**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-QSB**


**(Mark
      One)**




**þ**
            **Quarterly
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934.**




**For
      the quarterly period ended August 31, 2007.**


**or**




**o**
            **Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934.**




**For
      the transition period from ______to______.**




**Commission
      file number**




**TRANSDEL
      PHARMACEUTICALS, INC.**


(Exact
      name of registrant as specified in its charter)




**Delaware**
            **45-0567010**(State
                or other jurisdiction of
            (I.R.S.
                Employer Identification No.)incorporation
                or organization)**300 Park Avenue, Suite 1700, New York, NY**
            **10022**(Address
                of principal executive offices)
            (Zip
                Code)




**(212)
      572-6395**


(Registrant’s
      telephone number, including area code)





**BYWATER
      RESOURCES INC.**


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




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


Yes 
      þNo
o




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


Yes 
      þNo o





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of September 12, 2007: 7,400,000 shares of common stock.




















**BYWATER
      RESOURCES INC.**


**FINANCIAL
      STATEMENTS**




**INDEX**




**PART
      I-- FINANCIAL INFORMATION**




Item
                1.
            Financial
                StatementsItem
                2.
            Management’s
                Discussion and Analysis of Financial ConditionItem
                3.
            Control
                and Procedures




**PART
      II-- OTHER INFORMATION**




Item
                1.
            Legal
                ProceedingsItem
                2.
            Changes
                in SecuritiesItem
                3.
            Defaults
                Upon Senior SecuritiesItem
                4.
            Submission
                of Matters to a Vote of Security HoldersItem
                5.
            Other
                InformationItem
                6.
            Exhibits
                and Reports on Form 8-K





**SIGNATURE**













**Item
      1. Financial Information**




BASIS
      OF
      PRESENTATION




The
      accompanying reviewed financial statements are presented in accordance with
      generally accepted accounting principles for interim financial information
      and
      the instructions to Form 10-QSB and item 310 under subpart A of Regulation
      S-B.
      Accordingly, they do not include all of the information and footnotes required
      by generally accepted accounting principles for complete financial statements.
      In the opinion of management, all adjustments (consisting only of normal
      occurring accruals) considered necessary in order to make the financial
      statements not misleading, have been included. Operating results for
      the three months ended August 31, 2007 are not necessarily indicative of
      results that may be expected for the year ending May 31, 2008. The financial
      statements are presented on the accrual basis.








2






**BYWATER
                  RESOURCES, INC.****(AN
                  EXLORATION STAGE COMPANY)****CONDENSED
                  BALANCE SHEET****AS
                  OF AUGUST 31, 2007****(UNAUDITED)****ASSETS****CURRENT
                  ASSETS**Cash
              
              $
              14,263Prepaid
                  Expense
              
              
              6,188**TOTAL
                  ASSETS**
              
              $
              20,451**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****CURRENT
                  LIABILITIES**Accrued
                  Expenses
              
              $
              9,200**TOTAL
                  LIABILITIES**
              
              
              9,200**STOCKHOLDERS'
                  EQUITY**Preferred
                  Stock - Par value $0.001;Authorized:
                  5,000,000None
                  issued and outstanding
              
              
              -Common
                  Stock - Par value $0.001;Authorized:
                  50,000,000Issued
                  and Outstanding: 7,400,000
              
              
              7,400Additional
                  Paid-In Capital
              
              
              73,800Accumulated
                  Deficit during exploration stage
              
              
              (69,949
              )Total
                  Stockholders' Equity
              
              
              11,251**TOTAL
                  LIABILITIES AND EQUITY**
              
              $
              20,451








The
          accompanying notes are an integral part of these financial
          statements
 3




**BYWATER
                  RESOURCES, INC.****(AN
                  EXLORATION STAGE COMPANY)****CONDENSED
                  STATEMENT OF OPERATIONS****(UNAUDITED)**For
                  the PeriodFrom
                  January 11,For
                  the Three
              
              
              For
                  the Three
              
              
              2006Months
                  Ended
              
              
              Months
                  Ended
              
              
              (Inception)
                  toAugust
                  31, 2007
              
              
              August
                  31, 2006
              
              
              August
                  31, 2007**REVENUE**
              
              $
              -
              
              
              $
              -
              
              
              $
              -**OPERATING
                  EXPENSES**General
                  and Administrative expenses
              
              
              10,346
              
              
              
              7,733
              
              
              
              29,949Exploration
                  Costs
              
              
              -
              
              
              
              -
              
              
              
              40,000**TOTAL
                  OPERATING EXPENSES**
              
              
              10,346
              
              
              
              7,733
              
              
              
              69,949**LOSS
                  FROM OPERATINGS**
              
              
              (10,346
              )
              
              
              (7,733
              )
              
              
              (69,949
              )PROVISION
                  FOR INCOME TAXES
              
              
              -
              
              
              
              -
              
              
              
              -**NET
                  LOSS**
              
              $
              (10,346
              )
              
              $
              (7,733
              )
              
              $
              (69,949
              )Net
                  Loss per share - basic and diluted
              
              $
              (0.00
              )
              
              $
              (0.00
              )Weighted
                  average number of shares outstandingduring
                  the period - basic and diluted
              
              
              7,400,000
              
              
              
              7,400,000






The
          accompanying notes are an integral part of these financial
          statements
 4




**BYWATER
                  RESOURCES, INC.****(AN
                  EXLORATION STAGE COMPANY)****CONDENSED
                  STATEMENT OF STOCKHOLDERS' EQUITY****FOR
                  THE PERIOD FROM JANUARY 11, 2006 (INCEPTION) TO AUGUST 31,
                  2007****(UNAUDITED)****ACCUMULATED****DEFICIT****ADDITIONAL**
              
              
              **DURING****PREFERRED
                  STOCK**
              
              
              **COMMON
                  STOCK**
              
              
              **PAID
                  IN**
              
              
              **EXPLORATION**
              
              
              **TOTAL****SHARES**
              
              
              **AMOUNT**
              
              
              **SHARES**
              
              
              **AMOUNT**
              
              
              **CAPITAL**
              
              
              **STAGE**
              
              
              **EQUITY**Common
                  stock issued as
              
              
              
              
              $
              -
              
              
              
              5,550,000
              
              
              $
              5,550
              
              
              $
              (4,350
              )
              
              $
              -
              
              
              $
              1,200compensation
                  upon companyinception
                  (January 11, 2006)at
                  $0.0002 per shareCommon
                  stock issued for cash
              
              
              
              
              
              -
              
              
              
              971,250
              
              
              
              971
              
              
              
              41,029
              
              
              
              -
              
              
              
              42,000February
                  16, 2006 at $0.04per
                  share on private placementCommon
                  stock issued for cash
              
              
              
              
              
              -
              
              
              
              878,750
              
              
              
              879
              
              
              
              37,121
              
              
              
              
              
              
              
              38,000March
                  3, 2006 at $0.04per
                  share on private placementNet
                  income (loss)
              
              
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (46,206
              )
              
              
              (46,206
              )Balance,
                  May 31, 2006
              
              
              -
              
              
              
              -
              
              
              
              7,400,000
              
              
              
              7,400
              
              
              
              73,800
              
              
              
              (46,206
              )
              
              
              34,994Net
                  income (loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -
              
              
              
              
              
              
              
              (13,397
              )
              
              
              (13,397
              )Balance,
                  May 31, 2007
              
              
              -
              
              
              
              -
              
              
              
              7,400,000
              
              
              
              7,400
              
              
              
              73,800
              
              
              
              (59,603
              )
              
              
              21,597Net
                  income (loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -
              
              
              
              
              
              
              
              (10,346
              )
              
              
              (10,346
              )Balance,
                  August 31, 2007
              
              
              -
              
              
              $
              -
              
              
              
              7,400,000
              
              
              $
              7,400
              
              
              $
              73,800
              
              
              $
              (69,949
              )
              
              $
              11,251








The
          accompanying notes are an integral part of these financial
          statements
 5




**BYWATER
                  RESOURCES, INC.****(AN
                  EXLORATION STAGE COMPANY)****CONDENSED
                  STATEMENT OF CASH FLOWS****(UNAUDITED)**For
                  the PeriodFrom
                  January 11,For
                  the Three
              
              
              For
                  the Three
              
              
              2006Months
                  Ended
              
              
              Months
                  Ended
              
              
              (Inception)
                  to**CASH
                  FLOWS FROM OPERATING ACTIVITIES**
              
              August
                  31, 2007
              
              
              August
                  31, 2006
              
              
              August
                  31, 2007Net
                  loss
              
              $
              (10,346
              )
              
              $
              (7,733
              )
              
              $
              (69,949
              )Adjustments
                  to reconcile net loss to net cash used inoperating
                  activiities:Compensation
                  in the form of stock
              
              
              -
              
              
              
              -
              
              
              
              1,200Changes
                  in Assets and Liabilities:(Increase)
                  Decrease in Prepaid Expense
              
              
              2,062
              
              
              
              -
              
              
              
              (6,188
              )Increase
                  (Decrease) in Accrued Expenses
              
              
              5,565
              
              
              
              (3,750
              )
              
              
              9,200Net
                  cash used in operating activities
              
              
              (2,719
              )
              
              
              (11,483
              )
              
              
              (65,737
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES**
              
              
              -
              
              
              
              -
              
              
              
              -**CASH
                  FLOWS FROM FINANCING ACTIVITIES**Proceeds
                  from stock issuance
              
              
              -
              
              
              
              -
              
              
              
              80,000Net
                  cash provided financing activities
              
              
              -
              
              
              
              -
              
              
              
              80,000Net
                  increase (decrease) in cash
              
              
              (2,719
              )
              
              
              (11,483
              )
              
              
              14,263Cash
                  - beginning balance
              
              
              16,982
              
              
              
              39,944
              
              
              
              -**CASH
                  BALANCE - END OF PERIOD**
              
              $
              14,263
              
              
              $
              28,461
              
              
              $
              14,263










The
          accompanying notes are an integral part of these financial
          statements
 6




**BYWATER
        RESOURCES, INC.**
 **(AN
        EXPLORATION STAGE COMPANY)**
 **NOTES
        TO CONDENSED FINANCIAL STATEMENTS**
 **AS
        OF AUGUST 31, 2007**
 **(UNAUDITED)**
   **NOTE
          1 **SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES AND
          ORGANIZATION****
  ***(A)
        Basis of Presentation***
 
 The
        accompanying unaudited financial statements have been prepared in accordance
        with accounting principles generally accepted in the United States of America
        and the rules and regulations of the Securities and Exchange Commission for
        interim financial information. Accordingly, they do not include all the
        information necessary for a comprehensive presentation of financial position
        and
        results if operations.
 
 It
        is
        management’s opinion however, that all material adjustments (consisting of
        normal recurring adjustments) have been made which are necessary for a fair
        financial statements presentation. The results for the interim period are
        not
        necessarily indicative of the results to be expected for the year.
 
 ***(B)
        Organization***
 
 Bywater
        Resources Inc. (an exploration stage company) (the “Company”) was incorporated
        on January 11, 2006 in the State of Delaware. The Company is an exploration
        stage mining company. On February 6, 2006, the Company became actively engaged
        in acquiring mineral properties, raising capital, and preparing properties
        for
        production. The Company did not have any significant mining operations or
        activities from inception, and accordingly is deemed to be an exploration
        stage
        company.
 
 The
        fiscal year-end of the Company is May 31.
 
 ***(C)
        Revenue and Cost Recognition***
 
 The
        Company uses the accrual basis of accounting for financial statement reporting.
        Revenues and expenses are recognized in accordance with Generally Accepted
        Accounting Principles for the industry. Certain period expenses are recorded
        when obligations are incurred.
 
 ***(D)
        Use of Estimates***
 
 In
        preparing financial statements in conformity with generally accepted accounting
        principles, management is required to make estimates and assumptions that
        affect
        the reported amounts of assets and liabilities and the disclosure of contingent
        assets and liabilities at the date of the financial statements and revenues
        and
        expenses during the reported period. Actual results could differ from those
        estimates.
 
 ***(E)
        Non-Mining Property and Equipment***
 
 Property
        and equipment purchased by the Company are recorded at cost. Depreciation
        is
        computed by the straight-line method based upon the estimated useful lives
        of
        the respective assets. Expenditures for repairs and maintenance are charged
        to
        expense as incurred as are any items purchased which are below the Company's
        capitalization threshold of $1,000.
 
 For
        assets sold or otherwise disposed of, the cost and related accumulated
        depreciation are removed from accounts, and any related gain or loss is
        reflected in income for the period.
   7
  **BYWATER
          RESOURCES, INC.**
 **(AN
          EXPLORATION STAGE COMPANY)**
 **NOTES
          TO CONDENSED FINANCIAL STATEMENTS**
 **AS
          OF AUGUST 31, 2007**
 **(UNAUDITED)**
 ***(F)
        Income Taxes***
 
 The
        Company accounts for income taxes using the liability method, which requires
        recognition of deferred tax liabilities and assets for the expected future
        tax
        consequences of events that have been included in the financial statements
        or
        tax returns. Deferred tax assets and liabilities are determined based on
        the
        difference between the financial statements and tax basis of assets and
        liabilities using enacted tax rates in effect for the year in which the
        differences are expected to reverse.
 
 The
        Company's management determines if a valuation allowance is necessary to
        reduce
        any tax benefits when the available benefits are more likely than not to
        expire
        before they can be used.
 
 ***(G)
        Stock Based Compensation***
 
 The
        Company has adopted the provisions of SFAS No. 123R and related interpretations
        as provided by SAB 107.  As such, compensation cost is measured on the
        date of grant at their fair value.  Such compensation amounts, if any,
        are amortized over the respective vesting periods of the option
        grant.
 
 Common
        stock, stock options and common stock warrants****issued to
        other than employees****or directors are recorded on the
        basis of their fair value, as required by SFAS No. 123(R), which is measured
        as
        of the date required by EITF Issue 96-18, “Accounting for Equity Instruments
        That Are Issued to Other Than Employees for Acquiring, or in Conjunction
        with
        Selling, Goods or Services.” In accordance with EITF 96-18, the stock options or
        common stock warrants are valued using the Black-Scholes option pricing model
        on
        the basis of the market price of the underlying common stock on the “valuation
        date,” which for options and warrants related to contracts that have substantial
        disincentives to non-performance is the date of the contract, and for all
        other
        contracts is the vesting date. Expense related to the options and warrants
        is
        recognized on a straight-line basis over the shorter of the period over which
        services are to be received or the vesting period. Where expense must be
        recognized prior to a valuation date, the expense is computed under the
        Black-Scholes option pricing model on the basis of the market price of the
        underlying common stock at the end of the period, and any subsequent changes
        in
        the market price of the underlying common stock up through the valuation
        date is
        reflected in the expense recorded in the subsequent period in which that
        change
        occurs.
 
 ***(H)
        Cash and Cash Equivalents and Credit Risk***
 
 For
        purposes of reporting cash flows, the Company considers all cash accounts
        with
        maturities of 90 days or less and which are not subject to withdrawal
        restrictions or penalties, as cash and cash equivalents in the accompanying
        balance sheet.
 
 Cash
        includes deposits at Canadian financial institutions in US currency which
        is not
        covered by either the US FDIC limits or the Canadian CDI limits and therefore
        the entire cash balance of $14,263 is uninsured.  The company has
        placed its cash in a high credit quality financial institution.
  ***(I)
        Foreign Currency Translation and Transactions***
 
 The
        Company's functional currency is the US dollar. No material translations
        or
        transactions have occurred. Upon the occurrence of such material transactions
        or
        the need for translation adjustments, the Company will adopt Financial
        Accounting Standard No. 52 and other methods in conformity with Generally
        Accepted Accounting Principles.
 
 ***(J)
        Earnings Per Share***
 
 Basic
        and
        diluted net loss per common share is computed based upon the weighted average
        common shares outstanding as defined by Financial Accounting Standards No.
        128,
“Earnings Per Share.” As of August 31, 2007 and 2006, there were no dilutive
        securities outstanding.
   8
 **BYWATER
          RESOURCES, INC.**
 **(AN
          EXPLORATION STAGE COMPANY)**
 **NOTES
          TO CONDENSED FINANCIAL STATEMENTS**
 **AS
          OF AUGUST 31, 2007**
 **(UNAUDITED)**
  **NOTE
          2 **GOING
          CONCERN****
 The
        accompanying financial statements have been prepared assuming that the company
        will continue as a going concern. The Company’s financial position and operating
        results raise substantial doubt about its ability to continue as a going
        concern. The financial statements do not include any adjustments that might
        result from the outcome of this uncertainty.
 
 The
        Company lacks an operating history and has losses which we expect to continue
        into the future.
 
 The
        Company was incorporated in January 2006 and has not realized any revenues
        to
        date. The Company has no operating history upon which an evaluation of our
        future success or failure can be made. The ability to achieve and maintain
        profitability and positive cash flow is dependent upon the Company’s ability to
        locate a profitable mineral property, generate revenues and raise the capital
        necessary to continue exploration of the property.
 
 Based
        upon current plans, the Company
        expects to incur operating losses in future periods. This will happen because
        there are expenses associated with the research and exploration of mineral
        properties. The Company cannot guarantee that it will be successful in
        generating revenues in the future. Failure to generate revenues may cause
        the
        Company to go out of business.
 
 The
        Company intends to generate additional capital from the public markets to
        increase its ability to locate profitable mineral property and generate
        revenues. The Company may also consider public or private debt transactions
        and/or private placement, but has no such actions in place at this
        time.
 
 **NOTE
          3 **AFFILIATES
          AND RELATED PARTIES****
  The
        Company has compensated officers of the Company with compensation in the
        form of
        stock as described in the equity footnote.
 
 **NOTE
          4 **STOCKHOLDERS’
          EQUITY****
  ***(A)
        Preferred Stock***
 
 The
        Company has authorized five million (5,000,000) shares of preferred stock
        with a
        par value of $.001, none of which have been issued.
 
 ***(B)
        Common Stock***
 
 The
        Company has authorized fifty million (50,000,000) shares of common stock
        with a par value of $.001. The Company has 7,400,000 shares of common stock
        issued and outstanding.
 
 On
        January 11, 2006 the Company issued 5,550,000 shares of common stock to the
        Company President, Rolf Harms, as compensation for the formation of the
        corporation and services rendered for a value of $1,200 or $0.0002 per
        share.
 
 On
        February 16, 2006 the Company issued 971,250 shares of common stock at a
        price
        of $.04 per share in an offering exempt from registration at Section 4(2)
        of the
        Securities Act of 1933 for a total value of $42,000.
 
 On
        March
        3, 2006 the Company issued 878,750 shares of common stock at a price of $.04
        per
        share in an offering exempt from registration at Section 4(2) of the Securities
        Act of 1933 for a total value of $38,000.
   9
  **BYWATER
          RESOURCES, INC.**
 **(AN
          EXPLORATION STAGE COMPANY)**
 **NOTES
          TO CONDENSED FINANCIAL STATEMENTS**
 **AS
          OF AUGUST 31, 2007**
 **(UNAUDITED)**
  **NOTE
          5 **COMMITMENTS
          AND CONTINGENCIES****
  The
        Company entered into an agreement on February 6, 2006 with Ms. Gillian Wells
        (“Wells”) to purchase a 100% interest in the CARTER 1 claim located
        approximately 8 kilometers west of the Town of Port Alice, British Columbia
        for
        a total of $40,000. In addition, the Company gave Wells a 21⁄2% Net Smelter
        Royalty and received an option to repurchase 11⁄2% of the Net Smelter Royalty for
        $1.0 million within 12 months from commencement of commercial production.
        Advance minimum annual royalties of $25,000 are payable commencing 48 months
        from February 28, 2006. If the Company defaults on the royalty payments,
        the
        agreement calls for the Company to return its 100% interest in the claim
        to
        Wells and forfeits all future claims and royalty rights to the
        claim.
  **NOTE
        6 SUBSEQUENT
        EVENTS**
  On
        September 11, 2007, the Company's stockholders approved a .4625 for 1 reverse
        stock split for its common stock. As a result, stockholders of record at
        the
        close of business on September 11, 2007, received .4625 share of common stock
        for every one share held.  The Company also amended its authorized
        shares to 5,000,000 blank check preferred shares with a par value of $.001
        and 50,000,000 common shares at a par value of $.001.  All stock,
        additional paid-in capital and share and per share data for prior periods
        have
        been restated to reflect the stock split as if it had occurred at the beginning
        of the earliest period presented.  In addition, the Company changed
        its name to Transdel Pharmaceuticals, Inc.


10







**Item
      2. Management’s Discussion and Analysis or
      Plan of Operation**





*The
      following discussion contains forward-looking statements within the meaning
      of
      Section 27A of the Securities Act of 1933 and Section 21E of the Securities
      Exchange Act of 1934 relating to future events or our future performance. Actual
      results may materially differ from those projected in the forward-looking
      statements as a result of certain risks and uncertainties set forth in this
      prospectus. Although management believes that the assumptions made and
      expectations reflected in the forward-looking statements are reasonable, there
      is no assurance that the underlying assumptions will, in fact, prove to be
      correct or that actual results will not be different from expectations expressed
      in this report.*




**Organization**




We
      were
      organized as a Delaware Corporation on January 11, 2006 for the purpose of
      locating and developing copper-gold exploration properties in British
      Columbia.




**Overview**




Pursuant
      to our business plan we searched for available copper-gold mineral exploration
      properties in Vancouver Island British Columbia. In February 2006, we entered
      into an option agreement with Gillian Wells to acquire a 100% interest in the
      CARTER 1 claim. Our mineral claim is located 8 kilometres west of Port Alice,
      British Columbia on Vancouver Island. The property has been acquired from Wells
      by paying her a purchase payment of $40,000.




Upon
      commercial
      production, the property will be subject to a 2Ѕ% Net Smelter Return (“NSR”) of
      which 1 1/2% can be purchased for $1,000,000. However, if we are unable to
      delineate commercial quantities of copper-gold on the CARTER 1 claim we
      may have to cease operations on the CARTER 1 claim. We would seek out other
      properties with mineral potential to carry out exploration programs to replace
      the CARTER 1 claim.




Our
      ability to execute our growth strategy depends in part on our ability to
      identify and acquire desirable acquisition candidates consisting of suitable
      exploration properties. Initially we will seek exploration properties held
      by
      individuals or small private corporations. We need to diversify our property
      holdings to improve the likelihood that we secure a property that can be
      developed into a mine.




There
      can
      be no assurance that we will finalize and close any transactions or be able
      to
      identify suitable acquisition candidates or, to negotiate their acquisition
      at
      prices or on terms and conditions favorable to us.









11





**Property
      Payments**




Pursuant
      to our agreement, we are required to pay Ms. Wells a single payment and
      then annual Advance Royalties of $25,000 commencing February 6, 2010 to keep
      our
      agreement in good standing. We paid $40,000 in February 2006 and we are in
      good
      standing until the commencement of the advance royalties on or before February
      6, 2010.


Exploration
        stage expenses from inception through August 30, 2007 were $40,000 for general
        exploration costs related to the mineral rights of the exploration property
        and
        $29,949 of general and administrative costs for a total expense of $69,949
        as
        captioned in the financial statement’s statement of operations. Fees were
        incurred in the start-up costs of our company as well as the fees to prepare
        our
        audited financial statements and this registration statement. These fees
        were
        included in the general and administrative expense as discussed in this
        paragraph.




Our
      plan
      of operations for the next twelve months is to continue exploration activities
      on the property. We are planning to spend $8,000 on further exploration on
      the
      property. If we are successful in raising sufficient capital we hope to carry
      out most or all of the work described under Further Exploration in the CARTER
      1
      claim in the next twelve months. We are current in all of our
      obligations.




The
      following is a 12 month budget:




Exploration
                and site work (samples)
            
            
            8,000General
                and administrative
            
            
            17,400Total
            
            $
            25,400




At
      present, we do not have sufficient cash on hand to meet our exploration,
      general and administration expenses and we must raise more capital to carry
      out
      further exploration programs to maintain our interest in the CARTER 1 claim.
      If
      we are unable to raise sufficient capital to meet our obligations we could
      lose
      our interest in the properties or a portion thereof.  To date we have
      not been successful in our plans to raise capital for our
      operations.




We
      plan
      to raise a minimum of $45,000 to continue minimum exploration of our properties
      during the next 12 months through a private placement of debt, convertible
      securities, or common equity. If we are successful in raising the necessary
      capital, we may have to significantly dilute the current shareholders.
      Our plan has been  to offer the debt or equity to our current
      shareholders and management. We have not been successful in raising the
      required capital and we are offering our debt or equity to new investors. At
      present, we have not been successful in raising the required capital. As an
      alternative to raising capital through the selling of debt or equity, we may
      attempt to negotiate a joint venture with an industry partner. If the company
      is
      required to enter into a joint venture, we could end up with a minority interest
      in our properties. We have not contacted another party in the industry regarding
      a joint venture. There is no assurance we will raise the necessary capital,
      therefore there is a significant risk that the company may have to abandon
      or
      reduce the size of our property.




Liquidity
      and Capital Resources




Our
      unaudited balance sheet as of August 30, 2007 reflects assets of $20,451,
      consisting of cash of $14,263 and prepaid expense of $6,188. We have total
      liabilities of $9,200. We do not believe that the cash that we have on hand
      will
      be sufficient to meet our exploration, general and administration expenses
      for the next twelve months. We must raise more capital to carry out further
      exploration programs to maintain our interest in the CARTER 1 claim. If we
      are
      unable to raise sufficient capital to meet our obligations we could lose our
      interest in the properties or a portion thereof. We commenced pursuing financing
      activities in the spring of 2007 but to date have been unable to raise the
      capital needed to pursue our exploration program.






12







The
      accompanying financial statements have been prepared assuming that we will
      continue as a going concern. As discussed in the notes to the financial
      statements, we have experienced losses from inception. Our financial position
      and operating results raise substantial doubt about our ability to continue
      as a
      going concern. The financial statements do not include any adjustments that
      might result from the outcome of this uncertainty. We lack an operating history
      and have losses which we expect to continue into the future.





Based
      upon current plans, we expect to incur operating losses in future periods.
      This
      will happen because there are expenses associated with the research and
      exploration of mineral properties. We cannot guarantee that we will be
      successful in generating revenues in the future. Failure to generate revenues
      may cause us to go out of business.





We
      intend
      to generate additional capital from the public markets to increase our ability
      to locate profitable mineral property and generate revenues. We may also
      consider public or private debt transactions and/or private placement, but
      has
      no such actions in place at this time.




To
        date
        we have not been able to raise additional funds through either debt or equity
        offerings. Without this additional cash we have been unable to pursue our
        plan
        of operations and commence generating revenue. We believe that we may not
        be
        able to raise the necessary funds to continue to pursue our business operations.
        As a result of the foregoing, we have recently begun to explore our options
        regarding the development of a new business plan and direction. We are currently
        engaged in discussions with Trans-Pharma Corporation regarding the possibility
        of a reverse triangular merger (the “Merger”) involving the two companies. At
        this stage, no definitive terms have been agreed to, and neither party is
        currently bound to proceed with the Merger. With the permission of Trans-Pharma
        Corporation, on September 11, 2007 we changed our name to Transdel
        Pharmaceuticals, Inc. to facilitate these discussions. If the parties determine
        not to proceed with the Merger, we will adopt a name not similar to Trans-Pharma
        Corporation or Transdel Pharmaceuticals, Inc..





Subsequent
      Event





On
      September 11, 2007, the Company's stockholders approved a .4625 for 1 reverse
      stock split for its common stock. As a result, stockholders of record at the
      close of business on September 11, 2007, received .4625 share of common stock
      for every one share held.  The Company also amended its authorized
      shares to 5,000,000 blank check preferred shares with a par value of $.001
      and
      50,000,000 common shares at a par value of $.001.  All stock,
      additional paid-in capital and share and per share data for prior periods have
      been restated to reflect the stock split as if it had occurred at the beginning
      of the earliest period presented.




Critical
      Accounting Policies




Bywater’s
      financial statements and related public financial information are based on
      the
      application of accounting principles generally accepted in the United States
      (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
      subjective interpretations of accounting principles that have an impact on
      the
      assets, liabilities, revenue and expense amounts reported. These estimates
      can
      also affect supplemental information contained in our external disclosures
      including information regarding contingencies, risk and financial condition.
      We
      believe our use if estimates and underlying accounting assumptions adhere to
      GAAP and are consistently and conservatively applied. We base our estimates
      on
      historical experience and on various other assumptions that we believe to be
      reasonable under the circumstances. Actual results may differ materially from
      these estimates under different assumptions or conditions. We continue to
      monitor significant estimates made during the preparation of our financial
      statements.




Our
      significant accounting policies are summarized in Note 1 of our financial
      statements. While all these significant accounting policies impact its financial
      condition and results of operations, Bywater views certain of these policies
      as
      critical. Policies determined to be critical are those policies that have the
      most significant impact on Bywater’s financial statements and require management
      to use a greater degree of judgment and estimates. Actual results may differ
      from those estimates.






13






Our
      management believes that given current facts and circumstances, it is unlikely
      that applying any other reasonable judgments or estimate methodologies would
      cause effect on our results of operations, financial position or liquidity
      for
      the periods presented in this report.




Recent
      Accounting Pronouncements





In
      July
      2006, the FASB issued FASB Interpretation No. 48, *Accounting for Uncertainty
      in Income Taxes - an Interpretation of FASB Statement No. 109*(“FIN 48”).
      FIN 48 is intended to reduce the diversity encountered in practice with regard
      to certain aspects of the recognition and measurement related to accounting
      for
      income taxes, and to clarify the accounting and disclosure for uncertainty
      in
      tax positions. FIN 48 introduces a new and more comprehensive model of
      accounting and reporting for a number of tax positions routinely taken by
      corporations when filing their tax returns. FIN 48 is effective for fiscal
years
      beginning after December 15, 2006. The Company is evaluating the application
      of
      FIN 48 to its business, and currently believes that the adoption of FIN 48
      will
      not have a material effect on its financial position, operations or cash
      flows.




In
      September 2006, the FASB issued SFAS No. 157, *Fair Value Measurements*(“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework
      for measuring fair value under GAAP, expands the required disclosures regarding
      fair value measurements, and applies to other accounting pronouncements that
      either require or permit fair value measurements. SFAS No. 157 is effective
      for
      fiscal years beginning after November 15, 2007, and for interim periods within
      those fiscal years, with early adoption encouraged. SFAS No. 157 is to be
      applied prospectively, with a limited form of retrospective application for
      several financial instruments. The Company plans to adopt SFAS No. 157 on June
      1, 2007, and currently believes that its adoption will not have a material
      effect on the Company’s financial position, operations or cash
      flows.




In
      February 2007, the FASB issued SFAS No. 159, *The Fair Value Option for
      Financial Assets and Financial Liabilities*. SFAS No. 159 allows a company
      to choose to measure many financial assets and financial liabilities at fair
      value. Unrealized gains and losses on items for which the fair value option
      has
      been elected are reported in earnings. SFAS No. 159 is effective for fiscal
      years beginning after November 15, 2007. Therefore, the Company is required
      to adopt SFAS No. 159 by June 1, 2008. The Company is currently evaluating
      the
      requirements of SFAS No. 159 and the potential impact on the Company’s financial
      statements.





In
      September 2006, the SEC issued Staff Accounting Bulletin No. 108,
*Considering the Effects of Prior Year Misstatements when Quantifying
      Misstatements in Current Year Financial Statements*(“SAB No. 108”). SAB No.
      108 provides guidance in considering the effects of prior year misstatements
      in
      the quantification of current year misstatements, for the purpose of determining
      whether the current year’s financial statements are materially misstated. SAB
      No. 108 is effective for fiscal years ending after November 15, 2006. The
      adoption of SAB No. 108 has not had a material impact on the Company’s financial
      position, operations or cash flows.





**Item
      3. Controls and
      Procedures**




Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and principal financial officer, we conducted an
      evaluation of our disclosure controls and procedures, as such term is defined
      under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
      Exchange Act of 1934, as amended (Exchange Act), as of August 31, 2007. Based
      on
      this evaluation, our principal executive officer and principal financial officer
      have concluded that our disclosure controls and procedures are effective to
      ensure that information required to be disclosed by us in the reports we file
      or
      submit under the Exchange Act is recorded, processed, summarized, and reported
      within the time periods specified in the Securities and Exchange Commission’s
      rules and forms and that our disclosure and controls are designed to ensure
      that
      information required to be disclosed by us in the reports that we file or submit
      under the Exchange Act is accumulated and communicated to our management, including
      our principal executive officer and principal financial officer, or persons
      performing similar functions, as appropriate to allow timely decisions regarding
      required disclosure.




There
      were no changes (including corrective actions with regard to significant
      deficiencies or material weaknesses) in our internal controls over financial
      reporting that occurred during the first quarter of fiscal 2007 that has
      materially affected, or is reasonably likely to materially affect, our internal
      control over financial reporting.








14








**PART
      II - OTHER INFORMATION**




**Item
      1. Legal Proceedings.**




The
      Company is currently not a party to any pending legal proceedings and no such
      action, or to the best of its knowledge, has been threatened against the
      Company.




**Item
      2. Changes in
      Securities.**




None




**Item
      3. Defaults Upon Senior
      Securities.**




None




**Item
      4. Submission of Matters to a Vote of Security
      Holders.**




No
      matter
      was submitted during the quarter ending August 31, 2007, covered by this report
      to a vote of the Company’s shareholders, through the solicitation of proxies or
      otherwise.




**Item
      5. Other Information.**




On
        September 11, 2007, the Company's stockholders approved a .4625 for 1 reverse
        stock split for its common stock. As a result, stockholders of record at
        the
        close of business on September 11, 2007, received .4625 share of common stock
        for every one share held.  The Company also amended its authorized
        shares to 5,000,000 blank check preferred shares with a par value of $.001
        and
        50,000,000 common shares at a par value of $.001.  All stock,
        additional paid-in capital and share and per share data for prior periods
        have
        been restated to reflect the stock split as if it had occurred at the beginning
        of the earliest period presented.  In addition, the Company changed
        its name to Transdel Pharmaceuticals, Inc.




**Item
      6. Exhibits and Reports of Form
      8-K.**




(a)
            Exhibits





31.1
      Certification
      pursuant to Section 302 of Sarbanes Oxley Act of 2002


32.1
      Certification
      pursuant to Section 906 of Sarbanes Oxley Act of 2002




(b)
            Reports
                of Form 8-K




None.













15











**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, there unto duly
      authorized.




TRANSDEL
      PHARMACEUTICALS,
      INC.


Registrant




Date:
      September 12, 2007





By:*/s/**Rolf
      Harms*


**Rolf
      Harms


President,
      Chief Executive Officer,


Chairman
      of Board of Directors