UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 (Mark
One)
 [X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 
 For
the Quarterly Period Ended December 31, 2008
 
 [
] 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: 333-135783
 
 WATERPURE
INTERNATIONAL, INC.
 (Exact
name of registrant as specified in its charter)
 
 Florida
                20-3217152(State
      or other jurisdiction of incorporation or organization)
                (I.R.S.
      Employer Identification No.)
 
 525
Plymouth Road, Suite 310
 Plymouth Meeting,
PA19462
 (Address
of principal executive offices) (zip code)
 
 (954)
728-2405
 (Registrant’s
telephone number, including area code)
 
 (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 the definitions of “large accelerated filer”
“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
  Large
      accelerated filer o
              Accelerated
      filer oNon-accelerated
      filer o
              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.
 
 As of
February 23, 2009, there were 63,090,586 shares of registrant’s common stock
outstanding.
 
  1
  
  
 WATERPURE
INTERNATIONAL, INC.
 
 
 INDEXPART
      I.
                  FINANCIAL
      INFORMATIONITEM
      1.
                  Financial
      StatementsBalance
      sheets as of December 31, 2008 (unaudited) and June 30,
    2008
                  3Statements
      of operations for the three month and six month periods ended December 31,
      2008 and 2007, and cumulative from July 22, 2005 (inception) through
      December 31, 2008 (unaudited)
                  4Statements
      of changes in stockholders’ equity (deficiency) for the period from July
      22, 2005 (inception) through December 31, 2008 (unaudited)
                  5Statements
      of cash flows for the six month periods ended December 31, 2008 and 2007,
      and cumulative from July 22, 2005 (inception) through December 31,
      2008  (unaudited)
                  7Notes
      to financial statements (unaudited)
                  8-15ITEM
      2.
                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                  16-18ITEM
      3.
                  Quantitative
      and Qualitative Disclosures About Market Risk
                  19ITEM
      4T.
                  Controls
      and Procedures
                  19PART
      II.
                  OTHER
      INFORMATIONITEM
      1.
                  Legal
      Proceedings
                  20ITEM
      1A.
                  Risk
      Factors
                  20ITEM
      2.
                  Unregistered
      Sales of Equity Securities and Use of Proceeds
                  20ITEM
      3.
                  Defaults
      Upon Senior Securities
                  20ITEM
      4.
                  Submission
      of Matters to a Vote of Security Holders
                  20ITEM
      5.
                  Other
      Information
                  20ITEM
      6.
                  Exhibits
                  20SIGNATURES
                  21
 
 
  2
  
 WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 BALANCE
SHEETS
  December
      31,
                            
                            
                            June
      30,2008
                            
                            
                            2008(Unaudited)ASSETSCash
                            
                            $
                            -
                            
                            
                            $
                            5,421Accounts
      receivable - net of allowance ($16,297 at December 31, 2008
      and  $2,762 at June 30, 2008)
                            
                            
                            1,800
                            
                            
                            
                            -Inventories
                            
                            
                            53,635
                            
                            
                            
                            87,957Other
      current assets
                            
                            
                            6,000
                            
                            
                            
                            -Total
      current assets
                            
                            
                            61,435
                            
                            
                            
                            93,378Trademark
                            
                            
                            325
                            
                            
                            
                            325Intangible
      asset - license, net of accumulated amortization
                            
                            
                            1,027,202
                            
                            
                            
                            1,056,785Total
      assets
                            
                            $
                            1,088,962
                            
                            
                            $
                            1,150,488LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIENCY)CURRENT
      LIABILITIESAccounts
      payable
                            
                            $
                            116,119
                            
                            
                            $
                            122,641Accrued
      expenses
                            
                            
                            189,931
                            
                            
                            
                            133,921Accrued
      royalties payable - current
                            
                            
                            50,000
                            
                            
                            
                            -Licensing
      fees payable - current
                            
                            
                            82,500
                            
                            
                            
                            230,000Notes
      payable
                            
                            
                            25,000
                            
                            
                            
                            25,000Convertible
      debt
                            
                            
                            94,688
                            
                            
                            
                            50,000Due
      to officers
                            
                            
                            74,403
                            
                            
                            
                            98,053Due
      to stockholders
                            
                            
                            90,119
                            
                            
                            
                            105,169Total
      current liabilities
                            
                            
                            722,760
                            
                            
                            
                            764,784Accrued
      royalties payable - net of current portion
                            
                            
                            700,442
                            
                            
                            
                            496,373Licensing
      fees - net of current portion
                            
                            
                            255,463
                            
                            
                            
                            -STOCKHOLDERS'
      EQUITY (DEFICIENCY)Common
      stock, par value $.0001 per share; 100,000,000 authorized
                            
                            
                            5,354
                            
                            
                            
                            3,147Common
      stock to-be-issued
                            
                            
                            10,000
                            
                            
                            
                            355,000Additional
      paid-in-capital
                            
                            
                            3,639,206
                            
                            
                            
                            2,998,146Deficit
      accumulated during the development stage
                            
                            
                            (4,244,263
                            )
                            
                            
                            (3,466,962
                            )Total
      stockholders' deficiency
                            
                            
                            (589,703
                            )
                            
                            
                            (110,669
                            )Total
      liabilities and stockholders' equity (deficiency)
                            
                            $
                            1,088,962
                            
                            
                            $
                            1,150,488
 
 The
accompanying notes are an integral part of these financial
statements.
  3
  
 WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 
 STATEMENTS
OF OPERATIONS
 FOR THE THREE MONTHS AND SIX MONTHS
ENDED DECEMBER 31, 2008 AND DECEMBER 31, 2007 AND FOR THE PERIOD FROM JULY 22,
2005 (INCEPTION) THROUGH DECEMBER 31, 2008
 (Unaudited)
   July
      22, 2005Three
      months
                          
                          
                          Three
      months
                          
                          
                          Six
      months
                          
                          
                          Six
      months
                          
                          
                          (inception)ended
                          
                          
                          ended
                          
                          
                          ended
                          
                          
                          ended
                          
                          
                          throughDecember
      31,
                          
                          
                          December
      31,
                          
                          
                          December
      31,
                          
                          
                          December
      31,
                          
                          
                          December
      31,2008
                          
                          
                          2007
                          
                          
                          2008
                          
                          
                          2007
                          
                          
                          2008REVENUES
                          
                          $
                          35,120
                          
                          
                          $
                          4,168
                          
                          
                          $
                          83,132
                          
                          
                          $
                          21,347
                          
                          
                          $
                          155,062COST
      OF GOODS SOLD
                          
                          
                          20,077
                          
                          
                          
                          4,825
                          
                          
                          
                          51,165
                          
                          
                          
                          19,481
                          
                          
                          
                          122,232Gross
      profit
                          
                          
                          15,043
                          
                          
                          
                          (657
                          )
                          
                          
                          31,967
                          
                          
                          
                          1,866
                          
                          
                          
                          32,830EXPENSESGeneral
      and administrative expenses
                          
                          
                          299,671
                          
                          
                          
                          200,661
                          
                          
                          
                          728,648
                          
                          
                          
                          428,347
                          
                          
                          
                          4,096,545LOSS
      FROM OPERATIONS
                          
                          
                          (284,628
                          )
                          
                          
                          (201,318
                          )
                          
                          
                          (696,681
                          )
                          
                          
                          (426,481
                          )
                          
                          
                          (4,063,715
                          )Interest
      expense
                          
                          
                          4,067
                          
                          
                          
                          3,445
                          
                          
                          
                          6,317
                          
                          
                          
                          6,445
                          
                          
                          
                          36,657Accretion
      of accrued royalties
                          
                          
                          9,023
                          
                          
                          
                          -
                          
                          
                          
                          37,532
                          
                          
                          
                          -
                          
                          
                          
                          69,041Amortization
      expense
                          
                          
                          21,029
                          
                          
                          
                          5,397
                          
                          
                          
                          36,771
                          
                          
                          
                          5,397
                          
                          
                          
                          74,850Loss
      before provision for income taxes
                          
                          
                          (318,747
                          )
                          
                          
                          (210,160
                          )
                          
                          
                          (777,301
                          )
                          
                          
                          (438,323
                          )
                          
                          
                          (4,244,263
                          )Provision
      for income taxes
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Net
      loss
                          
                          $
                          (318,747
                          )
                          
                          $
                          (210,160
                          )
                          
                          $
                          (777,301
                          )
                          
                          $
                          (438,323
                          )
                          
                          $
                          (4,244,263
                          )Net
      loss per share basic and diluted
                          
                          $
                          (0.01
                          )
                          
                          $
                          (0.01
                          )
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.18
                          )Weighted
      average per common share
                          
                          
                          43,849,283
                          
                          
                          
                          22,412,125
                          
                          
                          
                          40,126,518
                          
                          
                          
                          21,897,508
                          
                          
                          
                          24,221,880
 
 The
accompanying notes are an integral part of these financial
statements.
  4
  WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY(DEFICIENCY)
 FOR THE PERIOD FROM
JULY 22, 2005 (INCEPTION) THROUGH DECEMBER 31, 2008


Common
      stock to-be-issued
                        
                        
                        Common
      stock issued and outstanding
                        
                        
                        Additonal
      paid-in-capital
                        
                        
                        Deficit
      accumulated during the development stage
                        
                        
                        Total
      stockholders' equity (deficiency)Shares
                        
                        
                        Amount
                        
                        
                        Shares
                        
                        
                        AmountBalance
      July 22, 2005 (inception)
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -Common
      stock to be issued in connection with Incorporation (July 22,
      2005)
                        
                        
                        4,000,000
                        
                        
                        
                        10,000
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        10,000Common
      stock to be issued for consulting services
                        
                        
                        16,150,000
                        
                        
                        
                        40,375
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        40,375Common
      stock issued - private placement, net of issuance costs of
      $58,255
                        
                        
                        461,750
                        
                        
                        
                        126,445
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        126,445Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (64,361
                        )
                        
                        
                        (64,361
                        )Balance
      June 30, 2006
                        
                        
                        20,611,750
                        
                        
                        
                        176,820
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (64,361
                        )
                        
                        
                        112,459Issuance
      of shares
                        
                        
                        (20,611,750
                        )
                        
                        
                        (176,820
                        )
                        
                        
                        20,611,750
                        
                        
                        
                        2,061
                        
                        
                        
                        174,759
                        
                        
                        
                        -
                        
                        
                        
                        -Beneficial
      conversion of loan discount
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        18,750
                        
                        
                        
                        -
                        
                        
                        
                        18,750Common
      stock issued for consulting services
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        660,000
                        
                        
                        
                        66
                        
                        
                        
                        622,334
                        
                        
                        
                        -
                        
                        
                        
                        622,400Issuance
      of options for compensation
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        231,300
                        
                        
                        
                        -
                        
                        
                        
                        231,300Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (1,113,231
                        )
                        
                        
                        (1,113,231
                        )Balance
      June 30, 2007
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        21,271,750
                        
                        
                        
                        2,127
                        
                        
                        
                        1,047,143
                        
                        
                        
                        (1,177,592
                        )
                        
                        
                        (128,322
                        )Common
      stock to-be-issued
                        
                        
                        1,750,000
                        
                        
                        
                        355,000
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        355,000Issuance
      of shares
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        4,330,000
                        
                        
                        
                        433
                        
                        
                        
                        468,567
                        
                        
                        
                        -
                        
                        
                        
                        469,000Issuance
      of shares as repayment of amount due to stockholders
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        467,626
                        
                        
                        
                        47
                        
                        
                        
                        70,097
                        
                        
                        
                        -
                        
                        
                        
                        70,144Common
      stock issued for consulting services
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        5,277,500
                        
                        
                        
                        528
                        
                        
                        
                        829,101
                        
                        
                        
                        -
                        
                        
                        
                        829,629Issuance
      of options for compensation
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        582,937
                        
                        
                        
                        -
                        
                        
                        
                        582,937Exercise
      of options
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        125,000
                        
                        
                        
                        12
                        
                        
                        
                        301
                        
                        
                        
                        -
                        
                        
                        
                        313Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (2,289,370
                        )
                        
                        
                        (2,289,370
                        )Balance
      June 30, 2008
                        
                        
                        1,750,000
                        
                        
                        
                        355,000
                        
                        
                        
                        31,471,876
                        
                        
                        
                        3,147
                        
                        
                        
                        2,998,146
                        
                        
                        
                        (3,466,962
                        )
                        
                        
                        (110,669
                        )
 
  5
  
 WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY(DEFICIENCY)
 FOR THE PERIOD FROM
JULY 22, 2005 (INCEPTION) THROUGH DECEMBER 31, 2008
 (continued)
 
 Common
      stock to-be-issued
                            
                            
                            Common
      stock issued and outstanding
                            
                            
                            Additonal
      paid-in-capital
                            
                            
                            Deficit
      accumulated during the development stage
                            
                            
                            Total
      stockholders' equity (deficiency)Shares
                            
                            
                            Amount
                            
                            
                            Shares
                            
                            
                            AmountCancellation
      of common stock to-be-issued (unaudited)
                            
                            
                            (1,500,000
                            )
                            
                            
                            (330,000
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (330,000
                            )Issuance
      of shares (unaudited)
                            
                            
                            (250,000
                            )
                            
                            
                            (25,000
                            )
                            
                            
                            250,000
                            
                            
                            
                            25
                            
                            
                            
                            24,975
                            
                            
                            
                            -
                            
                            
                            
                            -Issuance
      of shares as repayment of amount due to
      officers             (unaudited)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,000,000
                            
                            
                            
                            100
                            
                            
                            
                            49,900
                            
                            
                            
                            -
                            
                            
                            
                            50,000Issuance
      of shares as repayment of amount due to stockholders
      (unaudited)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            666,111
                            
                            
                            
                            67
                            
                            
                            
                            41,483
                            
                            
                            
                            -
                            
                            
                            
                            41,550Beneficial
      conversion of debt discounts (unaudited)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            22,500
                            
                            
                            
                            -
                            
                            
                            
                            22,500Common
      stock issued for consulting services (unaudited)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            20,152,600
                            
                            
                            
                            2,015
                            
                            
                            
                            502,202
                            
                            
                            
                            -
                            
                            
                            
                            504,217Common
      stock to-be-issued (unaudited)
                            
                            
                            1,000,000
                            
                            
                            
                            10,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            10,000Net
      loss (unaudited)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (777,301
                            )
                            
                            
                            (777,301
                            )Balance
      December 31, 2008 (unaudited)
                            
                            
                            1,000,000
                            
                            
                            $
                            10,000
                            
                            
                            
                            53,540,587
                            
                            
                            $
                            5,354
                            
                            
                            $
                            3,639,206
                            
                            
                            $
                            (4,244,263
                            )
                            
                            $
                            (589,703
                            )
 The accompanying
notes are an integral part of these financial
statements.
  6
  WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CASH FLOWS
 FOR
THE SIX MONTHS ENDED DECMBER 31, 2008 AND DECEMBER 31, 2007 AND FOR THE PERIODS
FROM JULY 22, 2005 (INCEPTION) THROUGH DECEMBE R
31, 2008
 (UNAUDITED)
   July
      22, 2005Six
      months
                                
                                
                                Six
      months
                                
                                
                                (inception)ended
                                
                                
                                ended
                                
                                
                                throughDecember
      31,
                                
                                
                                December
      31,
                                
                                
                                December
      31,2008
                                
                                
                                2007
                                
                                
                                2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                                
                                $
                                (777,301
                                )
                                
                                $
                                (438,323
                                )
                                
                                $
                                (4,244,263
                                )Adjustments
      to reconcile net loss to net cash used in operatingactivities:Accretion
      of accrued royalties and licensing fees
                                
                                
                                37,532
                                
                                
                                
                                -
                                
                                
                                
                                69,041Amortization
      of  intangible asset - license
                                
                                
                                29,583
                                
                                
                                
                                5,397
                                
                                
                                
                                67,662Common
      stock issued for consulting services
                                
                                
                                504,217
                                
                                
                                
                                164,187
                                
                                
                                
                                1,996,621Issuance
      of stock options - employee
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                814,237Amortization
      of beneficial conversion discount
                                
                                
                                7,188
                                
                                
                                
                                -
                                
                                
                                
                                25,938Changes
      in operating assets and liabilities(Increase)/Decrease
      in:Accounts
      receivable
                                
                                
                                (1,800
                                )
                                
                                
                                6,904
                                
                                
                                
                                (1,800
                                )Other
      receivables
                                
                                
                                -
                                
                                
                                
                                7,000
                                
                                
                                
                                -Other
      current assets
                                
                                
                                (6,000
                                )
                                
                                
                                (30
                                )
                                
                                
                                (6,000
                                )Inventories
                                
                                
                                34,322
                                
                                
                                
                                (47,154
                                )
                                
                                
                                (53,635
                                )Increase/(Decrease)
      in:Accounts
      payable and accrued expenses
                                
                                
                                56,488
                                
                                
                                
                                13,411
                                
                                
                                
                                306,050Net
      cash used in operating activities
                                
                                
                                (115,771
                                )
                                
                                
                                (288,608
                                )
                                
                                
                                (1,026,149
                                )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of license
                                
                                
                                (12,500
                                )
                                
                                
                                (50,000
                                )
                                
                                
                                (75,500
                                )Trademark
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (325
                                )Net
      cash used in investing activities
                                
                                
                                (12,500
                                )
                                
                                
                                (50,000
                                )
                                
                                
                                (75,825
                                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Net
      proceeds from private placement
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                126,445Proceeds
      from sale of founders shares
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                10,000Net
      proceeds from sale of stock and exercise of stock options
                                
                                
                                10,000
                                
                                
                                
                                202,313
                                
                                
                                
                                504,313Proceeds
      from notes payable
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                50,000Repayment
      of notes payable
                                
                                
                                -
                                
                                
                                
                                (20,000
                                )
                                
                                
                                (25,000
                                )Advances
      from officers
                                
                                
                                26,350
                                
                                
                                
                                65,898
                                
                                
                                
                                124,403Advances
      from stockholders
                                
                                
                                26,500
                                
                                
                                
                                109,033
                                
                                
                                
                                201,813Proceeds
      from convertible debt
                                
                                
                                60,000
                                
                                
                                
                                -
                                
                                
                                
                                110,000Net
      cash provided by financing activities
                                
                                
                                122,850
                                
                                
                                
                                357,244
                                
                                
                                
                                1,101,974NET
      INCREASE/(DECREASE) IN CASH
                                
                                
                                (5,421
                                )
                                
                                
                                18,636
                                
                                
                                
                                -CASH,
      beginning of period
                                
                                
                                5,421
                                
                                
                                
                                10,918
                                
                                
                                
                                -CASH,
      end of period
                                
                                $
                                -
                                
                                
                                $
                                29,554
                                
                                
                                $
                                -
  Supplemental
      disclosures of cash flow
information:
  1The Company issued
1,666,111 shares of common stock valued at $91,550 as repayment of amounts due
to stockholders and officers as described in Notes 6 .
   The
accompanying notes are an integral part of these financial
statements.
   7
 
 WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
1 - 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 (the
“SEC”) for interim financial reporting. Certain information and footnote
disclosures normally included in the Company’s annual financial statements have
been condensed or omitted. In the Company’s opinion, the unaudited interim
financial statements and accompanying notes reflect all adjustments, consisting
of normal and recurring adjustments, that are necessary for a fair presentation
of its financial position and operating results for the interim periods ended
December 31, 2008 and 2007 and cumulative period from inception (July 22, 2005)
to December 31, 2008.
 
 The
results of operations for the interim periods are not necessarily indicative of
the results to be expected for the entire fiscal year. This Form 10-Q should be
read in conjunction with the audited financial statements and notes there to
included in the Company’s Form 10-K as of June 30, 2008 and for the period
commencing from inception (July 22, 2005) through June 30, 2008.
 
 NOTE
2 - GOING CONCERN/MANAGEMENT’S PLAN
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the realization of assets
and the settlement of liabilities and commitments in the normal course of
business. The Company has incurred a net loss since its inception totaling
$4,244,263 has earned minimal revenues and has a working capital deficit as of
December 31, 2008. These matters raise substantial doubt about the Company’s
ability to continue as a going concern. These financial statements do not
include adjustments that might result from the outcome of this uncertainty. In
order to generate revenues and the working capital needed to continue and expand
operations, the Company’s management has committed to a plan for increasing
retail distribution channels for its products and raising additional capital.
There can be no assurances, however, that the Company will be able to obtain the
necessary funding to finance their operations or grow revenue in sufficient
amounts to fund their operations.
 
 NOTE
3 - SIGNIFICANT ACCOUNTING POLICIES
 
 NATURE
OF OPERATIONS
 
 WaterPure
International, Inc. (a development stage company) (the “Company”) was
incorporated in the state of Florida on July 22, 2005, for the purpose of
marketing selected private label products and services to the small office
and/or home office as well as the consumer markets. The Company intends to
market and eventually to manufacture licensed Atmospheric Water Generators from
Everest Water Ltd., devices which harvest pure drinking water from ambient air.
These machines are engineered to produce drinking water virtually free of any
material, bacterial, organic or other contaminants. The Company also intends to
market Mineral Additives that will permit addition of organic minerals, flavors
and other desired additives to water produced by the machine. The products will
bear the Company’s own exclusive WaterPure branding.
  DEVELOPMENT
STAGE COMPANY
 
 The
Company is considered a development stage company as defined by Statement of
Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by
Development Stage Enterprises,” as it has no principal operations and
minimal revenue. Operations from the Company’s inception through December 31,
2008 were devoted primarily to strategic planning, raising capital and
developing revenue-generating opportunities.
 
 USE
OF ESTIMATES
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those
estimates.
  8
 
 WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
3 - SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 CASH
AND CASH EQUIVALENTS
 
 The
Company considers financial instruments with a maturity date of three months or
less from the date of purchase to be cash equivalents. The Company had no cash
equivalents at December 31, 2008 and June 30, 2008.
  ACCOUNTS
RECIEVABLE
  The
Company makes judgments about the collectibility of accounts receivable to be
able to present them at their net realizable value on the balance sheet. 
Such judgments require careful analysis of the aging of customer accounts,
consideration of why accounts have not been paid, and review of historical bad
debt issues.  From this analysis, the Company determines an estimated
allowance for receivables that will ultimately become uncollectible.  As of
December 31, 2008, the Company had an allowance for bad debts of
$16,297.
 
 INVENTORIES
 
 The
Company states inventories at the lower of cost or market.  As of December
31, 2008, inventories consisted of purchased finished goods, plus directly
attributable acquisition costs.  Cost of inventory is determined using the
weighted-average cost method.  The Company assesses the need to establish
inventory reserves for excess, obsolete or slow-moving inventory based on
changes in customer demand, technology developments and other
factors.
 
 LONG-LIVED
ASSETS AND OTHER INTANGIBLE ASSETS
  The
Company accounts for its long-lived assets in accordance with Statement of
Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible
Assets”, which requires that intangible assets with finite lives be
amortized over their respective estimated lives and No. 144, “Accounting for the Impairment of
Long-lived Assets and for Long-lived Assets to be Disposed of,” which
requires that long-lived assets and certain intangible assets be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.  If undiscounted expected future
cash flows are less than the carrying value of the long-lived assets, an
impairment loss is to be recognized based on the fair value of the
assets.
  CONVERTIBLE
DEBT
 
 The
Company accounts for its convertible debt in accordance with the provisions of
Emerging Issues Task Force Issue (“EITF”) 98-5 “Accounting for Convertible
Securities with Beneficial Conversion Features”(“EITF 98-5”) and EITF
00-27 “Application of EITF
98-5 to Certain Convertible Instruments”(“EITF 00-27”) which require the
embedded beneficial conversion features present in convertible securities be
valued separately at issuance and recognized and measured by allocating a
portion of the proceeds equal to the intrinsic value of that feature to
additional paid-in capital.
 
 REVENUE
RECOGNITION
  The
Company recognizes revenue in accordance with Securities and Exchange Commission
(“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” which
outlines the four basic criteria that must be met before revenue can be
recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has
occurred or services have been rendered; (3) the fee is fixed or determinable;
and (4) collectibility is reasonably assured.  Determination of criteria
(3) and (4) are based on management’s judgments regarding the fixed nature of
the fee charged for services rendered and products delivered and the
collectibility of those fees.
  INCOME
TAXES
 
 The
Company recognizes 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 liabilities and assets are determined based on the
differences between the financial statement and tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Differences between the financial statement
and
  9
 
 WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
3 - SIGNIFICANT ACCOUNTING POLICIES (continued)
  CONCENTRATIONS
OF CREDIT RISK
 
 The
Company’s financial instruments that are exposed to a concentration of credit
risk are cash and accounts receivable. The Company places its cash with a high
credit quality institution. At December 31, 2008, the Company’s cash balance on
deposit did not exceed federal depository insurance limits. The Company
routinely assesses the financial strengths of its customers and, as a result,
believes that its accounts receivable, net of reserves, credit risk exposure is
limited.
 
 FAIR
VALUE OF FINANCIAL INSTRUMENTS
 
 FAS No.
107, Fair Value of Financial
Instruments, requires disclosure of the fair value of financial
instruments for which determination of fair value is practicable. SFAS No. 107
defines the fair value of a financial instrument as the amount at which the
instruments could be exchanged in a current transaction between willing parties.
The carrying amount of cash, accounts receivable, accounts payable and accrued
expenses, due to officers and due to stockholders approximates fair value
because of the immediate or short-term maturity of these financial instruments.
The fair value of the notes payable was estimated by discounting the future cash
flows using current rates offered by lenders for similar borrowings with similar
credit ratings. The fair value of the notes payable approximate their carrying
value. The fair value of the convertible notes is not determinable because of
the lack of any quoted market price or trading activity in the instruments (see
Notes 5 and 7 for a description of these instruments). The carrying value of the
accrued royalties payable approximate fair value and was estimated by
discounting future cash flows using a 12% discount rate. The Company’s financial
instruments are held for other than trading purposes.
 
 NET
LOSS PER COMMON SHARE
 
 The
Company presents basic earnings (loss) per share and, if applicable, diluted
earnings per share pursuant to the provisions of SFAS No. 128, Earnings per Share. Basic
earnings (loss) per share are calculated by dividing net income or loss by the
weighted average number of common shares outstanding during each
period.
 
 STOCK
BASED COMPENSATION AND PAYMENTS
 
 The
Company accounts for equity instruments exchanged for services in accordance
with FAS No. 123(R),“Share-Based Payments.” And EITF 96-18, “Accounting for Equity
Investments that are Issued to Other than Employees for Acquiring, or in
Conjunction with selling, Goals or Services.”  Under the provisions of
FAS No. 123(R), share-based compensation issued to employees is measured at the
grant date, based on the fair value of the award, and is recognized as an
expense over the requisite service period (generally the vesting period of the
grant). Share-based compensation issued to non-employees is measured at grant
date, based on the fair value of the consideration received or the fair value of
the equity instruments issued, whichever is more readily measurable, and is
recognized as an expense over the requisite service period.
 
 RECENT
ACCOUNTING PRONOUNCEMENTS
 
 There are
no accounting pronouncements not yet adopted that are expected to have a
significant impact on the Company.
  10
 
 WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
4 – INTANGIBLE ASSETS - LICENSE
 
 On
December 7, 2007, the Company entered into licensing agreements with Everest
Water LTD for the manufacturing and marketing rights to atmospheric water
generators and mineral additive units. The Company agreed to pay $300,000, plus
1,500,000 shares of the Company’s common stock valued at $330,000 as
consideration under this agreement. The Company paid $50,000 with the execution
of the agreement and an additional $20,000 through July 31, 2008. On August 1,
2008, the Company and Everest Water LTD modified the payment terms of their
licensing agreement. Under the amended payment terms, the Company cancelled the
shares to be issued to Everest and agreed to pay Everest $430,000 over 33 months
starting September 1, 2008, plus 8% royalty payments with guarantee minimum
payments as follows: $50,000 in year one, $60,000 in year two, $70,000 in year
three, $90,000 in year four and $100,000 each year after until the termination
of the licensing agreement which coincides with the expiration of the last
patent in August 2027.
 
 The
following table summarizes the various components of the Everest license as of
December 31, 2008:
  December
      31, 2008
                                
                                
                                June
      30, 2008Amended
      value of license described above
                                
                                $
                                1,094,864
                                
                                
                                $
                                1,094,864Less:
      accumulated amortization
                                
                                
                                67,662
                                
                                
                                
                                38,079License,
      net
                                
                                $
                                1,027,202
                                
                                
                                $
                                1,056,785
 Total
amortization for the six months ended December 31, 2008 and 2007 was
$29,583 and 5,397, respectively.
 
 Contingencies
- Royalties
 
 Pursuant
to the licensing agreement as described above, the Company will pay Everest
Water LTD an 8% royalty payment with a guaranteed minimum payment. The Company
has recognized a liability of $750,442, which represents the present value of
the minimum royalty payments the effective discount rate.
 
 NOTE
5 – NOTES PAYABLE
 
 The
Company entered into a Securities Purchase Agreement with accredited investors
on May 21, 2007 for the issuance of two $25,000 notes for a total of $50,000.
The notes payable accrue interest at 12% per annum and were due six-months from
the date of issuance.  On November 15,2007,
the terms of these notes were extended for an additional six
months.
 
 During
the year ended June 30, 2008, the Company repaid one of the $25,000 notes. The
other note is currently in default and is included in current liabilities on the
balance sheets.
 
 NOTE
6 – ADVANCES FROM OFFICERS AND SHAREHOLDERS
 
 Officers
and stockholders of the Company have provided various short-term working capital
advances. During the six months ended December 31, 2008, short-term working
capital advances from officers and stockholders under this borrowing arrangement
totaled $26,350 and $26,500 respectively. During the six months ended December
31, 2007, short-term working capital advances from officers and stockholders
under this borrowing arrangement totaled $65,898 and $109,033 respectively. The
Company issued 666,111 shares of common stock as repayment for $41,550 of the
amount due to stockholders and issued 1,000,000 shares of common stock as
repayment for $50,000 of the amount due to officers during the six months ended
December 31, 2008. The Company does not intend to pay interest on the principal
borrowed from officers and stockholders as the advances are intended to be
short-term.
  11
  WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
7 – CONVERTIBLE DEBT
 
 The Company entered into a Securities
Purchase Agreement with accredited investors on May 21, 2007 for the issuance of
an aggregate of $50,000 of convertible notes. The convertible notes accrue
interest at 12% per annum and are due two years from the date of the
note.  The note holder has the option to convert any unpaid note
principal to the Company’s common stock at a rate of $0.25 per share. In
accordance with EITF 98-5, during the year ended June 30, 2007, the Company
recorded a debt discount of $18,750 on the debt, representing the intrinsic
value of the beneficial conversion features based upon the difference between
the fair value of the underlying common stock at the commitment date and the
effective conversion price embedded in the debt. The Company determined the
commitment date of the loans to be the date of the
agreement.
 
 The
Company entered into a Securities Purchase Agreement with accredited investors
on July 30, 2008 for the issuance of an aggregate of $50,000 of convertible
notes. The convertible notes accrue interest at 8% per annum and are due one
year from the date of the note.  The note holders have the option to
convert any unpaid note principal to the Company’s common stock at a 30%
discount to the average five day stock price prior to conversion. In accordance
with EITF 98-5, during the six months ended December 31, 2008, the Company
recorded a debt discount of $15,000 on the debt, representing the intrinsic
value of the beneficial conversion features based upon the difference between
the fair value of the underlying common stock at the commitment date and the
effective conversion price embedded in the debt. The Company determined the
commitment date of the loans to be the date of the agreement.
 
 The
Company entered into a Securities Purchase Agreement with accredited investors
on November 18, 2008 for the issuance of an aggregate of $10,000 of convertible
notes. The convertible notes accrue interest at 12% per annum and are due one
year from the date of the note.  The note holder has the option to
convert any unpaid note principal to the Company’s common stock at a rate of
$0.005 per share. In accordance with EITF 98-5, during the six months ended
December 31, 2008, the Company recorded a debt discount of $7,500 on the debt,
representing the intrinsic value of the beneficial conversion features based
upon the difference between the fair value of the underlying common stock at the
commitment date and the effective conversion price embedded in the debt. The
Company determined the commitment date of the loans to be the date of the
agreement.
 
 NOTE
8 - STOCKHOLDERS’ EQUITY
 
 During
the six-months ended December 31, 2008, the Company sold 1,000,000 shares of its
common stock for $.01 per share or $10,000. The fair value of the shares was
determined based on the closing market price of the shares at the date of the
agreements. These shares have not been issued as of December 31,
2008.
 
 During
the six-months ended December 31, 2008, the Company issued 20,152,600 shares of
its common stock for consulting services totaling $504,217.
 
 During
the six-months ended December 31, 2008, the Company issued 666,111 shares of
common stock as repayment of $41,550 of the amount due to stockholders and
issued 1,000,000 shares of common stock as repayment of $50,000 of the amount
due to officers.
  During
the six months ended December 31, 2008, the Company cancelled 1,500,000 shares
of common stock to be issued in accordance with an amendment to the repayment
terms of its licensing agreement in the amount of $330,000 (Note
4).
  During the six
month ended December 31, 2008, the Company issued 25,000 shares of common stock
previously classified as to be issued.
 NOTE
9 – STOCK OPTIONS
 
 At the
time of inception (July 22, 2005), the Company issued 125,000 options to one of
its consultants for services rendered. The exercise price was $.0025, the
options were immediately exercisable, and expired five years from the grant
date. These options were exercised on August 29, 2007.
 
 During
the year ended June 30, 2007, the Company issued 500,000 options to one of its
executive officers. The exercise price is $0.55, which was the price of the
Company’s common stock on the grant date.  The options are immediately
exercisable and expire five years from the grant date.  The fair value
of the options was estimated at the date of grant using the Black-Scholes option
price model.
  12
  WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
9 – STOCK OPTIONS (continued)
 
 During
the year ended June 30, 2008, the Company issued 100,000 options to one of its
executive officers. The exercise price is $0.07, which was the price of the
Company’s common stock on the grant date.  The options are immediately
exercisable and expire five years from the grant date.  The fair value
of the options was estimated at the date of grant using the Black-Scholes option
price model. The Company determined that the stock option compensation was
$6,845 and was recognized during the year ended June 30, 2008.
 
 During
the year ended June 30, 2008, the Company also issued 3,000,000 options to one
of its executive officers. The exercise price was $0.10, which is a discount to
the price of the Company’s common stock price of $.20 on the grant
date.  The options are immediately exercisable and expire five years
from the grant date.  The fair value of the options was estimated at
the date of grant using the Black-Scholes option price model. The Company
determined that the stock option compensation was $576,092 and was recognized
during the year ended June 30, 2008.
 
 To
determine the fair value of the options granted during the year ended June 30,
2008, the Company used the following assumptions in its Black-Scholes option
-price calculation:
  Issue
      date
                  June
      30, 2007
                  January
      1, 2008
                  June
      30, 2008Options
      issued
                  500,000
                  3,000,000
                  100,000Risk-free
      interest rate
                  5%
                  3%
                  3%Expected
      option life
                  5
      years
                  5
      years
                  5
      yearsDividend
      yield
                  0%
                  0%
                  0%Volatility
                  120%
                  157%
                  194%Exercise
      price
                  $0.55
                  $0.10
                  $0.07
  These
assumptions were determined as follows:
 
 ·
              The
      risk free interest rate for the period within the contractual life of the
      option is based on the 5-year U.S. Treasury yield at the time of the
      grant.
 
 ·
              The
      expected term of the options granted represents the period of time that
      the options granted are expected to be
  outstanding.
 
 ·
              Historically,
      the Company has not paid a dividend on its common shares and does not
      expect to do so in the future.
 
 ·
              The
      volatility assumption represents an expectation of the volatility of the
      price of the underlying shares for the expected term of the option,
      considering factors such as historical stock price and stock volatility of
      other companies within the
industry.
 
 
 
 
 
 13
 WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 
 
 NOTE
9 – STOCK OPTIONS (continued)
 
 The
following is a summary of the status of stock option activity for the period
from inception (July 22, 2005) through December 31, 2008:
 
 Options
                        
                        Weighted
      Average Exercise PriceOutstanding
      as of July 22, 2005 (inception)
                        -
                        
                        $
                        -Granted
                        125,000
                        
                        
                        0.0025Exercised
                        -
                        
                        
                        -Forfeited
                        -
                        
                        
                        -Expired
                        -
                        
                        
                        -Outstanding
      as of June 30, 2006
                        125,000
                        
                        $
                        0.0025Granted
                        500,000
                        
                        
                        0.5500Exercised
                        -
                        
                        
                        -Forfeited
                        -
                        
                        
                        -Expired
                        -
                        
                        
                        -Outstanding
      as of June 30, 2007
                        625,000
                        
                        $
                        0.4400Granted
                        3,100,000
                        
                        
                        0.0990Exercised
                        125,000
                        
                        
                        0.0025Forfeited
                        -
                        
                        
                        -Expired
                        -
                        
                        
                        -Outstanding
      as of June 30, 2008
                        3,600,000
                        
                        $
                        0.1610Granted
                        -
                        
                        
                        -Exercised
                        -
                        
                        
                        -Forfeited
                        -
                        
                        
                        -Expired
                        -
                        
                        
                        -Outstanding
      as of December 31, 2008
                        3,600,000
                        
                        $
                        0.1610
 
 No
options were exercised and no funds were received from the exercise of
options during the six-month period ended December 31, 2008.
 
 NOTE
10 - RELATED PARTY TRANSACTIONS
 
 LEASE
 
 The
Company subleases its office space from Stein, Feldman and Sampson, LLC, of
which, Mr. Orr, the Company’s Chief Financial Officer is affiliated, for $500
per month on a month-to-month basis.
  DUE
TO OFFICERS AND STOCKHOLDERS
 
 During
the six-months ended December 31, 2008, the Company received advances, made
repayments, and had amounts due to officers and stockholders as disclosed in
Note 6.
 
 14
 WATERPURE
INTERNATIONAL, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 
 
 NOTE
11 - INCOME TAXES
 
 The
Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes – an interpretation of FASB Statement No. 109” (“FIN No.
48”), on July 1, 2007. FIN No. 48 requires that the impact of tax positions be
recognized in the financial statements if they are more likely than not of being
sustained upon examination, based on the technical merits of the position. As
discussed in the June 30, 2008 financial statements in the Form 10-K, the
Company has a valuation allowance against the full amount of its net deferred
tax assets. The Company currently provides a valuation allowance against
deferred tax assets when it is more likely than not that some portion, or all of
its deferred tax assets, will not be realized. There was no impact to the
Company as a result of adopting FIN No. 48 as the Company’s management has
determined that the Company has no uncertain tax positions requiring recognition
under FIN No. 48 both on July 1, 2007 (adoption) and on December 31,
2008.
 
 The
Company is subject to U.S. federal income tax as well as income tax of certain
state jurisdictions.  The Company has not been audited by the I.R.S.
or any states in connection with income taxes. The periods from inception – 2007
remain open to examination by the I.R.S. and state authorities.
 
 The
Company recognizes interest accrued related to unrecognized tax benefits in
interest expense. Penalties, if incurred, are recognized as a component of tax
expense.
  NOTE
12 – SUBSEQUENT EVENTS
  Subsequent
to December 31, 2008, the Company at various times sold 2,999,999 shares of its
common stock for $22,500. The fair value of the shares was determined based on
the closing price of the shares at the date of the agreements.
  Subsequent
to December 31, 2008, the Company at various times issued 6,550,000 shares of
its common stock for consulting services totaling $65,500.
 
 
 
 15
 
 ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 This
Management's Discussion and Analysis of Financial Condition and Results of
Operations includes a number of forward-looking statements that reflect
Management's current views with respect to future events and financial
performance. You can identify these statements by forward-looking words such as
“may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or
similar words.  Those statements include statements regarding the
intent, belief or current expectations of us and members of our management team
as well as the assumptions on which such statements are based. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risk and uncertainties, and that
actual results may differ materially from those contemplated by such
forward-looking statements.
 
 Readers
are urged to carefully review and consider the various disclosures made by us in
this report and in our other reports filed with the Securities and Exchange
Commission.  Important  factors  currently  known  to
Management  could  cause  actual  results  to
differ  materially  from  those in
forward-looking  statements.  We undertake no obligation to
update or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes in the future operating results
over time. We believe that our assumptions are based upon reasonable data
derived from and known about our business and operations.  No
assurances are made that actual results of operations or the results of our
future activities will not differ materially from our
assumptions.  Factors that could cause differences include, but are
not limited to, expected market demand for our products, fluctuations in pricing
for materials, and competition.
 
 Overview
 
 WaterPure
International, Inc. was organized under the laws of the state of Florida on July
22, 2005 and conducts business as a marketer of the WaterPure Atmospheric Water
Generator (“AWG”), a branded product of ours. We are structured expressly as a
marketing entity and therefore, we do not engage in the design, development or
manufacturing of products, however, we do intend to manufacture our own licensed
products in the future. We intend to operate in North America, South America and
the Caribbean providing various versions of our devices, which produce drinking
water from ambient air.
 
 We are a
development stage company, currently selling our products through our
distribution and marketing programs, which consists of placing our product in
retail establishments and through distributors. In December 2007, we entered
into an agreement with Everest Water Ltd., which was amended on August 4, 2008,
for the manufacturing and marketing rights to advanced models of our product.
Our primary focus will be on strengthening the defined sales channels and
supporting them with meaningful marketing programs to the extent that funds are
available. We have sold our first units and have generated minimal revenues from
operations.
 
 We want
to be identified as an environmentally sustainable business. Clean drinking
water is becoming a scarce commodity as our population increases. Pollution from
sewage, industry, agriculture and acid rain has destroyed surface water
reservoirs and aquifers. Water generation treatment and filtration is poised to
be an important humanitarian industry as we learn more about global
warming.
 
 Our
product line consists of three AWGs suitable for home and small office use and
for higher volume office or commercial use. In December 2007, we entered into
two worldwide license agreements with Everest Water Ltd. for the manufacturing
and marketing rights to advanced models of AWGs. One license is a non-exclusive
license for a stand-alone water generator and the second license is an exclusive
license for a mineral additive water generator process that will permit the
addition of organic minerals, flavors and other additives to the water produced
by the machine.
 
 We
previously purchased our products from a manufacturer in South Korea under an
Original Equipment Manufacturer arrangement. However, as a result of a lack of
financing to purchase AWGs and uncertainty regarding the manufacturer’s ability
to deliver in accordance with orders, we have chosen not to continue our supply
relationship with the Korean manufacturer, but we may reestablish the
relationship at any time. Currently, we are selling the remaining inventory from
our original purchases from the Korean manufacturer and purchasing additional
AWGs from H2O Liquid Air-Florida and another supplier in North Carolina on an
as-needed basis.
 
 During
the three months ended December 31, 2008 we made several important additions to
our marketing and product development operations by way of relationships with
five key independent consultants:
 
 ·
              The
      founder of Eco Green Development, an environmentally based business
      support company, is leading our efforts by adding qualified local,
      regional and master distributors;
  16
  ·
              We
      hired a veteran marketing specialist, as our major accounts representative
      calling on Big Box retailers and other large volume
    prospects;
 
 ·
              A
      consulting chemical engineer is assisting us in our research and
      development efforts including strategic product development and innovative
      methods of improving performance of our Atmospheric Water
      Generators;
 
 ·
              We
      hired a Project Manager for the development of our new Water Cycle AWG. He
      gained his knowledge and experience with water purification and
      desalination processes and refrigeration systems during his tenure with
      the US Navy; and
 
 ·
              A
      senior partner of the Referral Institute and executive director of
      BNI-Business Network International in Fort Lauderdale has joined the
      Company as a marketing consultant.
 
 Results
of Operations
 
 For
the Period from July 22, 2005 (Inception) through December 31, 2008
 
 Since we were formed on July 22, 2005,
we have earned approximately $155,000 in revenues and have incurred a cumulative
net loss since our inception of approximately $4,250,000 through December 31,
2008. Operations from inception through December 31, 2008 were devoted primarily
to strategic planning, raising capital and developing revenue-generating
opportunities.
  Liquidity
and Capital Resources
 
 As of
December 31, 2008, we have a working capital deficit of $661,325, have earned
minimal revenues and have incurred a net loss from our inception through
December 31, 2008 totaling $4,244,263.
 
 We have
financed our losses through the sale of our common stock, issuance of common
stock for services in lieu of cash, and loans from officers and stockholders.
During the six months ended December 31, 2008, we received the following capital
infusions: $10,000 from the sale of 1,000,000 shares of our common stock and
loans from officers and stockholders totaling $26,350 and $26,500, respectively.
In addition, during the six months ended December 31, 2008, in lieu of cash
payments, we issued 20,152,600 shares of common stock valued at approximately
$504,217 for services rendered.  We issued 1,000,000 and 666,111
shares of our common stock to repay $50,000 and $41,550 in advances from
officers and stockholders, respectively. We do not intend to pay interest on the
advances borrowed from officers and stockholders as the advances are intended to
be short-term.
 
 On July
30, 2008, we entered into a Securities Purchase Agreement with accredited
investors for the issuance of an aggregate of $50,000 of convertible notes. The
convertible notes accrue interest at 8% per annum and are due one year from the
date of the convertible notes.  The note holders have the option to
convert any unpaid note principal in shares of our common stock at a 30%
discount to the average five day stock price prior to conversion.
 
 On
November 18, 2008, we entered into a Securities Purchase Agreement with
accredited investors for the issuance of an aggregate of $10,000 of convertible
notes. The convertible notes accrue interest at 12% per annum and are due one
year from the date of the convertible notes.  The note holders have
the option to convert any unpaid note principal in shares of our common stock at
a price of $.005 per share.
 
 We do not
have enough capital to support operations for the next twelve months. We
anticipate we will need approximately $2 million, consisting of approximately
$900,000 for manufacturing, $200,000 for sales and marketing and $800,000 for
general and administrative expenses and working capital. An additional $100,000
would be utilized for the production and execution of our marketing support
program. We currently do not have any commitments for additional capital, and
have no assurances that capital will be available on terms acceptable to us, or
at all.
 
 Our
independent registered public accounting firm have included a going concern
paragraph in their opinion on our consolidated financial statements for the
fiscal year ended June 30, 2008 that states there is substantial doubt about our
ability to continue as a going concern. Our ability to continue as a going
concern is dependent on our ability to access capital through debt and equity
funding as well as market and sell our various products.
  17
  Critical
Accounting Policies
 
 Our
financial statements are prepared based on the application of accounting
principles generally accepted in the United States of America. These accounting
principles require us to exercise significant judgment about future events that
affect the amounts reported throughout our financial statements. Actual
events could unfold quite differently than our previous judgments had
predicted. Therefore, the estimates and assumptions inherent in the
financial statements included in this report could be materially different once
those actual events are known. We believe the following policies may
involve a higher degree of judgment and complexity in their application and
represent critical accounting policies used in the preparation of our financial
statements. If different assumptions or estimates were used, our financial
statements could be materially different from those included in this
report.
 
 Revenue
Recognition
 
 We
recognize revenues in accordance with Staff Accounting Bulletin 104, Revenue Recognition in
Financial Statements (SAB 104). We sell atmospheric water generators.
Revenue from such product sales is recognized when persuasive evidence of an
arrangement exists, delivery has occurred, the fee is fixed or determinable and
collectibility is probable.  At this time the earnings process is
complete and the risks and rewards of ownership have transferred to the
customer, which is generally when the goods are shipped and all our significant
obligations have been satisfied.
 
 Accounts
Receivable
 
 We must
make judgments about the collectibility of our accounts receivable to be able to
present them at their net realizable value on the balance sheet.  To
do this, we carefully analyze the aging of our customer accounts, try to
understand why accounts have not been paid, and review historical bad debt
problems.  From this analysis, we record an estimated allowance for
receivables that we believe will ultimately become uncollectible.  As
of December 31, 2008, we had an allowance for bad debts of $16,297. We
actively manage our accounts receivable to minimize our credit risks and believe
that our current allowance for doubtful accounts is fairly stated.
 
 Reliability
of Inventory Values
 
 We make
judgments about the ultimate realizability of our inventory in order to record
our inventory at its lower of cost or market.  These judgments involve
reviewing current demand for our products in comparison to present inventory
levels and reviewing inventory costs compared to current market
values.
 
 Recent
Accounting Pronouncements
 
 There are
no accounting pronouncements not yet adopted that are expected to have a
significant impact on us.
  18
  ITEM
3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 Not required under Regulation S-K for
“smaller reporting companies.”
 
 ITEM
4T - CONTROLS AND PROCEDURES
 
 a)
Evaluation of disclosure controls and procedures.
  The
Company, under the supervision and with the participation of its management,
including the principal executive officer and recently appointed principal
financial officer, has evaluated the effectiveness of the design and operation
of its disclosure controls and procedures as defined in Rule 13a-15(e) of the
Securities Exchange Act of 1934, as amended (the “Act”) as of the end of the
period covered by this report (the “Disclosure Controls”). Based upon the
Disclosure Controls evaluation, the principal executive officer and principal
financial officer have concluded that the Company’s disclosure controls and
procedures were not effective in connection with preparing this Quarterly Report
on Form 10-Q due to a material weakness in the Company’s internal control over
financial reporting, mainly its financial closing, review and analysis process.
The Company determined on February 13, 2009 that a restatement of its financial
statements for the quarter ended September 30, 2008 was necessary due to certain
clerical errors. The restatement was required to properly reflect the Company’s
financial results for certain accounting related to accrued royalties and
licensing fees. The amended quarterly report on Form 10-Q/A was filed with the
Securities and Exchange Commission on February 20, 2009.
  The
Company believes that the issues surrounding the restatement of this report,
mainly the internal controls related to the financial closing, review, and
analysis process has been addressed and the Company has taken additional steps
to avoid the reoccurrence of this condition by instituting a policy requiring
the Chief Financial Officer, at the end of each quarter, to review the Company’s
current licensing agreements to ensure that all royalty and licensing fees have
been properly recorded and that appropriate adjustments to previously accrued
royalties and licensing fees are recorded, if necessary. The Company believes
that these additional efforts taken by management since the end of the quarter
ended September 30, 2008 to strengthen the Company’s internal controls will be
effective in future periods.
  A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.
  The
Company’s internal control over financial reporting has been modified subsequent
to the Company’s most recent fiscal quarter as disclosed above to address
deficiencies in the financial closing, review and analysis process, which has
materially improved the Company’s internal control over financial
reporting.
  (b)
Changes in internal control over financial reporting.
  We
regularly review our system of internal control over financial reporting and
make changes to our processes and systems to improve controls and increase
efficiency, while ensuring that we maintain an effective internal control
environment. Changes may include such activities as implementing new, more
efficient systems, consolidating activities, and migrating
processes.
  We
made the changes as specified above in our internal control over financial
reporting that occurred subsequent to the period covered by this Quarterly
Report on Form 10-Q that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
 19
 
 PART
II - OTHER INFORMATION
  Item
1. Legal Proceedings
  We are
currently not a party to any material legal proceedings or claims.
 
 Item
1A. Risk Factors
 
 Not
required under Regulation S-K for “smaller reporting companies.”
 
 Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
  During
the six months ended December 31, 2008, we sold 1,000,000 shares of our common
stock to accredited investors for aggregate proceeds of $10,000.
 
 During
the six months ended December 31, 2008, in lieu of cash payments, we issued
20,152,600 shares of common stock valued at approximately $504,217 for services
rendered.
 
 During
the six months ended December 31, 2008, we issued 1,000,000 and 666,111 shares
of our common stock to repay $50,000 and $41,550 in advances from officers and
stockholders, respectively.
 
 On
November 18, 2008, we entered into a Securities Purchase Agreement with
accredited investors for the issuance of an aggregate of $10,000 of convertible
notes. The convertible notes accrue interest at 12% per annum and are due one
year from the date of the convertible notes.  The note holders have
the option to convert any unpaid note principal in shares of our common stock at
a price of $.005 per share.
  Item
3. Defaults Upon Senior Securities
  We are
currently in default on a $25,000 note, which was due May 15, 2008.
 
 Item
4. Submission of Matters to a Vote of Security Holders
  On
December 17, 2008 the Company’s shareholders elected as the Company’s directors
for a one-year term Paul S. Lipschutz and Robert F. Orr.
 
 On
December 17, 2008 the Company’s shareholders voted in favor to amend and restate
Article 4 of the Certificate of Incorporation, which allows the Company to
issue two classes of stock ; 250,000,000 shares of Common Stock, par
value $0.0001 and 1,000,000 shares of Preferred Stock, par value
$0.001.
 
 Item
5. Other Information.
  None.
 
 Item
6. Exhibits
 
 31.1
                Certification
      of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), as
      adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002
 
 31.2
                Certification
      of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), as
      adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002
 
 32.1
                Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002
 
 32.2
                Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002
  20
  
  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.
   WATERPURE
      INTERNATIONAL, INC.Date:  February
      23, 2009
                By:
                /s/ PAUL
      S. LIPSCHUTZPaul
      S. LipschutzPresident
      (Principal Executive Officer)
 Date:  February
      23, 2009
                  By:
                  /s/ ROBERT
      F. ORRRobert
      F. OrrChief
      Financial Officer (Principal Financial Officer and Principal Accounting
      Officer)
 
 
 
 
 
 
 
 
  
  21