UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





FORM 10-Q





(Mark One)


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





For the quarter ended:  March 31, 2011





o  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from ___________ to ___________





Commission file number: 000-54252





AQUASIL INTERNATIONAL INC.


(Exact name of registrant as specified in its charter)





Nevada

N/A(State or other jurisdiction of

(I.R.S. Employer Identification No.)incorporation or organization)





380 Lexington Ave., 17th Floor

New York, New York, 10168(Address of principal executive offices)




(888) 510-3394(Registrant’s telephone number, including area code)





(Former name, former address and former fiscal year, if changed since last report)





Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xNo o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o  No o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):





Large Accelerated Filero
Accelerated Filero
Non-Accelerated Filero
Smaller Reporting Companyx





Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes oNo x





State the number of shares outstanding of each of the issuer’s classes of common equity, as of May 20, 2011: 149,498,063 shares of common stock.










AQUASIL INTERNATIONAL INC.  AND SUBSIDIARY


(Formerly BWI Holdings, Inc. and Subsidiary)





FORM 10-Q





FOR THE PERIOD FROM INCEPTION (SEPTEMBER 21, 2010) TO 31 MARCH 31, 2011)


__________________





TABLE OF CONTENTS


___________________





PagePART I - FINANCIAL INFORMATIONItem 1.
Consolidated Financial Statements


F-1Item 2.
Management’s Discussion & Analysis of Financial Condition and Results of Operations


3Item 3.
Quantitative and Qualitative Disclosures About Market Risk


5Item 4.
Controls and Procedures


6PART II -- OTHER INFORMATIONItem 1.
Legal Proceedings


7Item 1A.
Risk Factors


7Item 2.
Unregistered Sales of Equity securities and Use of Proceeds


7Item 3.
Defaults Upon Senior Securities


7Item 4.
(Removed and Reserved)


7Item 5
Other Information


8Item 6.
ExhibitsSignatures



9


2
  PART I.                 FINANCIAL INFORMATION





ITEM I.                 CONSOLIDATED FINANCIAL STATEMENTS







The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  All such adjustments are of a normal recurring nature.  Operating results for the three month period ended March 31, 2011, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2011.  For further information refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.


PageUnaudited Consolidated Financial Statements


F-2Consolidated Balance Sheets


F-3Consolidated Statements of Operations


F-4Consolidated Statements of Cash Flows


F-5Notes to Unaudited Consolidated Financial Statements

F-6 to F-7
 F-1
 AQUASIL INTERNATIONAL INC.  AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 
 INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 
 (Stated in US Dollars)
 
 (UNAUDITED)
 
 
  F-2
  AQUASIL INTERNATIONAL INC.  AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 Consolidated Balance Sheets
 As Of March 31, 2010
 (Unaudited)
 
 March 31,

2011


December 31,

2010ASSETSCurrent AssetsCash

$
450


$
865Total Assets

$
450


$
865LIABILITIES AND STOCKHOLDERS' DEFICITCurrent LiabilitiesAccounts payable and accrued liabilities

$
254,306


$
101,160Advances from stockholders


242,687



922,527Total Current Liabilities


496,993



1,023,687Stockholders’ DeficitPreferred stock, $0.0001 par value, non-voting, 20,000,000 authorized, none issued and outstanding


-



-Common stock, $0.0001 par value, voting, 500,000,000 authorized, 149,498,063 issued and outstanding


14,950



7,950Additional paid-in capital


693,000



-Accumulated deficit during the development stage


(1,204,493
)


(1,030,772
)Total Stockholders’ Deficit


(496,543
)


(1,022,822
)Total Liabilities and Stockholders’ Deficit

$
450


$
865
 
 The accompanying notes are an integral part of these consolidated financial statements.
  F-3
  AQUASIL INTERNATIONAL INC.  AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 Consolidated Statements of Operations
 For The Three Months Ended March 31, 2011 and
 from Inception (September 21, 2010) To March 31, 2011
 (Unaudited)
 
 Three Months Ended


From Inception (September 21, 2010) toMarch 31, 2011


March 31, 2011Revenue


-



-ExpensesProfessional fees

$
164,178


$
83,848General and administrative


9,543



11,082Total Expenses


173,721



94,930Net Loss

$
(173,721
)

$
(94,930
)Loss Per Weighted Number Of Shares Outstanding – Basic And Diluted

$
(0.00
)Weighted Average Number Of Shares Outstanding – Basic And Diluted


123,053,619
 
 The accompanying notes are an integral part of these consolidated financial statements.
  F-4
  AQUASIL INTERNATIONAL INC.  AND SUBSIDIARY
 (FORMERLY BWI HOLDINGS, INC. AND SUBSIDIARY)
 (A DEVELOPMENT STAGE COMPANY)
 Consolidated Statements of Cash Flows
 For The Three Months Ended March 31, 2011 and
 from Inception (September 21, 2010) To March 31, 2011
 (Unaudited)
 
 Three Months Ended March 31, 2011


From Inception (September 21, 2010) to March 31, 2011Cash Flows From Operating ActivitiesNet loss

$
(173,721
)

$
(184,930
)Changes in operating assets and liabilities:Accounts payable and accrued liabilities


153,146



153,146Net Cash Used In Operating Activities


(20,575
)


(31,784
)Cash Flows From Financing ActivitiesAcquisition of AquaSil Inc.


-



1,000Advances from stockholders


20,160



31,234Net Cash Provided By Financing Activities


20,160



32,234Net (Decrease) Increase in Cash


(415
)


450Cash, Beginning of Period


865



-Cash, End of Period


450



450Supplemental Cash Flow Information:Cash Paid During the Period for:Interest


-



-Income taxes


-



-
 
 The accompanying notes are an integral part of these consolidated financial statements.
  F-5
  AQUASIL INTERNATIONAL INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 Notes To Consolidated Financial Statements
 For The Three Months Ended March 31, 2011
 
 1.       ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION
 
 Organization and Nature of Operations
 
 Gray Creek Mining, Inc. was incorporated on August 10, 2006 under the laws of the State of Nevada. A Certificate of Amendment was filed with the Nevada Secretary of State, on November 7, 2008, changing the corporation’s name to BWI Holdings, Inc. A Certificate of Amendment was filed with the Nevada Secretary of State, on January 27, 2011, changing the corporation’s name to Aquasil International Inc. (the “Company”).
 
 On December 30, 2010, the Company entered into a stock exchange agreement (the “Stock Exchange Agreement”) with AquaSil, Inc., a New York corporation (“AquaSil”) and the sole stockholder of AquaSil.  In accordance with the Stock Exchange Agreement, the Company acquired 100% of the total issued and outstanding shares of common stock of AquaSil in exchange for the issuance of an aggregate 70,000,000 shares of the Company’s common stock to the sole stockholder of AquaSil. As a result of this transaction, AquaSil became a wholly-owned subsidiary of the Company.
 
 The Company’s wholly owned subsidiary, AquaSil, was incorporated in the State of New York on September 21, 2010 to engage in the business of selling various water and soft drink products.
 
 Basis of Presentation
 
 The Company is in the development stage and has no revenues. A development stage company is one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.
 
 These consolidated financial statements include the accounts of Aquasil International Inc. and its wholly owned subsidiary, AquaSil for the period from inception of AquaSil (September 21, 2010) to December 31, 2010. All significant intercompany balances and transactions have been eliminated upon consolidation.
 
 The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  All such adjustments are of a normal recurring nature.  Operating results for the three month period ended March 31, 2011, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2011.  For further information refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.
 F-6
  AQUASIL INTERNATIONAL INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 Notes To Consolidated Financial Statements
 For The Three Months Ended March 31, 2011
 
 2.       GOING CONCERN
 
 The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company is a development stage company and is dependent on raising capital to commence principal operations. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern.
 
 Management believes the Company’s ability to continue as a going concern is dependent on its ability to raise capital. At present, the Company has no commitments for any additional financing. Management is currently seeking financing through a possible offering of common stock, which will be used to finance operations. Until such financing is obtained, it is the intent of stockholders to provide funds for professional fees related to maintaining the Company’s public reporting status.
 
 The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 3.       LICENSE AGREEMENT
 
 On October 25, 2010, the Company’s subsidiary, AquaSil, entered into a license agreement (the “Agreement”) with Khasid ICT, a corporation organized under the laws of the country of Tajikistan and controlled and managed by a controlling stockholder of the Company. Under the agreement, AquaSil has been granted an exclusive, sub-licensable, assignable, royalty-bearing license to use the Formula “ROSS TJ 72 N00422” (the “Formula”) for the purpose of selling the licensed products, as defined, throughout the world. Royalties are due quarterly, calculated at the rate of 5% of gross revenues. The term of the license is through December 31, 2020, unless terminated earlier. The licensor may terminate the Agreement without cause with 180 days prior notice or immediately with written notice.
 
 4.       ADVANCES FROM STOCKHOLDERS
 
 These advances represent amounts loaned to the business by principal stockholders and are unsecured, non-interest bearing and due on demand.
 
 5.       CAPITAL STOCK
 
 On February 3, 2011, the Company issued 70,000,000 shares of common stock at $0.01 per share in settlement of $700,000 of stockholder advances.
 
 6.       INCOME TAXES
 
 The Company’s deferred tax assets consist solely of the loss incurred during the period. Due to the uncertainty of their realization, no income tax benefit has been recorded by the Company, and a valuation allowance has been established for any such benefits.
  F-7




ITEM 2.  MANAGEMENT’S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 The following discussion of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and Notes thereto in Item I, and the Company’s 10-K Annual Report, the Company’s 8-K Entry Into a Material Definitive Agreement  and other publicly available financial information. This discussion contains forward-looking statements and involves numerous risks and uncertainties. Our actual results may differ materially from those contained in any forward-looking statements.
 
 Operating Results for the Period From Inception (September 21, 2010) to March 31, 2011
 
 On December 30, 2010, we entered into a stock exchange agreement (the “Stock Exchange Agreement”) with AquaSil, Inc., a New York corporation (“AquaSil”) and the sole stockholder of AquaSil.  In accordance with the Stock Exchange Agreement, we acquired 100% of the total issued and outstanding shares of common stock of AquaSil in exchange for the issuance of an aggregate 70,000,000 shares of our common stock to the sole stockholder of AquaSil. As a result of this transaction, AquaSil became our wholly-owned subsidiary.
 
 Our subsidiary, AquaSil, has not yet begun operations.  AquaSil was incorporated in the state of New York on September 21, 2010 and to date has generally incurred professional fees related to audit of the financial statements and legal.
 
 Results of Operations
 
 Three Month Period Ended March 31, 2011
  Our net loss for the three month period ended March 31, 2011 was $173,721.  We generated no revenue for the three month period ended March 31, 2011.
 
 During the three month period ended March 31, 2011, we incurred expenses of $173,721. The expenses incurred were attributable to the following items: (i) professional fees of $164,178; and (ii) general and administrative expenses of $9,543. General and administrative expenses generally included corporate overhead, financial and administrative contracted services, marketing and consulting costs.
 Thus, our net loss during the three month period ended March 31, 2011 was $173,721or $0.00 per share.
  3
 
 Liquidity and Capital Resources
 
 As of March 31, 2011, our current assets were $450 and our current liabilities were $496,993, which resulted in a working capital deficit of $496,543. As of March 31, 2011, current assets were comprised of $450 in cash . As at March 31, 20011, current liabilities were comprised of: (i) $254,306 in accounts payable and accrued liabilities; and (ii) $242,687 in advances from stockholders.  The decrease in current liabilities during the three month period ended March 31, 2011 from fiscal year ended December 31, 2010 was primarily due to the decrease in advances from stockholders of $679,840. During the quarter, we issued 70,000,000 shares of common stock is settlement of $700,000 of stockholder advances.
 
 Stockholders’ deficit decreased from ($1,022,822) as of December 31, 2010 to ($496,543) as of March 31, 2011.
 
 Cash Flows from Operating Activities
  We have not generated positive cash flows from operating activities. For the three month period ended March 31, 2011, net cash flows used in operating activities was $20,575 . This was primarily for payment of professional fees and fees paid to our stock transfer agent.
 
 Cash Flows from Investing Activities
 
 For the three month period ended March 31, 201, net cash flows used in investing activities was $-0-.
 
 Cash Flows from Financing Activities
 
 We have financed our operations primarily from debt or the issuance of equity instruments or advances from stockholders. For the three month period ended March 31, 2011, net cash flows provided from financing activities was $20,160. Cash flows from financing activities for the three month period ended March 31, 2011 consisted of $20,160 related to advances from stockholders.
  4
 
 PLAN OF OPERATION AND FUNDING
 
 Since inception, we have financed our working capital needs through advances from stockholders. Our future liquidity requirements will be dependent upon the ability to raise financing either by debt or by equity through private placement transactions. Until such financing is obtained, it is the intent of stockholders to provide funds for professional fees related to maintaining our public reporting status.
 
 We have not begun operations, have incurred a loss for the period and dependent on debt financing for our operating cash flow. These circumstances raise substantial doubt about our ability to continue as a going concern.
 
 Management believes our ability to continue as a going concern is dependent on its ability to raise capital. At present, we have no commitments for any additional financing. Management is currently seeking financing through a possible offering of common stock, which will be used to finance operations.
 
 Critical Accounting Policies and Estimates
 
 The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. For a list of our most significant accounting policies, please see our consolidated financial statements for the period from inception (September 21, 2010) to December 31, 2010 included in our 10-KT report filed with the Securities and Exchange Commission on April 15, 2011.
 
 Off-Balance Sheet Arrangements
 
 We have no material off-balance sheet arrangements that will have a current or future effect on our financial condition and changes in financial condition.
 
 Inflation
 
 Inflation has not had a significant impact on the Company’s operations.
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 The Company is a smaller reporting company and is not required to provide this information.
  5
 
 ITEM 4. CONTROLS AND PROCEDURES
 
 Evaluation of Disclosure Controls and Procedures
 
 Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the quarterly period covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of March 31, 2011.
 
 Management’s Report on Internal Control Over Financial Reporting
 
 Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed, under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.
 
 Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2010 was not effective for the reason described herein.
 
 The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) inadequate segregation of duties consistent with control objectives. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of December 31, 2010.
 
 Management believes that the material weakness set forth above did not have an effect on our financial results.
 
 All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparations and presentations. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
 This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide on management’s report on this quarterly report.
 
 Changes in Internal Control Over Financial Reporting
 
 There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken.
 6
  PART II - OTHER INFORMATION
 
 ITEM 1.  LEGAL PROCEEDINGS
 
 None.
 
 ITEM 1A. RISK FACTORS.
 
 Not applicable.
 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 Effective on February 1, 2011, our Board of Directors authorized the settlement of debt in the amount of $700,000 due and owing to Jim Can, our prior President/Chief Executive Officer (the “Debt”). The Debt consisted of funds advanced and loaned by Jim Can to us during fiscal years 2007 through 2009 for financing and working capital purposes as evidenced on the consolidated financial statements for the period ended December 31, 2009 filed with the quarterly report on Form 10-Q with the Securities and Exchange Commission. On approximately July 15, 2010, our Board of Directors had agreed that such Debt would be convertible at any time by Jim Can at $0.01 per share (the “Terms of Conversion”). Therefore, our Board of Directors acknowledged the Debt and Terms of Conversion and ratified and approved the issuance of 70,000,000 shares of common stock to Jim Can in satisfaction of the Debt.  The shares were issued to Jim Can on February 3, 2011.
 
 ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
 
 None.
 
 ITEM 4.  (Removed and Reserved).
 
 None.
  7
 
 ITEM 5.  OTHER INFORMATION
 
 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS
 
 On February 15, 2011, Kendall Dilling tendered his resignation as Secretary-Treasurer and a member of the Board of Directors of the Company. Therefore, as of the date of this Quarterly Report, the Board of Directors consists of the following members: Ilya Khasidov and Robert Baker. There were no disagreements or disputes between us and Kendall Dilling with regards to his resignation.
  AMENDMENT TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR
  In accordance with the terms and provisions of the Stock Exchange Agreement, our Board of Directors pursuant to written consent resolutions from the Board of Directors and the majority Shareholders dated January 3, 2011 approved a change in our name from “BWI Holdings Inc.” to “Aquasil International Inc.” to better reflect our additional business operations involving the marketing and distribution of “Mineral Spring Water” (the “Name Change”), to be effective as of February 8, 2011. The articles of amendment to the articles of incorporation were filed with the Nevada Secretary of State of January 27, 2011 effecting the Name Change with an effective date of February 8, 2011.
 
 FINRA received the necessary documentation and announced the Name Change to “Aquasil International Inc.” to take effect at the open of business on February 18, 2011. Our trading symbol for our shares on the OTC Bulletin Board has been changed to AQUS.OB. Our new cusip number is 03841W106.
 8
 SIGNATURES
 
 In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
 
 AQUASIL INTERNATIONAL INC.Date: May 20, 2011
By:
/s/Ilya KhasidovIlya KhasidovPresident and Chief Executive OfficerDate: May 20, 2011
By:
/s/Bruce MillroyBruce MillroyChief Financial Officer, Principal Financial Officer and Principal Accounting Officer