UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                  FORM 10-QSB/A
                                   (Mark One)

(X)  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE
     ACT OF 1934

                  For the quarterly period ended June 30, 2007

( )  TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

                   For the transition period from____________
                to ______________ Commission file number 1-09478

                                WATER CHEF, INC.
        -----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

            Delaware                                             86-0515678
-------------------------------                             -------------------
(State or Other Jurisdiction of                                (IRS Employer
 Incorporation or Organization)                             Identification No.)

           68 South Service Road, Suite 100, Melville, New York 11747
           ----------------------------------------------------------
                    (Address of Principal Executive Offices)

                                  631-577-7915
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

              ----------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

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

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date.

                        OUTSTANDING AS OF AUGUST 7, 2007
          CLASS                                                  Common
        ---------                                              -----------
Par value $0.001 per share                                     190,191,843

Transitional small business disclosure format (check one) Yes [ ] No [X]

<PAGE>

                                WATER CHEF, INC.

                                      INDEX




                                                                          PAGE


PART I - FINANCIAL INFORMATION:


ITEM 1: FINANCIAL STATEMENTS:

     Condensed Balance Sheet (Unaudited)
        At June 30, 2007                                                   2-3

     Condensed Statements of Operations (Unaudited)
        For the Three Months Ended June 30, 2007 and 2006
        For the Six Months Ended June 30, 2007 and 2006
        For the Period January 1, 2002 to June 30, 2007                     4

     Condensed Statement of Stockholders' Deficiency (Unaudited)
        For the Six Months Ended June 30, 2007 and 2006
                                                                           5-6
     Condensed Statements of Cash Flows (Unaudited)
        For the Six Months Ended June 30, 2007 and 2006
        For the Period January 1, 2002 to June 30, 2007                    7-8

     Notes to Condensed Financial Statements (Unaudited)                   9-16


ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION        17-20

ITEM 3:  CONTROLS AND PROCEDURES                                          21-22


PART II: OTHER INFORMATION:


ITEM 2:  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS        23

ITEM 6:  EXHIBITS                                                           24

SIGNATURE                                                                   25

CERTIFICATIONS                                                             26-27



                                        1
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                             CONDENSED BALANCE SHEET
                                   (UNAUDITED)

                                  JUNE 30, 2007

                                     ASSETS

CURRENT ASSETS:
    Cash                                                                $215,129
    Prepaid expenses and other current assets                             30,685
                                                                        --------
      Total Current Assets                                               245,814
                                                                        --------
FIXED ASSETS:
    Property and equipment - net of accumulated
       depreciation of $234                                               13,806
                                                                        --------
OTHER ASSETS
    Patents and trademarks - net of accumulated
       amortization of $11,579                                            14,476
    Other assets                                                           6,360
                                                                        --------

      Total Other Assets                                                  20,836
                                                                        --------


TOTAL ASSETS                                                            $280,456
                                                                        ========



                  See notes to condensed financial statements.

                                        2

<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>

                                       WATER CHEF, INC.
                   (A Development Stage Company Commencing January 1, 2002)

                                    CONDENSED BALANCE SHEET
                                          (UNAUDITED)

                                         JUNE 30, 2007

                           LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
    Accounts payable and accrued expenses                                          $    401,099
    Accrued compensation                                                                135,000
    Accrued consulting and director fees                                                155,833
    Notes payable to officer and director (including accrued interest of $2,863)        102,863
    Notes payable (including accrued interest of $393,361)                            1,001,314
    Fair value of detachable warrants and options                                       501,800
    Fair value of embedded conversion options                                           143,900
    Accrued dividends payable                                                           190,084
                                                                                   ------------

TOTAL CURRENT LIABILITIES                                                             2,631,893
                                                                                   ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDER'S DEFICIENCY:
    Preferred stock - $.001 par value; 10,000,000 shares
      Authorized; 185,819 shares issued and outstanding,
      (liquidation preference $2,321,500)                                                   186
    Common stock - $.001 par value; 340,000,000 shares authorized;
      190,196,243 shares issued and 190,191,843 shares outstanding                      190,191
    Additional paid-in capital                                                       25,333,677
    Treasury stock, at cost - 4,400 shares of common stock                               (5,768)
    Deficit accumulated through December 31, 2001                                   (14,531,596)
    Deficit accumulated during development stage                                    (13,338,127)
                                                                                   ------------

TOTAL STOCKHOLDERS' DEFICIENCY                                                       (2,351,437)
                                                                                   ------------


TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                     $    280,456
                                                                                   ============


                         See notes to condensed financial statements.

                                               3
<PAGE>

                                                       WATER CHEF, INC.
                                   (A Development Stage Company Commencing January 1, 2002)

                                             CONDENSED STATEMENTS OF OPERATIONS
                                                        (UNAUDITED)



                                                  For the Three Months Ended        For the Six Months Ended       For the period
                                                           June 30,                          June 30,              January 1, 2002
                                                           --------                          --------                to June 30,
                                                     2007             2006             2007             2006             2007
                                                -------------    -------------    -------------    -------------    -------------

SALES                                           $        --      $        --      $        --      $     115,000    $     471,290
                                                -------------    -------------    -------------    -------------    -------------

COST OF SALES                                           8,000           21,000           23,000           72,000          575,680

SELLING, GENERAL AND ADMINISTRATIVE -
  Including stock based compensation of
  $503,838 and $727,000 for the three months
  ended June 30, 2007 and 2006 and $503,838
  and $767,699 for the six months ended June
  30, 2007 and 2006, and $2,038,927 for the
  period January 1, 2002 to June 30, 2007,
  respectively                                        757,718          878,966          920,255        1,163,937        6,577,306

NON-DILUTION AGREEMENT TERMINATION COST                  --               --               --               --          2,462,453

INTEREST EXPENSE - Including interest expense
  to related parties of $2,466 and $5,967 for
  the three months ended June 30, 2007 and
  2006 and $2,863 and $11,934 for the six
  months ended June 30, 2007 and 2006, and
  $122,203 for the period January 1, 2002
  through June 30, 2007, respectively                  31,925           36,064          139,200          191,864        1,245,761

FINANCING COSTS - EXTENSION OF WARRANTS                  --               --               --               --             74,700

LOSS ON SETTLEMENT OF DEBT                               --               --               --               --          2,614,017

INTEREST EXPENSE -
  CONVERSION PROVISION                                113,000                           113,000                           113,000

CHANGE IN FAIR VALUE OF WARRANTS
  AND EMBEDDED CONVERSION OPTION                      (94,100)          72,400           18,400          186,600          146,500
                                                -------------    -------------    -------------    -------------    -------------
                                                      816,543        1,008,430        1,213,855        1,614,401       13,809,417
                                                -------------    -------------    -------------    -------------    -------------

NET LOSS                                             (816,543)      (1,008,430)      (1,213,855)       1,499,401)     (13,338,127)
                                                -------------    -------------    -------------    -------------    -------------

DEEMED DIVIDEND ON PREFERRED STOCK                       --               --               --               --         (2,072,296)

PREFERRED STOCK DIVIDENDS                                 (74)         (42,401)            (213)         (42,401)        (509,280)
                                                -------------    -------------    -------------    -------------    -------------
                                                          (74)         (42,401)            (213)         (42,401)      (2,581,576)
                                                -------------    -------------    -------------    -------------    -------------


NET LOSS APPLICABLE TO COMMON STOCKHOLDERS      $    (816,617)   $  (1,050,831)   $  (1,214,068)   $  (1,541,802)   $ (15,919,703)
                                                =============    =============    =============    =============    =============

BASIC AND DILUTED LOSS PER COMMON SHARE         $       (0.00)   $       (0.01)   $       (0.01)   $       (0.01)
                                                =============    =============    =============    =============

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING - BASIC AND DILUTED                 185,852,398      193,303,682      187,799,075      187,869,690
                                                =============    =============    =============    =============


                                         See notes to condensed financial statements.

                                                             4
<PAGE>

                                                      WATER CHEF, INC.
                                  (A Development Stage Company Commencing January 1, 2002)

                                       CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIENCY
                                                        (UNAUDITED)


                                                         Preferred Stock                  Common Stock              Additional
                                                   ----------------------------    ----------------------------      Paid-in
                                                      Shares          Amount          Shares          Amount         Capital
                                                   ------------    ------------    ------------    ------------    ------------
FOR THE SIX MONTHS ENDED JUNE 30, 2007

BALANCE - JANUARY 1, 2007                               188,917    $        189     198,977,497    $    198,977    $ 22,836,764

Proceeds from Sale of Common Stock:
  ($0.090 per share) May 10, 2007                          --              --         1,111,112           1,111          98,889
  ($0.083 per share) May 10, 2007                          --              --         2,409,640           2,409         197,591
  ($0.090 per share) May 31, 2007                          --              --           555,555             555          49,445
  ($0.083 per share) June 26, 2007                         --              --         1,203,080           1,203          98,797

Stock for compensation:
  ($0.110 per share) May 2, 2007                                                      2,500,000           2,500         272,500

Common stock issued in repayment of debt:
  ($0.132 per share) February 26, 2007                     --              --           195,212             195          25,534
  ($0.111 per share) March 8, 2007                         --              --           234,165             234          25,571
  ($0.107 per share) March 14, 2007                        --              --           256,643             257          25,587
  ($0.099 per share) March 19, 2007                        --              --           262,650             263          25,608
  ($0.097 per share) March 23, 2007                        --              --           806,583             807          76,867
  ($0.095 per share) April 4, 2007                         --              --           546,901             547          51,354
  ($0.086 per share) May 1, 2007                           --              --           908,885             909          77,345

 Stock for late payment penalty:
  ($0.100 per share) May 22, 2007                          --              --           100,000             100           9,900

Preferred stock converted to common stock:
  During the quarter ended March 31, 2007                (2,848)             (3)        113,920             114            (111)
  During the quarter ended June 30, 2007                   (250)           --            10,000              10             (10)

Cancellation of debt for no consideration                  --              --              --              --         1,327,321

Surrender and cancellation of common stock                 --              --       (20,000,000)        (20,000)         20,000

Reclassification of derivative liability
  to equity upon conversion of debt                        --              --              --              --           140,000

Reclassification of options to non employees to
  derivative liability                                     --              --              --              --          (247,100)

Reclassification of derivative liability to
 equity upon conversion of preferred stock                 --              --              --              --             3,200

Amortization of warrants and option over the
  vesting period for employees and non employees           --              --              --              --           218,838

Preferred stock dividend                                   --              --              --              --              (213)

Net loss                                                   --              --              --              --              --
                                                   ------------    ------------    ------------    ------------    ------------

BALANCE - JUNE 30, 2007                                 185,819    $        186     190,191,843    $    190,191    $ 25,333,677
                                                   ============    ============    ============    ============    ============


                                        See notes to condensed financial statements.

                                                            5
<PAGE>

                                              WATER CHEF, INC.
                          (A Development Stage Company Commencing January 1, 2002)

                               CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIENCY
                                                (UNAUDITED)
                                                (CONTINUED)


                                                                     Deficit         Deficit
                                                                   Accumulated     Accumulated
                                                     Treasury        through         During            Total
                                                      Stock        December 31,    Development     Stockholders'
                                                    - at cost          2001           Stage         Deficiency
                                                   ------------    ------------    ------------    ------------
FOR THE SIX MONTHS ENDED JUNE 30, 2007

BALANCE - JANUARY 1, 2007                          $     (5,768)   $(14,531,596)   $(12,124,272)   $ (3,625,706)

Proceeds from Sale of Common Stock:
  ($0.090 per share) May 10, 2007                          --              --              --           100,000
  ($0.083 per share) May 10, 2007                          --              --              --           200,000
  ($0.090 per share) May 31, 2007                          --              --              --            50,000
  ($0.083 per share) June 26, 2007                         --              --              --           100,000

Stock for compensation:
  ($0.110 per share) May 2, 2007                           --              --              --           275,000

Common stock issued in repayment of debt:
  ($0.132 per share) February 26, 2007                     --              --              --            25,729
  ($0.111 per share) March 8, 2007                         --              --              --            25,805
  ($0.107 per share) March 14, 2007                        --              --              --            25,844
  ($0.099 per share) March 19, 2007                        --              --              --            25,871
  ($0.097 per share) March 23, 2007                        --              --              --            77,674
  ($0.095 per share) April 4, 2007                         --              --              --            51,901
  ($0.086 per share) May 1, 2007                           --              --              --            78,254

Stock for late payment penalty:
  ($0.100 per share) May 22, 2007                          --              --              --            10,000

Preferred stock converted to common stock:
  During the quarter ended March 31, 2007                  --              --              --              --
  During the quarter ended June 30, 2007                   --              --              --              --

Cancellation of debt for no consideration                  --              --              --         1,327,321

Surrender and cancellation of common stock                 --              --              --              --

Reclassification of derivative liability
  to equity upon conversion of debt                        --              --              --           140,000

Reclassification of options to non employees to
  derivative liability                                     --              --              --          (247,100)

Reclassification of derivative liability to
  equity upon conversion of preferred stock                --              --              --             3,200

Amortization of warrants and option over the
  vesting period for employees and non employees           --              --              --           218,838

Preferred stock dividend                                   --              --              --              (213)

Net loss                                                   --              --        (1,213,855)     (1,213,855)
                                                   ------------    ------------    ------------    ------------

BALANCE - JUNE 30, 2007                            $     (5,768)   $(14,531,596)   $(13,338,127)   $ (2,351,437)
                                                   ============    ============    ============    ============


                                See notes to condensed financial statements.

                                                    6
<PAGE>

                                               WATER CHEF, INC.
                           (A Development Stage Company Commencing January 1, 2002)

                                     CONDENSED STATEMENTS OF CASH FLOWS
                                                 (UNAUDITED)


                                                                       For the Six Months Ended     For the Period
                                                                                June 30,            January 1, 2002
                                                                     ----------------------------     to June 30,
                                                                         2007            2006            2007
                                                                     ------------    ------------    ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                          $ (1,213,855)   $ (1,499,401)   $(13,338,127)
   Adjustments to reconcile net loss to net
     cash used in operating activities:
       Depreciation                                                           234            --               234
       Amortization of patents                                                927             927          10,197
       Interest expense - deferred financing                                4,687           4,687          15,000
       Stock-based compensation                                           503,838         767,699       2,048,927
       Interest expense - conversion provision                            113,000            --           113,000
       Accretion of debt discount                                          69,800         112,800         362,320
       Change in fair value of warrants and embedded
         conversion option                                                 18,400         186,600         146,500
       Loss on settlement of debt                                            --              --         2,614,017
       Non-dilution agreement termination cost                               --              --         2,462,453
       Inventory reserve                                                     --              --           159,250
       Write-off of stock subscription receivable                            --              --            21,800
       Financing cost - warrant extension                                    --              --            74,700
   Changes in assets and liabilities:
       Inventory                                                             --            30,000            --
       Prepaid expenses and other current assets                          (11,403)          2,394          25,815
       Security deposits                                                   (3,198)           --            (3,198)
       Accounts payable, accrued expenses and other current
         liabilities, accrued compensation, accrued consulting and
         director fees, accrued dividends and customer deposits           136,661        (189,381)      1,534,652
                                                                     ------------    ------------    ------------

           Net Cash Used in Operating Activities                         (380,909)       (583,675)     (3,752,460)
                                                                     ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                     (14,040)           --           (14,040)
                                                                     ------------    ------------    ------------

            Net Cash Used in Investing Activities                    $    (14,040)   $       --      $    (14,040)
                                                                     ------------    ------------    ------------


                                 See notes to condensed financial statements.

                                                     7
<PAGE>

                                         WATER CHEF, INC.
                     (A Development Stage Company Commencing January 1, 2002)

                                CONDENSED STATEMENTS OF CASH FLOWS
                                            (UNAUDITED)

                                                                                       For the Period
                                                           For the Six Months Ended    January 1, 2002
                                                                    June 30,             to June 30,
                                                               2007         2006             2007
                                                           -----------    ---------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Stock subscription receivable                           $      --      $    --        $    65,700
   Proceeds from sale of preferred stock                          --           --          1,130,127
   Proceeds from sale of common stock                          450,000      540,000        1,990,560
   Proceeds from sale of common stock to be issued                --           --            200,000
   Deferred financing costs                                       --           --            (15,000)
   Proceeds from convertible promissory notes                     --           --            550,000
   Proceeds from officers and directors loans                  100,000         --            100,000
   Repayment of notes payable                                  (39,638)     (15,962)         (75,269)
                                                           -----------    ---------      -----------

            Net Cash Provided by Financing Activities          510,362      524,038        3,946,118
                                                           -----------    ---------      -----------

NET INCREASE (DECREASE)  IN CASH                               115,413      (59,637)         179,618

CASH AT BEGINNING OF PERIOD                                     99,716      244,595           35,511
                                                           -----------    ---------      -----------

CASH AT END OF PERIOD                                      $   215,129    $ 184,958      $   215,129
                                                           ===========    =========      ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR:
         INTEREST                                          $      --      $    --        $   356,931
                                                           ===========    =========      ===========
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING
  AND FINANCING ACTIVITIES

   Compensation satisfied by issuance of common stock      $      --      $    --        $    55,250
                                                           ===========    =========      ===========

   Common stock issued in satisfaction of liabilities      $   311,078    $  48,485      $ 6,675,362
                                                           ===========    =========      ===========
   Reclassification of derivative liabilities upon
     conversion of debt                                    $   140,800    $    --        $   508,800
                                                           ===========    =========      ===========

   Reclassification of equity instruments to liabilities   $   247,100    $    --        $   536,000
                                                           ===========    =========      ===========

   Reclassification of derivative liabilities upon
     conversion of preferred stock                         $     3,200    $    --        $     3,200
                                                           ===========    =========      ===========

   Cancellation of debt for no consideration               $ 1,327,321    $    --        $ 1,327,321
                                                           ===========    =========      ===========


                           See notes to condensed financial statements.

                                                 8
</TABLE>
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1: DESCRIPTION OF BUSINESS

     Water Chef, Inc. (the "Company"), is a Delaware corporation currently
     engaged in the design and marketing of water purification equipment both
     inside and outside the United States. The Company's corporate headquarters
     are located in Melville, New York.


NOTE 2: BASIS OF PRESENTATION AND ACCOUNTING POLICIES

     The accompanying unaudited condensed financial statements have been
     prepared in accordance with accounting principles generally accepted in the
     United States of America for interim financial information. Accordingly,
     these interim financial statements do not include all of the information
     and footnotes required for annual financial statements. In the opinion of
     management, all adjustments (consisting of normal recurring accruals)
     considered necessary to make the financial statements not misleading have
     been included.

     The operating results for the six-month period ended June 30, 2007 are not
     necessarily indicative of the results that may be expected for the year
     ending December 31, 2007. These financial statements should be read in
     conjunction with the financial statements and footnotes thereto included in
     the Company's Annual Report on Form 10-KSB, filed on March 30, 2007, for
     the year ended December 31, 2006.

     DEVELOPMENT STAGE COMPANY
          The Company is in the development stage as defined by Statement of
          Financial Accounting Standards ("SFAS") Statement No. 7, "Accounting
          and Reporting for Development Stage Companies." To date, the Company
          has generated limited sales and has devoted its efforts primarily to
          developing its products, implementing its business and marketing
          strategy and raising working capital through equity financing or
          short-term borrowings.

     REVENUE RECOGNITION
          The Company recognizes its revenues when the product is shipped and or
          title passes and collection is reasonably assured.

     STOCK BASED COMPENSATION
          Effective January 1, 2006, the Company adopted SFAS 123R which
          replaces SFAS 123, "Accounting for Stock-Based Compensation" and
          supersedes Accounting Principles Board Opinion No. 25, "Accounting for
          Stock Issued to Employees." SFAS 123R requires all share-based
          payments to employees, including grants of employee stock options, to
          be recognized in the financial statements based on their fair values.
          Pro forma disclosure is no longer an alternative to financial
          statement recognition.

                                        9
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 3: GOING CONCERN

     The accompanying condensed financial statements have been prepared assuming
     that the Company will continue as a going concern. The Company has incurred
     recurring losses from operations, an accumulated deficit since its
     inception of approximately $27,870,000 and has a working capital deficiency
     of approximately $2,386,000 at June 30, 2007. These conditions raise
     substantial doubt about the Company's ability to continue as a going
     concern. Management's plans with respect to these matters include
     restructuring its existing debt, settling its existing debt by issuing
     shares of its common stock and raising additional capital through future
     issuance of stock and or debentures. However, there can be no assurance
     that the Company will be able to obtain sufficient funds to continue the
     development of its product, marketing plan and distribution network. The
     accompanying condensed financial statements do not include any adjustments
     that might be necessary should the Company be unable to continue as a going
     concern.


NOTE 4: RECENT ACCOUNTING STANDARDS

     In February 2006, the FASB issued SFAS 155, "Accounting for Certain Hybrid
     Financial Instruments - an amendment of FASB Statements No. 133 and 140"
     ("SFAS 155"). SFAS 155 resolves issues addressed in SFAS 133 Implementation
     Issue No. D1, "Application of Statement 133 to Beneficial Interests in
     Securitized Financial Assets." The requirements in SFAS 155 are effective
     for all financial instruments acquired or issued after the beginning of an
     entity's first fiscal year that begins after September 15, 2006. The
     adoption of this pronouncement did not have an impact on the Company's
     financial position, results of operations or cash flows.

     In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
     ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for
     measuring fair value in accordance with accounting principles generally
     accepted in the U.S., and expands disclosures about fair value
     measurements. SFAS 157 is effective for financial statements issued for
     fiscal years beginning after November 15, 2007, with earlier application
     encouraged. Any cumulative effect will be recorded as an adjustment to the
     opening accumulated deficit balance, or other appropriate component of
     equity. The adoption of this pronouncement did not have an impact on the
     Company's financial position, results of operations or cash flows.

     In September 2006, the SEC staff issued Staff Accounting Bulleting ("SAB")
     No. 108, Considering the Effects of Prior Year Misstatements when
     Quantifying Misstatements in Current Year Financial Statements ("SAB 108").
     SAB 108 was issued in order to reduce the diversity in practice in how
     public companies quantify misstatements of financial statements, including
     misstatements that were not material to prior years' financial statements.
     SAB 108 is effective for fiscal year 2007. The adoption of this
     pronouncement did not have an impact on the Company's financial position,
     results of operations, or cash flows.

                                       10
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 4: RECENT ACCOUNTING STANDARDS (Continued)

     In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
     Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 provides
     companies with an option to report selected financial assets and
     liabilities at fair value. The objective of SFAS 159 is to reduce both
     complexity in accounting for financial instruments and the volatility in
     earnings caused by measuring related assets and liabilities differently.
     Generally accepted accounting principles have required different
     measurement attributes for different assets and liabilities that can create
     artificial volatility in earnings. The FASB has indicated it believes that
     SFAS 159 helps to mitigate this type of accounting-induced volatility by
     enabling companies to report related assets and liabilities at fair value,
     which would likely reduce the need for companies to comply with detailed
     rules for hedge accounting. SFAS 159 also establishes presentation and
     disclosure requirements designed to facilitate comparisons between
     companies that choose different measurement attributes for similar types of
     assets and liabilities.

     SFAS 159 does not eliminate disclosure requirements included in other
     accounting standards, including requirements for disclosures about fair
     value measurements included in SFAS 157 and SFAS No. 107, "Disclosures
     about Fair Value of Financial Instruments." SFAS 159 is effective for the
     Company as of the beginning of fiscal year 2009 the adoption of this
     pronouncement is not expected to have an impact on the Company's financial
     position, results of operations or cash flows.

     In December 2006, the FASB approved FASB Staff Position (FSP) No. EITF
     00-19-2, "Accounting for Registration Payment Arrangements" ("FSP EITF
     00-19-2"), which specifies that the contingent obligation to make future
     payments or otherwise transfer consideration under a registration payment
     arrangement, whether issued as a separate agreement or included as a
     provision of a financial instrument or other agreement, should be
     separately recognized and measured in accordance with SFAS No. 5,
     "Accounting for Contingencies." FSP EITF 00-19-2 also requires additional
     disclosure regarding the nature of any registration payment arrangements,
     alternative settlement methods, the maximum potential amount of
     consideration and the current carrying amount of the liability, if any. The
     guidance in FSP EITF 00-19-2 amends FASB Statements No. 133, "Accounting
     for Derivative Instruments and Hedging Activities," and No. 150,
     "Accounting for Certain Financial Instruments with Characteristics of both
     Liabilities and Equity," and FASB Interpretation No. 45, "Guarantor's
     Accounting and Disclosure Requirements for Guarantees, Including Indirect
     Guarantees of Indebtedness of Others," to include scope exceptions for
     registration payment arrangements.

     FSP EITF 00-19-2 is effective immediately for registration payment
     arrangements and the financial instruments subject to those arrangements
     that are entered into or modified subsequent to the issuance date of this
     FSP, or for financial statements issued for fiscal years beginning after
     December 15, 2006, and interim periods within those fiscal years, for
     registration payment arrangements entered into prior to the issuance date
     of this FSP. The adoption of this pronouncement did not have an impact on
     the Company's financial position, results of operations or cash flows.

                                       11
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 4: RECENT ACCOUNTING STANDARDS (Continued)

     Effective January 1, 2007, the Company adopted the provisions of FASB
     Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
     interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 prescribes a
     recognition threshold and a measurement attribute for the financial
     statement recognition and measurement of tax positions taken or expected to
     be taken in a tax return. For those benefits to be recognized, a tax
     position must be more-likely-than-not to be sustained upon examination by
     taxing authorities. Differences between tax positions taken or expected to
     be taken in a tax return and the benefit recognized and measured pursuant
     to the interpretation are referred to as "unrecognized benefits." A
     liability is recognized (or amount of net operating loss carry forward or
     amount of tax refundable is reduced) for an unrecognized tax benefit
     because it represents an enterprise's potential future obligation to the
     taxing authority for a tax position that was not recognized as a result of
     applying the provisions of FIN 48.

     In accordance with FIN 48, interest costs related to unrecognized tax
     benefits are required to be calculated (if applicable) and would be
     classified as "Interest expense, net" in the consolidated statements of
     operations. Penalties would be recognized as a component of "General and
     administrative expenses."

     In many cases the Company's uncertain tax positions are related to tax
     years that remain subject to examination by relevant tax authorities. The
     Company files income tax returns in the United States (federal) and in
     various state and local jurisdictions. In most instances, the Company is no
     longer subject to federal, state and local income tax examinations by tax
     authorities for years prior to 2003.

     The adoption of the provisions of FIN 48 did not have a material impact on
     the Company's financial position and results of operations. As of June 30,
     2007, no liability for unrecognized tax benefits was required to be
     recorded.

     The Company recognized a deferred tax asset of approximately $8 million as
     of June 30, 2007, primarily relating to net operating loss carry-forwards
     of approximately $24 million through 2006, available to offset future
     taxable income.

     The ultimate realization of deferred tax assets is dependent upon the
     generation of future taxable income during the periods in which those
     temporary differences become deductible. The Company considers projected
     future taxable income and tax planning strategies in making this
     assessment. At present, the Company does not have a sufficient history of
     income to conclude that it is more likely than not that the Company will be
     able to realize all of its tax benefits in the near future and therefore a
     valuation allowance was established in the full value of the deferred tax
     asset.

     A valuation allowance will be maintained until sufficient positive evidence
     exists to support the reversal of any portion or all of the valuation
     allowance net of appropriate reserves.

                                       12
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 5: CONVERTIBLE PROMISSORY NOTES

     On October 17, 2006, the Company entered into a Convertible Promissory Note
     for proceeds of $300,000. The loan has a stated interest rate of 8% per
     annum and matured on February 17, 2007. The Company issued a warrant for
     882,352 shares of the Company's common stock, exercisable at $0.085 per
     share and has a life of three years. The warrant has a cashless exercise
     provision. The note and accrued interest are convertible at any time after
     the maturity date into shares of the Company's common stock at a conversion
     price equal to the current market price multiplied by eighty-five percent.
     After the maturity date, the lender converted $300,000 of principal and
     $11,078 of interest to 3,211,039 shares of common stock during the six
     months ended June 30, 2007 in full satisfaction of the note plus accrued
     interest

     The Convertible Promissory Note agreement required the Company to file a
     registration statement no later than thirty business days from the date of
     the agreement for no less than the amount of subscribed shares, and to
     cause the registration statement relating to the registrable securities to
     become effective the earlier of five business days after notice from the
     Securities and Exchange Commission that the registration statement may be
     declared effective, or one hundred twenty days.

     The Convertible Promissory Note agreement included a liquidated damages
     clause, which stipulates if the registration statement is not filed by the
     filing date or declared effective by the effective date, then upon failure
     of either event the subscriber shall be entitled to liquidated damages,
     payable in cash, in the sum of one percent (1%) of the principal amount of
     the Note:

     (a)  for each 30 day period after the filing date the transpires until the
          date that the Company files the registration statement, and

     (b)  for each 30 day period after the effective date that transpires until
          such date as the registration statement is declared effective.

     The Company accounted for the above transaction in accordance with EITF
     issue No. 00-19 "Accounting for Derivative Financial Instruments Indexed
     to, and Potentially Settled in, a Company's Own Stock." The Company has
     determined that there is an embedded conversion option of the warrants and
     derivative liabilities. Accordingly, the warrants and the embedded
     conversion option are recorded at fair market value and marked to market
     through earnings at the end of each reporting period.

     The gross proceeds of $300,000 were recorded net of a discount of $174,200.
     The debt discount consisted of $12,800 related to the warrants and $161,400
     related to the embedded conversion option. During the six months ended June
     30, 2007 the Company charged to interest expense $69,800 for the accretion
     of the debt discount.

                                       13
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 5: CONVERTIBLE PROMISSORY NOTES (Continued)

     The warrants and the embedded conversion option were accounted for under
     EITF issue No. 00-19 "Accounting for Derivative Financial Instruments
     Indexed to, and Potentially Settled in, a Company's Own Stock" and EITF
     05-4, View A "The Effect of a Liquidated Damages Clause on a Freestanding
     Financial Instrument." Due to certain factors and the liquidated damage
     provision in the registration rights agreement, the Company determined that
     the embedded conversion option and the warrants are derivative liabilities.

     Accordingly, the warrants and the embedded conversion option were marked to
     market through earnings at the end of each reporting period. The Company
     determined that the value of the registration rights was deemed to be de
     minimis and the related registration statement became effective in January
     2007. The warrants and the conversion option are valued using the
     Black-Scholes valuation model.

     The Convertible Promissory Note was secured by 4,000,000 shares of the
     Company's common stock held by an officer of the Company. The security
     shares were returned upon the registration of the common stock underlying
     the convertible debenture.

     Under accounting guidance provide by EITF 00-19, the conversion price of
     the convertible promissory note did not have a determinable number of
     shares the note could be settled in. As a result, previously granted
     warrants as well as the embedded conversion option of the Series F
     Convertible Preferred Stock were required to be reclassified from equity
     and presented as a derivative liability. Accordingly, the warrants, options
     and conversion option will be marked to market through earnings at the end
     of each reporting period.


NOTE 6: NET LOSS PER SHARE OF COMMON STOCK

     Basic loss per share was computed using the weighted average number of
     outstanding common shares. Diluted loss per share includes the effect of
     dilutive common stock equivalents from the assumed exercise of options,
     warrants, convertible preferred stock and convertible notes. Common stock
     equivalents were excluded in the computation of diluted loss per share
     since their inclusion would be anti-dilutive. Total shares issuable upon
     the exercise of warrants and conversion of preferred stock for the six
     months ended June 30, 2007 and 2006 were 20,274,384 and 8,666,720,
     respectively.



                                       14
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 7: STOCKHOLDERS' DEFICIENCY

     Debt
          During the six months ended June 30, 2007, the Company issued
          3,211,039 shares of common stock for $300,000 of debt principal and
          $11,078 of accrued interest.

     Conversion of preferred stock into common stock
          During the six months ended June 30, 2007, the Company issued 123,920
          shares of common stock in connection with the conversion of 3,098
          shares of preferred stock.

     Cash
          During the six months ended June 30, 2007, the Company raised $450,000
          through the sale of 5,279,387 shares of common stock.

     Services
          During the six months ended June 30, 2007, the Company issued 100,000
          shares of common stock in satisfaction of a late payment penalty to
          one of its note holders. The Company recorded a charge of $10,000.

          During the six months ended June 30, 2007, the Company issued
          2,500,000 shares of common stock to two management employees for
          services. The Company incurred a stock based compensation charge of
          $275,000.

          During the six months ended June 30, 2007, the Company granted
          9,100,000 warrants to various employees and consultants for services.
          Of this amount 4,100,000 warrant shares fully vested on the date of
          the grant, and the balance vest over the life of the grant. Each of
          the warrants has a life of three years, and is exercisable at $0.11 to
          $0.1175 per share. The Company incurred a stock based compensation
          charge of $218,838.

     Relinquishment of common stock
          Effective with his resignation as President and Chief Executive
          Officer, on January 29, 2007 David Conway returned to the Company
          20,000,000 shares of common stock owned by him and his affiliates. The
          return of the shares was recorded as a retirement and cancellation of
          the common stock.


NOTE 8: RELATED PARTY TRANSACTIONS

     On January 29, 2007, the Company's President and Chief Executive Officer
     resigned and surrendered his stock appreciation rights, any severance under
     his employment agreement, returned 20,000,000 shares of common stock,
     forgave $525,738 of notes payable and accrued interest, and relinquished
     his rights to $471,583 of unpaid and accrued salary.

     The Company reclassified the accrued compensation, notes payable and
     accrued interest to equity. The return of the shares was recorded as a
     retirement and cancellation of the common stock. The cancellation of the
     stock appreciation rights did not have an accounting impact.


                                       15
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 8: RELATED PARTY TRANSACTIONS (Continued)

     On February 12, 2007, Marshall S. Sterman resigned from the Board of
     Directors and waived his rights to any accrued consulting and director fees
     owed to him by the Company. The Company reclassified the debt of $330,000
     during the six months ended June 30, 2007 to equity.

     In January 2007, Leslie J. Kessler was appointed as President of the
     Company. In connection with her employment, she is to receive a salary of
     $9,000 per month. In addition, Ms. Kessler will be issued 2,000,000 shares
     of the Company's common stock and a warrant to purchase 2,000,000 shares of
     the Company's common stock. The warrants are exercisable at $0.11 per
     share, have a life of three years and vest over two years. In addition, the
     employment agreement provides for certain performance-based cash
     incentives. During the six months ended June 30, 2007, the Company issued
     the 2,000,000 shares of common stock at a value of $220,000 and granted the
     warrants at a value of $125,200. The warrants were valued using the
     Black-Scholes option valuation model.

     In March 2007, the Chief Executive Officer and a Director each made bridge
     loans of $50,000 to the Company. The loans pay simple interest at the rate
     of 10% per annum and are due and payable in 120 days.

     The loans to the Chief Executive Officer and the Director carry an option
     that if the loans are not repaid by June 14, 2007 and June 29, 2007,
     respectively, such option will entitle the lenders to convert their debt to
     common stock at a price equal to 50% of the average closing price of the
     Company's common stock over the three previous business days before demand
     for conversion is made. The Company recorded a charge of $113,000 during
     the second quarter ended June 30, 2007 for the embedded conversion option.


NOTE 9: MAJOR CUSTOMERS / CREDIT RISK

     During the six months ended June 30, 2007, the Company had no sales. During
     the six months ended June 30, 2006, the Company sold two units to one
     customer and recognized revenues of $115,000.

     The Company maintains cash deposits with financial institutions, which from
     time to time may exceed federally insured limits. The Company has not
     experienced any losses and believes it is not exposed to any significant
     credit risk from cash.


NOTE 10: CONTINGENCIES

     On July 14, 2006, Funding Group, Inc. filed a complaint with the Supreme
     Court of the State of New York in New York County seeking damages due to an
     alleged breach of contract related to a $25,000 loan made by the plaintiff
     to the Company. On October 11, 2006, the Company filed a counter claim
     against Funding Group, Inc. with the Supreme Court of the State of New
     York. The Company believes the complaint is without merit and intends to
     vigorously defend itself in these actions, and believes that the eventual
     outcome of these matters will not have a material adverse effect on the
     Company. However, the ultimate outcome of these matters cannot be
     determined at this time.

                                       16
<PAGE>

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

     The following discussion and analysis of financial condition and results of
     operations of the Company should be read in conjunction with the Company's
     Financial Statements and related Footnotes.

     Forward-Looking Statements

          This quarterly report on Form 10-QSB/A contains "forward-looking
          statements" intended to qualify for the safe harbor from liability
          established by the Private Securities Litigation Reform Act of 1995.
          All statements regarding the Company's expected financial position,
          business and financing plans are forward-looking statements. Such
          forward-looking statements are identified by use of forward-looking
          words such as "anticipates," "believes," "plans," "estimates,"
          "expects," and "intends" or words or phrases of similar expression.
          These forward-looking statements are subject to various assumptions,
          risks and uncertainties, including but not limited to, changes in
          political and economic conditions, demand for the Company's products,
          acceptance of new products, technology developments affecting the
          Company's products and to those discussed in the Company's filings
          with the Securities and Exchange Commission ("SEC"). Accordingly,
          actual results could differ materially from those contemplated by the
          forward-looking statements.

     Introduction

          Until the fourth quarter of 2001, Water Chef was engaged in the
          manufacture and marketing of water coolers and water purification and
          filtration products. In the fourth quarter of 2001, the Company
          completed the sale of this business in order to focus its activities
          on its PureSafe line of business. The PureSafe Water Station has been
          designed by the Company to meet the needs of communities which either
          do not have access to municipal water treatment systems, or for those
          which systems have been compromised, either by environmental factors
          or by faulty design or maintenance.

     Results of Operations

          Sales for the six months ended June 30, 2007 and 2006 were $0 and
          $115,000, respectively. During the six months ended June 30,2006, the
          Company recognized the sale of two PureSafe Water Station Systems

          Cost of sales for the six month period ended June 30, 2007 and 2006
          was $23,000 and $72,000, respectively. An analysis of the components
          of cost of sales in the 2007 and 2006 periods follows:


                                                    Rent and Overhead
                                         Product       Payments to
           Costs of Sales Period           CGS         Manufacturer      Total
           ---------------------           ---         ------------      -----

          For the six months ended
             June 30, 2007               $  --          $   23,000      $23,000
          For the six months ended
            June 30, 2006                $30,000        $   42,000      $72,000


                                       17
<PAGE>

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (Continued)

     Results of Operations (Continued)

          Selling, general and administrative expenses for the six months ended
          June 30, 2007 were $920,255 compared to $1,163,937 for the six months
          ended June 30, 2006, a decrease of 21%.

          The net loss for the six months ended June 30, 2007 was $1,213,855
          compared to $1,499,401 in the same period ended June 30, 2006.

     Liquidity and Capital Resources

          At June 30, 2007, the Company had a working capital deficiency of
          approximately $2,386,000. In addition, the Company continues to suffer
          recurring losses from operations and has an accumulated deficit since
          inception of approximately $27,870,000. The accompanying financial
          statements have been prepared assuming that that the Company will
          continue as a going concern. These conditions raise substantial doubt
          about the Company's ability to continue as a going concern.
          Management's plans with respect to these matters include restructuring
          its existing debt, raising additional capital through future issuances
          of stock and/or equity, and finding sufficient profitable markets for
          its products to generate sufficient cash to meet its business
          obligations. However, there can be no assurance that the Company will
          be able to obtain sufficient funds to continue the development of its
          product, marketing plan and distribution network. The accompanying
          financial statements do not include any adjustments that might be
          necessary should the Company be unable to continue as a going concern.

          In March 2007, the Chief Executive Officer and a Director each made
          bridge loans of $50,000 to the Company. The loans pay simple interest
          at the rate of 10% per annum and are due and payable in 120 days.
          Failure to repay the loans on a timely basis will entitle the lenders
          to convert their debt to common stock at a price equal to 50% of the
          average closing price of the Company common over the three previous
          business days before demand for conversion is made.

          The loans to the Chief Executive Officer and the Director carry an
          option that if the loans are not repaid by June 14, 2007 and June 29,
          2007, respectively, such option will entitle the lenders to convert
          their debt to common stock at a price equal to 50% of the average
          closing price of the Company's common stock over the three previous
          business days before demand for conversion is made. The Company
          recorded a charge of $113,000 during the second quarter ended June 30,
          2007 for the embedded conversion option.

     Recent Accounting Standards

          In February 2006, the FASB issued SFAS 155, "Accounting for Certain
          Hybrid Financial Instruments - an amendment of FASB Statements No. 133
          and 140" ("SFAS 155"). SFAS 155 resolves issues addressed in SFAS 133
          Implementation Issue No. D1, "Application of Statement 133 to
          Beneficial Interests in Securitized Financial Assets." The
          requirements in SFAS 155 are effective for all financial instruments
          acquired or issued after the beginning of an entity's first fiscal
          year that begins after September 15, 2006. The adoption of this
          pronouncement did not have an impact on the Company's financial
          position, results of operations or cash flows.


                                       18
<PAGE>

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (Continued)

     Recent Accounting Standards (Continued)

          In September 2006, the FASB issued SFAS No. 157, "Fair Value
          Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a
          framework for measuring fair value in accordance with accounting
          principles generally accepted in the U.S., and expands disclosures
          about fair value measurements. SFAS 157 is effective for financial
          statements issued for fiscal years beginning after November 15, 2007,
          with earlier application encouraged. Any cumulative effect will be
          recorded as an adjustment to the opening accumulated deficit balance,
          or other appropriate component of equity. The adoption of this
          pronouncement did not have an impact on the Company's financial
          position, results of operations, or cash flows.

          In September 2006, the SEC staff issued Staff Accounting Bulleting
          ("SAB") No. 108, Considering the Effects of Prior Year Misstatements
          when Quantifying Misstatements in Current Year Financial Statements
          ("SAB 108"). SAB 108 was issued in order to reduce the diversity in
          practice in how public companies quantify misstatements of financial
          statements, including misstatements that were not material to prior
          years' financial statements. SAB 108 is effective for fiscal year
          2007. The adoption of this pronouncement did not have an impact on the
          Company's financial position, results of operations, or cash flows.

          In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
          for Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159
          provides companies with an option to report selected financial assets
          and liabilities at fair value. The objective of SFAS 159 is to reduce
          both complexity in accounting for financial instruments and the
          volatility in earnings caused by measuring related assets and
          liabilities differently. Generally accepted accounting principles have
          required different measurement attributes for different assets and
          liabilities that can create artificial volatility in earnings. The
          FASB has indicated it believes that SFAS 159 helps to mitigate this
          type of accounting-induced volatility by enabling companies to report
          related assets and liabilities at fair value, which would likely
          reduce the need for companies to comply with detailed rules for hedge
          accounting. SFAS 159 also establishes presentation and disclosure
          requirements designed to facilitate comparisons between companies that
          choose different measurement attributes for similar types of assets
          and liabilities.

          SFAS 159 does not eliminate disclosure requirements included in other
          accounting standards, including requirements for disclosures about
          fair value measurements included in SFAS 157 and SFAS No. 107,
          "Disclosures about Fair Value of Financial Instruments." SFAS 159 is
          effective for the Company as of the beginning of fiscal year 2009. The
          adoption of this pronouncement is not expected to have an impact on
          the Company's financial position, results of operations or cash flows.


                                       19
<PAGE>

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (Continued)

     Recent Accounting Standards (Continued)

          In December 2006, the FASB approved FASB Staff Position (FSP) No. EITF
          00-19-2, "Accounting for Registration Payment Arrangements" ("FSP EITF
          00-19-2"), which specifies that the contingent obligation to make
          future payments or otherwise transfer consideration under a
          registration payment arrangement, whether issued as a separate
          agreement or included as a provision of a financial instrument or
          other agreement, should be separately recognized and measured in
          accordance with SFAS No. 5, "Accounting for Contingencies." FSP EITF
          00-19-2 also requires additional disclosure regarding the nature of
          any registration payment arrangements, alternative settlement methods,
          the maximum potential amount of consideration and the current carrying
          amount of the liability, if any. The guidance in FSP EITF 00-19-2
          amends FASB Statements No. 133, "Accounting for Derivative Instruments
          and Hedging Activities," and No. 150, "Accounting for Certain
          Financial Instruments with Characteristics of both Liabilities and
          Equity," and FASB Interpretation No. 45, "Guarantor's Accounting and
          Disclosure Requirements for Guarantees, Including Indirect Guarantees
          of Indebtedness of Others," to include scope exceptions for
          registration payment arrangements.

          FSP EITF 00-19-2 is effective immediately for registration payment
          arrangements and the financial instruments subject to those
          arrangements that are entered into or modified subsequent to the
          issuance date of this FSP, or for financial statements issued for
          fiscal years beginning after December 15, 2006, and interim periods
          within those fiscal years, for registration payment arrangements
          entered into prior to the issuance date of this FSP. The adoption of
          this pronouncement did not have an impact on the Company's financial
          position, results of operations or cash flows.




                                       20
<PAGE>

ITEM 3: CONTROLS AND PROCEDURES

     Evaluation and Disclosure Controls and Procedures

          The Company, under the supervision and with the participation of the
          Company's management, including the Company's Chief Executive Officer
          and Chief Financial Officer, has evaluated the effectiveness of the
          design and operation of the Company's "disclosure controls and
          procedures," as such term is defined in Rules 13a-15e promulgated
          under the Securities Exchange Act of 1934, as amended (the "Exchange
          Act"), as of this report. Based upon that evaluation, the Chief
          Executive Officer and Chief Financial Officer has concluded that the
          Company's disclosure controls and procedures were not effective as of
          the end of the period covered by this report to provide reasonable
          assurance that information required to be disclosed by the Company in
          reports that it files or submits under the Exchange Act is recorded,
          processed, summarized and reported within the time periods specified
          in SEC rules and forms.

          Our auditors in connection with our 2006 annual audit identified
          certain deficiencies which were considered to be both material and
          significant. Management is aware that there is a lack of segregation
          of duties within the Company due to the limited number of employees
          responsible for general administrative and financial matters. In the
          past, the (former) Chief Executive Officer of the Company performed
          substantially all of the duties of a chief executive officer, chief
          financial officer and was also responsible for all accounting and
          financial reporting matters. This constitutes a significant deficiency
          in the financial reporting. Management had previously concluded that,
          considering the employees involved and the control procedures in place
          and the potential benefits of adding additional employees to clearly
          segregate duties, the benefit did not justify the additional expense.
          However, subsequent to June 30, 2007, the following steps were taken
          to mitigate the identified significant deficiencies: (i) hired an
          accountant/bookkeeper, who holds an MS in accounting and who has
          nine-years of experience, to review and compile the financial
          statements on a quarterly and annual basis, (ii) hired a new Chief
          Financial Officer, who is a Certified Public Accountant ("CPA") and
          has been a Partner in a CPA firm for many years, (iii) hired a new
          Chief Executive Officer, so that the authorities vested in the Chief
          Financial Officer and Chief Financial Officer will be separated, and
          (iv) The Resnick Druckman Group LLC (outside financial consultants)
          review all monthly reporting and all financial transactions, with
          emphasis on debt transactions.

          The system for eliminating the reported deficiencies includes both a
          segregation of duties and multiple reviewers of financial transactions
          and financial reporting, with particular attention to debt financing
          transactions. The Company's Bookkeeper's functions are now reviewed by
          the Company's Chief Financial Officer on a regular basis. Monthly, all
          reporting and any debt and equity transactions and black scholes
          computations are reviewed by the Company's Chief Financial Officer, as
          well as by The Resnick Druckman Group LLC.

          The second reportable condition which was identified as a material
          weakness, was the inability to ensure that the accounting for our debt
          and equity-based transactions is accurate and complete. In recent
          years we have consummated a series of complex debt and equity
          transactions involving the application of highly specialized
          accounting principles. In order to mitigate this condition, The
          Resnick Druckman Group LLC now reviews all financial debt transactions
          of the Company. We believe this material weakness will be mitigated by
          this review process and by the other factors set forth in the third
          paragraph.

     Changes in Internal Controls

          Management has evaluated the effectiveness of the disclosure controls
          and procedures as of June 30, 2007. Based on such evaluation,
          management has concluded that the disclosure controls and procedures
          were not effective for their intended purpose described above. There
          were no other changes to the internal controls during the six months
          ended June 30, 2007 that have materially affected or that are
          reasonably likely to affect the internal controls. The control
          improvements identified above were implemented subsequent to June 30,
          2007 as described above.

                                       21
<PAGE>

ITEM 3: CONTROLS AND PROCEDURES

     Limitations on the Effectiveness of Controls

          A control system, no matter how well conceived and operated, can
          provide only reasonable, not absolute, assurance that the objectives
          of the control system are met. Because of the inherent limitations in
          all control systems, no evaluation of controls can provide absolute
          assurance that all control issues and instances of fraud, if any,
          within a company have been detected. The Company's disclosure controls
          and procedures are designed to provide reasonable assurance of
          achieving its objectives. The Company's principal executive officer
          and principal financial officer concluded that the Company's
          disclosure controls and procedures were not effective at June 30,
          2007, at that reasonable assurance level, as described above.











                                       22
<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                           PART II - OTHER INFORMATION


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

     During the six months ended June 30, 2007, the Company issued 3,211,039
     shares of common stock for the settlement of $311,078 of debt and accrued
     interest.

     During the six months ended June 30, 2007, the Company issued 123,920
     shares of common stock in connection with the conversion of 3,098 shares of
     preferred stock.

     During the six months ended June 30, 2007, the Company raised $450,000
     through the sale of 5,279,387 shares of common stock.

     During the six months ended June 30, 2007, the Company issued 100,000
     shares of common stock in satisfaction of a late payment penalty to one of
     its note holders. The Company recorded a charge of $10,000.

     During the six months ended June 30, 2007 the Company issued 2,500,000
     shares of common stock to two management employees for services. The
     Company incurred a stock based compensation charge of $275,000.

     During the six months ended June 30, 2007, the Company granted 9,100,000
     warrants for services. Of this amount 4,100,000 warrant shares fully vested
     on the date of the grant, and the balance vest over the life of the grant.
     Each of the warrants has a life of three years, and is exercisable at $0.11
     to $0.1175 per share. The Company incurred a stock based compensation
     charge of $218,838.

     The Company issued these shares in reliance on the exemption from
     registration afforded by Section 4(2) of the Securities Act of 1933 and
     Regulation D promulgated thereunder. These shares were offered to less than
     35 "non-accredited" investors and were purchased for investment purposes
     with no view to resale.

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<PAGE>

                                WATER CHEF, INC.
            (A Development Stage Company Commencing January 1, 2002)

                           PART II - OTHER INFORMATION



ITEM 6: EXHIBITS

     Exhibit No.    Description
     -----------    -----------

         31         Certification of Chief Executive Officer and Chief Financial
                    Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002.

         32         Certification of Chief Executive Officer and Chief Financial
                    Officer pursuant to 8 U.S.C. Section 1350 as adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.






















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<PAGE>


                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this Report to be signed on its behalf by the undersigned
thereunto duly authorized.

                                            Water Chef, Inc.



Date December 19, 2007                      /s/ Leslie J. Kessler
                                            ------------------------------------
                                            Leslie J. Kessler, President, Chief
                                            President and Chief Executive
                                            Officer
                                            (Principal Executive Officer)


Date December 19, 2007                      /s/ Terry R. Lazar
                                            ------------------------------------
                                            Terry R. Lazar
                                            Director and Chief Financial Officer
                                            (Principal Financial and
                                            Accounting Officer)






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