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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
EXCHANGE ACT

For the transition period from _________ to _________

Commission File No. 333-140595

FRESHWATER TECHNOLOGIES,
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 98-0508360                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

30 Denver Crescent, Suite 200, Toronto, Ontario, Canada
M2J 1G8(Address of principal executive offices) (zip code)

(416) 490-0254(Registrants telephone
number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 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 large
accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See definitions of large accelerated filer,
accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):

|Large accelerated filer [   ]                 | Accelerated
      filer                  
      [   ]
|--------------------------------------------- | -----------------------------------------------------
|Non-accelerated filer   [   ]                 | Smaller reporting company [X]                        
|(Do not check if a smaller reporting company) |                                                      

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

Yes [   ]    No [X]

APPLICABLE ONLY TO CORPORATE ISSUERS

As of August 14, 2009, there were 127,120,000 shares of common
stock, par value $0.001, outstanding.

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2

Freshwater Technologies, Inc. (A Development Stage Company)

June 30, 2009





|                                        | Index
|--------------------------------------- | -----
|                                        |      
|Balance Sheets                          | F-1  
|                                        |      
|Statements of Operations                | F-2  
|                                        |      
|Statements of Cash Flows                | F-3  
|                                        |      
|Notes to the Financial
      Statements | F-4  

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3

Freshwater Technologies, Inc. (A Development Stage Company)
Balance Sheets (expressed in U.S. dollars)

|                                                                        |  | June 30,   |   |  | December 31, |  
|----------------------------------------------------------------------- |  | ---------- | - |  | ------------ | -
|                                                                        |  | 2009       |   |  | 2008         |  
|                                                                        |  | $          |   |  | $            |  
|                                                                        |  |            |   |  |              |  
|ASSETS                                                                  |  |            |   |  |              |  
|                                                                        |  |            |   |  |              |  
|Current Assets                                                          |  |            |   |  |              |  
|                                                                        |  |            |   |  |              |  
|Cash                                                                    |  | 281        |   |  | 160          |  
|Receivables                                                             |  | 1,395      |   |  | 1,716        |  
|Inventory                                                               |  | 81,844     |   |  |             |  
|                                                                        |  |            |   |  |              |  
|Total Current Assets                                                    |  | 83,520     |   |  | 1,876        |  
|Intangible Assets
      (Notes 2(k) and 4(d))                           |  | 353,836    |   |  |             |  
|                                                                        |  |            |   |  |              |  
|Total Assets                                                            |  | 437,356    |   |  | 1,876        |  
|                                                                        |  |            |   |  |              |  
|                                                                        |  |            |   |  |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY
      (DEFICIT)                    |  |            |   |  |              |  
|                                                                        |  |            |   |  |              |  
|Current Liabilities                                                     |  |            |   |  |              |  
|                                                                        |  |            |   |  |              |  
|Accounts payable                                                        |  | 21,054     |   |  | 21,054       |  
|Accrued liabilities                                                     |  | 47,088     |   |  | 17,537       |  
|Due to related parties (Note 3(b))                                      |  | 343,588    |   |  | 167,957      |  
|                                                                        |  |            |   |  |              |  
|Total Liabilities                                                       |  | 411,730    |   |  | 206,548      |  
|                                                                        |  |            |   |  |              |  
|Going Concern (Note 1)                                                  |  |            |   |  |              |  
|Commitments and Contingencies (Notes 3(a), 6 and 8)                     |  |            |   |  |              |  
|Subsequent Events (Note 8)                                              |  |            |   |  |              |  
|                                                                        |  |            |   |  |              |  
|Stockholders Equity (Deficit)                                          |  |            |   |  |              |  
|                                                                        |  |            |   |  |              |  
|Class A Common Stock (Notes 4 and 5)                                    |  |            |   |  |              |  
|Authorized: 300,000,000 common shares, with a par
      value of $0.001 |  |            |   |  |              |  
|Issued and outstanding: 122,120,000
      shares (2008  112,120,000)   |  | 122,120    |   |  | 112,120      |  
|                                                                        |  |            |   |  |              |  
|Class B Common Stock                                                    |  |            |   |  |              |  
|Authorized: 100,000,000 common shares, with a par
      value of $0.001 |  |            |   |  |              |  
|Issued and outstanding: none                                            |  |           |   |  |             |  
|                                                                        |  |            |   |  |              |  
|Additional Paid-in Capital (Notes 4 and 5)                              |  | 833,790    |   |  | 686,589      |  
|                                                                        |  |            |   |  |              |  
|Class A Common Stock Issuable (Note 4(d))                               |  | 300,000    |   |  |             |  
|                                                                        |  |            |   |  |              |  
|Deficit Accumulated During the Development Stage                        |  | (1,230,284 | ) |  | (1,003,381   | )
|                                                                        |  |            |   |  |              |  
|Total Stockholders Equity (Deficit)                                    |  | 25,626     |   |  | (204,672     | )
|                                                                        |  |            |   |  |              |  
|Total Liabilities and Stockholders Equity (Deficit)                    |  | 437,356    |   |  | 1,876        |  

---

4

Freshwater Technologies, Inc. (A Development Stage Company)
Statements of Operations (expressed in U.S. dollars)

Accumulated from
    
    
      Three Months
    
    
      Three Months
    
    
      Six Months
    
    
      Six MonthsJanuary 21, 2005
    
    
      Ended
    
    
      Ended
    
    
      Ended
    
    
      Ended(Date of Inception)
    
    
      June 30,
    
    
      June 30,
    
    
      June 30,
    
    
      June 30,to June 30, 2009
    
    
      2009
    
    
      2008
    
    
      2009
    
    
      2008$
    
    
      $
    
    
      $
    
    
      $
    
    
      $Revenue
    
      462,484
    
    
      555
    
    
      
    
    
      685
    
    
      1,426Cost
      of Sales
    
      214,439
    
    
      79
    
    
      
    
    
      166
    
    
      601Gross Profit
    
      248,045
    
    
      476
    
    
      
    
    
      519
    
    
      825ExpensesAmortization of intangible
      assets
    
      96,164
    
    
      56,096
    
    
      
    
    
      96,164
    
    
      Consulting (Note
      3(a))
    
      229,000
    
    
      9,000
    
    
      9,000
    
    
      18,000
    
    
      18,000General and administrative
    
      124,889
    
    
      6,714
    
    
      2,895
    
    
      11,655
    
    
      4,091Imputed interest
      (Note 3(b))
    
      105,259
    
    
      4,273
    
    
      8,381
    
    
      7,201
    
    
      16,165Marketing and sales (Note 3(a))
    
      380,549
    
    
      48,413
    
    
      11,596
    
    
      101,003
    
    
      27,509Professional
      fees (Note 3(c))
    
      174,790
    
    
      9,860
    
    
      6,575
    
    
      32,337
    
    
      28,395Bad debts expense (recovery)
    
      369,678
    
    
      (7,896
    )
    
      
    
    
      (38,938
    )
    
      (880
    )Total Expenses
    
      1,480,329
    
    
      126,460
    
    
      38,447
    
    
      227,422
    
    
      93,280Net Loss From Operations
    
      (1,232,284
    )
    
      (125,984
    )
    
      (38,447
    )
    
      (226,903
    )
    
      (92,455
    )Other IncomeGain on settlement of debt
    
      2,000
    
    
      
    
    
      
    
    
      
    
    
      Net Loss
      
      (1,230,284
      )
      
      (125,984
      )
      
      (38,447
      )
      
      (226,903
      )
      
      (92,455
      )Net Loss Per Share
         Basic and Diluted
      
      
      
      
      
      
      
      
      
      
      
      
      
      Weighted Average Shares Outstanding
      
      
      
      
      114,967,000
      
      
      100,800,000
      
      
      114,967,000
      
      
      100,800,000


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5

Freshwater Technologies, Inc. (A Development Stage Company)
Statements of Cash Flows (expressed in U.S. dollars)

|                                                             |  | Six Months |   |  | Six Months |  
|------------------------------------------------------------ |  | ---------- | - |  | ---------- | -
|                                                             |  | Ended      |   |  | Ended      |  
|                                                             |  | June 30,   |   |  | June 30    |  
|                                                             |  | 2009       |   |  | 2008       |  
|                                                             |  | $          |   |  | $          |  
|Operating Activities                                         |  |            |   |  |            |  
|Net loss                                                     |  | (226,903   | ) |  | (92,455    | )
|Adjustments to reconcile net loss to net
      cash provided |  |            |   |  |            |  
|by operating activities:                                     |  |            |   |  |            |  
|Amortization of intangible
      assets                      |  | 96,164     |   |  |           |  
|Donated costs                                                |  |           |   |  | 12,156     |  
|Imputed interest                                             |  | 7,201      |   |  | 16,165     |  
|Forgiveness of debt                                          |  |           |   |  |           |  
|Provision for inventory
      obsolescence                   |  |           |   |  |           |  
|Changes in operating assets and liabilities:                 |  |            |   |  |            |  
|Accounts receivable                                          |  | 321        |   |  | 92         |  
|Other receivables                                            |  |           |   |  | 1,184      |  
|Inventory                                                    |  | (81,844    | ) |  |           |  
|Prepaid expenses                                             |  |           |   |  |           |  
|Accounts payable and accrued
      liabilities               |  | 29,551     |   |  | (6,506     | )
|Due
      to related parties                                 |  | 36,000     |   |  | 36,000     |  
|                                                             |  |            |   |  |            |  
|Net Cash Provided
      (Used) By Operating Activities       |  | (139,510   | ) |  | (33,364    | )
|Financing Activities                                         |  |            |   |  |            |  
|Advances from related parties                                |  | 156,073    |   |  | 36,580     |  
|Repayments to related parties                                |  | (16,442    | ) |  | (3,000     | )
|Net Cash Provided
      (Used) By Financing Activities       |  | 139,631    |   |  | 33,580     |  
|Increase (Decrease) in Cash                                  |  | 121        |   |  | 216        |  
|Cash  Beginning
      of Period                             |  | 160        |   |  | 224        |  
|Cash  End of Period                                         |  | 281        |   |  | 440        |  
|                                                             |  |            |   |  |            |  
|Non-cash Investing and Financing
      Activities:           |  |            |   |  |            |  
|Issuance of shares of common stock for
      intangible      |  |            |   |  |            |  
|assets                                                       |  | 450,000    |   |  |           |  
|                                                             |  |            |   |  |            |  
|Supplemental Disclosures                                     |  |            |   |  |            |  
|Interest paid                                                |  |           |   |  |           |  
|Income tax paid                                              |  |           |   |  |            |  

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1

Freshwater Technologies, Inc. (A Development Stage Company)
Notes to Financial Statements (expressed in US dollars)

|1. | Nature of Operations and Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On January 1, 2006, Freshwater Technologies Inc.
      (formerly HMI Technologies Inc.) (HMI) entered into an Asset Acquisition
      Agreement to acquire the business of Freshwater Technologies
      (Freshwater). HMI was incorporated in the State of Nevada, U.S.A. on
      December 10, 1999. Its principal business now involves the distribution
      and marketing of drinking water products and water activation products.
      HMI is a Development Stage Company, as defined by Statement of Financial
      Accounting Standard (SFAS) No.7, Accounting and Reporting by
      Development Stage Enterprises. Effective January 1, 2006, the
      acquisition of the Freshwater business was completed through the issuance
      of 80,000,000 split-adjusted restricted shares of common stock, and as a
      result, the former owners of the Freshwater business own approximately 75%
      of the outstanding common stock of HMI.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Prior to the acquisition of Freshwater, HMI was a
      non-operating shell company with nominal net assets. The acquisition is a
      capital transaction in substance and therefore has been accounted for as a
      recapitalization, which is outside the scope of SFAS 141, Business
      Combinations. Under recapitalization accounting, Freshwater is
      considered the acquirer for accounting and financial reporting purposes,
      and acquired the assets and assumed the liabilities of HMI. Assets
      acquired and liabilities assumed are reported at their historical amounts.
      These financial statements include the accounts of HMI since the effective
      date of the recapitalization (January 1, 2006) and the historical accounts
      of the business of Freshwater since inception (collectively, the
      Company). Refer to Note 5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | These financial statements have been prepared on a going
      concern basis, which implies that the Company will continue to realize its
      assets and discharge its liabilities in the normal course of business. The
      Company has generated limited revenues to date and has never paid any
      dividends and is unlikely to pay dividends or generate significant
      earnings in the immediate or foreseeable future. In order to fund the
      proposed plan of operation, the Company will require an additional
      $1,000,000 to $1,400,000 in funding through the next twelve month period.
      As at June 30, 2009, the Company had an accumulated deficit of $1,230,284
      and a working capital deficit of $328,210. The continuation of the Company
      as a going concern is dependent upon the continued financial support from
      its directors and officers, the ability to raise equity or debt financing,
      and the attainment of profitable operations from the business. These
      factors raise substantial doubt regarding the Companys ability to
      continue as a going concern. These financial statements do not include any
      adjustments to the recoverability and classification of recorded asset
      amounts and classification of liabilities that might be necessary should
      the Company be unable to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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2

Freshwater Technologies, Inc. 
  (A Development Stage Company) 
  Notes to Financial Statements 
  (expressed in US dollars)

|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------

| |    | be reasonable under the circumstances, the results of
      which form the basis for making judgments about the carrying values of
      assets and liabilities and the accrual of costs and expenses that are not
      readily apparent from other sources. The actual results experienced by the
      Company may differ materially and adversely from the Companys estimates.
      To the extent there are material differences between the estimates and the
      actual results, future results of operations will be affected.                                                                                                         
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | d) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The Company considers all highly liquid instruments with
      maturity of three months or less at the time of issuance to be cash
      equivalents. As at June 30, 2009, the Company had no cash
    equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | e) | Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | Inventory consists of water activation products and water
      filters and is recorded at the lower of cost and net realizable value on a
      first-in, first-out basis. The Company establishes inventory reserves for
      estimated obsolete or unmarketable inventory equal to the differences
      between the cost of inventory and the estimated realizable value based
      upon assumptions about future and market conditions. Shipping and handling
      costs are classified as a component of cost of sales in the statement of
      operations.                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | f) | Comprehensive Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | SFAS No. 130, Reporting Comprehensive Income,
      establishes standards for the reporting and display of comprehensive loss
      and its components in the financial statements. As at June 30, 2009, the
      Company has no items that represent comprehensive loss and, therefore, has
      not included a schedule of comprehensive loss in the financial
      statements.                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | g) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | SFAS No. 157 Fair Value Measurementsrequires an
      entity to maximize the use of observable inputs and minimize the use of
      unobservable inputs when measuring fair value. SFAS No. 157 establishes a
      fair value hierarchy based on the level of independent, objective evidence
      surrounding the inputs used to measure fair value. A financial
      instruments categorization within the fair value hierarchy is based upon
      the lowest level of input that is significant to the fair value
      measurement. SFAS No. 157 prioritizes the inputs into three levels that
      may be used to measure fair value:

Level 1

Level 1 applies to assets or
liabilities for which there are quoted prices in active markets for identical
assets or liabilities.

Level 2

Level 2 applies to assets or
liabilities for which there are inputs other than quoted prices that are
observable for the asset or liability such as quoted prices for similar assets
or liabilities in active markets; quoted prices for identical assets or
liabilities in markets with insufficient volume or infrequent transactions (less
active markets); or model-derived valuations in which significant inputs are
observable or can be derived principally from, or corroborated by, observable
market data.

Level 3

Level 3 applies to assets or
liabilities for which there are unobservable inputs to the valuation methodology
that are significant to the measurement of the fair value of the assets or
liabilities.

The Companys financial instruments
consist principally of cash, receivables, accounts payable, and amounts due to
related parties. Pursuant to SFAS No. 157, the fair value of the Companys cash
equivalents, when applicable, is determined based on Level 1 inputs, which
consist of quoted prices in active markets for identical assets. The Company
estimates that the carrying values of all of its other financial instruments
approximate their fair values due to the immediate or relatively short
maturities of these instruments.

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3

Freshwater Technologies, Inc. (A Development Stage Company)
Notes to Financial Statements (expressed in US dollars)

| | h) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Companys functional and reporting currency is the
      United States dollar. Monetary assets and liabilities denominated in
      foreign currencies are translated in accordance with SFAS No. 52
      Foreign Currency Translation using the exchange rate prevailing
      at the balance sheet date. Gains and losses arising on translation or
      settlement of foreign currency denominated transactions or balances are
      included in the determination of income. Foreign currency transactions are
      primarily undertaken in Canadian dollars. The Company has not, to the date
      of these financials statements, entered into derivative instruments to
      offset the impact of foreign currency fluctuations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | i) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Company recognizes revenue from the sale of drinking
      water products and water activation products in accordance with Securities
      and Exchange Commission Staff Accounting Bulletin No. 104 (SAB 104),
      Revenue Recognition in Financial Statements.The majority of the
      sales consist of water activation units in Costa Rica, Panama and Peru.
      Revenue consists of the sale of drinking water products and water
      activation products and is recognized only when the price is fixed or
      determinable, persuasive evidence of an arrangement exists, the product is
      shipped, and collectibility is reasonably assured. Our shipping terms are
      FOB shipping point. For UV products, the customer pays all costs from the
      point of shipment, and for ELCE products, the customer pays all costs from
      arrival point in the country to which the ELCE products are shipped. The
      Company evaluates the collectibility of accounts receivable based on a
      combination of factors. In cases where the Company is aware of
      circumstances that may impair a specific customers ability to meet its
      financial obligations subsequent to the original sale, the Company will
      record an allowance against amounts due, and thereby reduce the net
      recognized receivable to the amount the Company reasonably believes will
      be collected. For all other customers, the Company recognizes allowances
      for doubtful accounts based on the length of time the receivables are past
      due, the current business environment and the Companys historical
      experience.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | j) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Effective January 1, 2006, the Company adopted the fair
      value recognition provisions of SFAS No. 123R Share Based
      Payments, using the modified retrospective transition method. The
      Company has not issued any stock options or share based payments since its
      inception. Accordingly, there was no effect on the Companys reported loss
      from operations, cash flows or loss per share as a result of adopting SFAS
      No 123R.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | k) | Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Intangible assets represent costs incurred to acquire
      product distribution rights under the agreement disclosed in Note 6(c).
      The useful life of the product distribution rights acquired has been
      estimated by management to be two years. Amortization is provided on a
      straight-line basis over the estimated useful life. During the six month
      period ended June 30, 2009, the Company recorded $96,164 in amortization
      expense in relation to these assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | l) | Earnings (Loss) per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Company computes earnings (loss) per share in
      accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128
      requires presentation of both basic and diluted earnings per share (EPS)
      on the face of the income statement. Basic EPS is computed by dividing net
      income (loss) available to common shareholders (numerator) by the weighted
      average number of shares outstanding (denominator) during the period.
      Diluted EPS gives effect to all dilutive potential common shares
      outstanding during the period using the treasury stock method and
      convertible preferred stock using the if-converted method. In computing
      diluted EPS, the average stock price for the period is used in determining
      the number of shares assumed to be purchased from the exercise of stock
      options or warrants. Diluted EPS excludes all dilutive potential shares if
      their effect is anti dilutive. As at June 30, 2009, there are no
      anti-dilutive financial instruments outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | m) | Recently Adopted Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | In May 2008, the FASB issued SFAS No. 162, The
      Hierarchy of Generally Accepted Accounting Principles. SFAS No. 162
      identifies the sources of accounting principles and the framework for
      selecting the principles to be used in the preparation of financial
      statements of nongovernmental entities that are presented in conformity
      with generally accepted accounting principles in the
  United                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

---

4

Freshwater Technologies, Inc. (A Development Stage Company)
Notes to Financial Statements (expressed in US dollars)

|2. | Summary of Significant Accounting Policies
    (continued)
|-- | ----------------------------------------------------------

| | m) | Recently Adopted Accounting Pronouncements
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | States. It is effective 60 days following the SECs
      approval of the Public Company Accounting Oversight Board amendments to AU
      Section 411, The Meaning of Present Fairly in Conformity With
      Generally Accepted Accounting Principles. The adoption of this
      statement did not have a material effect on the Companys financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In March 2008, the Financial Accounting Standards Board
      (FASB) issued SFAS No. 161, Disclosures about Derivative Instruments
      and Hedging Activities  an amendment to FASB Statement No. 133. SFAS
      No. 161 is intended to improve financial standards for derivative
      instruments and hedging activities by requiring enhanced disclosures to
      enable investors to better understand their effects on an entity's
      financial position, financial performance, and cash flows. Entities are
      required to provide enhanced disclosures about: (a) how and why an entity
      uses derivative instruments; (b) how derivative instruments and related
      hedged items are accounted for under Statement 133 and its related
      interpretations; and (c) how derivative instruments and related hedged
      items affect an entitys financial position, financial performance, and
      cash flows. It is effective for financial statements issued for fiscal
      years beginning after November 15, 2008, with early adoption encouraged.
      The adoption of this statement did not have a material effect on the
      Companys financial statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In December 2007, the FASB issued SFAS No. 160
      Noncontrolling Interests in Consolidated Financial Statements-an
      amendment of ARB No.51SFAS No. 160 requires consolidated net income
      to be reported at amounts that include the amounts attributable to both
      the parent and the noncontrolling interest. It also requires disclosure,
      on the face of the consolidated statement of income, of the amounts of
      consolidated net income attributable to the parent and to the non
      controlling interest. SFAS No. 160 also requires that a parent recognize a
      gain or loss in net income when a subsidiary is deconsolidated. SAFAS No.
      160 also requires expanded disclosures in the consolidated financial
      statements that clearly identify and distinguish between the interests of
      the parents owners and the interests of the noncontrolling owners of a
      subsidiary. SFAS No. 160 is effective for financial statements issued for
      fiscal years beginning after December 15, 2008. The adoption of this
      statement did not have a material effect on the Companys financial
      statements.                          

|3. | Related Party Transactions
|-- | --------------------------
|   |                           
|   | a)                        
|   |                           
|   | b)                        
|   |                           
|   | c)                        
|   |                           
|   | d)                        
|   |                           
|   | e)                        

---

5

Freshwater Technologies, Inc. (A Development Stage Company)
Notes to Financial Statements (expressed in US dollars)

|4. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. | Recapitalization Transaction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On January 1, 2006, Freshwater Technologies Inc.
      (formerly HMI Technologies Inc.) (HMI) entered into an Asset Acquisition
      Agreement to acquire the business of Freshwater Technologies
      (Freshwater) which involves the distribution and marketing of drinking
      water products and water activation products. Effective January 1, 2006,
      the acquisition of the Freshwater business was completed through the
      issuance of 80,000,000 split-adjusted restricted shares of common stock,
      and as a result, the former owners of the Freshwater business own
      approximately 75% of the outstanding common stock of HMI.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Prior to the acquisition of Freshwater, HMI was a
      non-operating shell company with nominal net assets. The acquisition is a
      capital transaction in substance and therefore has been accounted for as a
      recapitalization, which is outside the scope of SFAS 141, Business
      Combinations. The acquisition has been accounted for as a
      continuation of the Freshwater Technologies business in accordance with
      EITF 98-3 Determining Whether a Nonmonetary Transaction Involves Receipt
      of Productive Assets or of a Business. Under recapitalization accounting,
      Freshwater is considered the acquirer for accounting and financial
      reporting purposes, and acquired the assets and assumed the liabilities of
      HMI. Assets acquired and liabilities assumed are reported at their
      historical amounts. These financial statements include the accounts of HMI
      since the effective date of the recapitalization (January 1, 2006) and the
      historical accounts of the business of Freshwater since inception
      (collectively, the Company).

| |                               |  | $       |  
| | ----------------------------- |  | ------- | -
| |                               |  |         |  
| | Advances from related parties |  | (45,301 | )
| |                               |  |         |  
| | Net liabilities assumed       |  | (45,301 | )

---

6

Freshwater Technologies, Inc. (A Development Stage Company)
Notes to Financial Statements (expressed in US dollars)

|6. | Commitments
|-- | -----------
|   |            
|   | a)         
|   |            
|   | b)         

$4,500 per month until May 2009;

$6,000 per month thereafter until
August 2009;

$7,500 per month thereafter until
November 2009; and

$9,000 per month thereafter until the
agreement is terminated.

| |    | Under the agreement, the Company has agreed to pay to
      ELCE 50% of the net profits relating to sales of ELCE water products and
      to maintain minimum inventories of ELCE water products for each country
      specified in the agreement in due course. As at June 30, 2009, the
      purchase cost of minimum inventory quantities was estimated to be $881,000
      in total.                                                                                                                                                                                                        
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | c) | In February 2009, the Company entered into an Agency
      Agreement with Ancizar Rendon Ramirez to act as Agent for ELCE sales in
      the Southern Region of Colombia, South America. The Company will pay
      $1,000 monthly for these consulting services including related sales
      expenses and a commission of 10% for all collected ELCE sales initiated by
      the Agent in the Southern Region of Colombia. The agreement is for a one
      year term which expires January 31, 2010, is renewable annually and can be
      terminated by the Company with three months
notice.

|7. | Economic Dependence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company relies solely upon VIQUA- a Trojan
      Technologies Company (formerly R-Can Environmental Inc.) (VIQUA), as the
      sole supplier of their drinking water products, ELCE International Corp.
      (ELCE), as the sole supplier of their water activation products and
      Ozocan Corporation as sole supplier of ozone water treatment systems.
      VIQUA and ELCE supplied the Company with 100% of the products that the
      Company offered and sold during the six months ended June 30, 2009 and
      2008. VIQUA, Ozocan and ELCE are the sole manufacturers and primary
      developers of the respective technologies in such products. As a result,
      the Company could be adversely affected by changes in the cost of the
      suppliers products, the financial condition of the suppliers or by the
      deterioration or termination of its relationship with the
  suppliers.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|8. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

---

7

Freshwater Technologies, Inc. (A Development Stage Company)
Notes to Financial Statements (expressed in US dollars)

|8. | Subsequent Events (continued)
|-- | -----------------------------
|   |                              
|   | b)                           
|   |                              
|   | c)                           

---

- 8 -

ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward Looking Statements

This quarterly report contains forward-looking statements.
Forward-looking statements are projections of events, revenues, income, future
economic performance or managements plans and objectives for our future
operations. In some cases, you can identify forward-looking statements by
terminology such as may, should, expects, plans, anticipates,
believes, estimates, predicts, potential or continue or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled Risk Factors and the
risks set out below, any of which may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars and all references to
common stock refer to the common shares in our capital stock.

As used in this quarterly report, the terms we, us, our,
and Freshwater mean Freshwater Technologies, Inc., unless otherwise indicated.

Corporate History

We were incorporated in the State of Nevada on December 10,
1999 under the name HMI Technologies Inc. Following incorporation until January
1, 2006, we sought out prospective businesses with which to enter into a merger
or business combination. On January 1, 2006, we entered into and closed an asset
sale agreement with Max Weissengruber and D. Brian Robertson, whereby we
acquired all of the assets related to the business as operated by Mr.
Weissengruber and Mr. Robertson under the name Freshwater Technologies in
consideration for the issuance of 40,000,000 common shares to each individual.
Following the closing of the asset sale agreement, we commenced the business of
distributing and selling drinking water products and water activation products.
On July 5, 2006, we changed our name from HMI Technologies Inc. to Freshwater
Technologies, Inc. to better reflect our new business direction. Following the
closing of the asset sale agreement, we appointed Max Weissengruber as our
President and director and Brian Robertson as our Chief Financial Officer and
director.

Current Business

We are a distributor of water treatment products to local
distributors and retailers for household and commercial applications. We
currently offer three product lines consisting of drinking water treatment
products and water activation products. The drinking water treatment products
feature Sterilight branded ultra violet products that are supplied to our
company by VIQUA(formerly R-Can Environmental Inc.), a manufacturer based out of
Guelph, Ontario, Canada. Sterilight branded ultraviolet water treatment systems
incorporate ultraviolet light energy that eradicates harmful microbiological
contaminants in drinking water. Traditional disinfectant methods such as
chlorination reacts with natural organic matter to produce objectionable taste
and odor and also forms substances with known carcinogenic properties such as
trihalomethane. Genetic components in organisms carry hereditary characteristics
that are copied and transmitted from each cell of water borne contaminants such
as bacteria, viruses and parasites. The Sterilight ultraviolet lamp emits
powerful ultraviolet light energy which, when absorbed by these

---

- 9 -

contaminants, causes disruption of the DNA Structure of those
contaminants preventing reproduction. It is the prevention of reproduction by
microbial contaminants that renders ultraviolet treated water safe for human
consumption. Sterilight lamps provide consistent UV output over the 9,000 hour
life of the lamp and uniform temperature distribution calculated to achieve the
desired levels of decontamination.

Our drinking water treatment products also feature the ozone
water treatment systems of Ozocan Corporation for the countries of Argentina,
Chile, Peru, Costa Rica and Panama. As a proven disinfectant, ozone is more
powerful than chlorine and, unlike chlorine, it discharges no potentially
harmful substances into the environment. Used in a variety of water treatment
applications, Ozocans products effectively treat municipal and industrial
drinking water and wastewater, are used in bottled water applications as well as
treating air conditioning and cooling tower installations. Ozocan systems can be
found throughout the globe either as custom designed applications or in one of a
number of standard sized units that can meet the effective treatment needs of a
wide variety of customers.

Our water activation products are designed to improve the
operating efficiency of commercial and industrial boilers and refrigeration
systems without the use of chemicals. Our water activation products are supplied
to our company by ELCE International Corp., the worldwide distributor of ELCE
products invented by Nihon Jisui Co. Ltd. of Japan. We order units from ELCE
International Corp. which are then shipped against customer orders or shipped
directly to one of our eleven local distributors located in Argentina, Chile,
Colombia, Costa Rica, Panama and Peru. ELCE water activation treatment systems
remove rust, scale and corrosion within heating and cooling systems. The water
activation units, which range in water flow capacity from 11 liters per minute
to over 3,000 liters per minute, change water properties physically without
removing or adding chemical impurities, ions or minerals.

We will only purchase limited quantities of replacement filters
and lamps for our water purification products for inventory as our distributors
will be inventorying the majority of replacement parts. We will purchase all
other finished product from our three supplier-manufacturers in quantities
sufficient to satisfy product orders of our customers.

In January 2009, we signed a Joint Venture Agreement with ELCE
International Corp., the company who has been a significant supplier to our
company for a number of years. In July 2009 we were approved for a private
labelling program whereby all ELCE Activators would now be labelled FW
Activators. In July we introduced a FW Activator rental program to our
distributors and, as a result, we will inventory rental units installed by our
distributors. Pursuant to the joint venture agreement, ELCE International will
supply its FW water activation units at manufacturers cost to Freshwater and
will participate with Freshwater to market and sell FW products in Argentina,
Chile, Columbia, Costa Rica, Panama and Peru. ELCE International has compiled
technical information on ELCE equipment installed world-wide in a variety of
commercial, industrial, agricultural and aquacultural applications. We intend to
target industries and companies for whom ELCE has already provided effective
solutions in terms of eliminating or reducing encrustations and corrosion,
improving energy efficiency and improving productivity and output.

The essential elements of the FW device lie in the properties
of its ceramic balls, hardened to 1200 degrees Centigrade. As water passes
through the stainless steel chamber containing the ceramic balls, the balls
rotate and rub against each other generating several forms of electrical energy
which act to reduce and eliminate the accumulated rust, scale and corrosion that
is caused by minerals and salts in the source water. As a result, FW water
activation eliminates the conventional use and ongoing costs of continually
using harsh chemicals to clean out deposits within heating and cooling systems.
We have formalized our relationship with ELCE International Corp. with a
non-exclusive distribution agreement and a joint venture agreement. We have also
formalized our relationship with VIQUA(formerlyR-Can Environmental Inc.) and
Oxocan Corporation pursuant to non-exclusive distribution agreements. We also
offer a full line of accessories, replacement parts and services compatible with
all types of our water treatment systems.

General

The following is a discussion and analysis of our results of
operation for the six month periods ended June 30, 2009 and June 30, 2008 and
the year ended December 31, 2008, and the factors that could affect our future
financial condition. This discussion and analysis should be read in conjunction
with our consolidated unaudited financial statements and the notes thereto
included elsewhere in this quarterly report. Our consolidated financial
statements

---

- 10 -

are prepared in accordance with United States generally
accepted accounting principles. All references to dollar amounts in this section
are in United States dollars unless expressly stated otherwise.

Results of Operations

Material Changes in Financial Condition

June 30, 2009
    
    
      December 31, 2008Current Assets
    $
      83,520
    
    $
      1,876Current Liabilities
    
      411,730
    
    
      206,548Working Capital Deficiency
    $
      328,210
    
    $
      204,672


Total assets at June 30, 2009 were $437,356 as compared to
$1,876 at December 31, 2008.

$81,844 of this increase is due to an increase in inventory
mainly representing two FW-12 Activation units that are being evaluated in
companies in Colombia.

$353,836 of this increase is attributable to Intangible Assets
as described below:

On January 25, 2009, the Company issued 10,000,000 restricted
shares of Class A common stock under the joint venture agreement with ELCE
International Corp. The fair value of the restricted shares issued was estimated
to be $150,000 as determined on the measurement date using quoted prices in an
active market, less a 75% discount to reflect the effect of the restriction.
Under the agreement, the Company is also obligated to issue a further 20,000,000
restricted shares of Class A common stock. The fair value of these restricted
shares was estimated to be $300,000 as determined on the measurement date using
quoted prices in an active market, less a 75% discount to reflect the effect of
the restriction. As at June 30, 2009, the estimated fair value of these shares
has been presented as Class A common stock issuable on the balance sheet. The
estimated fair value of the 30,000,000 shares issued and to be issued under the
agreement of $450,000 has been recorded as intangible assets at June 30, 2009,
less accumulated amortization of $96,164.

Liabilities at June 30, 2009 were $411,730 as compared to
$206,548 at December 31, 2008. The increase is due to an increase of $29,511 in
accrued liabilities mainly regarding professional fees and an increase of
$175,631 due to our directors and officers. The amounts due to our directors and
officers total $343,588 and are non-interest bearing, unsecured and have no
specific terms for repayment.

Revenue

We generated revenues of $555 for the three month period ended
June 30, 2009 compared to $nil for the three month period ended June 30, 2008
and $685 for the six month period ended June 30, 2009 compared to $1,426 for the
six month period ended June 30, 2008. The cost of sales for the three month
period ended June 30, 2009 was $79, compared to $nil for the three month period
ended June 30, 2008 while the cost of sales was $166 for the six month period
ended June 30, 2009 compared to $601 for the six month period ended June 30,
2008 .

This revenue was generated from sales of our drinking water
products.

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- 11 -

Operating Costs and Expenses

The major components of our revenue and expenses for the three
and six month periods ended June 30, 2009 and 2008 are outlined in the table
below:

Three Months
    
    
      Three Months
    
    
      Six Months
    
    
      Six MonthsEnded
    
    
      Ended
    
    
      Ended
    
    
      EndedJune 30,
    
    
      June 30,
    
    
      June 30,
    
    
      June 30,2009
    
    
      2008
    
    
      2009
    
    
      2008$
    
    
      $
    
    
      $
    
    
      $Revenue
    
      555
    
    
      
    
    
      685
    
    
      1,426Cost of Sales
    
      79
    
    
      
    
    
      166
    
    
      601Gross Profit
    
      476
    
    
      
    
    
      519
    
    
      825ExpensesAmortization of intangible assets
    
      56,096
    
    
      
    
    
      96,164
    
    
      Consulting
    
      9,000
    
    
      9,000
    
    
      18,000
    
    
      18,000General and administrative
    
      6,714
    
    
      2,895
    
    
      11,655
    
    
      4,091Imputed interest
    
      4,273
    
    
      8,381
    
    
      7,201
    
    
      16,165Marketing and sales
    
      48,413
    
    
      11,596
    
    
      101,003
    
    
      27,509Professional fees
    
      9,860
    
    
      6,575
    
    
      32,337
    
    
      28,395Bad debts expense (recovery)
    
      (7,896
    )
    
      
    
    
      (38,938
    )
    
      (880
    )Total Expenses
    
      126,460
    
    
      38,447
    
    
      227,422
    
    
      93,280Net Loss From Operations
    
      (125,984
    )
    
      (38,447
    )
    
      (226,903
    )
    
      (92,455
    )


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- 12 -

For the three months ended June 30, 2009, our operating
expenses totalled $126,460 as compared to $38,447 for the three months ended
June 30, 2008. Amortization of intangible assets representing costs incurred to
acquire product distribution rights under the joint venture agreement with ELCE
International Corp. amounted to $56,096 for the three months ended June 30, 2009
compared with nil for the three months ended June 30, 2008 as the agreement was
signed January 25, 2009. Professional fees amounted to $9,860 for the three
months ended June 30, 2009 as compared to $6,575 for the three months ended June
30, 2008. Marketing and sales expenses and consultants costs were $48,413 for
the three months ended June 30, 2009 as compared to $11,596 for the three months
ended June 30, 2008 with the increase being due to an increase in travel
expenses and fees for our Director of Latin America sales of $7,860, an increase
in fees and expenses for our Agent in Colombia of $5,736, an increase in costs
relating to our Joint Venture Agreement with ELCE International Corp. of $20,999
and an increase in Central/South America travel of $2,222. General and
administrative expenses were $6,714 during the three months ended June 30, 2009
as compared to $2,895 for the three months ended June 30, 2008. This increase is
due to increased trust company fees and increased shareholder communication
costs. Imputed interest on directors loans was $4,273 for the three months
ended June 30, 2009 as compared to $8,381 for the three months ended June 30,
2008. This decrease is mainly due to the completion of a debt settlement and
subscription agreement in August 2008 whereby $560,000 of debt to directors was
settled by the issuance of 11,200,000 common shares of our company which reduced
the imputed interest charged on Directors loans. For the three months ended
June 30, 2009 we recovered $7,896 of sales previously written off as compared to
$nil for the three months ended June 30, 2008.

For the six months ended June 30, 2009, our operating expenses
totalled $227,422 as compared to $93,280 for the six months ended June 30, 2008.
Amortization of intangible assets representing costs incurred to acquire product
distribution rights under the joint venture agreement with ELCE International
Corp. amounted to $96,164 for the six months ended June 30, 2009 compared with
nil for the six months ended June 30, 2008 as the agreement was signed January
25, 2009. Professional fees amounted to $32,337 for the six months ended June
30, 2009 as compared to $28,395 for the six months ended June 30, 2008.
Marketing and sales expenses and consultants costs were $101,003 for the six
months ended June 30, 2009 as compared to $27,509 for the six months ended June
30, 2008 with the increase being due to an increase in travel expenses and fees
for our Director of Latin America sales of $16,017, an increase in fees and
expenses for our Agent in Colombia of $9,136, an increase in costs relating to
our Joint Venture Agreement with ELCE International Corp. of $44,591 and a
business promotion fee paid of $3,750. General and administrative expenses were
$11,655 during the six months ended June 30, 2009 as compared to $4,091 for the
six months ended June 30, 2008. This increase is mainly due to costs of setting
up banking in Colombia and Peru of $3,500 and increased shareholder
communication costs of $2,728. Imputed interest on directors loans was $7,201
for the six months ended June 30, 2009 as compared to $16,165 for the six months
ended June 30, 2008. This decrease is mainly due to the completion of a debt
settlement and subscription agreement in August 2008 whereby $560,000 of debt to
directors was settled by the issuance of 11,200,000 common shares of our company
which reduced the imputed interest charged on Directors loans. For the six
months ended June 30, 2009 we recovered $38,938 of sales previously written off
as compared to $880 for the six months ended June 30, 2008.

Liquidity and Capital Resources

Working Capital

June 30, 2009
      
      December 31, 2008Current Assets
    $
      83,520
    $
      1,876Current Liabilities
    
      411,730
    
      206,548Working Capital Deficiency
    $
      328,210
    $
      204,672


Cash Flows

Six Months Ended June 30,
      2009
    
    Six Months Ended June 30,
      2008Cash
      provided (used) in Operating Activities
    $
      (139,510)
    $
      (33,364)Cash
      used by Investing Activities
    
      -
    
      -Cash
      provided (used) by Financing Activities
    
      139,631
    
      33,580Net
      Increase (Decrease) in Cash
    $
      121
    $
      216


---

- 13 -

We had cash on hand of $281 and negative working capital of
$328,210 as of June 30, 2009 compared to cash on hand of $160 and negative
working capital of $204,672 for the year ended December 31, 2008. We anticipate
that we will require approximately $1,000,000 to $1,400,000 for operating
expenses, including professional, legal and accounting expenses associated with
our reporting requirements under the Exchange Act during the next twelve months.
Accordingly, we do not have enough money to carry out our business plan and we
will need to obtain additional financing in order to continue operating

There are no assurances that we will earn the funds required
for our continued operations. If we do not earn the required revenues, then we
will have to seek another source of financing, likely through the sale of more
shares of our common stock or borrowing money. There can be no assurance that
additional financing will be available to us when needed or, if available, that
it can be obtained on commercially reasonable terms. If we are not able to
obtain the additional financing on a timely basis, we will not be able to meet
our other obligations as they become due and we will be forced to scale down or
perhaps even cease the operation of our business.

There is substantial doubt about our ability to continue as a
going concern as the continuation of our business is dependent upon a
combination of our ability to obtain further long-term financing, the successful
and sufficient market acceptance of any product offerings that we may introduce,
the continuing successful development of our product offerings, and, finally,
our ability to achieve a profitable level of operations. The issuance of
additional equity securities by us could result in a significant dilution in the
equity interests of our current stockholders. Obtaining commercial loans,
assuming those loans would be available, would increase our liabilities and
future cash commitments.

Operating Activities

Operating activities used cash of $139,510 for the six months
ended June 30, 2009 and used cash of $33,364 for the six months ended June 30,
2008.

Financing Activities

Net cash provided by financing activities was $139,631 for the
six months ended June 30, 2009 and net cash provided by financing activities was
$33,580 for the six months ended June 30, 2008. These financing activities were
provided by two directors of our Company.

Non-cash Investing and Financing Activities

In January 2009, we signed a Joint Venture Agreement with ELCE
International Corp. Under the Agreement we are to issue 30,000,000 common shares
with an estimated fair value of $450,000 on the date of the agreement for
certain distribution rights.

Going Concern

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on our audited annual financial
statements for the year ended December 31, 2008, our independent auditors
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that led to this disclosure by our
independent auditors. There is substantial doubt about our ability to continue
as a going concern as the continuation and expansion of our business is
dependent upon obtaining further financing, successful and sufficient market
acceptance of our products, and, finally, achieving a profitable level of
operations. The issuance of additional equity securities by us could result in a
significant dilution in the equity interests of our current stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.

Future Financings

Fundraising will be one of our primary objectives over the next
  twelve months. The financial requirements of our company for the next twelve
  months will depend on our ability to raise the money we require through credit
  facilities and additional private placements of our equity securities or loans
  from our directors. The issuance of additional equity securities by us may result
  in a significant dilution in the equity interests of our current shareholders.

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- 14 -

There is no assurance that we will be able to obtain the funds
required for our continued operations or that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis, we will not be able to meet our other obligations
as they become due and we will be forced to scale down or perhaps even cease our
operations. We do not currently have any plans to merge with another company,
and we have not entered into any agreements or understandings for any such
merger.

Our cash on hand and the revenue that we anticipate generating
going forward from our operations will not be sufficient to satisfy our cash
requirements for the next twelve month period. We expect to require from
$1,000,000 to $1,400,000. We intend to raise any such additional capital
primarily through the private placement of our securities and further borrowings
from our directors if this type of funding continues to be available. We also
intend to continue to seek additional funds from our directors to fund our day
to day operations until a private placement can be pursued but we have no
guarantee that our directors will continue to fund our day to day
operations.

Estimated Working Capital Expenditures During the Next Twelve
Month Period

We estimate our future expenditures for the next twelve months
as follows:

| | Operating expenditures           |   |                       | 
| | -------------------------------- | - | --------------------- | 
| | Marketing                        | $ | 400,000 - 550,000     | 
| | General and Administrative       | $ | 50,000 - 75,000       | 
| | Legal and Accounting             | $ | 50,000 - 75,000       | 
| | Working capital                  | $ | 400,000 - 500,000     | 
| | Repayment of Directors Advances | $ | 100,000 - 200,000     | 
| | Total                            | $ | 1,000,000 - 1,400,000 | 

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to stockholders.

Application of Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Our company regularly evaluates estimates and assumptions
related to provision for uncollectible sales, provision for inventory
obsolescence, donated expenses and deferred income tax asset valuation
allowances. Our company bases its estimates and assumptions on current facts,
historical experience and various other factors that it believes to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by our company may differ materially and
adversely from our companys estimates. To the extent there are material
differences between the estimates and the actual results, future results of
operations will be affected.

Cash and Cash Equivalents

Our company considers all highly liquid instruments with
maturity of three months or less at the time of issuance to be cash equivalents.
As at June 30, 2009, we had no cash equivalents.

---

- 15 -

Inventory

Inventory consists of water activation products and water
filters and is recorded at the lower of cost and net realizable value on a
first-in, first-out basis. Our company establishes inventory reserves for
estimated obsolete or unmarketable inventory equal to the differences between
the cost of inventory and the estimated realizable value based upon assumptions
about future and market conditions. Shipping and handling costs are classified
as a component of cost of sales in the statement of operations.

Revenue Recognition

Our company recognizes revenue from the sale of drinking water
products and water activation products in accordance with Securities and
Exchange Commission Staff Accounting Bulletin No. 104 (SAB 104), Revenue
Recognition in Financial Statements.The majority of the sales consist of
water activation units in Costa Rica, Panama and Peru. Revenue consists of the
sale of drinking water products and water activation products and is recognized
only when the price is fixed or determinable, persuasive evidence of an
arrangement exists, the product is shipped, and collectibility is reasonably
assured. Our shipping terms are FOB shipping point. For UV products, the
customer pays all costs from the point of shipment, and for FW Activators, the
customer pays all costs from arrival point in the country to which the FW
Activators are shipped. Our company evaluates the collectibility of accounts
receivable based on a combination of factors. In cases where our company is
aware of circumstances that may impair a specific customers ability to meet its
financial obligations subsequent to the original sale, our company will record
an allowance against amounts due, and thereby reduce the net recognized
receivable to the amount our company reasonably believes will be collected. For
all other customers, our company recognizes allowances for doubtful accounts
based on the length of time the receivables are past due, the current business
environment and our companys historical experience.

Comprehensive Loss

SFAS No. 130, Reporting Comprehensive Income,
establishes standards for the reporting and display of comprehensive loss and
its components in the financial statements. As at June 30, 2009, we have no
items that represent comprehensive loss and, therefore, have not included a
schedule of comprehensive loss in the financial statements.

Financial Instruments

SFAS No. 157 Fair Value Measurements requires an
entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. SFAS No. 157 establishes a fair
value hierarchy based on the level of independent, objective evidence
surrounding the inputs used to measure fair value. A financial instruments
categorization within the fair value hierarchy is based upon the lowest level of
input that is significant to the fair value measurement. SFAS No. 157
prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or
liabilities for which there are quoted prices in active markets for identical
assets or liabilities.

Level 2

Level 2 applies to assets or
liabilities for which there are inputs other than quoted prices that are
observable for the asset or liability such as quoted prices for similar assets
or liabilities in active markets; quoted prices for identical assets or
liabilities in markets with insufficient volume or infrequent transactions (less
active markets); or model-derived valuations in which significant inputs are
observable or can be derived principally from, or corroborated by, observable
market data.

Level 3

Level 3 applies to assets or
liabilities for which there are unobservable inputs to the valuation methodology
that are significant to the measurement of the fair value of the assets or
liabilities.

---

- 16 -

The Companys financial instruments consist principally of
cash, receivables, accounts payable, and amounts due to related parties.
Pursuant to SFAS No. 157, the fair value of the Companys cash equivalents, when
applicable, is determined based on Level 1 inputs, which consist of quoted
prices in active markets for identical assets. The Company estimates that the
carrying values of all of its other financial instruments approximate their fair
values due to the immediate or relatively short maturities of these
instruments.

Foreign Currency Translation

Our companys functional and reporting currency is the United
States dollar. Monetary assets and liabilities denominated in foreign currencies
are translated in accordance with SFAS No. 52 Foreign Currency
Translation using the exchange rate prevailing at the balance sheet date.
Gains and losses arising on translation or settlement of foreign currency
denominated transactions or balances are included in the determination of
income. Foreign currency transactions are primarily undertaken in Canadian
dollars. We have not, to the date of these financials statements, entered into
derivative instruments to offset the impact of foreign currency fluctuations.

Stock-based Compensation

Effective January 1, 2006, our company adopted the fair value
recognition provisions of SFAS No. 123R Share Based Payments, using the
modified retrospective transition method. Our company has not issued any stock
options or share based payments since its inception. Accordingly, there was no
effect on our companys reported loss from operations, cash flows or loss per
share as a result of adopting SFAS No 123R.

Earnings (Loss) Per Share

The Company computes earnings (loss) per share in accordance
with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires
presentation of both basic and diluted earnings per share (EPS) on the face of
the income statement. Basic EPS is computed by dividing net income (loss)
available to common shareholders (numerator) by the weighted average number of
shares outstanding (denominator) during the period. Diluted EPS gives effect to
all dilutive potential common shares outstanding during the period using the
treasury stock method and convertible preferred stock using the if-converted
method. In computing diluted EPS, the average stock price for the period is used
in determining the number of shares assumed to be purchased from the exercise of
stock options or warrants. Diluted EPS excludes all dilutive potential shares if
their effect is anti dilutive. As at June 30, 2009, there are no anti-dilutive
financial instruments outstanding.

Recently Adopted Accounting Pronouncements

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted AccountingPrinciples. SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles in the United States. It is effective 60 days following the SECs
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles. The adoption of this statement did not have
a material effect on the Companys financial statements.

In March 2008, the Financial Accounting Standards Board
(FASB) issued SFAS No. 161, Disclosuresabout Derivative Instruments and
Hedging Activities  an amendment to FASB Statement No. 133. SFAS No. 161
is intended to improve financial standards for derivative instruments and
hedging activities by requiring enhanced disclosures to enable investors to
better understand their effects on an entity's financial position, financial
performance, and cash flows. Entities are required to provide enhanced
disclosures about: (a) how and why an entity uses derivative instruments; (b)
how derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations; and (c) how derivative
instruments and related hedged items affect an entitys financial position,
financial performance, and cash flows. It is effective for financial statements
issued for fiscal years beginning after November 15, 2008, with early adoption
encouraged. The adoption of this statement did not have a material effect on the
Companys financial statements.

In December 2007, the FASB issued SFAS No. 160
Noncontrolling Interests in Consolidated Financial Statements-an amendment
of ARB No.51SFAS No. 160 requires consolidated net income to be reported
at

---

- 17 -

amounts that include the amounts attributable to both the
parent and the noncontrolling interest. It also requires disclosure, on the face
of the consolidated statement of income, of the amounts of consolidated net
income attributable to the parent and to the non controlling interest. SFAS No.
160 also requires that a parent recognize a gain or loss in net income when a
subsidiary is deconsolidated. SAFAS No. 160 also requires expanded disclosures
in the consolidated financial statements that clearly identify and distinguish
between the interests of the parents owners and the interests of the
noncontrolling owners of a subsidiary. SFAS No. 160 is effective for financial
statements issued for fiscal years beginning after December 15, 2008. The
adoption of this statement did not have a material effect on the Companys
financial statements.

Risks and Uncertainties

Much of the information included in this quarterly report
includes or is based upon estimates, projections or other forward looking
statements. Such forward looking statements include any projections and
estimates made by us and our management in connection with our business
operations. While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our current judgment
regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions
or other future performance suggested herein.

Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward looking statements.

Risks Related to the Economy

The recent weakening of economic conditions around the world
could have harmful effects on our business. If these harmful effects cause us to
scale down our planned operations, then our share price will likely decrease. If
these harmful effects cause us to cease our operations, then our shareholders
will likely lose their entire investment in our company.

The recent weakening of economic conditions around the world
could have harmful effects on our business. Weakening economic conditions
generally lead to less money being spent on luxuries, which water treatment
products may be considered by many to be. If consumers spend less and do not
choose to spend their limited funds on our water treatment products, we will
earn less revenue than we currently plan on and we will not be able to achieve
profitable operations.

The recent economic problems will likely also have a negative
impact on the amount of money we may expect to raise through sales of our equity
securities. Many investors have recently seen large decreases in the value of
various investments due to declining share prices across many economic sectors.
Because of this and other market factors, if we choose to raise funds through
the sale of our equity securities, potential investors may be less likely to buy
our equity securities or we may be need to sell our equity securities at low
prices, resulting in fewer proceeds. This would make it difficult for us to
raise adequate amounts to fund our operations through the sale of our equity
securities.

If we are unable to fund our operations through revenues or the
sale of our equity securities, then we may choose to borrow money to pay for
some of our operations. A tightening of credit conditions has also been
experienced in the economy recently. Because of the recent credit crisis, it is
possible that we would not be able to borrow adequate amounts to fund our
operations on terms and at rates of interest we find acceptable and in the best
interests of our company.

If we cannot fund our planned operations from revenue, the sale
of our equity securities or through incurring debt on acceptable terms, then we
will likely have to scale down or cease our operations. If we scale down our
operations, our share price would likely decrease and if we cease our
operations, shareholders will likely lose their entire investment in our
company.

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- 18 -

The recent weakening of economic conditions around the world
could have harmful effects on the operations of our customers and suppliers and
the confidence of end consumers, all of which could cause our operations to
suffer and our revenues to decrease.

Some of our customers or suppliers could experience serious
cash flow problems due to the current economic situation. If our customers or
suppliers attempt to increase their prices, pass through increased costs, alter
payment terms or seek other relief, our business may suffer from decreased sales
to final consumers or increased costs to us. If any of our vendors or suppliers
go out of business, we may not be able to replace them with other companies of
the same quality and level of service. If the quality of our products and
promptness of delivery deteriorates as a result, our revenue will likely
decrease as retailers and consumers would be less likely to choose our products
out of those available to them.

We do not expect that the difficult economic conditions are
likely to improve significantly in the near future, and further deterioration of
the economy, and even consumer fear that the economy will deteriorate further,
could intensify the adverse effects of these difficult market conditions.

Risks Related to our Company

We have had minimal revenues from operations and if we are
not able to obtain further financing we may be forced to scale back or cease
operations or our business operations may fail.

To date, we have not generated significant income from our
operations and we have been dependent on sales of our equity securities and
advances from directors to meet the majority of our cash requirements. From the
date of inception on January 21, 2005 to March 31, 2009, we have generated
$462,484 in revenue from the sale of our products. As at June 30, 2009, we had
cash of $281 and negative working capital of $328,210. We expect to generate a
moderate positive cash flow from operations in the next twelve month period. We
estimate that we will require between $1,000,000 and $1,400,000 to carry out our
business plan for the next twelve month period. We will, in all likelihood,
continue to incur operating expenses without significant revenues until our
products gain significant popularity. Since we are still in the early stages of
operating our company and because of the lack of operating history, our
independent auditors report and Note 1 to the financial statements for the
years ended December 31, 2008 and December 31, 2007 state that these factors
raise substantial doubt regarding our companys ability to continue as a going
concern. Because we cannot anticipate when we will be able to generate
significant revenues from sales, we will need to raise additional funds to
develop our business plan, respond to competitive pressures, sign distribution
agreements with distributors and respond to unanticipated requirements or
expenses. If we are not able to generate significant revenues from the sale of
our products, we will not be able to maintain our operations or achieve a
profitable level of operations.

We will not be able to expand our operations beyond current
levels without generating significant revenues from our current operations or
obtaining further financing. We cannot assure that we will be able to generate
enough interest in our products to ever become profitable. If we are unable to
establish and generate material revenues, or obtain adequate future financing,
our business will fail and you may lose some or all of your investment in our
common stock.

We have only commenced our current business operations on
January 1, 2006 and we have a limited operating history. If we cannot
successfully manage the risks normally faced by start-up companies, we may not
achieve profitable operations and ultimately our business may fail.

We have a limited operating history. From the date of inception
on January 21, 2005 to the closing of the asset purchase agreement on January 1,
2006, our business operations consisted primarily seeking out prospective
entities with which to enter into a merger or business combination. Since
January 1, 2006, we have concentrated on our new business of selling drinking
water products and water activation products to distributors for resale in our
target markets of South America, Central America and the Caribbean. Our
prospects are subject to the risks and expenses encountered by start up
companies, such as uncertainties regarding our level of future revenues, our
inability to budget expenses and manage growth accordingly, and our inability to
access sources of financing when required and at rates favorable to us. Our
limited operating history and the highly competitive nature of the drinking
water and water activation industries make it difficult or impossible to predict
future results of our operations. We may not

---

- 19 -

establish a distribution network that will make us profitable,
which may result in the loss of some or all of your investment in our common
stock.

The fact that we have only generated limited revenues since
our inception raises substantial doubt about our ability to continue as a going
concern, as indicated in our independent auditors report in connection with our
audited financial statements.

We have generated limited revenues since our inception on
January 21, 2005. Since we are still in the early stages of operating our
company and because of the lack of operating history, our independent auditors
report includes an explanatory paragraph about our ability to continue as a
going concern. We will, in all likelihood, continue to incur operating expenses
without significant revenues until our products gain significant popularity.
From January 21, 2005 to June 30, 2009, we raised $511,891 through advances
provided by two of our directors. We estimate our average monthly operating
expenses to be approximately $30,000 per month. We will not be able to expand
our operations beyond current levels without generating significant revenues
from our current operations or obtaining further financing. Our primary source
of funds has been advances from two of our directors and officers. We cannot
assure that we will be able to generate enough interest in our products. If we
cannot attract a successful distribution network, we will not be able to
generate any significant revenues or income. In addition, if we are unable to
establish and generate material revenues, or obtain adequate future financing,
our business will fail and you may lose some or all of your investment in our
common stock. These circumstances raise substantial doubt about our ability to
continue as a going concern as described in an explanatory paragraph to our
independent auditors report on the financial statements for the years ended
December 31, 2008 and December 31, 2007.

Our substantial debt could adversely affect our financial
condition and prevent us from fulfilling our obligations to our creditors and
cause us to go out of business.

As of June 30, 2009, we had total liabilities of $411,730, of
which $343,588 was due to related parties. Our liabilities are substantial
relative to our current assets, which were $81,844 as of June 30, 2009, and
could adversely affect our financial condition and make it more difficult for us
to satisfy our obligations with respect to our creditors. If we are unable to
pay our debts as they come due, we will be insolvent and investors will lose all
of their investment in our company. Our substantial liabilities and lack of cash
could also have other negative effects, including:

- increase our vulnerability to adverse general economic conditions;
- require us to dedicate a substantial portion of our cash flow from
  operations to payments on our liabilities, thereby reducing the availability
  of our cash flow to fund working capital, investments, capital expenditures
  and other general corporate purposes;
- limit our ability to make required payments under our existing contractual
  commitments;
- limit our flexibility in planning for, or reacting to, changes in our
  business and the industry in which we operate; and,
- place us at a competitive disadvantage compared to our competitors that
  have fewer liabilities.

If we are unable to obtain financing in the amounts and on
terms and dates acceptable to us, we may not be able to expand or continue our
operations and development and so may be forced to scale back or cease
operations or discontinue our business.

We do not currently have any arrangements for financing and we
can provide no assurance to investors we will be able to find such financing
when such funding is required. Obtaining additional financing would be subject
to a number of factors, including investor acceptance of our product selection
and our business model. Furthermore, there is no assurance that we will not
incur further debt in the future, that we will have sufficient funds to repay
our future indebtedness, or that we will not default on our future debts,
thereby jeopardizing our business viability. Finally, we may not be able to
borrow or raise additional capital in the future to meet our needs or to
otherwise

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- 20 -

provide the capital necessary to maintain our operations, which
might result in the loss of some or all of your investment in our common stock.

Our company anticipates that the funds that were raised from
private placements by way of subscription agreements and funds advanced from
directors will not be sufficient to satisfy our cash requirements for the next
twelve month period. Also, there is no assurance that actual cash requirements
will not exceed our estimates. We will need additional capital in the next month
in order to continue our business plan.

We depend almost exclusively on outside capital to pay for the
continued development of our business and the marketing of our products. Such
outside capital may include the sale of additional stock, shareholder and
director advances and/or commercial borrowing. There can be no assurance that
capital will continue to be available if necessary to meet these continuing
development costs or, if the capital is available, that it will be on terms
acceptable to us. The issuance of additional equity securities by us will result
in a significant dilution in the equity interests of our current stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.

If we are unable to obtain additional capital in the next
month, then we will be unable to pursue our business plan and we will go out of
business. If this happens, investors will lose their entire investment in our
company.

Our company relies on three suppliers who supply our company
with all of our products and as a result, we could be adversely affected by
changes in the cost of the suppliers products, the financial condition of the
suppliers or by the deterioration or termination of our relationship with the
suppliers.

We sell drinking water treatment products and water activation
products. Our two suppliers of drinking water products, VIQUA(formerly R-Can
Environmental Inc.) of Guelph, Ontario, Canada, and Ozocan Corporation of
Toronto, Ontario, Canada supplied our company with all of our drinking water
treatment products that our company sold during the years ended December 31,
2008 and December 31, 2007. Similarly, our sole supplier of water activation
products, ELCE International Corp., is the manufacturer and distributor of our
FW water activation units. We order units from ELCE International which are then
shipped to our warehouse facility for reshipment or directly to countries where
our distributors are located. ELCE International supplied our company with all
of our water activation products that our company sold during the year ended
December 31, 2008 and December 31, 2007. Our three suppliers manufacture their
respective products and develop the technologies within such products. In
addition, these suppliers also supply similar products from other manufacturers.
As of May 2005, VIQUA(formerly R-Can Environmental Inc.) supplied our company
with products from some components from outside suppliers but all VIQUA products
are assembled and shipped from their Guelph, Ontario, Canada manufacturing
facility. A significant decline in our suppliers financial condition, a
material rise in the cost of their prices or a reduction in the number of
products currently available could adversely affect our results of operations.
In addition, if our existing relationship with VIQUA(formerly R-Can
Environmental Inc.), Ozocan Corporation or ELCE International Corp. deteriorates
or is terminated in the future, and we are not successful in establishing a
relationship with an alternative supplier at prices and products currently
offered by such suppliers, our results of operations could be adversely
affected.

All of our directors and officers are engaged in other
business activities and accordingly may not devote sufficient time to our
business affairs, which may affect our ability to conduct operations and
generate revenues.

Although all three of our directors and officers are involved
in other business activities, as a development stage company, we are able to
manage the current level of business with our three officers, our relationship
with eleven local distributors and the technical assistance of our three product
suppliers, VIQUA(formerly R-Can Environmental), Ozocan Corporation and ELCE
International as well as local accounting and technical support services, our
Latin American Director of Sales and our Southern Colombian and Peruvian sales
agents. At present, Max Weissengruber, our President and director, spends
approximately 30 hours per week, or 80%, of his business time on the management
of our company. D. Brian Robertson, our Chief Financial Officer, Vice-President
of Sales and director, spends approximately 35 hours per week, or 90%, of his
business time on the management of our company and Douglas R. Robertson, our
Secretary and director, spends approximately 4 hours per week, or 10 %, of his
business time on the management of our company. As a result of their other
business endeavors, Mr. Weissengruber, Mr. B. Robertson and Mr. D. Robertson may
not be able to devote sufficient time to our business

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- 21 -

affairs, which may negatively affect our ability to conduct our
ongoing operations and our ability to generate revenues. In addition, the
management of our company may be periodically interrupted or delayed as a result
of our directors and officers other business interests.

All of our assets and all of our directors and officers are
outside the United States, with the result that it may be difficult for
investors to enforce within the United States any judgments obtained against us
or any of our directors or officers.

All of our assets are located outside the United States and we
do not currently maintain a permanent place of business within the United
States. In addition, all of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of such persons assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against us or our officers or directors, including
judgments predicated upon the civil liability provisions of the securities laws
of the United States or any state thereof. Consequently, you may be effectively
prevented from pursuing remedies under United States federal securities laws
against them.

Risks Relating to our Business

Changes to the current or future government regulation of
our products may add to our operating costs.

We may face unanticipated operating costs due to future
government regulation of drinking water standards. We believe that we are not
currently subject to direct regulation of our current and expected activities,
other than regulations generally applicable to businesses. However, the issue of
what constitutes pure drinking water as is currently defined leaves the claim of
purity open to a broad spectrum of water providers. Laws and regulations may be
introduced that affect drinking water standards and claims of purity or other
characteristics of water being sold to consumers. Complying with new regulations
could increase our operating costs. Furthermore, we may be subject to the laws
of various jurisdictions where we actually conduct business. Although we rely on
distributors who sell our products in our target markets, there is a risk that
we may be deemed to be actively selling in jurisdictions that may impose
regulations on the sale of our products. Under such circumstances, we could be
subject to fines or penalties that could have a material adverse impact on our
business and operations.

Sales and delivery of our products may be interrupted due to
international political situations, natural disasters or other causes.
Interruptions may cause us to lose customers and distributors and, accordingly,
may adversely affect our business and results of operations.

Most of our products are manufactured in Canada and Japan. Our
target market includes Central and South America, which are subject to social,
economic and political uncertainty. We are subject to the risk that the sale,
payment and delivery of our products may be interrupted as a result of social,
economic and political turmoil or by natural disasters such as earthquakes and
fires. Any such interruptions may cause us to lose customers and distributors
and, accordingly, may adversely affect our business and results of operations.

Our industry is very competitive and we may not be able to
achieve long term success. If this happens, we will go out of business.

Our products compete with a number of established brands and
new products that target the same market as we do. We compete against major
manufacturers of both traditional and new water treatment methods and
technologies most with substantially greater marketing, cash, distribution,
production, technical and other resources than our company has at present. In
addition to competitors with comparable ultra violet technology, there are
large, well established water treatment companies offering proven technologies
such as chlorination, ozone, reverse osmosis and physical filtration methods. If
we are unable to produce, market and distribute our products as well as our
competitors or if customers do not find our products to be as good or better
than others on the market, then we may never develop a client base or sell
enough of our product to be profitable. If this happens, we will go out of
business.

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- 22 -

Risks Related to our Securities

Because our directors and officers control a large
percentage of our common stock, such insiders have the ability to influence
matters affecting our shareholders and other shareholders will likely have no
effect on the decisions made by our company. This could result in our management
making decisions that are in the best interest of themselves and not in the best
interest of shareholders. Shareholders could lose some or all of the value of
their investments in our common stock as a result.

Our directors and officers, in the aggregate, beneficially own
approximately 75% of the issued and outstanding shares of our common stock. As a
result, they have the ability to influence matters affecting our shareholders,
including the election of our directors, the acquisition or disposition of our
assets, and the future issuance of our shares. Because our officers and
directors control such shares, investors may find it difficult to replace our
management if they disagree with the way our business is being operated. Because
the influence by these insiders could result in management making decisions that
are in the best interest of those insiders and not in the best interest of the
investors, you may lose some or all of the value of your investment in our
common stock.

Because we do not have sufficient insurance to cover our
business losses, we might have uninsured losses, increasing the possibility that
you may lose your investment.

We may incur uninsured liabilities and losses as a result of
the conduct of our business. We do not currently maintain any comprehensive
liability or property insurance. Even if we obtain such insurance in the future,
we may not carry sufficient insurance coverage to satisfy potential claims. We
do not carry any business interruption insurance. Should uninsured losses occur,
any purchasers of our common stock could lose their entire investment.

The market price of our common stock is likely to be highly
volatile. The market price of our common stock may also fluctuate significantly
in response to the following factors, most of which are beyond our
control:

- variations in our quarterly operating results;
- changes in securities analysts estimates of our financial performance;
- changes in general economic conditions and in the software industry;
- changes in market valuations of similar companies;
- announcements by us or our competitors of significant new products; and,
- the loss of key management.

The equity markets have, on occasion, experienced significant
price and volume fluctuations that have affected the market prices for many
companies securities and that have often been unrelated to the operating
performance of these companies. Any such fluctuations may adversely affect the
market price of our common stock, regardless of our actual operating
performance. As a result, stockholders may be unable to sell their shares, or
may be forced to sell them at a loss.

Because we can issue additional common shares, purchasers of
our common stock may incur immediate dilution and may experience further
dilution.

We are authorized to issue up to 400,000,000 common shares,
including 100,000,000 Series B common shares which have equal rights and
preferences as our common shares. As of August 14, 2009, there were 127,120,000
common shares issued and outstanding and no Series B common shares issued and
outstanding. In addition, under our Joint Venture Agreement with ELCE
International Corp. we have committed to issue 15,000,000 common shares over the
next eighteen months. Our board of directors has the authority to cause our
company to issue additional shares of common stock without the consent of any of
our shareholders. Consequently, our shareholders may experience more dilution in
their ownership of our company in the future.

Our stock is a penny stock. Trading of our stock may be
restricted by the Securities and Exchange Commissions penny stock regulations
which may limit a stockholders ability to buy and sell our stock.

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- 23 -

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the Securities and Exchange Commission which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customers
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customers confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules; the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

Financial Industry Regulatory Authority (FINRA) sales
practice requirements may also limit a stockholders ability to buy and sell our
stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, FINRA rules require that in recommending an
investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to
recommending speculative low priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information
about the customers financial status, tax status, investment objectives and
other information. Under interpretations of these rules, FINRA believes that
there is a high probability that speculative low priced securities will not be
suitable for at least some customers. FINRA requirements make it more difficult
for broker-dealers to recommend that their customers buy our common stock, which
may limit your ability to buy and sell our stock and have an adverse effect on
the market for our shares.

Item 3. Quantitative and Qualitative Disclosures about
Market Risk.

Not Applicable.

Item 4T. Controls and Procedures.

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commissions rules and forms, and that such information
is accumulated and communicated to our management, including our president (who
is our principal executive officer) and our treasurer, chief financial officer,
vice-president of sales (who is our principal financial and accounting officer)
to allow for timely decisions regarding required disclosure. In designing and
evaluating our disclosure controls and procedures, our management recognizes
that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and our management is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.

As of June 30, 2009, the end of the three month period covered
by this report, our management carried out an evaluation with the participation
of our principal executive officer and our principal financial officer, of the
effectiveness of our disclosure controls and procedures. Based on the foregoing,
our management concluded that our disclosure controls and procedures were not
effective as of the end of the period covered by this quarterly report.

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- 24 -

There have been no changes in our internal controls over
financial reporting that occurred during the three months ended June 30, 2009
that have materially affected, or are reasonably likely to materially affect,
our internal controls over financial reporting.

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.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

|Exhibit   | Description                                                                                                                               
|--------- | ------------------------------------------------------------------------------------------------------------------------------------------
|Number    |                                                                                                                                           
|          |                                                                                                                                           
|3.1(1)    | Articles of
      Incorporation                                                                                                           
|          |                                                                                                                                           
|3.2 (1)   | By-laws                                                                                                                                   
|          |                                                                                                                                           
|10.1 (1)  | Supplier
      Agreement with ELCE International dated August 18, 2001                                                                    
|          |                                                                                                                                           
|10.2 (1)  | Distribution
      Agreement with Avila S.T.E.M., SA dated February 1, 2005                                                               
|          |                                                                                                                                           
|10.3 (1)  | Supplier
      Agreement with R-Can Environmental Inc. dated May 20, 2005                                                                 
|          |                                                                                                                                           
|10.4 (1)  | Distribution
      Agreement with JEUFI International, SA dated June 22, 2005                                                             
|          |                                                                                                                                           
|10.5 (1)  | Distribution
      Agreement with Freshwater Latin, S.A. dated September 1, 2005                                                          
|          |                                                                                                                                           
|10.6 (1)  | Asset Sale
      Agreement dated January 1, 2006, among our company, Max Weissengruber and
      D. Brian Robertson                       
|          |                                                                                                                                           
|10.7 (1)  | Consulting
      Agreement dated January 1, 2006, between our company and D. Brian
      Robertson                                        
|          |                                                                                                                                           
|10.8 (1)  | Agreement with
      Max Weissengruber, dated January 1, 2006.                                                                            
|          |                                                                                                                                           
|10.9 (2)  | Distribution
      Agreement dated October 9, 2008 with Watergeeks Laboratories Inc., dated
      October 9, 2008                         
|          |                                                                                                                                           
|10.10 (2) | Extension
      Agreement dated December 31, 2008 to Distribution Agreement with
      Watergeeks Laboratories Inc., dated October 9, 2008

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- 25 -

|Exhibit   | Description                                                                                                                                                         
|--------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number    |                                                                                                                                                                     
|          |                                                                                                                                                                     
|10.11 (2) | Joint Venture
        Agreement with ELCE International Corp., dated January 25, 2009                                                                               
|          |                                                                                                                                                                     
|31.1*     | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002 of Max Weissengruber 
|          |                                                                                                                                                                     
|31.2*     | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002 of D. Brian Robertson
|          |                                                                                                                                                                     
|32.1*     | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant Section
        906 Certifications under Sarbanes-Oxley Act of 2002           

|(1) | Filed as an exhibit to our Form
      SB-2 registration statement filed on February 12, 2007.
|--- | ---------------------------------------------------------------------------------------------
|(2) | Filed as an exhibit to our Form
      8-K filed on January 6, 2009.                          
|*   | Filed herewith                                                                               

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- 26 -

SIGNATURES

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

FRESHWATER TECHNOLOGIES, INC.

|By    | /s/ Max Weissengruber                      | 
|----- | ------------------------------------------ | 
|      | Max Weissengruber                          | 
|      | President and Director                     | 
|      | (Principal
      Executive Officer)        | 
|      |                                            | 
|Date: | August 14, 2009                            | 
|      |                                            | 
|      |                                            | 
|By    | /s/ Brian Robertson                        | 
|      | D. Brian Robertson                         | 
|      | Treasurer, Chief Financial
      Officer   | 
|      | Vice-President of Sales and
      Director | 
|      | (Principal
      Accounting Officer        | 
|      | and Principal Financial Officer)           | 
|      |                                            | 
|Date: | August 14, 2009                            | 

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