---

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 June 30, 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)

011-49-6031-791-760(Issuer'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 August 16,
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

---

|AQUA SOCIETY, INC.                       
|-----------------------------------------
|                                         
|INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|                                         
|June 30, 2007                            
|                                         
|(Stated in US Dollars)                   
|                                         
|(Unaudited)                              

---

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

|                                                                     |   | June 30,    |   |   | September 30, |  
|-------------------------------------------------------------------- | - | ----------- | - | - | ------------- | -
|ASSETS                                                               |   | 2007        |   |   | 2006          |  
|                                                                     |   |             |   |   |               |  
|Current                                                              |   |             |   |   |               |  
|Cash                                                                 | $ | 193,156     |   | $ | 187,432       |  
|Accounts receivable  trade                                          |   | 78,161      |   |   | 143,039       |  
| other  Note 4                                                     |   | 20,210      |   |   | -             |  
|Government value added tax receivable                                |   | 42,117      |   |   | 217,919       |  
|Inventory                                                            |   | 296,794     |   |   | 306,569       |  
|Loans receivable  Note 3                                            |   | -           |   |   | 1             |  
|                                                                     |   |             |   |   |               |  
|                                                                     |   | 630,438     |   |   | 854,960       |  
|Investments  Note 3                                                 |   | 1           |   |   | 2             |  
|Patents and patent rights                                            |   | 193,485     |   |   | 193,485       |  
|Equipment                                                            |   | 51,817      |   |   | 65,343        |  
|                                                                     |   |             |   |   |               |  
|                                                                     | $ | 875,741     |   | $ | 1,113,790     |  
|                                                                     |   |             |   |   |               |  
|LIABILITIES                                                          |   |             |   |   |               |  
|                                                                     |   |             |   |   |               |  
|Current                                                              |   |             |   |   |               |  
|Accounts payable and accrued liabilities 
      Note 4              | $ | 337,672     |   | $ | 537,271       |  
|Loans payable  Notes 4 and
      5                                  |   | 3,020,723   |   |   | 2,377,099     |  
|                                                                     |   |             |   |   |               |  
|                                                                     |   | 3,358,395   |   |   | 2,914,370     |  
|                                                                     |   |             |   |   |               |  
|STOCKHOLDERS DEFICIENCY                                             |   |             |   |   |               |  
|                                                                     |   |             |   |   |               |  
|Common stock, $0.001 par value  Notes
      6 and 7                 |   |             |   |   |               |  
|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                                           |   | 31,878,034  |   |   | 28,609,612    |  
|Accumulated other comprehensive loss                                 |   | (332,682    | ) |   | (150,368      | )
|Accumulated deficit                                                  |   | (34,146,185 | ) |   | (30,378,003   | )
|                                                                     |   |             |   |   |               |  
|                                                                     |   | (2,482,654  | ) |   | (1,800,580    | )
|                                                                     |   |             |   |   |               |  
|                                                                     | $ | 875,741     |   | $ | 1,113,790     |  

SEE ACCOMPANYING NOTES

---

|AQUA SOCIETY, INC.                                        
|----------------------------------------------------------
|INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS             
|for the three and nine months ended June 30, 2007 and 2006
|(Stated in US Dollars)                                    
|(Unaudited)                                               

|                                     |   | Three months ended |   |   | Nine months ended |  
|------------------------------------ | - | ------------------ | - | - | ----------------- | -
|                                     |   | June 30,           |   |   | June 30,          |  
|                                     |   | 2007               |   |   | 2006              |  
|                                     |   |                    |   |   |                   |  
|Sales                                | $ | 32,180             |   | $ | 273,301           |  
|Less: cost of goods sold             |   | 25,964             |   |   | 339,480           |  
|                                     |   |                    |   |   |                   |  
|                                     |   | 6,216              |   |   | (66,179           | )
|                                     |   |                    |   |   |                   |  
|General and administrative expenses: |   |                    |   |   |                   |  
|Accounting and audit fees            |   | 59,842             |   |   | 94,555            |  
|Advertising and promotion            |   | 7,076              |   |   | 435,912           |  
|Amortization                         |   | 6,415              |   |   | 25,956            |  
|Bad debts                            |   | -                  |   |   | 635               |  
|Bank charges and interest            |   | 203                |   |   | 160               |  
|Consulting fees                      |   | 18,255             |   |   | 14,451            |  
|Development costs  Note 4           |   | 53,721             |   |   | 435,811           |  
|Filing fees                          |   | 751                |   |   | 1,061             |  
|Interest                             |   | 50,000             |   |   | 19,292            |  
|Legal fees  Note 4                  |   | 16,872             |   |   | 21,573            |  
|Management fees  Note 4             |   | 117,244            |   |   | 123,043           |  
|Office and miscellaneous             |   | 32,222             |   |   | 71,491            |  
|Rent                                 |   | 25,345             |   |   | 36,735            |  
|Salaries and benefits                |   | 116,228            |   |   | 164,160           |  
|Stock-based compensation  Note 6    |   | 1,026,623          |   |   | -                 |  
|Transfer agent                       |   | 275                |   |   | 301               |  
|Travel  Note 4                      |   | 34,913             |   |   | 59,143            |  
|                                     |   |                    |   |   |                   |  
|                                     |   | (1,565,985         | ) |   | (1,504,279        | )
|                                     |   |                    |   |   |                   |  
|Operating loss before other item     |   | (1,559,769         | ) |   | (1,570,458        | )
|                                     |   |                    |   |   |                   |  
|Other items:                         |   |                    |   |   |                   |  
|Interest income                      |   | -                  |   |   | 132               |  
|Write down of patents                |   | -                  |   |   | (97               | )
|Write down of investment and loan    |   | (2                 | ) |   | (687              | )
|Loss on disposal of equipment        |   | -                  |   |   | -                 |  
|                                     |   |                    |   |   |                   |  
|Net loss for the period              |   | (1,559,771         | ) |   | (1,571,110        | )
|                                     |   |                    |   |   |                   |  
|Other comprehensive loss:            |   |                    |   |   |                   |  
|Foreign currency adjustment          |   | (44,566            | ) |   | (7,474            | )
|                                     |   |                    |   |   |                   |  
|Comprehensive loss for the period    | $ | (1,604,337         | ) | $ | (1,578,584        | )
|                                     |   |                    |   |   |                   |  
|Basic loss per share                 | $ | (0.01              | ) | $ | (0.01             | )
|                                     |   |                    |   |   |                   |  
|Weighted average number of shares    |   | 118,178,323        |   |   | 116,779,590       |  
|outstanding                          |   |                    |   |   |                   |  

SEE ACCOMPANYING NOTES

---

|AQUA SOCIETY, INC.                              
|------------------------------------------------
|INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS   
|for the nine months ended June 30, 2007 and 2006
|(Stated in US Dollars)                          
|(Unaudited)                                     

|                                                   |   | 2007       |   |   | 2006       |  
|-------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                   |   |            |   |   |            |  
|Cash flows used in Operating Activities            |   |            |   |   |            |  
|Net loss for the period                            | $ | (3,768,182 | ) | $ | (3,842,485 | )
|Items not affecting cash:                          |   |            |   |   |            |  
|Amortization                                       |   | 18,879     |   |   | 43,803     |  
|Stock-based
      compensation                     |   | 1,599,039  |   |   | -          |  
|Write-down of patents                              |   | -          |   |   | 9,188      |  
|Write-down
      of investment and loan receivable |   | 2          |   |   | 65,312     |  
|Interest imputed on loans
      payable            |   | 124,000    |   |   | -          |  
|Loss on disposal
      of equipment                |   | 1,151      |   |   | -          |  
|Changes in non-cash working capital items:         |   |            |   |   |            |  
|Accounts
      receivable                          |   | 52,264     |   |   | 499,247    |  
|Government value added tax
      receivable        |   | 184,781    |   |   | (279,702   | )
|Inventory                                          |   | 28,124     |   |   | 2,759      |  
|Accounts payable and accrued
      liabilities     |   | (217,182   | ) |   | 388,222    |  
|                                                   |   |            |   |   |            |  
|                                                   |   | (1,977,124 | ) |   | (3,113,656 | )
|                                                   |   |            |   |   |            |  
|Cash flows used in Investing Activities            |   |            |   |   |            |  
|Investment                                         |   | -          |   |   | (15,999    | )
|Cash acquired in investment in TMR GmbH            |   | -          |   |   | 15,999     |  
|Patents                                            |   | -          |   |   | (194       | )
|Equipment purchases                                |   | (6,504     | ) |   | (6,478     | )
|Increase in loans receivable                       |   | -          |   |   | (72,146    | )
|                                                   |   |            |   |   |            |  
|                                                   |   | (6,504     | ) |   | (78,818    | )
|                                                   |   |            |   |   |            |  
|Cash flows from Financing Activities               |   |            |   |   |            |  
|Issuance of common stock for cash                  |   | -          |   |   | 2,303,328  |  
|Increase in loans payable                          |   | 2,038,681  |   |   | 251,361    |  
|                                                   |   |            |   |   |            |  
|                                                   |   | 2,038,681  |   |   | 2,554,689  |  
|                                                   |   |            |   |   |            |  
|Effect of exchange rates on cash                   |   | (49,329    | ) |   | 9,170      |  
|                                                   |   |            |   |   |            |  
|Increase (decrease) in cash during the period      |   | 5,724      |   |   | (628,615   | )
|                                                   |   |            |   |   |            |  
|Cash, beginning of the period                      |   | 187,432    |   |   | 658,949    |  
|                                                   |   |            |   |   |            |  
|Cash, end of the period                            | $ | 193,156    |   | $ | 30,334     |  
|                                                   |   |            |   |   |            |  
|Non-cash Transaction  Note 8                      |   |            |   |   |            |  

SEE ACCOMPANYING NOTES

---

|AQUA SOCIETY, INC.                                                    
|----------------------------------------------------------------------
|INTERIM STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY)               
|for the period May 13, 2004 (Date of Inception) to June 30,
      2007
|(Stated in US Dollars)                                                
|(Unaudited)                                                           

|                                                       |  | Common Stock |   |   |           |   |   |            |  |  | Accumulated |   |   |          |   |   |                   |  
|------------------------------------------------------ |  | ------------ | - | - | --------- | - | - | ---------- |  |  | ----------- | - | - | -------- | - | - | ----------------- | -
|                                                       |  |              |   |   |           |   |   | Additional |  |  |             |   |   |          |   |   | Other             |  
|                                                       |  |              |   |   |           |   |   | Paid-in    |  |  | Special     |   |   | Warrants |   |   | Comprehensiv      |  
|                                                       |  |              |   |   |           |   |   |            |  |  |             |   |   |          |   |   | e                 |  
|                                                       |  | 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          | )

/contd

SEE ACCOMPANYING NOTES

---

|                                                                       | Continued
|---------------------------------------------------------------------- | ---------
|AQUA SOCIETY, INC.                                                    
|INTERIM STATEMENTS OF STOCKHOLDERS EQUITY
      (DEFICIENCY)         
|for the period May 13, 2004 (Date of Inception)
      to June 30, 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                        |  | -            |  |   | -         |  |   | 1,599,039  |  |  | -                |  |   | -             |  |   | -                 |  
|Unrealized loss on foreign currency translation |  | -            |  |   | -         |  |   |            |  |  | -                |  |   | -             |  |   | (182,314          | )
|Contribution of interest 
      Note 5         |  | -            |  |   | -         |  |   | 124,000    |  |  | -                |  |   | -             |  |   | -                 |  
|Loan payable forgiven  Notes 4 and 5           |  | -            |  |   | -         |  |   | 1,545,383  |  |  | -                |  |   | -             |  |   | -                 |  
|Net loss for the period                         |  | -            |  |   | -         |  |   | -          |  |  | -                |  |   | -             |  |   | -                 |  
|                                                |  |              |  |   |           |  |   |            |  |  |                  |  |   |               |  |   |                   |  
|Balance, June 30, 2007                          |  | 118,178,323  |  | $ | 118,179   |  | $ | 31,878,034 |  |  | -                |  | $ | -             |  | $ | (332,682          | )

SEE ACCOMPANYING NOTES

---

|AQUA SOCIETY, INC.                                    
|------------------------------------------------------
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|June 30, 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 June 30, 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 June 30, 2007,
  the Company had not yet achieved profitable operations, has accumulated losses
  of $34,146,185 since its inception, has a working capital deficiency of $2,727,957
  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.

---

|Aqua Society, Inc.                                    
|------------------------------------------------------
|Notes to the Interim Consolidated Financial Statements
|June 30, 2007                                         
|(Stated in US Dollars)  Page 2                       
|(Unaudited)                                           

|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. During the nine
        months ended June 30, 2007, the Company wrote down the loan receivable
        to $Nil.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 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 EUR 12,749 (US $15,674) to $1. During the nine
        months ended June 30, 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 |  |   | Nine months ended | 
| | ----------------- | - | ------------------ |  | - | ----------------- | 
| |                   |   | June 30,           |  |   | June 30,          | 
| |                   |   | 2007               |  |   | 2006              | 
| |                   |   |                    |  |   |                   | 
| | Development costs | $ | 40,422             |  | $ | 85,040            | 
| | Legal fees        |   | -                  |  |   | -                 | 
| | Management fees   |   | 117,244            |  |   | 123,043           | 
| | Travel            |   | 6,739              |  |   | 1,819             | 
| |                   |   |                    |  |   |                   | 
| |                   | $ | 164,405            |  | $ | 209,902           | 

Accounts receivable  other includes
  $20,210 related to an advance to a former officer of the Company.

---

|Aqua Society, Inc.                                    
|------------------------------------------------------
|Notes to the Interim Consolidated Financial Statements
|June 30, 2007                                         
|(Stated in US Dollars)  Page 3                       
|(Unaudited)                                           

|Note 4 | Related Party Transactions Note 7
       (contd)
|------ | ---------------------------------------------------

Included in accounts payable and accrued
  liabilities is $109,549 (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 $Nil (September
  30, 2006: $1,441,507) due to a law firm of which a former director of the Company
  is a partner. During the nine months ended June 30, 2007, the loan was forgiven
  and recorded as additional paid-in capital.

|Note 5 | Loans Payable
|------ | -------------

Of the total loans outstanding at June
  30, 2007, $201,246 (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 were repayable on or before December 31, 2006, $Nil (September
  30, 2006: $743,675) are non-interest bearing, secured by accounts receivable
  of the GmbH and were repayable on or before December 31, 2006, $2,694,691 (September
  30, 2006: $634,276) are non-interest bearing, unsecured and due on demand, and
  $124,786 (September 30, 2006: $115,326) of loans payable bear interest of 7.5%
  per annum, are unsecured and were 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 $50,000 and $124,000 during the three and nine months ended June
  30, 2007, respectively. During the nine months ended June 30, 2007, loans totaling
  $1,545,383 were forgiven and recorded as additional paid-in capital.

|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.

---

|Aqua Society, Inc.                                    
|------------------------------------------------------
|Notes to the Interim Consolidated Financial Statements
|June 30, 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 the stock options outstanding
  as at June 30, 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                                   |  | 7,500,000  |   | $ | 0.33     | 
| |                                           |  |            |   |   |          | 
| | Options outstanding at June 30, 2007      |  | 7,878,000  |   | $ | 0.30     | 
| |                                           |  |            |   |   |          | 
| | Options exercisable at June 30, 2007      |  | 3,940,500  |   |   |          | 

A summary of stock options outstanding
  at June 30, 2007, is as follows:

| |           | Exercise |                 
| | --------- | -------- | ----------------
| | Number    | Price    | Expiry Date     
| |           |          |                 
| | 562,500   | $0.40    | April 1, 2009   
| | 3,000,000 | $0.23    | June 7, 2009    
| | 562,500   | $0.40    | July 1, 2009    
| | 562,500   | $0.40    | October 1, 2009 
| | 378,000   | $1.70    | October 15, 2009
| | 562,500   | $0.40    | January 1, 2010 
| | 562,500   | $0.40    | April 1, 2010   
| | 562,500   | $0.40    | July 1, 2010    
| | 562,500   | $0.40    | October 1, 2010 
| | 562,500   | $0.40    | January 1, 2011 
| |           |          |                 
| | 7,878,000 |          |                 

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

---

|Aqua Society, Inc.                                    
|------------------------------------------------------
|Notes to the Interim Consolidated Financial Statements
|June 30, 2007                                         
|(Stated in US Dollars)  Page 5                       
|(Unaudited)                                           

|Note 6 | Capital Stock (contd)
|------ | -----------------------

Commitments  (contd)

Share Purchase Options  (contd)

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.

On December 21, 2006 the Company used
  the Black-Scholes option valuation model to compute estimated fair value of
  options granted on that date, 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     

On June 7, 2007 the Company used the
  Black-Scholes option valuation model to compute estimated fair value of options
  granted on that date, based on the following assumptions:

| | Risk-free interest rate                   | 5.03%     
| | ----------------------------------------- | ----------
| | Dividend yield rate                       | 0.00%     
| | Price volatility                          | 154.30%   
| | Weighted average expected life of options | 2.00 years
| | Weighted average fair value               | $0.23     

The Company recognized stock-based compensation
  of $1,026,623 and $1,599,039 during the three months and nine months ended June
  30, 2007, respectively.

The volatility is based on the Companys
  historical share price.

---

|Aqua Society, Inc.                                    
|------------------------------------------------------
|Notes to the Interim Consolidated Financial Statements
|June 30, 2007                                         
|(Stated in US Dollars)  Page 6                       
|(Unaudited)                                           

|Note 6 | Capital Stock (contd)
|------ | -----------------------

Commitments  (contd)

Share Purchase Warrants

A summary of share purchase warrants
  outstanding as at June 30, 2007 and changes during the period is presented below

| |                                            |  |           |   |   | Weighted | 
| | ------------------------------------------ |  | --------- | - | - | -------- | 
| |                                            |  |           |   |   | Average  | 
| |                                            |  |           |   |   | Exercise | 
| |                                            |  | Number    |   |   | Price    | 
| |                                            |  |           |   |   |          | 
| | Warrants outstanding at September 30, 2006 |  | 2,823,001 |   | $ | 1.37     | 
| | Expired                                    |  | (416,666  | ) | $ | 2.40     | 
| |                                            |  |           |   |   |          | 
| | Warrants outstanding at June 30, 2007      |  | 2,406,335 |   | $ | 1.20     | 

As at June 30, 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      
| | --------- | -------------- | -----------------
| | 1,160,960 | $1.30          | February 10, 2008
| | 1,245,375 | $1.10          | June 08, 2008    
| | 2,406,335 |                |                  

|Note 7 | Commitments Note 6
|------ | -------------------

| | 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 $9,014) per month. Two of the leases were 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 Company continues to rent the premises
        on a month-to- month basis. The remaining lease agreement requires total
        payments of EUR 680 (US $916) per month. The lease will be automatically
        extended every year unless cancelled with six months advance notice.

---

|Aqua Society, Inc.                                    
|------------------------------------------------------
|Notes to the Interim Consolidated Financial Statements
|June 30, 2007                                         
|(Stated in US Dollars)  Page 7                       
|(Unaudited)                                           

|Note 7 | Commitments Note 6  (contd)
|------ | ------------------------------

| | i) | Lease Contracts
| | -- | ---------------

| | Minimum future lease payments |   |        | 
| | ----------------------------- | - | ------ | 
| | September 30, 2007            | $ | 2,749  | 
| | 2008                          |   | 10,994 | 
| |                               | $ | 13,743 | 

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

---

|Aqua Society, Inc.                                    
|------------------------------------------------------
|Notes to the Interim Consolidated Financial Statements
|June 30, 2007                                         
|(Stated in US Dollars)  Page 8                       
|(Unaudited)                                           

|Note 7 | Commitments Note 6  (contd)
|------ | ------------------------------

| | ii) | Management/Consulting Contracts
| | --- | -------------------------------
| |     |                                
| |     | e)                             
| |     |                                
| |     | f)                             
| |     |                                
| |     | g)                             
| |     |                                
| |     | h)                             

|Note 8 | Non-cash Transaction
|------ | --------------------

Investing and financing activities that
  do not have an impact on current cash flows are excluded from the statement
  of cash flows.

During the nine months ended June 30,
  2007, the loans payable were reduced by $1,545,383 with respect to the forgiveness
  of a loan.

This transaction has been excluded from
  the statements of cash flows.

---

|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 nine
month period ended June 30, 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 March 31, 2007 fiscal quarter:

|1. | 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. Receipt of the first installment has been delayed; however,
      we expect to receive this within the next month. Subsequent installments
      will be received in the following months upon our providing the Ministry
      with proof of the work performed.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2. | On June 7, 2007, our Board of Directors approved the
      grant of an aggregate of 3,000,000 options to purchase our common stock to
      certain of our executive officers and directors. The options are fully
      vested and exercisable at a price of $0.23 per share for a term of two
      years expiring on June 7, 2009. The options were granted pursuant to our
      2006 Stock Incentive Plan.                                                                                                                                                                                                                                               

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:

3

---

|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 have constructed 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 and
        for different market applications.                    

We anticipate spending approximately $1,000,000 in pursuing our
plan of operation over the next twelve months. As of June 30, 2007, the date of
our most recently available financial statements, we had a working capital
deficit of $2,727,957. As such, we do not have sufficient working capital to
meet our expected needs over the next twelve months. Although we have been
earning revenues since 2005, we have not yet earned a net profit and we do not
expect to achieve profitability in the near future as we 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.

4

---

RESULTS OF OPERATIONS

Third Quarter and Nine Months Summary

|                        |   | Third Quarter Ended June 30 |   |   | Nine Months Ended June 30 |  
|----------------------- | - | --------------------------- | - | - | ------------------------- | -
|                        |   |                             |   |   |                           |  
|                        |   |                             |   |   |                           |  
|                        |   | 2007                        |   |   | 2006                      |  
|Revenue                 | $ | 32,180                      |   | $ | 273,301                   |  
|Cost of Goods Sold      |   | (25,964                     | ) |   | (339,480                  | )
|General and             |   | (1,565,985                  | ) |   | (1,504,279                | )
|Administrative Expenses |   |                             |   |   |                           |  
|Other Items             |   | (2                          | ) |   | (652                      | )
|Net Loss                | $ | (1,559,771                  | ) | $ | (1,571,110                | )

Revenues

Revenues earned by us during the three and nine month periods
ended June 30, 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, 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 June 30, 2007, our revenue
decreased by 88.2% 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 have scaled back our HVAC&R
and energy optimizing consulting activities. As a result, our revenues have
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 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 June 30, 2007 decreased proportionately.

5

---

General and Administrative Expenses

Our general and administrative expenses for the quarterly
period ended June 30, 2007 consisted of the following:

|                          |   | Third Quarter Ended June 30 |  |   | Nine Months Ended June 30 | 
|------------------------- | - | --------------------------- |  | - | ------------------------- | 
|                          |   |                             |  |   |                           | 
|                          |   |                             |  |   |                           | 
|                          |   | 2007                        |  |   | 2006                      | 
|Accounting and audit fees | $ | 59,842                      |  | $ | 94,555                    | 
|Advertising and promotion |   | 7,076                       |  |   | 435,912                   | 
|Amortization              |   | 6,415                       |  |   | 25,956                    | 
|Bad debts                 |   | -                           |  |   | 635                       | 
|Bank charges and interest |   | 203                         |  |   | 160                       | 
|Consulting fees           |   | 18,255                      |  |   | 14,451                    | 
|Development costs         |   | 53,721                      |  |   | 435,811                   | 
|Filing fees               |   | 751                         |  |   | 1,061                     | 
|Interest expense          |   | 50,000                      |  |   | 19,292                    | 
|Legal fees                |   | 16,872                      |  |   | 21,573                    | 
|Management fees           |   | 117,244                     |  |   | 123,043                   | 
|Office and miscellaneous  |   | 32,222                      |  |   | 71,491                    | 
|Rent                      |   | 25,345                      |  |   | 36,735                    | 
|Salaries and benefits     |   | 116,228                     |  |   | 164,160                   | 
|Stock-based               |   | 1,026,623                   |  |   | --                        | 
|compensation              |   |                             |  |   |                           | 
|Transfer agent            |   | 275                         |  |   | 301                       | 
|Travel                    |   | 34,913                      |  |   | 59,143                    | 
|Total General and         | $ | 1,565,985                   |  | $ | 1,504,279                 | 
|Administrative Expenses   |   |                             |  |   |                           | 

The largest component in our general and administrative
expenses for the three and nine month periods ended June 30, 2007 was
stock-based compensation. Stock-based compensation represents the amounts
recorded in respect of stock options granted to our officers and directors on
December 21, 2006 and June 7, 2007. Not including stock-based compensation, our
general and administrative expenses decreased by $964,917 (or 64.1%) and by
1,972,796 (or 47.2%) during the three and nine month periods ended June 30,
2007, respectively.

These decreases in our general and administrative expenses were
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 $277,757, or 43.3%, during the
nine months ended June 30, 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
director is a partner. Also, during last the six months, we scaled back some of
our product development and advertising 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.

6

---

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital         |   |                     |   |   |                    |   |  |                       |   
|----------------------- | - | ------------------- | - | - | ------------------ | - |  | --------------------- | --
|                        |   | At                  |   |   | At                 |   |  | Percentage            |   
|                        |   | June
      30, 2007 |   |   | September 30, 2006 |   |  | Increase / (Decrease) |   
|Current Assets          | $ | 630,438             |   | $ | 854,960            |   |  | (26.3                 | )%
|Current Liabilities     |   | (3,358,395          | ) |   | (2,914,370         | ) |  | 15.2                  | % 
|Working Capital Deficit | $ | (2,727,957          | ) | $ | (2,059,410         | ) |  | 32.5                  | % 

During the period, a loan of approximately $1,545,383 payable
  to a law firm of which one of our former officers and directors is a partner,
  was waived by the creditor and transferred to contributed surplus.

|Cash Flows                                          |   |                           |   |   |            |  
|--------------------------------------------------- | - | ------------------------- | - | - | ---------- | -
|                                                    |   | Nine Months Ended June 30 |  
|                                                    |   | 2007                      |   |   | 2006       |  
|Cash Flows used in Operating Activities             | $ | (1,977,124                | ) | $ | (3,113,656 | )
|Cash Flows used in Investing Activities             |   | (6,504                    | ) |   | (78,818    | )
|Cash Flows from Financing Activities                |   | 2,038,681                 |   |   | 2,554,689  |  
|Effects of Foreign Exchange Rates                   |   | (49,329                   | ) |   | 9,170      |  
|Net Increase (Decrease) in Cash During
      Period | $ | 5,724                     |   | $ | (628,615   | )

Our sole source of financing during the nine months ended June
30, 2007 came in the form of loans payable. The amounts obtained as a result of
these loans are unsecured, non-interest bearing and payable upon demand.

Total loans payable at June 30, 2007 consist of the following
amounts:

| | (a) | $201,246, 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) | $124,786, bearing interest a rate of 7.5% per annum,
      unsecured and payable on or before December 31, 2006; and                                                                    
| |     |                                                                                                                                                                                         
| | (c) | $2,694,691, 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 June 30, 2007 we had cash in the amount of $193,156 and a
working capital deficit of $2,727,957. We anticipate spending approximately
$1,000,000 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 $32,180 during the fiscal quarter ended
June 30, 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:

7

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| | (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. This private
placement offering did not complete and our Board of Directors have cancelled
this offering.

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.

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.

8

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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 June 30, 2007, we had loans payable totaling $3,020,723. Of
this amount, $326,032 was due on December 31, 2006, and has not been repaid or
otherwise settled. 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 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.

We do not currently have any 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.

9

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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.

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.

10

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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.

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

11

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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, Ltd. dated September 5, 2005. (7)                                                                      

13

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|Exhibit |                                                                                                                                                                                                                                                   
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                                                                                            
|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)                                                                                                                                             
|10.17   | Non-Qualified
        Stock Option Agreement between Aqua Society, Inc. and Robert Terberg dated
        effective as of June 7, 2007.(13)                                                                                                        
|10.18   | Non-Qualified Stock Option Agreement
        between Aqua Society, Inc. and Hugo van der Zee dated effective as of
        June 7, 2007.(13)                                                                                                      
|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.                             
|(13) | Files as an exhibit to our Current Report on Form 8-K
      filed with the SEC on June 13, 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: August 20, 2007 | By:               
|                      |                   
|                      |                   
|                      |                   
|                      |                   

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