SECURITIES AND EXCHANGE
COMMISSION


WASHINGTON, D.C.
20549


___________________________________________________






AMENDMENT
NO.  2 TO FORM 10-KSB




(Mark
One)




x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
      The Fiscal Year Ended August 31,
2007




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




FOR
      THE TRANSITION PERIOD FROM ______ TO
________




Commission File No. 000-31343




GLOBAL
      WATAIRE, INC.(Exact
      name of issuer as specified in its charter)Nevada
            36-4567500(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)534 Delaware Avenue, Suite
      412
              Buffalo,
      New York
            14202(Address
      of principal executive offices)
            (Zip
      Code)Registrant’s
      telephone number, including area code: (716)
      332-7150Securities
      registered under Section 12(b) of the Exchange Act:
            None.Securities
      registered under Section 12(g) of the Exchange Act:
            Common
      stock, par value $0.001 per share.(Title
      of class)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding twelve months (or 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. Yesx Noo




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. o




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yeso Nox




State
issuer’s revenues for its most recent fiscal year: $ 61,750.




State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of
August 31, 2007: $58,008.




Number of
the issuer’s Common Stock outstanding as of November 27, 2007:
24,585,571




Documents
incorporated by reference: None.




Transitional
Small Business Disclosure Format (Check One): Yeso Nox









NOTE:  This
Amendment is being filed to include an auditor’s consent letter that is dated
and indicates the city and state where issued.


TABLE OF CONTENTS
  Item
      1
              Description
      of Business
              1Item
      2
              Description
      of Property
              13Item
      3
              Legal
      Proceedings
              13Item
      4
              Submission
      of Matters to a Vote of Security Holders
              13Item
      5
              Market
      for Common Equity and Related Stockholder Matters
              14Item
      6
              Management’s
      Discussion and Analysis or Plan of Operation
              15Item
      7
              Financial
      Statements
              18Item
      8
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
              18Item
      8A
              Controls
      and Procedures
              18Item
      9
              Directors
      and Executive Officers of the Registrant
              20Item
      10
              Executive
      Compensation
              24Item
      11
              Security
      Ownership of Certain Beneficial Owners and Management
                and
      Related Stockholder Matters
              26Item
      12
              Certain
      Relationships and Related Transactions
              27Item
      13
              Exhibits
              27Item
      14
              Principal
      Accountant and Fees and Services
              27
  
 
  PART I
  Item
      1.
                Description
      of Business.
  Company Overview
  We
provide both advisory and transactional services to help business owners develop
and implement the business strategies necessary to achieve their financial
objectives. Our participation is relationship driven and seeks exclusive
engagements that will enable both the client and the Company to achieve superior
results, positive cash flow and better than market returns from their
businesses. We bring together the expertise of an experienced team of
professionals dedicated to developing the right strategies for our clients to
get the funding they need to succeed. Our team of professionals and associates
are committed to being strategic partners of our clients both now and in the
future as they grow and prosper.
  We will
help our client companies and their owners identify and prioritize those
business strategies most critical to sustained success. Our goal is to support
the needs of emerging high potential growth private companies to help them
become successful, working together as a team. Our goal is not to deal with a
large volume of start up enterprises. We will focus only on what we feel are
viable, sustainable companies that have a high potential to succeed well into
the future and benefit by having an equity interest in that success. Towards
this goal, we provide our clients with access to centralized services, including
assistance in the areas of strategy, planning, finance, systems, accounting, and
human resources. This means we will selectively target only quality ventures
that we feel, with our assistance, can obtain the capital they need to
succeed.
  We will
seek out, investigate and, if warranted, acquire an interest in business
opportunities presented to us by companies that seek strategic assistance and
the advantages of a corporation that is a registered publicly traded company
with access to the public capital markets.
  We will
not restrict our search to any specific business, industry or geographical
location and we may participate in a business venture of virtually any kind or
nature. We will seek business opportunities with entities which are in the
development stage, have recently commenced operations or with established
companies that wish to take advantage of the capital markets to raise additional
funding to expand into new products or markets or for other corporate
development purposes. We may establish subsidiaries to acquire businesses or
acquire existing companies as subsidiaries. In short, we plan to identify
emerging companies with exceptional promise and, with the our help, incubate
them into in successful stand alone enterprises.
  As part
of our investigation of potential business opportunities our management will
meet, interview and scrutinize the management and key personnel, visit and
inspect facilities; verify and analyze information obtained, seek the advice of
industry experts and use our financial resources and management expertise to
perform rigorous due diligence to critically evaluate the strengths and
weaknesses of the candidate business with the goal of eliminating candidates
that do not have the likelihood of success we seek. The manner in which we
participate in an opportunity will depend on the nature of the opportunity, the
respective needs of the parties and what it will take to make the venture a
success.
  We intend
to concentrate on candidate opportunities brought to us by our officers,
directors, by our shareholders and their respective contact networks. In
analyzing prospective business opportunities, we will scrutinize all relevant
factors, such as the market, future prospects, the quality and depth of
management, technical resources; working capital and other financial needs;
history of operations, if any; nature of present and expected competition, etc.
We will not acquire or merge with any company for which audited financial
statements cannot be obtained within 71 days after closing of the proposed
transaction, as required by the Securities Exchange Act of 1934, as
amended.
  We were
formerly known as International Development Corp., a Nevada corporation.
Moreover, International Development Corp. was formerly known as Ozolutions,
Inc., a Delaware corporation. We changed our name from Ozolutions, Inc. to
International Development Corp. and our state of domicile on December 9, 2004.
See “Description of Business - Change of Domicile.” On April 14, 2006, we
changed our name to Global Wataire, Inc.
   1
   Our
previous business, conducted through our wholly owned subsidiary, Freshwater
Technologies, Inc., now known as DigiTar, Inc., had been that of international
marketing and distribution of water purification systems using ultraviolet,
ozone and water activator technology. The markets we primarily targeted were
located in the United States, Canada, Mexico, Costa Rica, Peru, and
Panama.
  Previous Business
  Ozone Technology. On June 21,
2000, we purchased the exclusive marketing rights to distribute the products of
Hankin Ozone Systems, Ltd. in Canada, the Caribbean, and Mexico from 1421209
Ontario Limited. The purchase price was $1,017,217 and the issuance of 8,000,000
shares of our common stock. We had an agreement to repurchase 6,000,000 of the
8,000,000 shares for $81,699, which we decided to cancel in August 2004. In
April 2002, the agreement with 1421209 Ontario Limited was cancelled and the
obligation to pay $1,017,217 was likewise cancelled. We wrote-off the net
marketing rights of $762,743 and the outstanding obligation of $1,017,217, and
recorded an extraordinary gain from the cancellation of the agreement of
$237,257. We paid $50,000 directly to Hankin for the same marketing rights which
we recorded as an expense during the year ended August 31, 2002. In September
2004, Hankin was placed into bankruptcy, and the deposit of $22,292 for certain
units was written off as of August 31, 2004.
  Water-Activated Technology.
In August 2001, we acquired non-exclusive distribution rights to an activated
water system from ELCE International Inc. for Mexico and the Caribbean markets
including Panama, Costa Rica, Ecuador and Peru. No fees were paid for these
rights. In September 2003, we approved the issuance of 250,000 shares of our
common stock to the president of ELCE and the cancellation of an option to
purchase 500,000 shares of our common stock at $0.50 per share in order to
maintain the existing relationship in Canada. The issuance of the common stock
resulted in a charge against earnings of $15,000 in 2004.
  Ultraviolet Products. In
order to provide viable technology and pricing options to residential and
commercial customers for drinking water solutions, we entered into an agreement
with R-Can Environmental in June 2005 with the intention of distributing
ultraviolet water treatment systems and water filters in selected markets in
Latin America and the United States. We terminated a prior agreement with
another supplier.
  On
January 21, 2005, we formed a wholly owned subsidiary, Freshwater Technologies,
Inc., and transferred our water activation and purification-related assets and
business to it. On January 11, 2006, we executed and closed an Asset Sale
Agreement with Max Weissengruber, our then president and chief operations
officer and a director, and D. Brian Robertson, our then chief financial
officer, with respect to the purchase of certain assets of Freshwater
Technologies. Although the agreement was executed and closed on January 11,
2006, it was effective as of October 1, 2005. Included in the assets was the
name “Freshwater Technologies.” The purchase price for the assets was $60,210.33
paid in the form of the forgiveness of debt for salary owed by International
Development Corp. and Freshwater Technologies, Inc. in the amount of $32,482.51
to Mr. Weissengruber, and $27,727.82 to Mr. Robertson.
  As
additional consideration, Messrs. Weissengruber and Robertson agreed to the
termination of their employment agreements with International Development Corp
and a general release of any and all claims they may have had against either
International Development Corp. or Freshwater Technologies, Inc. Moreover,
certain other liabilities of Freshwater Technologies, Inc. were either assumed
or forgiven by Messrs. Weissengruber and Robertson and Bob Glassen in the amount
of $10,918.54. The net effect of the transaction was that International
Development and Freshwater were relieved of liabilities, which exceeded assets
in the amount of $134,532.17, and that Freshwater Technologies, Inc. is now debt
free. We changed the name of Freshwater Technologies, Inc. to Atlantic Seaboard
Company, Inc. on May 31, 2006.
  Change in Control
  On
September 23, 2004, Betty-Ann Harland for $25,000 acquired 15,000,000 shares of
our common stock, which represented 30.51 percent of our issued and outstanding
common stock. In addition, Ms. Harland had proxies to vote 6,000,000 shares of
our common stock, granted by 1421209 Ontario Limited. The proxies expired on
February 1, 2005. In January 2005, the 15,000,000 common shares held by Ms.
Harland were exchanged for 1,000,000 shares of our Series A preferred
stock.
  2
   In July
2005, our board of directors approved the surrendering and cancellation of
900,000 shares of the Series A preferred stock held by Ms. Harland. In July
2005, our board authorized the issuance of 1,000,000 shares of Series B
preferred stock to Ms. Harland in consideration of $1,000 and the surrender of
900,000 shares of our Series A preferred stock.
  Each
share of the Series A preferred stock is convertible into 200 fully paid and
nonassessable shares of our common stock, and has the voting power equal to 200
shares of our common stock. The shares of the Series B preferred stock is not
convertible into shares of our common stock, preferred stock, or any of our
other securities. However, on all matters submitted to a vote of the holders of
our common stock, including, without limitation, the election of directors, a
holder of shares of the Series B preferred stock shall be entitled to the number
of votes on such matters equal to the number of shares of the Series B preferred
stock held by such holder multiplied by 500.
  Following
the acquisition of our shares by Ms. Harland, on September 23, 2004, she was
elected our chairman and chief executive officer. In addition, Max
Weissengruber, Douglas Robertson, Robert W. Gingell, and Arthur N. Kelly were
elected as our officers and directors. At the same time, D. Brian Robertson was
elected our chief financial officer. On March 30, 2004, Robert W. Gingell
resigned as a director and Richard Proulx was elected a director.
  On May
24, 2006, Max Weissengruber resigned as secretary and as a director, effective
immediately. There was no disagreement between Mr. Weissengruber and Global
Wataire. Likewise, on June 27, 2006, our board of directors, pursuant to our
Bylaws Company, elected Robert Glassen to serve as a director and elected Edmund
Gorman to serve as a director and corporate secretary of Global
Wataire.
  Because
of the change in ownership of voting stock and the composition of the board
after the closing of the agreement with Ms. Harland, there was a change in
control.
  Change of
Domicile
  On
December 9, 2004, a majority of our stockholders voted to approve a change in
our state of incorporation from Delaware to Nevada by means of a merger
permitted under the corporate statutes of both states.
  The
merger was between Ozolutions, Inc., a Delaware corporation, and International
Development Corp., a Nevada corporation, organized by us for the specific
purpose of the change of domicile. The merger was consummated pursuant to a Plan
of Merger, which provided that Ozolutions, Inc. merge with and into
International Development Corp. Following the merger, International Development
Corp. was the surviving entity.
  International
Development Corp. was a newly formed corporation with one share of common stock
issued and outstanding held by Ms. Harland, with only minimal capital and no
other assets or liabilities. The terms of the merger provided that the existing
stockholders of Ozolutions, Inc. would be entitled to receive one share of the
common stock of International Development Corp. for every one share of the
common stock of Ozolutions, Inc. held by the common stockholders of Ozolutions,
Inc. In addition, the then currently issued one share of the common stock of
International Development Corp. held by Ms. Harland was cancelled. As a result,
following the merger, the former stockholders of Ozolutions, Inc. became the
only stockholders of the newly merged corporation.
  The
change of domicile did not interrupt the existence of Ozolutions, Inc. Each
share of our common stock remained issued and outstanding as one share of the
common stock of International Development Corp. after the change of domicile
from Delaware to Nevada.
  Officers and Directors.
Before the change of domicile, our board of directors consisted of five members,
Betty-Ann Harland, Max Weissengruber, Douglas Robertson, Robert W. Gingell, and
Arthur N. Kelly. Upon the change of domicile, our board of directors consisted
of the same individuals who were also the directors of International Development
Corp. At a later date Robert W. Gingell resigned and Richard Proulx was elected
a director.
   3




Resales of Our Common Stock.
Pursuant to Rule 145 under the Securities Act, due to the merger of Ozolutions,
Inc. with International Development Corp., the exchange of our shares of common
stock in the Delaware corporation for shares of the common stock of the Nevada
corporation was exempt from registration under the Securities Act, since the
sole purpose of the transaction was a change of our domicile within the United
States. The effect of the exemption is that the shares of our common stock
issuable in the change of domicile may be resold by the former stockholders
without restriction to the same extent that such shares may have been sold
before the change of domicile.
  Accounting for the
Transaction. Upon consummation of the change of domicile, the historical
financial statements of the Delaware corporation became the historical financial
statements of the Nevada corporation. Total stockholders’ equity was unchanged
as a result of the change of domicile.
  Changing the Scope of Our
Business
  Historically,
our business was limited to the development of water activation and purification
businesses. With the recent change in control, changes in our board of directors
and management, the Company decided to change our business to the advisory and
transactional services business to help high potential emerging companies
develop and implement the strategies they need to obtain the capital required to
be successful and to continue into the future as equity partners and strategic
advisors with those companies. We would expect to derive revenue from consulting
and transactional fees charged our clients and outside investors. However, our
principal source of revenue is expected from returns on the equity we retain in
our client companies once they obtain adequate funding, either in the form of
share appreciation or profit sharing agreements or both, as the case may
be.
  The
Company continues to pursue its new business strategy of providing advisory and
transactional services to help high potential emerging companies develop and
implement the strategies they need to obtain the capital required to be
successful and to continue into the future as equity partners and strategic
advisors with those companies . The Company will also pursue promising business
opportunities in the energy, precious metals and commercial real estate
industries as principal or joint venture partner.
  Expanding
on our new strategy of being an equity partner in high potential industries, on
June 24, 2007, the Company entered into a letter of intent with NexGen Bio
Energy, LLC.,(NexGen) of Marion, Ohio with respect to a proposed transaction in
which the Company, or its subsidiary, would purchase from NexGen, a 4 million
gallon per year biodiesel production plant manufactured by Orbitec, Inc of
Tulsa, Oklahoma. However, it became apparent that it is in our best interest to
pursue the acquisition of biodiesel production capacity directly with production
plant manufacturers and feedstock producers. Accordingly we are in discussions
with those companies to produce biodiesel either on our own or in a joint
venture with those companies.
  On July
27, 2006 Global Wataire, Inc. and its wholly-owned subsidiary, Atlantic
Seaboard, Inc. entered into an agreement with DigiTar Inc., whereby Global would
purchase substantial all of the business assets of DigiTar, Inc. The terms of
certain key documents necessary to complete the purchase of DigiTar’s assets
could not be agreed to by the parties and the parties could not resolve their
differences as to the terms of the planned acquisition of DigiTar’s business.
Consequently, on June 28, 2007, Global Wataire, Inc., and its wholly-owned
subsidiary, Atlantic Seaboard, Inc., rescinded the proposed transaction and
cancelled the planned acquisition of DigiTar Inc.’s business. Global Wataire,
Inc., and its wholly-owned subsidiary, Atlantic Seaboard, Inc will seek to
recover the monies advanced during the negotiations to DigiTar for working
capital in the amount of $50,000.
  Material
Agreement
  Transaction with Dutchess Private
Equities Fund, Ltd.
  On April
24, 2007, we entered into an Investment Agreement with Dutchess Private Equities
Fund, Ltd. (the “Investor”). Pursuant to this Agreement, the Investor shall
commit to purchase up to $10,000,000 of our common stock over the course of up
to thirty-six (36) months. The amount that we shall be entitled to request from
each purchase (“Puts”) shall be equal to, at our election, either (i) up to
$250,000 or (ii) 200% of the average daily volume (U.S. market only) of the
common stock for the ten (10) trading days prior to the applicable put notice
date, multiplied by the average of the three (3) daily closing bid prices
immediately preceding the put date.
   4
    The put
date shall be the date that the Investor receives a put notice of a draw down by
us. The purchase price shall be set at ninety-three percent (93%) of the lowest
closing Best Bid price of the common stock during the pricing period. The
pricing period shall be the five (5) consecutive trading days immediately after
the put notice date. There are put restrictions applied on days between the put
date and the closing date with respect to that particular Put. During this time,
we shall not be entitled to deliver another put notice. Further, we shall
reserve the right to withdraw that portion of the Put that is below seventy-five
percent (75%) of the lowest closing bid prices for the 10-trading day period
immediately preceding each put notice.
  In
connection with the Agreement, we entered into a Registration Rights Agreement
with Dutchess (“Registration Agreement”). Pursuant to the Registration
Agreement, we are obligated to file a registration statement with the Securities
and Exchange Commission covering the shares of common stock underlying the
Investment Agreement within fifteen (15) days after the closing date. In
addition, we are obligated to use all commercially reasonable efforts to have
the registration statement declared effective by the SEC within ninety (90) days
after the closing date. The Agreement does not impose any penalties on us for
failure to meet either the 30 day or 90 day obligations, however, we shall
endeavor to meet both such deadlines.
  Employees
  Currently,
we have three employees. As we grow, we will need to attract an unknown number
of additional qualified employees. Although we have experienced no work
stoppages and believe our relationships with our employees are good, we could be
unsuccessful in attracting and retaining the persons needed. None of our
employees are currently represented by a labor union.
  Transfer Agent
  On
November 7, 2006, our board of directors approved the appointment of Transfer
Online, Inc. as our transfer agent.
   RISK FACTORS
   The
following risk factors should be considered carefully in addition to the other
information contained in this report. This report contains forward-looking
statements. Forward-looking statements relate to future events or our future
financial performance. We generally identify forward-looking statements by
terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,”
“could,” “intends,” “target,” “projects,” “contemplates,” “believes,”
“estimates,” “predicts,” “potential” or “continue” or the negative of these
terms or other similar words. These statements are only predictions. The outcome
of the events described in these forward-looking statements is subject to known
and unknown risks, uncertainties and other factors that may cause our customers’
or our industry’s actual results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements, to
differ. “Risk Factors,” “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Business,” as well as other sections
in this report, discuss some of the factors that could contribute to these
differences.
  The
forward-looking statements made in this report relate only to events as of the
date on which the statements are made. We undertake no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which the statement is made or to reflect the occurrence of unanticipated
events.
  This
report also contains market data related to our business and industry. These
market data include projections that are based on a number of assumptions. If
these assumptions turn out to be incorrect, actual results may differ from the
projections based on these assumptions. As a result, our markets may not grow at
the rates projected by these data, or at all. The failure of these markets to
grow at these projected rates may have a material adverse effect on our
business, results of operations, financial condition and the market price of our
Common Stock.
   5
   Risks Relating to
Our Business
  Our independent auditors have
included a going concern opinion and related discussion in the notes to our
financial statements.
  It should
be noted that our independent auditors have included a going concern opinion and
related discussion in the notes to our financial statements. The auditors have
included the going concern provision because we have incurred significant and
recurring losses and have a large working capital deficit that the auditors
believe raises substantial doubt about our ability to continue as a going
concern. We have incurred net losses of ($1,131,102), (263,996) and (1,407,124)
for the fiscal years ended August 31, 2005, August 31, 2006, and August 31,
2007, respectively. Our working capital deficit as of August 31, 2007 is
(691,154). Until such time we receive additional debt or equity financing, there
is a risk that our auditors will continue to include a going concern provision
in the notes to our financial statements. We may continue to incur losses as we
spend additional capital to develop and market our products and services and
establish our infrastructure and organization to support anticipated operations.
We cannot be certain whether we will ever earn a significant amount of revenues
or profit, or, if we do, that we will be able to continue earning such revenues
or profit. Any of these factors could cause our stock price to decline and
result in your losing a portion or all of your investment.
  Under our business plan, we have a
limited operating history and are not likely to succeed unless we can overcome
the many obstacles we face.
  As of the
date of this report, we had minimal business operations or revenues, and we are
still in our formative stage. You should be aware of the difficulties, delays
and expenses normally encountered by an enterprise many of which are beyond our
control, including unanticipated expenses, employment costs, and administrative
expenses. It is possible that our proposed business plan as described in this
report will not materialize or prove to be successful or operate profitably. If
we cannot operate profitably, you could lose your entire
investment.
  Unless we generate additional capital
through revenues or financings, we risk failure.
  We expect
to incur significant capital expenses in pursuing our plans to increase sales
volume, expanding our products and services and obtaining additional financing
through stock offerings, or other feasible financing alternatives. We may also
seek funding for the development and marketing of our products and services
through strategic partnerships and other arrangements with investment partners.
It is possible that such collaborative arrangements or additional funds will not
be available when needed, or on terms acceptable to us, if at all. In order to
continue our operations, we will require additional funds over the next 12
months. As of the date of this report, we estimate our need for additional funds
will be $5,000,000. We hope to be able to generate the funds necessary to
maintain our operations through revenues and borrowings. However, without
additional funds there will be a limitation to the number of new projects that
we could take on, which may have an effect on our ability to maintain our
operations. Additional financing may not be available on terms favorable to us,
or at all. If additional funds are not available, we may not be able to execute
our business plan or take advantage of business opportunities. Our ability to
obtain such additional financing and to achieve our operational goals is
uncertain. In the event that we do not obtain additional capital or are not able
to increase cash flow through the increase in revenues, our business may
fail.
  Need for additional specialized
personnel.
  Although
we are committed to the continued development and growth of our business, the
addition of specialized key personnel to assist Global Wataire in the execution
of our business model is necessary. It is possible that we will not be able to
locate and hire such specialized personnel on acceptable terms. We will make
every effort to recruit executives with proven experience and expertise as
needed to achieve our plan.
  We have only a token number of
employees, and in order to grow our business we will need to hire significant
additional personnel.
  We need
to hire, train and retain additional employees for all aspects of our business
if we are to achieve our goals. Our success will also depend on our ability to
attract and retain a staff of qualified personnel. Qualified individuals are in
high demand and are often subject to competing offers. We cannot be certain that
we will be able to attract and retain the qualified personnel we need for our
business. If we are unable to hire additional personnel as needed, it would have
a material adverse effect on us.
   6







Dependence on ability to market
products and services.




Due to
our limited resources, the execution of our business model and sales and
marketing of our products and services has been limited to date. Our success is
dependent upon our ability to execute with such limited resources.




We may not be able to develop a
market for our products and services, which will most likely cause our stock
price to decline.




The
demand and price for our products and services will be based upon the existence
of markets for them. The extent to which we may gain a share of our intended
markets will depend, in part, upon the cost effectiveness and performance of our
products and services when compared to alternative products and services, which
may be conventional or heretofore unknown. If the products and services of other
companies provide more cost-effective alternatives or otherwise outperform our
products and services, the demand for our products and services may be adversely
affected. Our success will be dependent upon market acceptance of our products
and services. Failure of our products and services to achieve and maintain
meaningful levels of market acceptance would materially and adversely affect our
business, financial condition, results of operations and market penetration.
This would likely cause our stock price to decline.




We may have difficulty in attracting
and retaining management and outside independent members to our board of
directors as a result of their concerns relating to their increased personal
exposure to lawsuits and stockholder claims by virtue of holding these positions
in a publicly held company.




The
directors and management of publicly traded corporations are increasingly
concerned with the extent of their personal exposure to lawsuits and stockholder
claims, as well as governmental and creditor claims which may be made against
them, particularly in view of recent changes in securities laws imposing
additional duties, obligations and liabilities on management and directors. Due
to these perceived risks, directors and management are also becoming
increasingly concerned with the availability of directors and officers liability
insurance to pay on a timely basis the costs incurred in defending such claims.
We currently do not carry limited directors and officers liability insurance.
Directors and officers liability insurance has recently become much more
expensive and difficult to obtain. If we are unable to provide directors and
officers liability insurance at affordable rates or at all, it may become
increasingly more difficult to attract and retain qualified outside directors to
serve on our board of directors.




We may
lose potential independent board members and management candidates to other
companies that have directors and officers liability insurance to insure them
from liability or to companies that have revenues or have received greater
funding to date which can offer greater compensation packages. The fees of
directors are also rising in response to their increased duties, obligations and
liabilities as well as increased exposure to such risks. As a company with a
limited operating history and limited resources, we will have a more difficult
time attracting and retaining management and outside independent directors than
a more established company due to these enhanced duties, obligations and
liabilities.




Legislative actions and potential new
accounting pronouncements are likely to impact our future financial position and
results of operations.




There
have been regulatory changes, including the Sarbanes-Oxley Act of 2002, and
there may potentially be new accounting pronouncements or additional regulatory
rulings, which will have an impact on our future financial position and results
of operations. The Sarbanes-Oxley Act of 2002 and other rule changes as well as
proposed legislative initiatives have increased our general and administrative
costs as we have incurred increased legal and accounting fees to comply with
such rule changes. Further, proposed initiatives are expected to result in
changes in certain accounting rules, including legislative and other proposals
to account for employee stock options as a compensation expense. These and other
potential changes could materially increase the expenses we report under
accounting principles generally accepted in the United States of America, and
adversely affect our operating results.






7






Proprietary
rights.




We intend
to closely monitor competing product introductions for any infringement of our
proprietary rights. We believe that, as the demand for products such as those
developed by Global Wataire increase, infringement of intellectual property
rights may also increase. If certain industry competitors infringe on our
proprietary rights, they may have substantially greater financial, technical,
and legal resources than we, which could adversely affect our ability to defend
our rights. In addition, we could incur substantial costs in defending our
rights.




Dependence on key
employees.




Our
business is dependent upon our senior executive officers, principally, Sydney
Harland, our president and Chief Executive Officer, who is responsible for our
operations, including marketing and business development, and Edmund Gorman, our
chief financial officer, secretary and treasurer. Should Messrs. Harland and/or
Gorman leave our employ, our business may be adversely affected. In the event of
future growth in administration, marketing, manufacturing and customer support
functions, we may have to increase the depth and experience of our management
team by adding new members. Our success will depend to a large degree upon the
active participation of our key officers, directors and employees. Loss of
services of any of the current officers and directors could have a significant
adverse effect on our operations and prospects. There can be no assurance that
we will be able to employ qualified persons on acceptable terms to replace
officers who become unavailable.




Certain Nevada corporation law
provisions could prevent a potential takeover, which could adversely affect the
market price of our common stock.




We are
incorporated in the State of Nevada. Certain provisions of Nevada corporate law
could adversely affect the market price of our common stock. Because Nevada
corporate law, NRS Sections 78.378 to 78.3793, contain provisions with respect
to acquisition of a controlling interest in a corporation, it would be more
difficult for someone to acquire control of the Comapny. Nevada corporate law
also discourages proxy contests making it more difficult for you and other
stockholders to elect directors other than the candidate or candidates nominated
by our board of directors.




Taxation of
dividends.




In the
absence of an applicable treaty between the United States and the government of
the country of which a stockholder is a citizen, if such stockholder is not a
United States citizen or a resident alien of the United States, pursuant to
United States income tax law, all dividends payable by the Company on our
capital stock to any such stockholder are subject to a withholding rate of 30
percent. As of the effective date of this report, there is no way to determine
which of our potential stockholders may be subject to the 30 percent withholding
requirement.




Financial projections; distributions
of cash.




Any
projections and related assumptions discussed in this report were based on
information about circumstances and conditions existing as of the date of this
report. The projections and estimated financial results are based on estimates
and assumptions that are inherently uncertain and, though considered reasonable
by us, are subject to significant business, economic, and competitive
uncertainties and contingencies, all of which are difficult to predict and many
of which are beyond our control. Accordingly, there can be no assurance that the
projected results will be realized or that actual results will not be
significantly lower than projected. We do not intend to update the projections.
The inherent uncertainties in results increase materially for years closer to
the end of the projected period. Neither we nor any other person or entity
assumes any responsibility for the accuracy or validity of the
projections.








8






Risks Relating to
Our Stock




Our common stock is thinly traded, so
you may be unable to sell at or near ask prices or at all if you need to sell
your shares to raise money or otherwise desire to liquidate your
shares.




Our
common stock has historically been sporadically or “thinly-traded” on the Over
the Counter Bulletin Board, meaning that the number of persons interested in
purchasing our common stock at or near ask prices at any given time may be
relatively small or non-existent. This situation is attributable to a number of
factors, including the fact that we are a small company which is relatively
unknown to stock analysts, stock brokers, institutional investors and others in
the investment community that generate or influence sales volume, and that even
if we came to the attention of such persons, they tend to be risk-averse and
would be reluctant to follow an unproven company such as ours or purchase or
recommend the purchase of our shares until such time as we became more seasoned
and viable.




As a
consequence, there may be periods of several days or more when trading activity
in our shares is minimal or non-existent, as compared to a mature issuer which
has a large and steady volume of trading activity that will generally support
continuous sales without an adverse effect on share price. It is possible that a
broader or more active public trading market for our common stock will not
develop or be sustained, or that current trading levels will
continue.




The market price for our common stock
is particularly volatile given our status as a relatively unknown company with a
small and thinly traded public float, limited operating history and lack of net
revenues which could lead to wide fluctuations in our share price. The price at
which you purchase our common stock may not be indicative of the price that will
prevail in the trading market.




The
market for our common stock is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
In fact, during the period from June 1, 2007 until August 31, 2007, the high and
low sale prices of a share of our common stock were $0.13 and $0.11,
respectively. The volatility in our share price is attributable to a number of
factors. First, as noted above, the shares of our common stock are sporadically
and/or thinly traded. As a consequence of this lack of liquidity, the trading of
relatively small quantities of shares by our stockholders may disproportionately
influence the price of those shares in either direction. The price for our
shares could, for example, decline precipitously in the event that a large
number of shares of our common stock are sold on the market without commensurate
demand, as compared to a seasoned issuer which could better absorb those sales
without adverse impact on its share price.




Secondly,
we are a speculative or “risky” investment due to our limited operating history
and lack of profits to date, and uncertainty of future market acceptance for our
products and services. As a consequence of this enhanced risk, more risk-adverse
investors may, under the fear of losing all or most of their investment in the
event of negative news or lack of progress, be more inclined to sell their
shares on the market more quickly and at greater discounts than would be the
case with the stock of a seasoned issuer.




You may be unable to sell your common
stock at or above your purchase price, which may result in substantial losses to
you.




The
following factors may add to the volatility in the price of our common stock:
actual or anticipated variations in our quarterly or annual operating results;
government regulations, announcements of significant acquisitions, strategic
partnerships or joint ventures; our capital commitments; and additions or
departures of our key personnel. Many of these factors are beyond our control
and may decrease the market price of our common stock, regardless of our
operating performance. We cannot make any predictions or projections as to what
the prevailing market price for our common stock will be at any time, including
as to whether our common stock will sustain its current market price, or as to
what effect that the sale of shares or the availability of common stock for sale
at any time will have on the prevailing market price.






9




Volatility in our common stock price
may subject the Company to securities litigation.




The
market for our common stock is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
In the past, plaintiffs have often initiated securities class action litigation
against a company following periods of volatility in the market price of its
securities. We may in the future be the target of similar litigation. Securities
litigation could result in substantial costs and liabilities and could divert
management’s attention and resources.




Existing stockholders may experience
significant dilution from the sale of our common stock pursuant to the
investment agreement.




The sale
of our common stock to Dutchess Private Equities Fund, Ltd. in accordance with
the Investment Agreement will have a dilutive impact on our shareholders. As a
result, our net income per share could decrease in future periods and the market
price of our common stock could decline. In addition, the lower our stock price
is at the time we exercise our put option, the more shares of our common stock
we will have to issue to Dutchess Private Equities Fund, Ltd. in order to
drawdown on the Equity Line. If our stock price decreases, then our existing
shareholders would experience greater dilution. The perceived risk of dilution
may cause our stockholders to sell their shares, which would contribute to a
decline in the price of our common stock. Moreover, the perceived risk of
dilution and the resulting downward pressure on our stock price could encourage
investors to engage in short sales of our common stock. By increasing the number
of shares offered for sale, material amounts of short selling could further
contribute to progressive price declines in our common stock.




Dutchess Private Equities Fund, Ltd.
will pay less than the then-prevailing market price of our common stock which
could cause the price of our common stock to decline.




Our
common stock to be issued under the Investment Agreement will be purchased at a
seven percent (7%) discount to the lowest closing bid price during the five
trading days immediately following our notice to Dutchess Private Equities Fund,
Ltd. of our election to exercise our “put” right. Each issuance of shares of our
common stock will dilute the value of each share of common stock due to the
increase in the number of outstanding shares. Dutchess Private Equities Fund,
Ltd. has a financial incentive to sell our shares immediately upon receiving the
shares to realize the profit between the discounted price and the market price.
If Dutchess Private Equities Fund, Ltd. sells our shares, the price of our
common stock may decrease. If our stock price decreases, Dutchess Private
Equities Fund, Ltd. may have a further incentive to sell such shares.
Accordingly, the discounted sales price in the Investment Agreement may cause
the price of our common stock to decline.




Voting control of our common stock is
possessed by Betty-Ann Harland. Additionally, this concentration of ownership
could discourage or prevent a potential takeover of Global Wataire that might
otherwise result in your receiving a premium over the market price for your
common stock.




The
voting control of our common stock is in Betty-Ann Harland, our chairman and
wife of Sydney A. Harland, our president and Chief Executive Officer. Ms.
Harland owns 66,000 shares of our Series A preferred stock and 1,000,000 shares
of our Series B preferred stock. A holder of shares of our Series A preferred
stock is entitled to the number of votes equal to the number of shares of the
Series A preferred stock held by such holder multiplied by 200 on all matters
submitted to a vote of our stockholders. A holder of shares of the Series B
preferred stock is entitled to the number of votes equal to the number of shares
of the Series B preferred stock held by such holder multiplied by 500 on all
matters submitted to a vote of our stockholders. Consequently, as of the date of
this report, Ms. Harland had the right to vote 513,000,000 shares of our common
stock, a number in excess of our currently issued and outstanding shares of
common stock. The result of Ms. Harland’s voting control is that she has the
ability to control all matters submitted to our stockholders for approval and to
control our management and affairs, including extraordinary transactions such as
mergers and other changes of corporate control, and going private transactions.
Additionally, this concentration of voting power could discourage or prevent a
potential takeover of the Company that might otherwise result in your receiving
a premium over the market price for your common stock.






10




We may need to raise additional
capital. If we are unable to raise necessary additional capital, our business
may fail or our operating results and our stock price may be materially
adversely affected.




Because
we are a newly operational company, we need to secure adequate funding. If we
are unable to obtain adequate funding, we may not be able to successfully
develop and market our products and services and our business will most likely
fail. We do not have commitments for additional financing. To secure additional
financing, we may need to borrow money or sell more securities, which may reduce
the value of our outstanding securities. We may be unable to secure additional
financing on favorable terms or at all.




Selling
additional stock, either privately or publicly, would dilute the equity
interests of our stockholders. If we borrow more money, we will have to pay
interest and may also have to agree to restrictions that limit our operating
flexibility. If we are unable to obtain adequate financing, we may have to
curtail business operations, which would have a material negative effect on
operating results and most likely result in a lower stock price.




Our issuance of additional common
stock in exchange for services or to repay debt, would dilute your proportionate
ownership and voting rights and could have a negative impact on the market price
of our common stock.




Our board
may generally issue shares of common stock to pay for debt or services, without
further approval by our stockholders based upon such factors as our board of
directors may deem relevant at that time. For the past three years and for the
twelve month period ended August 31, 2007, we issued no common stock for debt.
For the past four years ended August 31, 2007, we issued a total of 2,316,325
shares in payment for services. It is likely that we will issue additional
securities to pay for services and reduce debt in the future. It is possible
that we will issue additional shares of common stock under circumstances we may
deem appropriate at the time.




The elimination of monetary liability
against our directors, officers and employees under our articles of
incorporation and the existence of indemnification rights to our directors,
officers and employees may result in substantial expenditures by Global Wataire
and may discourage lawsuits against our directors, officers and
employees.




Our
articles of incorporation contain provisions, which eliminate the liability of
our directors for monetary damages to the Comapny and our stockholders. Our
bylaws also require that we indemnify our officers and directors. We may also
have contractual indemnification obligations under our agreements with our
directors, officers and employees. The foregoing indemnification obligations
could result in the Company incurring substantial expenditures to cover the cost
of settlement or damage awards against directors, officers and employees, which
we may be unable to recoup. These provisions and resultant costs may also
discourage the Company from bringing a lawsuit against directors, officers and
employees for breaches of their fiduciary duties, and may similarly discourage
the filing of derivative litigation by our stockholders against our directors,
officers and employees even though such actions, if successful, might otherwise
benefit the Company and our stockholders.




Our directors have the right to
authorize the issuance of additional shares of our preferred stock and
additional shares of our common stock.




Our
directors, within the limitations and restrictions contained in our articles of
incorporation and without further action by our stockholders, have the authority
to issue shares of preferred stock from time to time in one or more series and
to fix the number of shares and the relative rights, conversion rights, voting
rights, and terms of redemption, liquidation preferences and any other
preferences, special rights and qualifications of any such series. We have no
intention of issuing additional shares of preferred stock at the present time.
Any issuance of additional shares of preferred stock could adversely affect the
rights of holders of our common stock.




Should we
issue additional shares of our common stock at a later time, each investor’s
ownership interest in our stock would be proportionally reduced. No investor
will have any preemptive right to acquire additional shares of our common stock,
or any of our other securities.






11




If we fail to remain current on our
reporting requirements, we could be removed from the OTC Bulletin Board, which
would limit the ability of broker-dealers to sell our securities and the ability
of stockholders to sell their securities in the secondary
market.
  The
Company is traded on the OTC Bulletin Board, and as such, we must be current in
our reports under Section 13 of the Exchange Act, in order to maintain our price
quotation privileges on the OTC Bulletin Board. If we fail to remain current on
our reporting requirements, we could be removed from the OTC Bulletin Board. As
a result, the market liquidity for our securities could be adversely affected by
limiting the ability of broker-dealers to sell our securities and the ability of
stockholders to sell their securities in the secondary market.
  Our common stock is subject to the
“penny stock” rules of the SEC and the trading market in our securities is
limited, which makes transactions in our stock cumbersome and may reduce the
value of an investment in our stock.
  The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a “penny stock,” for the purposes relevant to the Company, as any
equity security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions.
Inasmuch as the current bid and ask price of our common stock is less than $5.00
per share, our shares are classified as “penny stock” under the rules of the
SEC. For any transaction involving a penny stock, unless exempt, the rules
require:
  ·
              That
      a broker or dealer approve a person’s account for transactions in penny
      stocks; and
  ·
              The
      broker or dealer receives from the investor a written agreement to the
      transaction, setting forth the identity and quantity of the penny stock to
      be purchased.
  In order
to approve a person’s account for transactions in penny stocks, the broker or
dealer must:
  ·
              Obtain
      financial information and investment experience objectives of the person;
      and
  ·
              Make
      a reasonable determination that the transactions in penny stocks are
      suitable for that person and the person has sufficient knowledge and
      experience in financial matters to be capable of evaluating the risks of
      transactions in penny stocks.
  The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the SEC relating to the penny stock market,
which, in highlight form:
  ·
              Sets
      forth the basis on which the broker or dealer made the suitability
      determination; and
  ·
              That
      the broker or dealer received a signed, written agreement from the
      investor prior to the transaction.
  Generally,
brokers may be less willing to execute transactions in securities subject to the
“penny stock” rules. This may make it more difficult for investors to dispose of
our common stock and cause a decline in the market value of our
stock.
  Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
  The market for penny stocks has
suffered in recent years from patterns of fraud and abuse.
  Stockholders
should be aware that, according to SEC Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include:
   12
   ·
              Control
      of the market for the security by one or a few broker-dealers that are
      often related to the promoter or
issuer;
  ·
              Manipulation
      of prices through prearranged matching of purchases and sales and false
      and misleading press releases;
  ·
              Boiler
      room practices involving high-pressure sales tactics and unrealistic price
      projections by inexperienced sales
persons;
  ·
              Excessive
      and undisclosed bid-ask differential and markups by selling
      broker-dealers; and
  ·
              The
      wholesale dumping of the same securities by promoters and broker-dealers
      after prices have been manipulated to a desired level, along with the
      resulting inevitable collapse of those prices and with consequential
      investor losses.
  Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
The occurrence of these patterns or practices could increase the volatility of
our share price.
  Item
      2.
              Description
      of Property.
  Our
corporate office is located at 534 Delaware Avenue, Suite 412, Buffalo, New York
14202, which we rent at the rate of $250.00 per month. In addition, we use
approximately 400 square feet of office space at 5050 DeSorel, Suite 110
Montreal, Quebec, Canada H4P 1G5. We believe that all of our facilities are
adequate for at least the next 12 months. We expect that we could locate other
suitable facilities at comparable rates, should we need more space.
  Item
      3.
              Legal
      Proceedings.
  We are
not engaged in any other litigation, and we are unaware of any claims or
complaints that could result in future litigation. We will seek to minimize
disputes with our customers but recognize the inevitability of legal action in
today’s business environment as an unfortunate price of conducting
business.
  Item
      4.
              Submission
      of Matters to a Vote of Security
Holders.
  None.
  13




PART II
  Item
      5.
              Market
      for Common Equity and Related Stockholder
  Matters.
  Since
April 17, 2006, following the change in our corporate name from International
Development Corp. to Global Wataire, Inc., our common stock has been quoted on
the OTC Bulletin Board under the symbol “GWTE.OB.” Beginning in July 2001, until
December 9, 2004, our symbol was “OZLU.OB.” When we changed our corporate name
from Ozolutions, Inc. to International Development Corp. on December 9, 2004,
our symbol changed to “IDVL.OB.” The following table sets forth, for the fiscal
quarters indicated, the high and low bid prices. These quotations reflect the
closing inter-dealer prices, without mark-up, mark-down or commission, and may
not represent actual transactions. In reviewing the quotations, you should take
into account that our common stock was the subject of a one for 1,000 reverse
split on April 14, 2006. See “Description of Business.” The effect of the
reverse split was that our shares following the reverse split on April 14, 2006
are quoted at a price, which should be higher than that which obtained before
the reverse split.
  High
              
              
              LowFiscal 2005 Quarter
      Ended:
                November
      30, 2004
                February
      29, 2005
                May
      31, 2005
                August
      31, 2005
              
              $
                $
                $
                $
              0.
      01
                0.0024
                0.0007
                0.0007
              
              
              $
                $
                $
                $
              0.01
                0.0022
                0.0006
                0.0006Fiscal
      2006 Quarter Ended:November
      30, 2005
                February
      28, 2006
                May
      31, 2006
                August
      31, 2006
              
              $
                $
                $
                $
              0.0015
                0.0008
                1.01
                0.51
              
              
              $
                $
                $
                $
              0.0006
                0.0003
                0.
      18
                0.12Fiscal
      2007 Quarter Ended:November
      30, 2006
                February
      28, 2007
                May
      31, 2007
                August
      31, 2007
              
              $
                $
                $
                $
              0.51
                0.
      71
                0.40
                0.13
              
              
              $
                $
                $
                $
              0.14
                0.16
                0.14
                0.11
  We
currently have 24,584,571 shares of our common stock outstanding. Our shares of
common stock are held by approximately 1,667 stockholders of record. The number
of record holders was determined from the records of our transfer agent and does
not include beneficial owners of our common stock whose shares are held in the
names of various securities brokers, dealers, and registered clearing agencies.
There is no trading market for the shares of our preferred stock.
  We have
never declared or paid any cash dividends on our common stock. We do not
anticipate paying any cash dividends to stockholders in the foreseeable future.
In addition, any future determination to pay cash dividends will be at the
discretion of our board of directors and will be dependent upon our financial
condition, results of operations, capital requirements, and such other factors
as the board deem relevant.
  Recent Sales of Unregistered
Securities
  None.
   14




Securities Authorized for Issuance
under Equity Compensation Plans
  Plan
      Category
              
              Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
              
              
              Weighted-average
      exercise price of outstanding options, warrants and rights
              
              
              Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))(a)
              
              
              (b)
              
              
              (c)Equity
      compensation plans approved by security holders
              
              
              3,000,000
              
              
              $.13
              
              
              -0-Equity
      compensation plans not approved by security holders
              
              
              -0-
              
              
              $-0-
              
              
              -0-Total
              
              
              -0-
              
              
              -0-
              
              
              -0-
  Purchases of Equity Securities by the
Registrant and Affiliated Purchasers
  There
were no purchases of our equity securities by the Company or any affiliated
purchasers during any month within the fourth quarter of the fiscal year covered
by this Annual Report.
  Item 6.  Management’s
Discussion and Analysis or Plan of Operation.
   SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
  In this
report, we make a number of statements, referred to as “forward-looking
statements” which are intended to convey our expectations or predictions
regarding the occurrence of possible future events or the existence of trends
and factors that may impact our future plans and operating results. We note,
however, that these forward-looking statements are derived, in part, from
various assumptions and analyses we have made in the context of our current
business plan and information currently available to the Companyand in light of
our experience and perceptions of historical trends, current conditions and
expected future developments and other factors we believe to be appropriate in
the circumstances.
  You can
generally identify forward-looking statements through words and phrases such as
“seek,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,”
“budget,” “project,” “may be,” “may continue,” “may likely result,” and similar
expressions. When reading any forward-looking statement you should remain
mindful that all forward-looking statements are inherently uncertain as they are
based on current expectations and assumptions concerning future events or future
performance of the Company, and that actual results or developments may vary
substantially from those expected as expressed in or implied by that statement
for a number of reasons or factors, including those relating to:
  ·
              Whether
      or not markets for our products and services develop and, if they do
      develop, the pace at which they
develop;
  ·
              Our
      ability to attract and retain the qualified personnel to implement our
      growth strategies;
  ·
              Our
      ability to fund our short-term and long-term financing
    needs;
  ·
              Competitive
      factors;
  ·
              General
      economic conditions;
  ·
              Changes
      in our business plan and corporate strategies;
  and
  
  15




·
              Other
      risks and uncertainties discussed in greater detail in the sections of
      this report, including those captioned “Risk Factors” and “Management’s
      Discussion and Analysis or Plan of Operations.” Readers are cautioned not
      to place undue reliance on the forward-looking statements contained
      herein, which speak only as of the date hereof. We believe the information
      contained in this Form 10-KSB to be accurate as of the date hereof.
      Changes may occur after that date. We will not update that information
      except as required by law in the normal course of our public disclosure
      practices.
  ·
              Additionally,
      the following discussion regarding our consolidated financial condition
      and results of operations should be read in conjunction with the
      consolidated financial statements and related notes contained in Item 1 of
      Part I of this Form 10-KSB, as well as the consolidated financial
      statements in Item 7 of Part II of our Form 10-KSB for the fiscal year
      ended August 31, 2006.
  Each
forward-looking statement should be read in context with, and with an
understanding of, the various other disclosures concerning Global Wataire and
our business made elsewhere in this report as well as other pubic reports filed
with the United States Securities and Exchange Commission. You should not place
undue reliance on any forward-looking statement as a prediction of actual
results or developments. We are not obligated to update or revise any
forward-looking statement contained in this report to reflect new events or
circumstances unless and to the extent required by applicable law.
  Overview
  Plan of Operations. Our
proposed plan of operations for the next 12 months is to further develop our
plans to make acquisitions, achieve profitability and improve the availability
of working capital. We have identified the following steps in order to
accomplish the plan:
  ·
              First,we must control and
      in some cases reduce general and administrative expenses while growing our
      business.
  ·
              Second,we must find
      additional sources of working capital, through both debt and equity
      transactions, to fund our day to day operations as well as
      acquisitions.
  Profitability. Profitability
is directly dependent upon our ability to manage our business consistent with
our business strategy, which is described in “Description of Business” in this
report.
  Results of
Operations
  Since we
have made a significant change in our business and management, the results of
our previous operations may not be material to our future operations. However,
the previous results of operations may be relevant to an investor’s decision to
purchase shares of our common stock offered hereby. Any potential investor
should be aware that we have ceased all previous business and will focus on
trying to develop and market our advisory services or possible other business
opportunities.
  Comparison of
consolidated results of operations for the years ended August 31, 2007 and
August 31, 2006
  Revenue
for the year ending August 31, 2007 was $61,750. These revenues were
professional services for locating OTCBB shell’s for suitable mergers. Due to
the Sale of Freshwater Technologies, revenues for the year ended August 31,
2006, was $ -0-. Cost of goods sold was $-0- for each of the years ending August
31, 2007 and 2006, respectively. Gross profit was $61,750 and $-0- for fiscal
2007 and 2006, respectively.
  The net
loss for the year ended August 31, 2007 was $1,407,124 compared to a net loss of
$263,996 for the year ended August 31, 2006. Expenses for the year ended August
31, 2007 increased $1,010,136 over the year ended August 31, 2006. Increases in
total expenses can be directly attributable to compensation expense of stock
options of $389,953, an increase in consulting fees of $220,000 and an increase
in general and administrative costs of $334,515, which, can be directly
attributable to increases in the costs of other consulting fees of 73,000,
director’s compensation expense of $208,000 and directors fees of 30,000.
Interest expense for the year ended August 31, 2007 increased $15,668 over
fiscal 2006 as a result of the increase in the outstanding balances owing to
directors and a stockholder. As mentioned above, the sale of Freshwater
Technologies provided a gain to the company of $194,742 for the year ended
August 31, 2006.
   16
  Liquidity and Capital
Resources
  Comparison for
the fiscal years ended August 31, 2007 and August 31, 2006
  Our
operations used approximately $529,000 in cash during the year ended August 31,
2007. Cash required during the year ended August 31, 2007 came principally from
the proceeds from issuance of Regulation S shares of $948,000. Directors and
stockholder advances were repaid in the amount of $171.000.
  In
pursuing our marketing and sale of our products under our new business plan, we
estimate our operational expenses during the next 12 months will be
approximately $2,500,000.
  As
discussed by our accountants in the audited financial statements included in
this report, our revenues are currently insufficient to cover our costs and
expenses and our lack of sources of revenue raise substantial doubts about our
ability to continue as a going concern.
  Pursuant
to this report, we are attempting to raise additional capital. In addition,
certain of our directors and stockholders may continue to provide the Company
with the funds needed to continue our development and operations. To the extent
our revenue shortfall exceeds our capital raising efforts and the willingness
and ability of our directors and stockholders to continue providing the Company
with the funds needed, we anticipate raising any necessary capital from other
outside investors coupled with bank or mezzanine lenders. As of the date of this
report, we have not entered into any negotiations with any third parties to
provide such capital.
  We
anticipate that our current financing strategy of private debt and equity
offerings will meet our anticipated objectives and business operations for the
next 12 months. Subject to our ability to obtain adequate financing at the
applicable time, we may enter into definitive agreements on one or more of those
opportunities.
  Regulation S Offering in
Europe
  On
October 23, 2006, we began an offering of shares of our common stock to European
investors, pursuant to Regulation S promulgated under the Securities Act.
15,000,000 shares were offered at $0.50 per share. The shares weresold in the
offshore transactions to non-U.S. persons who were qualified investors and who
were deemed acceptable by the Company.
  The
shares were sold on a “best efforts” basis on the Berlin Stock Exchange in
Berlin, Germany through various authorized selling agents. All cash payments for
the shares were immediately available for use by the Company without the use of
any escrow agent.
  The
subscription period began on October 23, 2006 and terminated on January 31,
2007. On August 3, 2007 we added an additional 5,000,000 shares to share
offering for a total of 15,000,000 shares to be offered on the Berlin Stock
Exchange. As a result of the offering the Company sold 10,408,233 shares and
raised $947,927 after stock issuance costs.
  Application of Critical Accounting
Policies
  Our
financial statements and accompanying notes are prepared in accordance with
generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
impact the reported amounts of assets, liabilities, revenue, and expenses. These
estimates and assumptions are affected by management’s application of accounting
policies. Critical accounting policies include revenue recognition and
impairment of long-lived assets.
  We
recognize revenue in accordance with Staff Accounting Bulletin No.101, “Revenue
Recognition in Financial Statements.” Sales are recorded when products are
shipped to customers. Provisions for discounts and rebates to customers,
estimated returns and allowances and other adjustments are provided for in the
same period the related sales are recorded.
  We
evaluate our long-lived assets for financial impairment on a regular basis in
accordance with Statement of Financial Accounting Standards No. 144, “Accounting
for the Impairment or Disposal of Long-Lived Assets” which evaluates the
recoverability of long-lived assets not held for sale by measuring the carrying
amount of the assets against the estimated discounted future cash flows
associated with them. At the time such evaluations indicate that the future
discounted cash flows of certain long-lived assets are not sufficient to recover
the carrying value of such assets, the assets are adjusted to their fair
values.
   17
  Stock-Based
Compensation
  In
December 2002, the FASB issued SFAS No. 148 – “Accounting for Stock-Based
Compensation - Transition and Disclosure.” This statement amends SFAS No. 123 –
“Accounting for Stock-Based Compensation,” providing alternative methods of
voluntarily transitioning to the fair market value based method of accounting
for stock based employee compensation. FAS 148 also requires disclosure of the
method used to account for stock-based employee compensation and the effect of
the method in both the annual and interim financial statements. The provisions
of this statement related to transition methods are effective for fiscal years
ending after December 15, 2002, while provisions related to disclosure
requirements are effective in financial reports for interim periods beginning
after December 31, 2002.
  We
elected to continue to account for stock-based compensation plans using the
intrinsic value-based method of accounting prescribed by APB No. 25, “Accounting
for Stock Issued to Employees,” and related interpretations. Under the
provisions of APB No. 25, compensation expense is measured at the grant date for
the difference between the fair value of the stock and the exercise
price.
  Off-Balance Sheet
Arrangements
  We do not
have any off-balance sheet arrangements.
  Item
      7.
              Financial
      Statements.
  The
financial statements and related notes are included as part of this Annual
Report as indexed in the appendix on page F-1 through F-20.
  Item
      8.
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure.
  None.
  Item
      8A.
              Controls
      and Procedures.
  Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by us in the reports that we file under the Exchange
Act is accumulated and communicated to our management, including our principal
executive and financial officers, as appropriate to allow timely decisions
regarding required disclosure.
  Evaluation of Disclosure and
Controls and Procedures. As of the end of the period covered by this
Quarterly Report, we conducted an evaluation, under the supervision and with the
participation of our chief executive officer and principal financial officer, of
our disclosure controls and procedures (as defined in Rules 13a-15(e) of the
Exchange Act). Based on this evaluation, our Chief Executive Officer and
principal financial officer concluded that our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms.
  Changes in Internal Controls over
Financial Reporting. There was no change in our internal controls, which
are included within disclosure controls and procedures, during our most recently
completed fiscal quarter that has materially affected, or is reasonably likely
to materially affect, our internal controls.
   18
  Item 8B.Other
Information
   The
Company has entered into the following material agreements, which are described
in Item 10: Executive Compensation, under the caption “Employment
Agreements:”
  ·
              Employment
      Agreement between the Company and Betty-Ann Harland dated October 1,
      2004
  ·
              Employment
      Agreement between the Company and Sydney Harland dated August 23,
      2007
  ·
              Employment
      Agreement between the Company and Edmund Gorman dated August 23,
      2007
  The
Company has entered into the following material agreement, which is described in
Item 1: Description of Business, under the caption “Transaction with Dutchess
Private Equities Fund, Ltd:”
  ·
              Investment
      Agreement between the Company and Dutchess Private Equities Fund,
      Ltd.
  
 19
  PART III
  Item
      9.
                Directors
      and Executive Officers of the
Registrant.
  Executive Officers and
Directors
  The
following table furnishes the information concerning our directors and
officers.
  Name
                Age
                Position
                Director
      SinceBetty-Ann
      Harland
                55
                Chairman
                2004Sydney
      A. Harland
                56
                President,
      Chief Executive Officer and Director
                2006Edmund
      Gorman
                61
                Chief
      Financial Officer, Secretary and Director
                2006Robert
      Glassen
                60
                Director
                2006Arthur
      N. Kelly
                45
                Director
                2004Richard
      Proulx
                53
                Director
                2005Mark
      Hollingworth
                48
                Vice
      President
                N/A
  The
members of our board of directors are subject to change from time to time by the
vote of the stockholders at special or annual meetings to elect directors. The
number of the directors may be fixed from time to time by resolution duly passed
by our board. Each director is elected for a period of one year at the annual
meeting of our stockholders, and will hold office for the term for which elected
and until his successor is elected and qualified or until his earlier death,
resignation or removal. Vacancies and newly created directorships resulting from
any increase in the number of authorized directors may generally be filled by a
majority of the directors then remaining in office. The directors elect officers
annually. Betty-Ann Harland and Sydney A. Harland are married. Otherwise, there
are no family relationships among our directors and officers.
  We may
employ additional management personnel, as our board of directors deems
necessary. We have not identified or reached an agreement or understanding with
any other individuals to serve in management positions, but do not anticipate
any problem in employing qualified staff.
  A
description of the business experience during the past several years for each of
our directors and executive officers is set forth below.
  Betty-Ann Harland has
31 years of experience in a variety of senior management positions. Prior to
joining our board, she was vice-president of Ameri-can Equipment Sales and
Leasing. From 1988 to 1993, she worked in finance and insurance and sales
consulting for Decarie Motors, of Montreal, Quebec. From 1994 until 1995, she
was a finance and insurance specialist for Addison Bay, of Toronto,
Ontario.
  Sydney A. Harland has
over 20 years of business experience, primarily in management of new innovative
product solutions, in the railway, telecommunications, electrical utilities and
mining industries. Mr. Harland is an entrepreneur who ran his own company,
Ameri-Can Equipment Sales & Leasing Inc. for almost 20 years – until 2005.
Between 1995 and 2000, Mr. Harland also worked on a consulting basis for Ontario
Power Generation’s technology lab where he was mandated to develop marketing and
commercialization plans for OPG’s specialized technology and customer service
offerings. In 1998 he co-founded ARS Networks and served as chairman, president
and chief executive officer on a consulting basis. ARS was a fully reporting
publicly traded company that was engaged in the design and development of
advanced railway communications and data management systems. He holds two
patents and has been elected a member of the Canadian Institute of Marketing and
the American Railway Engineering and Maintenance-of-Way
Association.
  Edmund Gorman has 30
years of progressing experience in corporate finance, organizational development
and strategic planning. In 1973 he joined Delloite Touche and in 1978 moved to
Morrison Knudsen Corporation in Boise, Idaho, where he worked for almost 20
years in various executive positions, starting with the company as international
legal and tax counsel he rose to become senior vice president, chief financial
officer and treasurer.
   20







In 1995,
Mr. Gorman joined American Ecology Corporation of Houston, Texas, a NASDAQ
company specializing in nuclear, medical waste hazardous waste disposal, serving
first as a chief financial officer and then president and chief operating
officer. In 1997, Mr. Gorman founded E.J Gorman & Associates, a financial
and legal consulting firm specializing in project financing, company start-ups
and organizational development. He holds degrees of Bachelor of Science and
Doctor of Jurisprudence from the University of Oregon and a Post Doctorate
(L.L.M.) in Law from New York University.




Robert Glassen served
as a member of the Florida House of Representatives Staff, House Natural
Resources Committee, Tallahassee, Florida. In 1978 he joined Dames & Moore,
Boca Raton, Florida, as a Senior Geologist. In 1985, he joined O.H. Materials
Corporation (OHM) as a Regional Manager. In 1990 he joined Steffen, Robertson
and Kirsten US, Inc. (a company specializing in environmental and engineering
consulting for the mining industry) as executive vice-president and chief
operating officer. In 1993 he was recruited by Ogden Environmental where he was
a vice president and general manager of their Oak Ridge, Tennessee office. In
1997, he joined SCIENTECH, Inc. where he served as a general manager of Grant
Environmental, general manager of the Utility Security Services Division, and
vice president, sales and marketing on assignment with Ontario Power
Generation’s Kinectrics subsidiary. From 2002 to present, he was president of
Timberline Ridge Consulting, where he was a consultant to Enertech (a division
of Curtiss Wright) identifying opportunities and executing nationwide sales of
engineering and technical service to U.S. nuclear power plants. He holds degrees
of Bachelor of Arts from Villanova University of Pennsylvania, a Masters degree
from the University of Virginia and has completed post graduate studies in
geology at Florida State University.




Arthur N. Kelly has
18 years of marketing, sales and management experience and is currently vice
president of sales-North America for ELTEK Energy where he is responsible for
the development and growth of all ELTEK Energy sales in the U.S and Canadian
markets. He attended Concordia University in Montreal where he earned his
bachelor of business administration degree. Mr. Kelly held various sales and
management positions with Marconi Communications from 1988 to 2001 where he was
responsible for sales of power generation and communication supplies to major
North American communications companies. Mr. Kelly was a sales a manager for
S.N.P Associates in France from 1986 to 1988 and also district sales manager for
Pylon Electronics in Montreal, Quebec from 1985 to 1986.




Richard Proulx has a
background in marketing and sales and presently is director of sales of Cash
Acme, Canada, a division of Reliance Manufacturing, a world-wide Australian
based specialty water valve manufacturer supplying its products to the
commercial and residential building industry. Prior to joining Cash Acme,
Canada, Mr. Proulx was North American sales manager for Reliance Manufacturing’s
product launch and North American distribution network. From 1998 to 2002, he
was general sales manager of IIG Specialties responsible for introducing new
industrial products to the North American market and managing U.S and Canadian
sales operations for existing product lines. From 1985 to 1997, Mr. Proulx was
president and founder of Terval Sales and Services, a plumbing and heating
manufacturer's sales agency in Toronto. He received his C.E.T. in mechanical
building sciences from St. Laurent College in 1974 and his diplomas in business
administration from Vanier College in 1976.




Mark Hollingworth is
the founder of 5i Strategic Affairs, a management consulting firm specializing
in leading and facilitating the strategic planning and implementation process
for blue chip and promising start up companies. Recent clients have included the
Government of Canada, Hydro-Quebec, Ivaco Inc, Kruger Inc, McGill University,
Option Consommateurs, Setym International, and many other smaller companies and
start-ups. Mr. Hollingsworth also lectures at McGill University where he teaches
Strategic Management/Leadership, Technological Entrepreneurship and Technology
Impact Assessment in several different faculties. He is the author of the book
“Growing People, Growing Companies” and has also had articles published in the
Globe & Mail and the Ivey Business Journal.






21




Committees of the Board of
Directors




Compensation Committee. Our
board of directors has created a compensation committee which makes
recommendations to the board of directors concerning salaries and compensation
for our executive officers and employees. The members of the committee are
Arthur Kelly, as chairman, and Richard Proulx. We have adopted a charter for the
compensation committee.




Audit Committee. Our board of
directors has created an audit committee which is directly responsible for the
appointment, compensation, and oversight of the work of any registered public
accounting firm employed by the Company (including resolution of disagreements
between our management and the auditor regarding financial disclosure) for the
purpose of preparing or issuing an audit report or related work. The audit
committee also reviews and evaluates our internal control functions. The members
of the committee are Arthur Kelly, as chairman, and Richard Proulx. We have
adopted a charter for the audit committee.




Audit
committee members shall meet the requirements of the National Association of
Securities Dealers and the criteria set forth below. The audit committee shall
be comprised of two or more directors as determined by the board of directors,
each of whom shall be independent non-executive directors, free from any
relationship that would interfere with the exercise of his independent judgment.
All members of the audit committee shall have a basic understanding of finance
and accounting and be able to read and understand fundamental financial
statements, and at least one member of the audit committee shall have accounting
or related financial management expertise.




Specifically,
the audit committee:




·
            Review
      and reassess the adequacy of its charter at least annually. Submit the
      charter to the board of directors for approval and have the document
      published at least every three years in accordance with the Securities and
      Exchange Commission regulations.




·
            Review
      our annual audited financial statements prior to filing or distribution.
      Review should include discussion with management and independent auditors
      of significant issues regarding accounting principles, practices and
      judgments.




·
            In
      consultation with the management and the independent auditors, consider
      the integrity of the Company’s financial reporting processes and controls.
      Discuss significant financial risk exposures and the steps management has
      taken to monitor, control and report such exposures. Review significant
      findings prepared by the independent auditors together with management’s
      responses including the status of previous
  recommendations.




·
            The
      independent auditors are ultimately accountable to the audit committee and
      the board of directors. The audit committee shall review the independence
      and performance of the auditors and annually recommend to the board of
      directors the appointment of the independent auditors or approve any
      discharge of auditors when circumstances
  warrant.




·
            Approve
      the fees and other significant compensation to be paid to the independent
      auditors.




·
            On
      an annual basis, the audit committee should review and discuss with the
      independent auditors all significant relationships they have with the
      Company that could impair the auditors’
  independence.




·
            Review
      the independent auditors’ audit plan, and discuss scope, staffing,
      locations, reliance upon management and internal audit and general audit
      approach.




·
            Prior
      to releasing the year-end earnings, discuss the results of the audit with
      the independent auditors. Discuss certain matters required to be
      communicated to audit committees in accordance with the American Institute
      of Certified Public Accountants Statement of Auditing Standards No.
      61.




·
            Consider
      the independent auditors’ judgment about the quality and appropriateness
      of our accounting principles as applied in its financial
      reporting.






22




The
members of the audit committee are independent as defined under Rule 4200(a)(15)
of the NASD’s listing standards.




Our board
of directors has determined that Mr. Kelly is a financial expert. In addition,
Mr. Kelly is independent, as that term is used in Item 7(d)(3)(iv) of Schedule
14A under the Securities Exchange Act of 1934. In order to be considered to be
independent, a member of an audit committee of a listed issuer that is not an
investment company may not, other than in his or her capacity as a member of the
audit committee, the board of directors, or any other board
committee:




·
            Accept
      directly or indirectly any consulting, advisory, or other compensatory fee
      from the issuer or any subsidiary thereof, provided that, unless the rules
      of the national securities exchange or national securities association
      provide otherwise, compensatory fees do not include the receipt of fixed
      amounts of compensation under a retirement plan (including deferred
      compensation) for prior service with the listed issuer (provided that such
      compensation is not contingent in any way on continued service);
      or




·
            Be
      an affiliated person of the issuer or any subsidiary
    thereof.




As
defined by the Exchange Act, an audit committee financial expert means a person
who has the following attributes:




·
            An
      understanding of generally accepted accounting principles and financial
      statements;




·
            The
      ability to assess the general application of such principles in connection
      with the accounting for estimates, accruals and
  reserves;




·
            Experience
      in preparing, auditing, analyzing or evaluating financial statements that
      present a breadth and level of complexity of accounting issues that are
      generally comparable to the breadth and complexity of issues that can
      reasonably be expected to be raised by our financial statements, or
      experience actively supervising one or more persons engaged in such
      activities;




·
            An
      understanding of internal controls and procedures for financial reporting;
      and




·
            An
      understanding of audit committee
functions.




Mr. Kelly
has acquired the status of financial expert through experience actively
supervising a principal financial officer, principal accounting officer,
controller, public accountant, auditor or person performing similar functions,
and overseeing or assessing the performance of companies or public accountants
with respect to the preparation, auditing or evaluation of financial
statements.




Nominating Committee. Our
board of directors has created a nominating committee which exercises the power
and authority to recommend the appropriate size and composition of our board,
nominees for election to our board, and nominees for election to the committees.
We have not yet formed the committee. We have adopted a charter for the
nominating committee.




Executive Committee. Our
board of directors has created an executive committee which exercises all the
powers and authority of our board between regular or special meetings of the
board in the management of our business and affairs, except to the extent
limited by Nevada law. We have not yet formed the committee. We have adopted a
charter for the executive committee.




Section 16(a) Beneficial Ownership
Reporting Compliance




Under
Section 16(a) of the Exchange Act, our directors and certain of our officers,
and persons holding more than 10 percent of our common stock are required to
file forms reporting their beneficial ownership of our common stock and
subsequent changes in that ownership with the United States Securities and
Exchange Commission. Such persons are also required to furnish Global Wataire
with copies of all forms so filed.






23






Based
solely upon a review of copies of such forms filed on Forms 3, 4, and 5, and
amendments thereto furnished to us, we believe that as of the date of this
report, our executive officers, directors and greater than 10 percent beneficial
owners complied on a timely basis with all Section 16(a) filing
requirements.




Code of Ethics




We have
adopted a code of ethics that applies to our principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The code of ethics is designed to deter
wrongdoing and to promote:




·
            Honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional
      relationships;




·
            Full,
      fair, accurate, timely, and understandable disclosure in reports and
      documents that we file with, or submit to, the SEC and in other public
      communications made by the Company;




·
            Compliance
      with applicable governmental laws, rules and
  regulations;




·
            The
      prompt internal reporting of violations of the code to an appropriate
      person or persons identified in the code;
and




·
            Accountability
      for adherence to the code.




We will
provide to any person without charge, upon request, a copy of our code of
ethics. Any such request should be directed to our corporate secretary at 534
Delaware Avenue, Suite 412, Buffalo, New York 14202, telephone (716) 332
7150.




Item
      10.
            Executive
      Compensation.




The
following table provides certain summary information concerning the compensation
earned by the named executive officers (determined as of the end of the last
fiscal year) for services rendered in all capacities to Global Wataire and our
subsidiaries for the fiscal years ended August 31, 2007, 2006 and
2005.






24





Summary Compensation
Table
  Name
      and Principle Position
              Year
              Annual
      Compensation
              Long
      Term CompensationSalary
              Bonus
              Other
      Annual Compensation
              Awards
              PayoutsRestricted
      Stock
                Award(s)
      (US$)
              Securities
      Underlying Options/SARs (#)
              LTIP
      Payouts (US$)Sydney
      Harland
                Chief
      Executive Officer
                and
      Director
                Betty
      Harland (1)
                and
      Director
                Edmund
      Gorman
                Chief
      Financial Officer
                Mark
      Hollingworth
                Vice
      President
              2007
                2006
                2005
                2007
                2006
                2005
                2007
                2006
                2005
                2007
              0
                0
                N/A
                0
                0
                0
                N/A
                N/A
                N/A
                0
              0
                0
                N/A
                0
                0
                0
                N/A
                N/A
                N/A
                0
              $334,333
                0
                N/A
                $237,000
                $232,000
                $251,667
                $63,000
                N/A
                N/A
                0
              0
                0
                N/A
                0
                0
                0
                N/A
                N/A
                N/A
                0
              500,000
                0
                N/A
                500,000
                0
                0
                N/A
                N/A
                N/A
                0
              0
                0
                N/A
                0
                0
                0
                N/A
                N/A
                N/A
                0
  (1)
              Ms.
      Harland’s employment contract commenced on October 1,
  2004.
  (2)
              Mr.
      Robertson and Mr. Weissengruber’s contracts were terminated in
      2006.
  We have
no long-term incentive compensation plans for our executive officers and
employees. In addition, we do not award stock appreciation rights or long term
incentive plan pay-outs
  On August
23, 2007 the Company entered in employment contracts with Messrs Harland and
Gorman
  Options Granted In First Quarter of
Fiscal 2007
  On July
25, 2007 each member of the Board of Directors was granted as compensation for
services options to buy 500,000 shares of the Company’s common stock at the last
quoted common stock offering price as of that day.
  Compensation of
Directors
  In the
fiscal year ended August 31, 2007, we paid $5,000 each to our non-employee
directors as compensation for their services as directors. On July 25, 2007,
each member of the Board of Directors was granted as compensation for services,
options to buy 500,000 shares of the Company’s common stock at the last quoted
common stock offering price as of that day.
   25
  Employment
Agreements
  On
October 1, 2004, the Company executed an agreement with Ms. Harland whereby she
would perform various consulting services to the Company for a period of five
years commencing on October 1, 2004. Our board of directors will review this
agreement from time to time.
  On August
23, 2007 the Company entered into an employment agreement with Mr. Harland to
serve as President and Chief Executive Officer for a period of 5 years. On the
same date the Company entered into an employment agreement with Mr. Gorman to
serve as Chief Financial Officer for a period of 2 years.
  Item
      11.
                Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
  The
following table presents information regarding the beneficial ownership of all
shares of our common stock by:
  ·
                Each
      person who owns beneficially more than five percent of the outstanding
      shares of our common stock;
  ·
                Each
      person who owns beneficially outstanding shares of our preferred
      stock;
  ·
                Each
      director;
  ·
                Each
      named executive officer; and
  ·
                All
      directors and officers as a group.
  Name
      of Beneficial Owner (1)
                Shares
      of Common Stock Beneficially Owned (2)
                Shares
      of Preferred Stock Beneficially Owned (2)Number
                Percent
                Number
                PercentBetty-Ann
      Harland (3) (5)
      (6)
                5,000,000
                25
                1,000,000
                100Betty-Ann
      Harland (4) (5)
      (6)
                -0-
                -0-
                66,000
                66Sydney
      A. Harland (5)
                -0-
                -0-
                -0-
                -0-Edmund
      Gorman
                -0-
                -0-
                -0-
                -0-Robert
      Glassen
                -0-
                -0-
                -0-
                -0-Arthur
      N. Kelly
                -0-
                -0-
                -0-
                -0-Richard
      Proulx
                -0-
                -0-
                -0-
                -0-Mark
      Hollingworth
                -0-
                -0-
                -0-
                -0-All
      officers and directors as a group (seven persons)
                5,000,000
                25
                1,066,000
  
  (1)
                Unless
      otherwise indicated, the address for each of these stockholders is c/o
      Global Wataire, 534 Delaware Avenue, Suite 412, Buffalo, New York 14202.
      Also, unless otherwise indicated, each person named in the table above has
      the sole voting and investment power with respect to our shares of common
      stock which he beneficially owns.
  (2)
                Beneficial
      ownership is determined in accordance with the rules of the Securities and
      Exchange Commission. As of the date of this report, there were issued and
      outstanding 20,191,637 shares of our common stock, 66,000 shares of our
      Series A preferred stock, 1,000,000 shares of our Series B preferred Stock
      and -0- of our Series C preferred stock and -0- of our Series D preferred
      stock.
  (3)
                Series
      B preferred stock.
  (4)
                Series
      A preferred stock.
  (5)
                Mr.
      Harland and Ms. Harland are
married.
  (6)
                Betty-Ann
      Harland is chairman of our board of directors. She holds 5,000,000 shares
      of our common stock, 66,000 shares of our Series A preferred stock and
      1,000,000 shares of our Series B preferred stock, the ownership of which
      gives her the power to vote 513,000,000 shares of our common stock, which
      number exceeds the majority of the issued and outstanding shares of the
      common stock on the date of this
report.
  Other as
stated above:
  ·
                There
      are no arrangements, known to us, including any pledge by any person of
      our securities, the operation of which may at a subsequent date result in
      a change in control of the Company;
and
  
 26
  ·
                  There
      are no arrangements or understandings among members of both the former and
      the new control groups and their associates with respect to election of
      directors or other matters.
  Item
      12.
                  Certain
      Relationships and Related
Transactions.
  On
September 23, 2004, Betty-Ann Harland acquired 15,000,000 shares of our common
stock, which represented 30.51 percent of our issued and outstanding common
stock. Ms. Harland paid the sum of $25,000 for the shares. In January 2005, the
15,000,000 common shares were exchanged for 1,000,000 shares of our Series A
preferred stock. In July 2005, our board of directors approved the surrendering
and cancellation of 900,000 shares of Series A preferred stock held by Ms.
Harland. In July, 2005, our board authorized the issuance of 1,000,000 shares of
Series B preferred stock to Ms. Harland in consideration of $1,000 and the
surrender of 900,000 shares of our Series A preferred stock. See “Description of
Business – Change in Control.” During the period ended February 28, 2007, Ms.
Harland converted 25,000 shares of Class A Preferred Shares into 5,000,000
Shares of Common Stock. Additionally, other stockholders of the Company that are
closely related to Ms. Harland also converted 9,000 shares of Class A Preferred
Shares into 1,800,000 Shares of Common Stock during the same
period.
  On
January 11, 2006, we executed and closed an Asset Sale Agreement with Max
Weissengruber, our president, chief operations officer and a director, and D.
Brian Robertson, our chief financial officer, with respect to the purchase of
certain assets of Freshwater Technologies, Inc., our wholly-owned subsidiary.
See “Description of Business – Previous Business.” Our board of directors
approved of the sale to Messrs. Weissengruber and Robertson on September 29,
2005, and as modified, on January 6, 2006.
  Item
      13.
                  Exhibits.
  Exhibit
      No.
                  Identification of
      Exhibit3.1
                  Articles
      of Incorporation3.2
                  Bylaws
      (1)10.1
                  Investment
      Agreement Dated August 24, 2007, by and between the Company and Dutchess
      Private Equities Fund Ltd. (2)10.2
                  Registration
      Rights Agreement dated August 24, 2007, by and between the Company and
      Dutchess Private Equities Fund Ltd. (2)14
                  Code
      of Ethics(3)23.1
                  Consent
      of Independent Certified Public Accountants.31.1
                  Certification
      of Sydney A. Harland, Chief Executive Officer of Global Wataire, Inc.,
      pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the
      Sarbanes-Oxley Act of 2002.31.2
                  Certification
      of Edmund J. Gorman, Chief Financial Officer of Global Wataire, Inc.,
      pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the
      Sarbanes-Oxley Act of 2002.32.1
                  Certification
      of Sydney A. Harland, Chief Executive Officer of Global Wataire, Inc.,
      pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the
      Sarbanes-Oxley Act of 2002.32.2
                  Certification
      of Edmund J. Gorman, Chief Financial Officer of Global Wataire, Inc.,
      pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the
      Sarbanes-Oxley Act of 2002.99.1
                  Ed
      Gorman August 2007 Employment Contract (4)99.2
                  Sydney
      Harland August 2007 Employment Contract (4)99.3
                  Betty
      Harland October 2004 Employment Contract
(4)
  (1)
Incorporated by reference to Form 10SB12G filed on August 15, 2000 (File No.
000-31343)
  (2)
Incorporated by reference to Form 8K filed on August 30, 2007 (File No.
000-31343)
  (3)
Incorporated by reference from Form 10KSB filed on January 30, 2006 (File No.
000-31343)
  (4)
Incorporated by reference from Form SB-2 filed on September 28, 2007 (File No.
333-146387)
  Item
      14.
                  Principal
      Accountant Fees and Services.
  Audit Fees
  The
aggregate fees billed by Rotenberg & Company, LLP for professional services
rendered for the audit of our annual financial statements for fiscal year ended
August 31, 2006 were $25,478.
  The
aggregate fees billed by Rotenberg & Company, LLP for professional services
rendered for the audit of our annual financial statements for fiscal year ended
August 31, 2007 were $25,500.
   27
  Audit Related
Fees
  The
aggregate audit-related fees billed by Rotenberg & Company, LLP for
professional services rendered for the audit of our annual financial statements
for fiscal year ended August 31, 2006 were $2,454 for review of the SEC comment
letter response.
  The
aggregate audit-related fees billed by Rotenberg & Company, LLP for
professional services rendered for the audit of our annual financial statements
for fiscal year ended August 31, 2007 were $795 for review of the SEC comment
letter response.
  Tax Fees
  The
aggregate tax fees billed by Rotenberg & Company, LLP for professional
services rendered for tax services for fiscal year ended August 31, 2006 were
$2,500.
  The
aggregate tax fees billed by Rotenberg & Company, LLP for professional
services rendered for tax services for fiscal year ended August 31, 2007 were
$-0-..
  All Other Fees
  There
were no other fees billed by Rotenberg & Company, LLP for professional
services rendered during the last two fiscal years, other than as stated under
the captions Audit Fees, Audit-Related Fees, and Tax Fees.
   28
    SIGNATURES
   In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
   Dated: June 18,
2008
   By/s/ Sydney A. Harland
 Sydney A.
Harland,
 Chief
Executive Officer
   By/s/ Edmund J. Gorman
 Edmund J.
Gorman,
 Chief
Financial Officer
   In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
  Signature
                  Title
                  Date/s/
      Sydney A. Harland
                    Sydney
      A. Harland
                  President,
                    Chief
      Executive Officer
                    and
      Director
                  June
      18, 2008/s/
      Edmund J. Gorman
                    Edmund
      J. Gorman
                  Chief
      Financial Officer,
                    Secretary
      and Director
                  June
      18, 2008/s/
      Betty-Ann Harland
                    Betty-Ann
      Harland
                  Chairman
                  June
      18, 2008/s/
      Robert Glassen
                    Robert
      Glassen
                  Director
                  June
      18, 2008/s/
      Arthur N. Kelly
                    Arthur
      N. Kelly
                  Director
                  June
      18, 2008/s/
      Richard Proulx
                    Richard
      Proulx
                  Director
                  June
      18, 2008
   29
  GLOBAL WATAIRE
INC.
 (A NEVADA
CORPORATION)
 Buffalo, New York
  FINANCIAL
      REPORTSATAugust
      31, 2007
  
  
  GLOBAL WATAIRE
INC.
 (A NEVADA
CORPORATION)
  Buffalo, New York
  TABLE OF CONTENTS
  REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                    1Consolidated
      Balance Sheets at August 31, 2007 and 2006
                    2Consolidated
      Statements of Changes in Stockholders’ Deficit for the
                      Years
      Ended August 31, 2007 and 2006
                    3Consolidated
      Statements of Operations for the Years Ended
                      August
      31, 2007 and 2006
                    4Consolidated
      Statements of Cash Flows for the Years Ended
                      August
      31, 2007 and 2006
                    5-6Notes
      to Consolidated Financial Statements
                    7-14
  
  
  REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
 
 
 To the
Board of Directors and
Stockholders
 Global
Wataire, Inc.
 (A
Nevada Corporation)
 Montreal,
Quebec, Canada
 
 
 We have audited the accompanying
consolidated balance sheets of Global Wataire, Inc. as of August 31, 2007 and
2006, and the related statements of operations, changes in stockholders'
deficit, and cash flows for the years then ended.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
 
 We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States).  Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In our opinion, the financial
statements referred to above present fairly, in all material respects, the
financial position of the Company as of August 31, 2007 and 2006, and the
results of its operations and its cash flows for they years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 As discussed in Note P to the
financial statements, the financial statements for August 31, 2006 were restated
because the purchase of DigiTar was rescinded.  For the year ended
August 31, 2006 the purchase was recorded as an investment of $65,618 and a gain
on subsidiary stock investment of $65,618.  Because the transaction
was rescinded, this investment should not have been recorded.  Total
assets at August 31, 2006 have therefore been reduced by $65,618 to $-0- and net
loss at August 31, 2006 increased by $65,618 to $263,996.
 
 The accompanying financial
statements have been prepared assuming Global Wataire, Inc. will continue as a
going concern.  As discussed in Note E to the consolidated financial
statements, the Company has incurred losses that have resulted in an accumulated
deficit.  This condition raises substantial doubt about the Company’s
ability to continue as a going concern.  Management’s plans regarding
this matter are described in Note E.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
 /s/
Rotenberg & Co., llp
 
 Rotenberg
& Co., llp
 Rochester,
New York
 November
29, 2007
    F-1




GLOBAL
      WATAIRE INC. AND SUBSIDIARY(A
      NEVADA CORPORATION)Buffalo,
      New YorkCONSOLIDATED
      BALANCE SHEETSRestatedAugust
      31,
              
              2007
              
              
              2006ASSETSCurrent
      AssetsCash
      and Cash Equivalents
              
              $
              197,593
              
              
              $
              —LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      LiabilitiesAccounts
      Payable
              
              $
              21,861
              
              
              $
              157,253Accrued
      Expenses
              
              
              35,829
              
              
              
              18,500Accrued
      Compensation - Directors
              
              
              511,833
              
              
              
              —Due
      to Directors
              
              
              319,224
              
              
              
              490,281Total
      Liabilities
              
              
              888,747
              
              
              
              666,034Stockholders'
      DeficitCommon
      Stock: $.001 Par; 800,000,000 Shares Authorized;23,191,637
      and 483,404, Issued and 20,191,637
              
              
              20,191
              
              
              
              484and
      483,404 Outstanding, respectivelyCommon
      Stock, Class B: $.001 Par; 50,000 Shares Authorized;-0-
      Issued and Outstanding
              
              
              ––
              
              
              
              ––Preferred
      Stock, Class A: $.001 Par; 1,000,000 Shares Authorized;66,000
      and 100,000 Issued andOutstanding,
      respectively
              
              
              66
              
              
              
              100Preferred
      Stock, Class B: $.001 Par; 5,000,000 Shares Authorized;1,000,000
      Issued and Outstanding
              
              
              1,000
              
              
              
              1,000Preferred
      Stock, Class C: $.001 Par; 15,000,000 Shares Authorized;-0-
      Issued and Outstanding
              
              
              ––
              
              
              
              ––Preferred
      Stock, Class D: $.001 Par; 13,000,000 Shares Authorized;-0-
      Issued and Outstanding
              
              
              ––
              
              
              
              —Additional
      Paid-In Capital
              
              
              4,103,631
              
              
              
              2,738,300Accumulated
      Deficit
              
              
              (4,813,042)
              )
              
              
              (3,405,918
              )Treasury
      Stock – 3,000,000 Shares at $.001 Par
              
              
              (3,000
              )
              
              
              —Total
      Stockholders' Deficit
              
              
              (691,154
              )
              
              
              (660,034
              )Total
      Liabilities and Stockholders' Deficit
              
              $
              197,593
              
              
              $
              —
  
 F-2
 GLOBAL
      WATAIRE INC. AND SUBSIDIARY(A
      NEVADA CORPORATION)Buffalo,
      New YorkSTATEMENT
      OF CHANGES IN STOCKHOLDERS’ DEFICITCommon
                
                
                Preferred
      Stock
                
                
                Additional
                
                
                
                
                
                Treasury
                
                
                TotalStock
                
                
                ($.001
      Par)
                
                
                Paid
      - In
                
                
                Accumulated
                
                
                Stock
                
                
                Stockholders’($.001
      Par)
                
                
                Class
      A
                
                
                Class
      B
                
                
                Capital
                
                
                Deficit
                
                
                ($.001
      Par)
                
                
                DeficitBalance
      - August 31, 2005
                
                $
                484
                
                
                $
                100
                
                
                $
                1,000
                
                
                $
                2,709,843
                
                
                $
                (3,141,922
                )
                
                $
                ––
                
                
                $
                (430,495
                )Capital
      Contribution – Interest Expense
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                28,457
                
                
                
                —
                
                
                
                —
                
                
                
                28,457Net
      Loss - Restated
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (263,996
                )
                
                
                —
                
                
                
                (263,996
                )Balance
      - August 31, 2006 - Restated
                
                
                484
                
                
                
                100
                
                
                
                1,000
                
                
                
                2,738,300
                
                
                
                (3,405,918
                )
                
                
                —
                
                
                
                (666,034
                )Common
      Stock Issued in Exchange for Preferred Stock
                
                
                7,000
                
                
                
                (34
                )
                
                
                —
                
                
                
                (6,966
                )
                
                
                —
                
                
                
                —
                
                
                
                —Common
      Stock Issued in Exchange for Services Rendered
                
                
                2,300
                
                
                
                —
                
                
                
                —
                
                
                
                (2,300
                )
                
                
                —
                
                
                
                —
                
                
                
                —Common
      Stock Issued for Cash
                
                
                13,407
                
                
                
                —
                
                
                
                —
                
                
                
                934,519
                
                
                
                —
                
                
                
                —
                
                
                
                947,926Acquisition
      of Common Stock into Treasury Stock
                
                
                (3,000
                )
                
                
                —
                
                
                
                —
                
                
                
                6,000
                
                
                
                —
                
                
                
                (3,000
                )
                
                
                —Capital
      Contribution – Interest Expense
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                44,125
                
                
                
                —
                
                
                
                —
                
                
                
                44,125Compensation
      Expense – Stock Options
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                389,953
                
                
                
                —
                
                
                
                —
                
                
                
                389,953Net
      Loss
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (1,407,124
                )
                
                
                —
                
                
                
                (1,407,124
                )Balance
      - August 31, 2007
                
                $
                20,191
                
                
                $
                66
                
                
                $
                1,000
                
                
                $
                4,103,631
                
                
                $
                (4,813,042
                )
                
                $
                (3,000
                )
                
                $
                (691,154
                )
  
  F-3




GLOBAL
      WATAIRE INC. AND SUBSIDIARY(A
      NEVADA CORPORATION)Buffalo,
      New YorkSTATEMENTS
      OF OPERATIONSRestatedFor
      the Years Ended August 31,
              
              2007
              
              
              2006Revenues,
      Net
              
              $
              61,750
              
              
              $
              —Cost
      of Goods Sold
              
              
              —
              
              
              
              —Gross
      Profit
              
              
              61,750
              
              
              
              —ExpensesBad
      Debt
              
              
              50,000
              
              
              
              —Compensation
      Expense – Stock Options
              
              
              389,953
              
              
              
              —Consulting
      Fees
              
              
              440,000
              
              
              
              220,000General
      and Administrative
              
              
              544,796
              
              
              
              210,281Interest
      Expense
              
              
              44,125
              
              
              
              28,457Total
      Expenses
              
              
              1,468,874
              
              
              
              458,738Loss
      from Operations BeforeProvision
      for Taxes
              
              
              (1,407,124
              )
              
              
              (458,738
              )Provision
      for Taxes
              
              
              —
              
              
              
              —Loss
      from Operations
              
              
              (1,407,124
              )
              
              
              (458,738
              )Gain
      from Sale of Net Assets ofSubsidiary,
      Net of Taxes
              
              
              —
              
              
              
              194,742Net
      Loss
              
              $
              (1,407,124
              )
              
              $
              (263,996
              )Weighted
      Average Number ofCommon
      Shares Outstanding -Basic
              
              
              8,770,043
              
              
              
              483,404Diluted
              
              
              9,090,454
              
              
              
              483,404Net
      Loss Per Common Share -Basic
      and Diluted – Continuing Operations
              
              $
              (0.16
              )
              
              $
              (0.95
              )Basic
      and Diluted – Discontinued Operations
              
              $
              0.00
              
              
              $
              0.40
  
 F-4
  GLOBAL
      WATAIRE INC. AND SUBSIDIARY(A
      NEVADA CORPORATION)Buffalo,
      New YorkCONSOLIDATED
      STATEMENTS OF CASH FLOWSRestatedYears
      Ended August 31,
                
                2007
                
                
                2006Cash
      Flows from Operating ActivitiesNet
      Loss
                
                $
                (1,407,124
                )
                
                $
                (263,996
                )Non-Cash
      Adjustments:Bad
      Debt
                
                
                50,000
                
                
                
                —Gain
      on Sale of Net Assets of Subsidiary
                
                
                —
                
                
                
                (194,742
                )Interest
      on Directors/Stockholder Loans
                
                
                44,125
                
                
                
                28,457Revenues
      to be Applied Against Accounts Payable
                
                
                (61,750)
                
                
                
                ––Compensation
      Expense – Stock Options
                
                
                389,953
                
                
                
                ––Changes
      in Assets and Liabilities:)Accounts
      Payable
                
                
                (73,643
                )
                
                
                83,186Accrued
      Expenses
                
                
                17,329
                
                
                
                18,500Accrued
      Compensation - Directors
                
                
                511,833
                
                
                
                ––Net
      Cash Flows from Operating Activities
                
                
                (529,277
                )
                
                
                (328,595
                )Cash
      Flows from Investing ActivitiesLoan
      Advance
                
                
                (50,000
                )
                
                
                —Cash
      Flows from Financing ActivitiesProceeds
      from Issuance of Regulation S Shares
                
                
                947,927
                
                
                
                ––Advances
      from (Repayment to) Directors - Net
                
                
                (171,057
                )
                
                
                328,401Net
      Cash Flows from Financing Activities
                
                
                776,870
                
                
                
                328,401Net
      Change in Cash and Cash Equivalents
                
                
                197,593
                
                
                
                (194
                )Cash
      and Cash Equivalents - Beginning of Year
                
                
                —
                
                
                
                194Cash
      and Cash Equivalents - End of Year
                
                $
                197,593
                
                
                
                —
  -
continued -
  F-5
  GLOBAL
      WATAIRE INC. AND SUBSIDIARY(A
      NEVADA CORPORATION)Buffalo,
      New YorkCONSOLIDATED
      STATEMENTS OF CASH FLOWS - continuedRestatedYears
      Ended August 31,
                
                2007
                
                
                2006Supplemental
      DisclosuresInterest
      Paid
                
                $
                —
                
                
                $
                —Income
      Taxes Paid
                
                $
                —
                
                
                $
                —NON-CASH
      INVESTING AND FINANCING ACTIVITIESAcquisition
      of Marketing Rights via Issuance of Preferred Stock
                
                $
                —
                
                
                $
                15,000Termination
      of Marketing Rights via Cancellation of Preferred Stock
                
                $
                —
                
                
                $
                (15,000
                )Assets
      and Liabilities Transferred to Related Parties inConnection
      with Sale of Net Assets of Subsidiary:Accounts
      Receivable
                
                $
                —
                
                
                $
                15,678Inventory
                
                $
                —
                
                
                $
                190,830Accounts
      Payable
                
                $
                —
                
                
                $
                (15,457
                )Deferred
      Revenue
                
                $
                —
                
                
                $
                (7,037
                )Due
      to Directors
                
                $
                —
                
                
                $
                (173,333
                )Due
      to Stockholder
                
                $
                —
                
                
                $
                (145,212
                )Sale
      of Net Assets of Subsidiary Paid via Forgiveness ofLiabilities:Due
      to Directors
                
                $
                —
                
                
                $
                (32,483
                )Due
      to Stockholder
                
                $
                —
                
                
                $
                (27,728
                )
  
  F-6




GLOBAL WATAIRE INC. AND
SUBSIDIARY
 (A NEVADA
CORPORATION)
 Buffalo, New York
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 
  Note A - The
Company
  International
Development Corp. (“IDC”) was formed on October 22, 2004, under the laws of the
state of Nevada. On December 9, 2004, IDC merged with Ozolutions Inc., a
Delaware Corporation, which was formed on January 10, 1996 as Unipak Process,
Inc., with IDC as the surviving corporation. On April 13, 2006 IDC changed its
name to Global Wataire Inc. The Company’s principal office is located in
Buffalo, New York.
  On
December 9, 2004, the Company amended the articles of incorporation to increase
the authorized shares of common stock from 50,000,000 to 800,000,000 and
authorized up to 100,000,000 shares of all classes of Preferred
Stock.
  On
December 9, 2004, the Company established a series of Preferred Stock, Class A,
$0.001 Par Value. The Company is authorized to issue 1,000,000 shares of
Preferred Stock, Class A, with each share carrying 200 to 1 voting rights and
convertible into common stock on a 200 for 1 basis.
  In April
2005, the Company established a series of Preferred Stock, Class B, $0.001 Par
Value. The Company is authorized to issue 5,000,000 shares with each share
carrying 500 to 1 voting rights and not convertible into common
stock.
  Preferred
Stock, Class C, $0.001 Par Value. The Company is authorized to issue 15,000,000
shares with each share carrying 1 to 1 voting rights and convertible into common
stock on a 1 for 1 basis.
  In May
2006, the Company established a series of Preferred Stock, Class D, $0.001 Par
Value. The Company is authorized to issue 13,000,000 shares with each share
carrying 3 to 1 voting rights and convertible into common stock on a 3 for 1
basis.
  On May
31, 2006, the Company changed the name of its wholly owned subsidiary Freshwater
Technologies, Inc. to Atlantic Seaboard Company.
  On
September 28, 2006, the Company changed the name of its wholly owned subsidiary
Atlantic Seaboard Company to DigiTar Nevada, Inc.
  On
November 5, 2007, the Company changed the name of its wholly owned subsidiary
DigiTar Nevada, Inc. to Knightbridge Corp.
  Principles of
Consolidation
  The
consolidated financial statements include the accounts of Global Wataire Inc.,
and its wholly owned subsidiary, DigiTar Nevada, Inc. (the “Company”). All
significant intercompany balances have been eliminated in
consolidation.
  Scope of Business
  The
Company provides advisory and transactional services to help high potential
emerging companies to develop and implement strategies to obtain capital and
achieve their financial objectives.
  Note B - Summary of Significant
Accounting Policies
  Method of
Accounting
  The
Company maintains its books and prepares its financial statements on the accrual
basis of accounting.
   -
continued -
  F-7




GLOBAL WATAIRE INC. AND
SUBSIDIARY
 (A NEVADA
CORPORATION)
 Buffalo, New York
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


Note B - Summary of Significant
Accounting Policies – continued
  Cash and Cash
Equivalents
  Cash and
cash equivalents include time deposits, certificates of deposit, and all highly
liquid debt instruments with original maturities of three months or less. The
Company maintains cash and cash equivalents at financial institutions, which
periodically may exceed federally insured amounts.
  Income Taxes
  The
Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, “Accounting for Income Taxes, ”using the asset and
liability approach, which requires recognition of deferred tax liabilities and
assets for the expected future tax consequences of temporary differences between
the carrying amounts and the tax basis of such assets and liabilities. This
method utilizes enacted statutory tax rates in effect for the year in which the
temporary differences are expected to reverse and gives immediate effect to
changes in income tax rates upon enactment. Deferred tax assets are recognized,
net of any valuation allowance, for temporary differences and net operating loss
and tax credit carry forwards. Deferred income tax expense represents the change
in net deferred assets and liability balances.
  Earnings per
Share
  Earnings
per share of common stock are computed in accordance with SFAS No, 128,
“Earnings per Share”. Basic earnings per share are computed by dividing income
or loss available to common shareholders by the weighted-average number of
common shares outstanding for each period. Diluted earnings per share are
calculated by adjusting the weighted average number of shares outstanding
assuming conversion of all potentially dilutive stock options, warrants and
convertible securities, if dilutive. Common stock equivalents that are
anti-dilutive are excluded from both diluted weighted average number of common
shares outstanding and diluted earnings per share.
  Financial
Instruments
  The
Company’s financial instruments consist of cash, long-term investments, and
accounts payable. Unless otherwise noted, it is management’s opinion that the
Company is not exposed to significant interest, currency or credit risks arising
from these financial instruments. The fair value of these financial instruments
approximates their carrying value, unless otherwise noted.
  Use of Estimates
  The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts 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.
  Stock-Based
Compensation
  SFAS No.
123R requires all share-based payment to employees, including grants of employee
stock options, to be recognized as compensation expense in the financial
statements based on their fair values. That expense will be recognized over the
period during which an employee is required to provide services in exchange for
the award, known as the requisite service period (usually the vesting period).
The Company has selected the Black-Scholes option pricing model as the most
appropriate fair value method for our awards and have recognized compensation
costs immediately as our awards are 100% vested.
   F-8




GLOBAL WATAIRE INC. AND
SUBSIDIARY
 (A NEVADA
CORPORATION)
 Buffalo, New York
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 Note C - Discontinued
Operations
  On
January 6, 2006, the Board of Directors approved the Asset Sales Agreement
between the Company and Max Weissengruber, the Company’s Chief Operations
Officer, and D. Brian Robertson, the Company’s former Chief Financial Officer.
The Asset Sales Agreement replaces the Stock Purchase Agreement that had been
previously approved on September 29, 2005, but was subsequently rescinded on
January 6, 2006. The Company sold 100% of the assets and liabilities of
FreshWater Technologies, Inc. to Mr. Weissengruber and Mr. Robertson for a total
purchase price of $60,211. The purchase price was paid through the forgiveness
of debts owed to Mr. Weissengruber and Mr. Robertson by the Company. The fair
market value of the liabilities of FreshWater Technologies, Inc. being assumed
by Mr. Weissengruber and Mr. Robertson exceed the assets being sold to Mr.
Weissengruber and Mr. Robertson by $134,531. As a result of this sale, the
Company has no revenue generating operations at this time.
  Note D - Marketing
Rights
  On
October 12, 2005, the Company entered into an Exclusive Licensing Agreement with
Wataire Industries, Inc., an unrelated party, for the exclusive right to
distribute and sell the technology-based water generation and purification
products of Wataire Industries, Inc. in the United States of America, for an
indefinite period. In consideration of the Exclusive Licensing Agreement, the
Company issued 15,000,000 shares of Preferred Stock, Class C, valued at
$15,000.
  On June
27, 2006, the Company announced that it had terminated the Marketing
Rights/Exclusive License Agreement with Wataire Industries, Inc., that was
executed on October 12, 2005. The license granted an exclusive license for the
entire United States of America covering certain processes and products relating
to technology based water generation and purification. The license granted in
October was subsequently expanded by agreement of the parties to be worldwide.
The license agreement was perpetual, non-revocable, and assignable by the
Company.
  In
connection with the termination of the license agreement, the Company decided to
terminate its relationship with Wataire Industries, Inc., and cancel the
issuance of 15,000,000 shares of the Company’s Class C preferred stock and
25,000 shares of Class A preferred stock that had been issued to Phil Fraser and
William Robertson by Betty Harland in exchange for the license
agreement.
  Note E - Going
Concern
  The
Company’s consolidated financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has
reported recurring losses from operations. As a result, there is an accumulated
deficit of $4,813,042 at August 31, 2007.
  The
Company’s continued existence is dependent upon its ability to raise capital or
acquire a marketable company. The consolidated financial statements do not
include any adjustments that might be necessary should the Company be unable to
continue as a going concern.
  Note F - Recently
Issued Accounting Standards
  In
February 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 155, “Accounting for
Certain Hybrid Financial Instruments – an amendment of FASB Statement No. 133
and 140” (“SFAS 155”).
   -
continued -
  F-9




GLOBAL WATAIRE INC. AND
SUBSIDIARY
 (A NEVADA
CORPORATION)
 Buffalo, New York
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
  Note F - Recently
Issued Accounting Standards – continued
  SFAS 155
resolves issues addressed in Statement 133 Implementation Issue No. D1,
“Application of Statement 133 to Beneficial Interest in Securitized Financial
Assets.” SFAS 155 is effective for all financial instruments acquired or issued
after the beginning of the first fiscal year that begins after September 15,
2006. As such, the Company is required to adopt these provisions at the
beginning of the fiscal year ended August 31, 2008. The Company is currently
evaluating the impact of SFAS 155 on its consolidated financial
instruments.
  In March
2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial
Assets – an amendment of FASB Statement No. 140” (“SFAS 156”). SFAS 156 amends
FASB Statement No. 140 with respect to the accounting for separately recognized
servicing assets and servicing liabilities. SFAS 156 requires all separately
recognized servicing assets and servicing liabilities to be initially measured
at fair value, if practical. SFAS 156 is effective as of the beginning of the
first fiscal year that begins after September 15, 2006. As such, the Company is
required to adopt these provisions at the beginning of the fiscal year ended
August 31, 2008. The Company is currently evaluating the impact of SFAS 156 on
its consolidated financial statements.
  In July
2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in
Income Taxes – an interpretation of FASB Statement No. 109 (“FIN 48), which
clarifies the accounting and disclosure for uncertainty in tax positions. FIN 48
prescribes a more-likely-than-not threshold for financial statement recognition
and measurement of a tax position taken or expected to be taken in a tax return.
This interpretation also provides guidance on de-recognition of income tax
assets and liabilities, classification of current and deferred income tax assets
and liabilities, accounting for interest and penalties associated with tax
positions, accounting for income taxes in interim periods and income tax
disclosures.
  In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 157, "Fair Value
Measurements”. SFAS 157 defines fair value, establishes a framework for
measuring fair value, and expands disclosures about fair value measurements.
SFAS 157 is effective as of the beginning of the first fiscal year that begins
after November 15, 2007. As such, the Company is required to adopt these
provisions at the beginning of the fiscal year ended August, 2008. The Company
is currently evaluating the impact of SFAS 157 on its consolidated financial
statements.
  In
February 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities, including an amendment of
FASB Statement No. 115”. SFAS 159 permits entities to choose to measure many
financial instruments and certain other items at fair value at specified
election dates. This Statement applies to all entities, including not-for-profit
organizations. SFAS 159 is effective as of the beginning of an entity’s first
fiscal year that begins after November 15, 2007. As such, the Company is
required to adopt these provisions at the beginning of the fiscal year ended
August, 2008. The Company is currently evaluating the impact of SFAS 159 on its
consolidated financial statements.
  Note G - Equity Compensation
Plans
  On July 25, 2007, each member of the
Board of Directors was granted as compensation for services options to buy
500,000 shares of the Company’s common stock at the last quoted common stock
offering price as of that day. A total of 3,000,000 options were granted at a
price of $0.13.
   -
continued-
  F-10




GLOBAL WATAIRE INC. AND
SUBSIDIARY
 (A NEVADA
CORPORATION)
 Buffalo, New York
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 Note G - Equity Compensation Plans –
continued
   For the
year ended August 31, 2007, $389,953 was expensed utilizing the Black-Scholes
option pricing model. The following weighted-average assumptions were used for
the grants issued:
  2007
 Dividend
Yield                             
0.00%
 Expected
Volatility                   
239.22%
 Discount
Rate                              
4.92%
 Option
Life                                      
10 Years
   Note H - Related
Party Transactions
  In
September 2004, Betty-Ann Harland was appointed CEO and Chair of the Board of
Directors of the Company, and received 15,000,000 shares of common stock in
consideration for $25,000. In January 2005, the 15,000,000 common shares were
exchanged for 1,000,000 Class A Preferred Shares. In July 2005, the Board of
Directors approved the surrendering and cancellation of 900,000 Class A
Preferred Shares held by Betty- Ann Harland. In April 2006, Betty-Ann resigned
as CEO, and Sydney Harland was then appointed.
  In July
2005, the Board of Directors authorized the issuance of 1,000,000 Class B
Preferred Shares to Betty-Ann Harland in consideration of $1,000.
  During
the period ended February 28, 2007, Betty-Ann Harland converted 25,000 shares of
Class A Preferred Shares into 5,000,000 Shares of Common Stock. Additionally,
other stockholders of the Company that are closely related to Betty-Ann Harland
also converted 9,000 shares of Class A Preferred Shares into 1,800,000 Shares of
Common Stock during the same period.
  On March
7, 2007, in connection with the cancelled Wataire license agreement, Mrs.
Harland was re-issued 25,000 Class A Preferred Shares.
   -
continued -
  F-11




GLOBAL WATAIRE INC. AND
SUBSIDIARY
 (A NEVADA
CORPORATION)
 Buffalo, New York
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 Note H - Related
Party Transactions - continued
  Certain
disbursements of the Company have been paid by two directors of the Company,
therefore, a Due to Directors account has been established. The balance at
August 31, 2007 and 2006 was $319,224 and $490,281, respectively. The amount due
is non-interest bearing and contains no formal repayment terms. For each of the
years ended August 31, 2007 and 2006 ,the Company has imputed interest at the
8.75% and charged operations with an offsetting credit to additional paid in
capital.
  In
October 2004, the Company entered into a consulting agreement with its Chairman,
Betty-Ann Harland for a five year term, with annual compensation of $
220,000.
  On August
25, 2007, the Company entered into a consulting agreement with its CEO, Sydney
Harland for a five year term, with annual compensation of $220,000, health
benefits of $15,000 and $12,000 of auto allowance. The agreement agrees to pay
all accrued compensation from April 2006.
  Note I - Other
Matters
  On June
5, 2001, the Company entered into advisory agreements with the firms of David
Michael LLC and Feng Shui Consulting, Inc. In June 2002, David Michael LLC and
Feng Shui Consulting, Inc. filed a suit against the Company for breach of
contract. The Company filed a counter claim and third party complaint denying
the substantive allegations of the complaint and asserting breach of contract
and fraud in connection with the transaction. In August 2004, the United States
District Court for the State of Utah dismissed the case in its entirety with
prejudice, with each party to bear its own costs and fees. As part of the
dismissal, in September 2004, the Company paid $5,000 to repurchase the 800,000
common shares that were previously issued to the plaintiffs. On April 13, 2006
the 800,000 common shares were subject of a one-for-one thousand reverse stock
split (See Note J). As of August 31, 2007, the 800 shares have not been received
by the Company for cancellation therefore the shares are still recorded as
issued and outstanding.
  On
January 11, 2002, the Company entered into a financial consulting and investment
banking agreement with Chapman, Spira and Carson LLC (“Chapman”). Chapman
cancelled this agreement in June 2002. Thereafter in June 2002, Chapman made a
demand for arbitration through the American Arbitration Association as provided
in the agreement claiming $50,000 in fees, plus nine percent interest, and
200,000 shares of the Company’s common stock. In February 2003, the judge
returned a verdict against Chapman and awarded the Company approximately $22,000
net of any Company legal fees. Chapman appealed to the New York State Supreme
Court in 2004 and this appeal was dismissed. Subsequently, Chapman appealed to
the Court of Appeals in New York. On April 7, 2006, the firm of Chapman, Spria
and Carlson, agreed to settle the arbitration award dispute with the Company for
the sum of $15,000. The New York legal firm of Bahn, Herzfeld and Multer, LLP
received $12,500 for their services and Max Weissengruber and Brian Robertson
received a total of $2,500 for their expenses related to the arbitration award
and subsequent litigation. All matters have now been resolved regarding this
matter
  Note J - Stock
Transactions
  During
the period ended February 28, 2007, the Company acquired 3,000,000 Common Shares
and placed them into treasury at a par value of $.001.
  On April
13, 2006, the holder of the majority of the voting power of our outstanding
capital stock voted to approve the following:
   -
continued -
   F-12
 
 GLOBAL WATAIRE INC. AND
SUBSIDIARY
 (A NEVADA
CORPORATION)
 Buffalo, New York
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 Note J - Stock
Transactions - continued
  1. A
grant of discretionary authority to our board of directors to implement a
reverse split of the issued and outstanding shares of our common stock on the
basis of one post-consolidation share for each 1,000 pre-consolidation shares to
occur immediately. All share and per share amounts used in the Company’s
financial statements and notes have been retroactively restated to reflect the
one-for-one thousand reverse stock split.
  2. An amendment to the Company's
Articles of Incorporation to provide for the creation of a second series of
common stock to be known as "Class B Common Stock"
  Note K - Income
Taxes
  At August
31, 2007 and 2006, the Company had approximately $4,813,043 and $3,228,996
accumulated tax losses to apply against future taxable income. The net operating
loss carry forwards begin to expire in 2011.
  The
Company has fully reserved for any future tax benefits form the net operating
loss carry forwards since it has not generated any net income to date. The
Company has no other material deferred tax assets or liabilities for the periods
presented.
  Note L -
Reorganization/Investment
  On July
27, 2006 an Asset Purchase Agreement and Plan of Reorganization was proposed by
Global Wataire, Inc. and its wholly-owned subsidiary, Atlantic Seaboard, Inc.
with DigiTar Wyoming, Inc. DigiTar was to sell to Atlantic substantially all of
its assets in exchange for 49% of the issued and outstanding common stock of
Atlantic and 10,000,000 shares of Atlantic’s voting convertible preferred stock.
Global was to retain a 30% investment in Atlantic once the transaction was
finalized.
  The
proposed Asset Purchase Agreement and Plan of Reorganization was never
consummated. Certain key documents necessary to complete the purchase of
DigiTar’s assets have not been agreed to by Global Wataire Inc., Atlantic
Seaboard, Inc. and DigiTar Inc. Consequently, Global Wataire Inc. and Atlantic
Seaboard, Inc. have rescinded the transaction and cancelled the planned
acquisition of DigiTar Inc.’s business as of June 28, 2007. Atlantic therefore
remains a wholly-owned subsidiary of Global. Global has also taken the
20,000,000 shares of common stock out of escrow that were being held for the
benefit of DigiTar. Global Wataire, Inc., and its wholly-owned subsidiary,
Atlantic Seaboard, Inc. are working to recover the monies advanced to DigiTar
for working capital in the amount of $50,000. The Company believes their attempt
to recover this loan will be futile and has therefore written off the $50,000 as
a bad debt as of August 31, 2007.
  Note
M - Regulation S Stock
  On January 26, 2007, the Company issued
a press release announcing that they had launched anequity offering on the
Berlin Stock Exchange. The company originally was offering 10,000,000 shares for
sale. On August 1, 2007, the board authorized an additional 5,000,000 shares for
sale. All shares are being offered at a price of $0.50 per share and if
completely subscribed will yield $7,500,000. This offering is on a best effort
basis. As of August 31, 2007, 12,708,233 shares had been issued of which
2,300,000shares were issued in exchange for financial services rendered. Gross
proceeds from the sale of stock were $2,629,033 less stock issuance costs of
$1,681,106. Net proceeds from the sale of stock were
$947,927.
  Note
N - Subsequent Events
  On
November 5, 2007, the Company changed the name of its wholly owned subsidiary
DigiTar Nevada, Inc. to Knightbridge Corp.
  F-13




GLOBAL WATAIRE INC. AND
SUBSIDIARY
 (A NEVADA
CORPORATION)
 Buffalo, New York
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 Note O - Investment
Agreement
  On August
20, 2007 the Company entered into an investment agreement with Dutchess Private
Equities Fund, Ltd.(The Investor). Pursuant to this agreement, the Investor
shall commit to purchase up to $10,000,000 of the Company’s common stock over
the course of thirty-six (36) months. The amount that the Company shall be
entitled to request from each purchase “Puts” shall be equal to either up to
$250,000 or 200% of the average daily volume (US Market Only) of the common
stock for the ten (10) trading days prior to the Put notice date, multiplied by
the average of the three (3) daily closing bid prices immediately preceding the
Put date.
  Note P- Restatement of Prior Year
Financials
  As
described in Note L the proposed purchase of DigiTar Wyoming was never
consummated. For the year ended August 31, 2006 the completion of the purchase
was recorded as an investment of $65,618 and a gain on subsidiary stock
investment of $65,618. Because this transaction was rescinded this investment
should not have been recorded. Total assets at August 31, 2006 have therefore
been reduced by $65,618 to $-0- and net loss at August 31, 2006 increased by
$65,618 to $263,996
    F-14