of $66,094 to its net realizable value of $1.

---

Aqua Society, Inc. 
  Notes to the Interim Consolidated Financial Statements 
  March 31, 2007 
  (Stated in US Dollars)  Page 2 
  (Unaudited)

|Note 3 | Investments (contd)
|------ | ---------------------

| | ii) | By an agreement dated February 18, 2006, the Company
        acquired a 51% interest in TMR GmbH (TMR), a German limited
        company, in consideration of EUR 12,750 (US $15,999). TMR is involved
        in the development, installation, distribution and management of renewable
        resources. At the date of acquisition, TMR had no business, assets or
        liabilities. During the year ended September 30, 2006, the Company wrote
        down its investment by $15,674 (EUR 12,749) to $1. During the six months
        ended March 31, 2007, the Company disposed of its interest in TMR for
        $1.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 4 | Related Party Transactions Note
      7                                                                                                                                                                               
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                        
|       | The Company incurred the following
        amounts charged by directors of the Company, the brother of a director
        of the Company and a law firm of which a former director of the Company
        is a partner:

| |                   |   | Three months ended |  |   | Six months ended | 
| | ----------------- | - | ------------------ |  | - | ---------------- | 
| |                   |   | March 31,          |  |   | March 31,        | 
| |                   |   | 2007               |  |   | 2006             | 
| |                   |   |                    |  |   |                  | 
| | Development costs | $ | 39,297             |  | $ | 125,667          | 
| | Legal fees        |   | -                  |  |   | 29,992           | 
| | Management fees   |   | 187,949            |  |   | 393,038          | 
| | Travel            |   | -                  |  |   | 1,799            | 
| |                   |   |                    |  |   |                  | 
| |                   | $ | 344,305            |  | $ | 550,496          | 

Accounts receivable  other includes
  $60,000 related to an advance to a former officer of the Company.

Included in accounts payable and accrued
  liabilities is $119,081 (September 30, 2006: $79,358) due to directors and officers
  of the Company and a former director of the Company. These amounts are unsecured,
  non-interest bearing and have no specific terms for repayment.

Included in loans payable is $1,543,529
  (September 30, 2006: $1,441,507) due to a law firm of which a former director
  of the Company is a partner.

---

Aqua Society, Inc. 
  Notes to the Interim Consolidated Financial Statements 
  March 31, 2007 
  (Stated in US Dollars)  Page 3 
  (Unaudited)

|Note 5 | Loans Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | Of the total loans outstanding
        at March 31, 2007, $1,076,015 (September 30, 2006: $883,822) bear interest
        at 7.5% per annum, are secured by the accounts receivable of the Companys
        subsidiary (GmbH) and are repayable on or before December
        31, 2006, $666,667 (September 30, 2006: $743,675) are non-interest bearing,
        secured by accounts receivable of the GmbH and are repayable on or before
        December 31, 2006, $2,666,667 (September 30, 2006: $634,276) are non-interest
        bearing, unsecured and due on demand, and $123,488 (September 30, 2006:
        $115,326) of loans payable bear interest of 7.5% per annum, are unsecured
        and are repayable on or before December 31, 2006. The loans due on or
        before December 31, 2006 were not repaid and are consequently in default.
        The company has imputed interest on the non-interest bearing loans for
        a total of $24,000 and $74,000 during the three and six months ended March
        31, 2007, respectively.                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Note 6 | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | Commitments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | Share Purchase Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On December 21, 2006, the Company
        adopted a second stock incentive plan (the 2006 Stock Option Plan)
        to provide incentives to employees, directors, officers and permitted
        consultants. The 2006 Stock Plan provides for the issuance of up to 7,000,000
        options with a term to be determined by the plan administer or, if not
        so established, ten years. The maximum aggregate number of shares that
        may be optioned under the 2006 Stock Option Plan will be increased effective
        the first day of each of the Companys fiscal quarters (adjustment
        date), beginning with the fiscal quarter commencing April 1, 2007
        by an amount equal to the lesser of i) 15% of the outstanding shares on
        the first day of the applicable quarter less a) the number of shares of
        common stock that may be optioned and sold under the plan prior to the
        adjustment date and b) the number of shares of common stock that may be
        optioned and sold under any other stock option plan in effect as of the
        adjustment date or ii) such lesser number of shares of common stock as
        may be determined by the Board.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | A summary of the stock options
        outstanding as at March 31, 2007 and changes during the period is presented
        below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |                                           |            |   | Weighted
| | ----------------------------------------- | ---------- | - | --------
| |                                           |            |   | Average 
| |                                           |            |   | Exercise
| |                                           | Shares     |   | Price   
| |                                           |            |   |         
| | Options outstanding at September 30, 2006 | 7,535,000  |   | $1.70   
| | Cancelled                                 | (7,157,000 | ) | $1.70   
| | Granted                                   | 4,500,000  |   | $0.40   
| |                                           |            |   |         
| | Options outstanding at March 31, 2007     | 4,878,000  |   | $0.50   
| |                                           |            |   |         
| | Options exercisable at March 31, 2007     | 378,000    |   |         

---

Aqua Society, Inc. 
  Notes to the Interim Consolidated Financial Statements 
  March 31, 2007 
  (Stated in US Dollars)  Page 4 
  (Unaudited)

|Note 6 | Capital Stock (contd)                                                       
|------ | ------------------------------------------------------------------------------
|       |                                                                               
|       | Commitments (contd)                                                         
|       |                                                                               
|       | Share Purchase Options  (contd)                                             
|       |                                                                               
|       | A summary of stock options outstanding at March
      31, 2007, is as follows:

Number
      Exercise Price
      Expiry Date562,500
      $0.40
      April 1, 2009562,500
      $0.40
      July 1, 2009562,500
      $0.40
      October 1, 2009378,000
      $1.70
      October 15, 2009562,500
      $0.40
      January 1, 2010562,500
      $0.40
      April 1, 2010562,500
      $0.40
      July 1, 2010562,500
      $0.40
      October 1, 2010562,500
      $0.40
      January 1, 20114,878,000


The Company used the Black-Scholes option
  valuation model to compute the estimated fair value at each of the grant dates.

The Black-Scholes option-valuation model
  requires the input of highly subjective assumptions including the expected price
  volatility. Changes in the subjective input assumptions can materially affect
  the fair value estimate and therefore the Black-Scholes model does not necessarily
  provide a reliable single measure of the fair value of the Companys share
  purchase options.

The Company used the Black-Scholes option
  valuation model to compute the estimated fair value of the options granted during
  the three and six months ended March 31, 2007, based on the following assumptions:

| | Risk-free interest rate                   | 4.84%     
| | ----------------------------------------- | ----------
| | Dividend yield rate                       | 0.00%     
| | Price volatility                          | 159.23%   
| | Weighted average expected life of options | 2.03 years
| | Weighted average fair value               | $0.36     

The Company recognized stock-based compensation
  of $515,174 and $572,416 during the three months and six months ended March
  31, 2007, respectively.

---

Aqua Society, Inc. 
  Notes to the Interim Consolidated Financial Statements 
  March 31, 2007 
  (Stated in US Dollars)  Page 5 
  (Unaudited)

Note 6
      Capital Stock (contd)Commitments (contd)Share Purchase WarrantsAs at March 31, 2007, a total
          of 2,406,335 share purchase warrants exercisable into 2,406,335 common
          shares were outstanding as follows:


| | Number    | Exercise Price | Expiry Date     
| | --------- | -------------- | ----------------
| | 1,169,960 | $1.30          | February 9, 2008
| | 1,245,375 | $1.10          | June 15, 2008   
| | 2,406,335 |                |                 

|       | Private Placement                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | The Company approved a private
        placement offering of 7,500,000 units at $0.30 per unit with each unit
        consisting of one share of the Companys common stock and one-half
        share purchase warrant for total proceeds of $2,250,000. Each share purchase
        warrant entitles the holder to purchase one additional share of the Companys
        common stock at $0.35 per share for a period of one year from the date
        of issuance of the units.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 7 | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | i) | Lease Contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | By four lease agreements dated September 30, 2004 and
        effective October 1, 2004, the Company entered into four lease contracts
        for the Companys corporate head office. The leases require total
        payments of EUR 6,690 (US$8,920) per month. Two of the leases are effective
        until May 31, 2007 and the other two are effective until December 31,
        2007. During the six months ended March 31, 2007, several contracts were
        cancelled effective June 30, 2007. The remaining lease requires total
        payments of EUR 680 (US $907) per month. The lease will be automatically
        extended every year unless cancelled with six months advance notice.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | Minimum future lease payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

September 30, 2007
      $
      32,2002008
      
      10,880$
      43,080


---

Aqua Society, Inc. 
  Notes to the Interim Consolidated Financial Statements 
  March 31, 2007 
  (Stated in US Dollars)  Page 6
  (Unaudited)

|Note 7 | Commitments (contd)
|------ | ---------------------

| | ii) | Management/Consulting Contracts
| | --- | -------------------------------
| |     |                                
| |     | a)                             
| |     |                                
| |     | b)                             
| |     |                                
| |     | c)                             
| |     |                                
| |     | d)                             
| |     |                                
| |     | e)                             

---

Aqua Society, Inc. 
  Notes to the Interim Consolidated Financial Statements 
  March 31, 2007 
  (Stated in US Dollars)  Page 7 
  (Unaudited)

|Note 7 | Commitments (contd)
|------ | ---------------------

| | ii) | Management/Consulting Contracts  (contd)
| | --- | ------------------------------------------
| |     |                                           
| |     | f)                                        
| |     |                                           
| |     | g)                                        
| |     |                                           
| |     | h)                                        

---

ITEM
2.           MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report
constitute "forward-looking statements". These statements, identified by words
such as plan, "anticipate," "believe," "estimate," "should," "expect" and
similar expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption "Management's Discussion
and Analysis or Plan of Operation" and elsewhere in this Quarterly Report. We do
not intend to update the forward-looking information to reflect actual results
or changes in the factors affecting such forward-looking information. We advise
you to carefully review the reports and documents we file from time to time with
the United States Securities and Exchange Commission (the SEC), particularly
our Annual Reports on Form 10-KSB, our Quarterly Reports on Form 10-QSB and our
Current Reports on Form 8-K.

As used in this Quarterly Report, the terms "we", "us", "our",
  the Company and Aqua Society mean Aqua Society, Inc.
  unless otherwise indicated. All dollar amounts in this Quarterly Report are
  in U.S. dollars unless otherwise stated.

INTRODUCTION

The following discussion and analysis summarizes our plan of
operation for the next twelve months, our results of operations for the three
and six month periods ended March 31, 2007 and changes in our financial
condition from September 30, 2006. This discussion should be read in conjunction
with the Managements Discussion and Analysis or Plan of Operation included in
our Annual Report on Form 10-KSB for the year ended September 30, 2006.

Recent Corporation Developments

The following significant corporate developments have occurred
since the end of our December 31, 2006 fiscal quarter:

|1. | In January, 2007, our board of directors approved a
      private placement offering of our equity securities consisting of
      7,500,000 units at a price of $0.30 per unit. Each unit offered consists
      of one share of our common stock and one-half of one share purchase
      warrant. Each full share purchase warrant will entitle the holder to
      purchase one additional share of our common stock at a price of $0.35 per
      share for a period of one year from the date of issuance. This private
      placement offering is being made pursuant to the provisions of Regulation
      S under the Securities Act of 1933 to persons who are not US persons as
      defined in Regulation S. We have not yet completed the sale of any of the
      units offered and there are no assurances that we will be able to do
      so.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | In May, 2007, the Ministry of Innovation, Science,
      Research and Technology of North Rhine- Westphalia, provided us with a
      grant in the amount of EUR 226,759 (approximately $302,383). This grant
      was provided for the purpose of assisting us in the development of our
      EnergyMission/Yellow Box technology. We will receive the grant in three
      installments, the first of which is expected to be received at the end of
      June, 2007. Subsequent installments will be received in the following
      months upon our providing the Ministry with proof of the work
      performed.                                                                                                                                                                                                                                        

3

---

PLAN OF OPERATION

During the next twelve months, we will focus: (1) on the design
and construction of products ordered from us; (2) on further developing the
market for our products; and (3) on continuing to develop and improve our
products. Specifically, our plan of operation for the next twelve months
involves the following:

|1. | Design and Construction of Ordered Units:During the next twelve months, we will work on the design and construction
        of the EnergyMission/Yellow Box, AquaMission and ThermoMobil units for
        which we have received orders.                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                      
|2. | Market Development Activities:Over the next twelve months we intend to do the following in an effort
        to continue developing a market for our products and services:                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                      
|   | (a)                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                      
|   | (b)                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                      
|   | (c)                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                      
|   | In addition to these activities, we may
        also seek to increase brand awareness through various advertising activities
        and sponsorships.                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                      
|3. | Product Development Activities:During the next twelve months, we will also continue to work on further
        developing and improving our existing products in an effort to increase
        their marketability. As part of these efforts, we have developed and built
        a demonstration model of our Yellow Box technology.
|   |                                                                                                                                                                                                                                                                                                                                      
|   | We are also in the process of constructing
        a high-tech climate room that will allow us to simulate the
        worlds various humidity and temperature zones. This climate
        room will assist us in optimizing our AquaMission unit for different
        geographic locations.                                   

We anticipate spending approximately $2,000,000 in pursuing our
  plan of operation over the next twelve months. As of March 31, 2007, the date
  of our most recently available financial statements, we had a working capital
  deficit of $3,748,906. As such, we do not have sufficient working capital to
  meet our expected needs over the next twelve months. Although we have recently
  begun to earn revenues, we have not yet earned a net profit and we do not expect
  to achieve profitability in the near future as we

4

---

expect to continue to incur substantial product development,
marketing and operating expenses. We are likely to continue to need substantial
additional financing in order to implement our plan of operation. Our management
expects that any additional financing that we obtain will likely be in the form
of equity financing.

Our actual expenditures and business plan may differ from the
one stated above. Our Board of Directors may decide not to pursue this plan. In
addition, we may modify the plan based on available financing.

RESULTS OF OPERATIONS

Second Quarter and Six Months Summary

Second
        Quarter Ended March 31,
      
      Six Months Ended March 31,Percentage
      
      
      
      Percentage2007
      2006
      Increase /
      
      2007
      2006
      Increase /(Decrease)
      
      
      
      (Decrease)Revenue
      $69,903
      $1,023,827
      (93.2%)
      
      $95,344
      $1,806,069
      (94.7%)Cost of Goods Sold
      (58,053)
      (738,398)
      (92.1%)
      
      (58,633)
      (1,331,408)
      (95.6%)General and Administrative Expenses
      (1,264,393)
      (1,432,530)
      (11.7%)
      
      (2,243,971)
      (2,679,434)
      (16.2%)Other Items
      (1,151)
      1,028
      (212.0%)
      
      (1,151)
      (66,602)
      (98.3%)Net Loss
      $(1,253,694)
      $(1,146,073)
      9.4%
      
      $(2,208,411)
      $(2,271,375)
      (2.8%)


Revenues

Revenues earned by us during the three and 6 month periods
ended March 31, 2007 and 2006 were from HVAC&R and energy optimization
consulting services provided by us, and from equipment sales made in connection
with the provision of those services. However, we do not have a long-term
history of earning revenues and, as a result, we are unable to accurately
forecast future revenues. Readers are cautioned that our past operating results
may not be indicative of future performance.

During the fiscal quarter ended March 31, 2007, our revenue
decreased by 93.2% as compared to the same period ended in 2006. Since their
appointment in October, 2006, our management has been conducting a company wide
review of our operations. During this period, we scaled back our HVAC&R and
energy optimizing consulting activities. As a result, our revenues decreased
substantially.

During the next twelve months, we intend to concentrate our
resources on developing the market for our ThermoMobil, AquaMission and
EnergyMission/Yellow Box products, as we believe that these products will
provide us with the greatest opportunity for future profitability. As a result,
we may continue to scale back the HVAC&R and energy optimization consulting
services that we have provided in the past.

Although we have received orders for our ThermoMobil,
AquaMission and EnergyMission/Yellow Box products, we have not yet earned any
revenues from the sale of those products, and there are no assurances that we
will be able earn such revenues in the future.

Cost of Goods Sold

Cost of goods sold represents the costs of HVAC&R and
energy optimization consulting services provided by us during the period and the
cost of equipment sold in connection with the provision of

5

---

those services. As stated above, we have scaled back our
HVAC&R and energy optimizing consulting activities. As a result, our cost of
goods sold for the fiscal period ended March 31, 2007 decreased
proportionately.

General and Administrative Expenses

Our general and administrative expenses for the quarterly
period ended March 31, 2007 consisted of the following:

Second Quarter Ended March 31,
      
      Six Months Ended March 31,Percentage
      
      
      
      Percentage2007
      2006
      Increase /
      
      2007
      2006
      Increase /(Decrease)
      
      
      
      (Decrease)Accounting and audit
      $55,997
      $74,870
      (25.2%)
      
      $129,439
      $131,991
      (1.9%)feesAdvertising and
      22,596
      46,749
      (51.7%)
      
      41,925
      104,936
      (60.0%)promotionAmortization
      6,565
      11,263
      (41.7%)
      
      12,464
      17,847
      (30.2%)Bad debts
      32,500
      16,022
      102.8%
      
      60,931
      59,707
      2.1%Bank charges and
      221
      408
      (45.8%)
      
      337
      493
      (31.6%)interestConsulting fees
      11,393
      68,867
      (83.5%)
      
      48,027
      245,952
      (80.5%)Development costs
      119,252
      480,259
      (75.2%)
      
      388,171
      892,714
      (56.5%)Filing fees
      1,420
      1,846
      (23.1%)
      
      2,287
      1,967
      16.3%Interest
      52,251
      42,262
      23.6
      
      109,507
      99,350
      (40.1%)Legal fees
      69,517
      62,402
      11.4%
      
      199,745
      98,666
      102.4%Management fees
      187,949
      393,038
      (52.2%)
      
      245,938
      517,895
      (52.5%)Office and
      20,338
      60,935
      (66.6%)
      
      43,609
      127,209
      (65.7%)miscellaneousRent
      32,797
      36,445
      (10.0%)
      
      58,951
      65,362
      (9.8%)Salaries and benefits
      119,542
      116,568
      2.6%
      
      273,594
      213,456
      28.2%Stock-based
      515,174
      -
      100%
      
      572,416
      -
      100%compensationTransfer agent
      875
      370
      136.5%
      
      1,100
      1,185
      (7.2%)Travel
      16,006
      20,226
      (20.9%)
      
      55,530
      100,704
      (44.9%)Total General and
      $1,264,393
      $1,432,530
      (11.7%)
      
      $2,243,971
      $2,679,434
      (16.2%)Administrative


Our general and administrative expenses decreased by $168,137,
  or 11.7%, during the three month period ended March 31, 2007 as compared to
  2006. This decrease in our general and administrative expenses was primarily
  generated as a result of the efforts of our current management to streamline
  our operations. During the next few months, we expect that our general and administrative
  expenses will continue to fluctuate somewhat as we continue to review and overhaul
  our current operations.

Management fees decreased by $205,089, or 52.2%, during the
quarter ended March 31, 2007, primarily because of the termination of a
management services contract under which we had been obligated to pay management
fees of EUR 20,000 per month to a law firm of which a former officer and

6

---

director is a partner. Also, during the last fiscal quarter, we
scaled back some of our product development activities as our management
conducted a company wide assessment of our operations. As a result, development
costs, and consulting fees associated with our development activities, also
decreased significantly during our last fiscal quarter. Office and travel
expenses also decreased primarily as a result of our efforts to streamline our
operations.

During the three month period ended March 31, 2007, we recorded
stock-based compensation expenses of $515,174 on account of stock options
granted to certain of our officers and directors in December, 2006 that vested
during the period. No options or other stock-based compensation were granted
during the period ended March 31, 2006.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital                         |                |                    |                      
|--------------------------------------- | -------------- | ------------------ | ---------------------
|                                        | At             | At                 | Percentage           
|                                        | March 31, 2007 | September 30, 2006 | Increase / (Decrease)
|Current Assets                          | $1,229,953     | $854,960           | 43.9%                
|Current Liabilities                     | (4,978,859)    | (2,914,370)        | 70.8%                
|Working Capital Surplus
      (Deficit) | $(3,748,906)   | $(2,059,410)       | 80.5%                

Included in current liabilities are a total of $1,543,529
payable to a law firm of which one of our former officers and directors, is a
partner. We are currently in negotiations with the former officer and director
for the settlement of the amounts owed to him and his law firm.

|Cash Flows                              |                                 |             
|--------------------------------------- | ------------------------------- | ------------
|                                        | Six
      Months Ended March 31
|                                        | 2007                            | 2006        
|Cash Flows used in Operating Activities | $(1,476,886)                    | $(2,049,410)
|Cash Flows used in Investing Activities | (2,217)                         | (37,831)    
|Cash Flows from Financing Activities    | 2,016,324                       | 2,507,635   
|Effects of Foreign Exchange Rates       | (14,473)                        | (16,230)    
|Net Increase in Cash During Period      | $522,748                        | $404,164    

During the six month period ended March 31, 2007, we have obtained
  financing in the form of loans totaling $2,016,324. The amounts obtained as
  a result of these loans are unsecured, non-interest bearing and payable upon
  demand.

Total loans payable at March 31, 2007 consist of the following
amounts:

| | (a) | $1,076,015, bearing interest at a rate of 7.5% per annum,
      secured by accounts receivable of the Companys subsidiary, Aqua GmbH, and
      repayable on or before December 31, 2006;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                           
| | (b) | $666,667, non-interest bearing, secured by the accounts
      receivable of Aqua GmbH and repayable on or before December 31,
    2006;                                                   
| |     |                                                                                                                                                                                           
| | (c) | $123,488, bearing interest a rate of 7.5% per annum,
      unsecured and payable on or before December 31, 2006;
and                                                                      

7

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| | (d) | $2,666,667, non-interest bearing, unsecured and due on
      demand.
| | --- | --------------------------------------------------------------------

The amounts payable on or before December 31, 2006 have not yet
been repaid and are past due. We are currently in negotiations with our
creditors for the settlement or extension of the amounts owed to them; however,
there are no assurances that those negotiations will be successful. If we are
not successful in negotiating alternative arrangements to settle or extend those
loans, we will need to obtain additional financing in order to repay the amounts
owing.

As at March 31, 2007 we had cash in the amount of $710,180 and
  a working capital deficit of $3,748,906. We anticipate spending approximately
  $2,000,000 over the next twelve months in pursuing our plan of operation. We
  will require substantial additional financing in the next few months in order
  to pursue our current plan of operation.

We earned revenues of $69,903 during the fiscal quarter ended
March 31, 2007; however we have not yet achieved profitability. Our management
is currently in the process of reviewing and restructuring our operations. As a
result, past results may not be indicative of future performance. Our future
financial results are uncertain due to a number of factors, many of which are
outside of our control. These factors include, but are not limited to:

| | (a) | our ability to commercially market our ThermoMobil and
      AquaMission products;                                           
| | --- | -----------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                              
| | (b) | our ability to develop a commercially marketable
      EnergyMission/Yellow Box product;                                     
| |     |                                                                                                                              
| | (c) | our ability to raise additional capital necessary to
      implement our business strategy and plan of operation;            
| |     |                                                                                                                              
| | (d) | our ability to compete with other existing technologies;
      and                                                           
| |     |                                                                                                                              
| | (e) | the success of any marketing and promotional campaign
      which we conduct for our products once development is
  complete.

Due to the uncertainty regarding our future revenues and
profitability, we expect that the majority of additional financing that we
obtain, if any, will likely be in the form of equity financing. Our management
does not expect sufficient debt financing to be available to us through
traditional sources at this stage of our business.

In January, 2007, our board of directors approved a private
placement offering of 7,500,000 units at a price of $0.30 per unit for total
potential proceeds of $2,250,000. Each unit offered consists of one share of our
common stock and one-half of one share purchase warrant. Each full share
purchase warrant will entitle the holder to purchase one additional share of our
common stock at a price of $0.35 per share for period of one year from the date
of issuance. This private placement offering is being made pursuant to the
provisions of Regulation S of the Securities Act of 1933 to persons who are not
US persons as defined in Regulation S. We have not yet completed the sale of
any of the securities being offered as part of this private placement and there
are no assurances that we will be able to do so.

We do not currently have any other financing arrangements in
place. Our management is currently in the process of evaluating our financing
options. There are no assurances that we will be able to obtain financing in an
amount sufficient to fund our plan of operation and meet our current
obligations.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant 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 are material
  to our stockholders.

8

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CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with
generally accepted accounting principles requires our management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations. Our significant accounting policies are
disclosed in Note 2 to our audited financial statements for the year ended
September 30, 2006 included in our Annual Report on Form 10-KSB filed with the
SEC on January 16, 2007.

Principles of Consolidation

The consolidated financial statements include the accounts of
Aqua Society, Inc and our wholly owned subsidiary, Aqua Society GmbH, a German
limited liability company (Aqua GmbH). All inter-company transactions have
been eliminated.

Foreign Currency Translation

Our functional currency is United States dollars. Our
subsidiary, Aqua GmbH, uses the Euro as its functional currency. Accordingly,
assets and liabilities of Aqua GmbH are translated into US dollars at the
exchange rate in effect at the balance sheet date and capital accounts are
translated at historical rates. Income statement accounts are translated at the
average rates of exchange prevailing during the period. Translation adjustments
arising from the use of differing exchange rates from period to period are
included in the Accumulated Other Comprehensive Gain/(Loss) account in
Stockholders Equity.

Transactions undertaken in currencies other than the functional
currency of the entity are translated using the exchange rate in effect as of
the transaction date. Any exchange gains and losses would be included in the
Statement of Operations.

Patents, Patent Rights and Amortization

Patents and patent rights are recorded at cost. We provide for
the amortization of patents and patent rights on the straight-line basis over
their estimated economic lives, estimated to be 5 years. Amortization is
recorded upon the patents being awarded.

RISKS AND UNCERTAINTIES

Need For Financing

We do not have sufficient financial resources to meet the
expected costs of our plan of operation and current liabilities over the next
twelve months. We have not yet achieved profitability. We are likely to continue
to need substantial additional financing in order to implement our long term
business plan.

At March 31, 2007, we had loans payable totaling $4,532,836.
  Of this amount, $1,866,170 was due on December 31, 2006, and has not been repaid.
  As a result, we are currently in default of our obligations under those loans.
  We are currently in the process of negotiating alternative arrangements for
  the settlement or extension of those loans; however, there are no assurances
  that those negotiations will be

9

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successful. If we are not successful in negotiating alternative
arrangements to settle or extend those loans, we will need to obtain additional
financing in order to repay the amounts owing.

In January, 2007, our board of directors approved a private placement
  offering of our equity securities. If we are able to complete the sale of all
  of the equity securities offered, we will receive total proceeds of $2,250,000.
  However we have not yet completed the sale of any of the equity securities offered,
  and there are no assurances that we will be able to do so. Even if we are able
  to complete the sale of all of the securities being offered in this private
  placement, the proceeds that we will receive will be insufficient to repay all
  of our current liabilities and pay for the anticipated costs of our plan of
  operation for the next twelve months.

We do not currently have any other financing arrangements in
place, and there is no assurance that we will be able to obtain sufficient
financing.

Limited Operating History, Risks Of A Developing Business

We are still in the process of developing our business and have
only recently begun to earn revenues. Readers are cautioned that our past
results may not be indicative of future performance.

Potential investors should be aware of the difficulties
normally encountered by developing enterprises and the high rate of failure of
such enterprises. The potential for future success must be considered in light
of the problems, expenses, difficulties complications and delays encountered in
connection with the development of a business in the area in which we intend to
operate and in connection with the formation and commencement of operations of a
new business in general. These include, but are not limited to, unanticipated
problems relating to research and development programs, marketing, approvals by
government agencies, competition and additional costs and expenses that may
exceed current estimates. There is no history upon which to base any assumption
as to the likelihood that we will prove successful, and there can be no
assurance that we will ever achieve profitable operations.

If We Are Unable To Achieve Market Acceptance For Our
Products, We Will Be Unable To Build Our Business

To date, we have completed technical development of our
EnergyMission/Yellow Box, ThermoMobil and AquaMission products. However, we have
only received a limited number of confirmed orders for these products. Our
future success will depend upon the acceptance of our existing products, and
other products that we develop, by the respective industries in which we intend
to market those products. Achieving such acceptance will require significant
investments in research and development and market development. The technologies
upon which our products and services are based are relatively new and are
evolving. Accordingly, in order to achieve commercial acceptance, we will have
to educate prospective clients about the uses and benefits of our products.

Even If We Are Able To Develop A Commercial Market For Our
Products, We May Not Have The Ability To Meet The Demand For Those Products

We intend to complete the construction of the initial
AquaMission, ThermoMobil and EnergyMission/Yellow Box units ordered from us at
our facilities located in Herten, Germany. However, the size of these facilities
is limited.

We are currently in the process of establishing a wholly owned
subsidiary in the Netherlands, with which we intend to establish a larger scale
production facility. Further, we intend to seek supply contracts and/or joint
venture/licensing agreements with independent manufacturing companies to
manufacture our products on a large scale basis, however we have not yet entered
into any such contracts or agreements.

10

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Our Operations May Be Subject to Extensive Government
Regulation

Our operations may be subject to extensive government
regulations in the United States, Europe and elsewhere. In order to sell our
products, we may have to satisfy numerous mandatory procedures, regulations, and
safety standards established by international, federal and state regulatory
agencies. Although we currently comply with stringent German regulations, there
can be no assurance that we can successfully comply with all present and future
government regulations worldwide.

Risks of International Business Operations

Although we are incorporated in the United States, the majority
of our operating activities are conducted in Germany. Additionally, in the past,
we have targeted markets for our products in the Persian Gulf and other
developing parts of the world, such as Africa. As such, a significant portion of
our business depends upon our ability to establish and maintain successful
relationships with businesses and governments located outside of the United
States. If we are unable to establish and maintain such relationships, we may
not be able to implement our business plan or plan of operations.

In order to better manage the risks associated with our
international operations, our management has decided to focus their business
development efforts on markets near to our base of operations, such as Germany,
the Netherlands and the rest of Europe.

Rapid Technological Changes In Our Industry Could Make Our
Products Obsolete

The industry in which we intend to compete is characterized by
rapid technological change and intense competition. New technologies, products
and industry standards will develop at a rapid pace which could make our planned
products obsolete. Our future success will depend upon our ability to develop
and introduce product enhancements to address the needs of our customers.

Asserting And Defending Intellectual Property Rights May
Impact Results Of Operations

The success of our business may depend on our ability to
successfully defend our intellectual property rights. Future litigation may have
a material impact on our financial condition even if we are successful in
developing and marketing products. We may not be successful in defending or
asserting our intellectual property rights.

An adverse outcome in any litigation or interference proceeding
could subject us to significant liabilities to third parties and require us to
cease using the technology that is at issue or to license the technology from
third parties. In addition, a finding that any of our intellectual property
rights are invalid could allow our competitors to more easily and
cost-effectively compete. Thus, an unfavorable outcome in any patent litigation
or interference proceeding could have a material adverse effect on our business,
financial condition or results of operations.

The cost to us of any patent litigation or interference
proceeding could be substantial. Uncertainties resulting from the initiation and
continuation of patent litigation or interference proceedings could have a
material adverse effect on our ability to compete in the marketplace. Patent
litigation and interference proceedings could also absorb significant management
time.

We May Be Subject To Product Liability Lawsuits

We may be subject to product liability claims. Such claims may
  absorb significant management time and could degrade our reputation and the
  marketability of our products. If product liability claims are made with respect
  to our products, we may need to recall the implicated product which could have
  a material adverse effect on our business, financial condition and results of
  operations. In addition, although we may maintain product liability insurance,
  we cannot be sure that such insurance will be adequate to cover potential product
  liability lawsuits. Insurance is expensive and in the future may not be available
  on acceptable terms, if at all. If a successful product liability claim or series
  of claims exceeds insurance coverage, it could have a material adverse effect
  on our business, financial condition and results of operations.

11

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If We Are Late In Filing Any Of Our Annual Or Quarterly
Reports During The Next Two Years, Our Common Stock May Become Ineligible For
Quotation On The OTC Bulletin Board, Which Would Negatively Affect The Market
For Our Shares And Our Ability To Obtain Additional Financing.

On November 16, 2005, the SEC approved certain changes to NASD
Rule 6530. As amended, NASD Rule 6530 provides that OTC Bulletin Board (OTCBB)
issuers who are late in filing their annual or quarterly reports three times
within a 24-month period will be ineligible for quotation on the OTCBB. In order
to regain eligibility under this rule, the issuer would need to timely file all
of its annual and quarterly reports due in a one year period. The amended NASD
Rule 6530 does not apply to annual or quarterly reports for periods ended before
October 1, 2005.

From time to time, we have been late in filing our quarterly
and annual reports. If we are late in filing our annual or quarterly reports
three times within a 24-month period, we may become ineligible for quotation on
the OTCBB, which would negatively affect the market for our common stock. In
addition, if our common stock is no longer eligible for quotation on the OTCBB,
it may become more difficult for us to obtain additional equity financing as
shares of our common stock will be less attractive to potential investors.

ITEM
3.           CONTROLS AND
PROCEDURES.

Under the supervision and with the participation of our
management, including our principal executive officer and principal financial
officer, we have evaluated the effectiveness of our disclosure controls and
procedures as required by Exchange Act Rule 13a-15(b) as of the end of the
period covered by this report. Based on that evaluation, our principal executive
officer and principal financial officer has concluded that our disclosure
controls and procedures were not effective as we failed to timely file our
periodic reports with the SEC on a number of occasions during our September 30,
2006 fiscal year.

Our management is in the process of taking measures to improve
our disclosure controls and procedures in an effort to ensure that the
information required to be disclosed is internally communicated and publicly
reported within the time periods specified in the SECs rules and forms. In
particular, we intend to engage outside consultants to assist us in the
preparation of our accounting records and financial statements and will attempt
to increase internal accountability and to clearly define internal communication
channels in an effort to remedy the deficiencies identified by our principal
executive officer and principal financial officer.

By working with our external consultants and our principal
independent accountants, our management believes that the financial statements
and the other information presented in this Quarterly Report are materially
correct.

There were no changes in our internal control over financial
reporting during the last fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

12

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PART II - OTHER INFORMATION

ITEM
1.           LEGAL
PROCEEDINGS.

None.

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

None.

ITEM
3.           DEFAULTS UPON
SENIOR SECURITIES.

None.

ITEM
4.           SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM
5.           OTHER
INFORMATION.

None.

ITEM
6.           EXHIBITS.

|Exhibit |  |                                                                                                                                                                                              
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description of Exhibit                                                                                                                                                                       
|        |  |                                                                                                                                                                                              
|3.1     |  | Restated Articles of Incorporation filed with the Nevada
      Secretary of State effective December 27, 2004.(5)                                                                            
|        |  |                                                                                                                                                                                              
|3.2     |  | Bylaws, effective March 2, 2000.(1)                                                                                                                                                          
|        |  |                                                                                                                                                                                              
|10.1    |  | Share Purchase Agreement between Water-Capital-Holding
      Ltd., V G Tech, Inc., Aqua Society GmbH and Steve Livingston, dated for
      reference September 3, 2004.(2)                   
|        |  |                                                                                                                                                                                              
|10.2    |  | Agreement and Deed of Transfer between
      Water-Capital-Holding Ltd. and V G Tech, Inc. dated for reference
      September 22, 2004.(3)                                                  
|        |  |                                                                                                                                                                                              
|10.3    |  | Certified Translation of a Notarial Deed executed by Uwe
      Diestel and Aqua Society GmbH dated November 30, 2004 regarding the
      purchase and sale of an interest in UFI-TEC GmbH.(5)
|        |  |                                                                                                                                                                                              
|10.4    |  | 2004 Stock Incentive Plan.(4)                                                                                                                                                                
|        |  |                                                                                                                                                                                              
|10.5    |  | Marketing & Promotion Agreement between Aqua Society
      GmbH, Sesam Business Consultancy and Moosa Abu Aisha.(6)                                                                          
|        |  |                                                                                                                                                                                              
|10.6    |  | Management Consulting Contract between Aqua Society GmbH
      and Stamm & Lang Rechtsanwelte, executed December 13,
      2004.(7)                                                          
|        |  |                                                                                                                                                                                              
|10.7    |  | Supplementary Agreement between Aqua Society GmbH and
      Stamm & Lang Rechtsanwelte, dated September 30, 2005.(8)                                                                         
|        |  |                                                                                                                                                                                              
|10.8    |  | Sales Agency Agreement between Aqua Society GmbH and
      Technical Supplies Center,                                                                                                        

13

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|Exhibit |  |                                                                                                                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description of Exhibit                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                   
|        |  | Ltd. dated September
        5, 2005. (7)                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                   
|10.9    |  | Patent License
        Agreement between Ecoenergy Patent GmbH and Aqua Society GmbH, executed
        by Ecoenergy Patent GmbH on August 21, 2006, and by Aqua Society GmbH
        on September 30, 2006 (translated from German to English).(9)
|        |  |                                                                                                                                                                                                                                                   
|10.10   |  | Attachment 1
        to Patent License Agreement between Ecoenergy Patent GmbH and Aqua Society
        GmbH, executed by Ecoenergy Patent GmbH on August 21, 2006, and by Aqua
        Society GmbH on September 30, 2006 (German Language).(9)  
|        |  |                                                                                                                                                                                                                                                   
|10.11   |  | 2006 Stock Option
        Plan.(10)                                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                   
|10.12   |  | Non-Qualified
        Stock Option Agreement between Aqua Society, Inc. and Robert Terberg dated
        effective as of December 21, 2006.(10)                                                                                                   
|        |  |                                                                                                                                                                                                                                                   
|10.13   |  | Non-Qualified
        Stock Option Agreement between Aqua Society, Inc. and Hugo van der Zee
        dated effective as of December 21, 2006.(10)                                                                                                 
|        |  |                                                                                                                                                                                                                                                   
|10.14   |  | Management Consulting
        Services Agreement between Aqua Society, Inc. and Robert Terberg dated
        effective as of December 28, 2006.(11)                                                                                               
|        |  |                                                                                                                                                                                                                                                   
|10.15   |  | Management Consulting
        Services Agreement between Aqua Society, Inc. and Hugo van der Zee dated
        effective as of December 28, 2006.(11)                                                                                             
|        |  |                                                                                                                                                                                                                                                   
|10.16   |  | Technical Consulting
        Agreement between Aqua Society GmbH and Dr. Oser Partner in Technik.(12)                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                   
|14.1    |  | Code of Ethics.(5)                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                   
|21.1    |  | List of Subsidiaries.(11)                                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                   
|31.1    |  | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                        
|        |  |                                                                                                                                                                                                                                                   
|32.1    |  | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                        

|(1)  | Filed as an exhibit to our Registration Statement on Form
      10-SB originally filed with the SEC on January 29, 2003, as
  amended.
|---- | --------------------------------------------------------------------------------------------------------------------------------------
|(2)  | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on September 10, 2004.                                 
|(3)  | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on September 28, 2004.                                 
|(4)  | Filed as an exhibit to our Registration Statement on Form
      S-8 filed with the SEC on January 12, 2005.                           
|(5)  | Filed as an exhibit to our Annual Report on Form 10-KSB
      filed with the SEC on January 20, 2005.                                 
|(6)  | Filed as an exhibit to our Quarterly Report on Form
      10-QSB filed with the SEC on August 23, 2005.                               
|(7)  | Filed as an exhibit to our Annual Report on Form 10-KSB
      filed with the SEC on January 18, 2006.                                 
|(8)  | Filed as an exhibit to our Amended Annual Report on Form
      10-KSB filed with the SEC on February 3, 2006.                         
|(9)  | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on October 6, 2006.                                    
|(10) | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on December 29, 2006.                                  
|(11) | Filed as an exhibit to our Annual Report on Form 10-KSB
      filed with the SEC on January 16, 2007.                                 
|(12) | Filed as an exhibit to our Quarterly Report on Form
      10-QSB filed with the SEC on February 20, 2007.                             

14

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SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|      |              |     | AQUA SOCIETY, INC.                                            
|----- | ------------ | --- | --------------------------------------------------------------
|      |              |     |                                                               
|      |              |     |                                                               
|Date: | May 21, 2007 | By: | /s/ Robert Terberg                                            
|      |              |     |                                                               
|      |              |     | **ROBERT TERBERG**                                            
|      |              |     | President, Chief Executive Officer and Chief Financial Officer
|      |              |     | (Principal Executive Officer and Principal Accounting Officer)

---