S-1 1 eawd_s1.htm REGISTRATION STATEMENT
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As filed with the Securities and Exchange Commission on January 23, 2023

 

Registration No. 333-

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

        

ENERGY AND WATER DEVELOPMENT CORP.

(Exact name of registrant as specified in its charter)

 

Florida   3585   30-0781375
(State or other jurisdiction of incorporation or organization)   (Primary Standard Industrial Classification Code Number)   (I.R.S. Employer Identification No.)

 

 

7901 4th Street N STE #4174, St Petersburg, Florida   33702
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code 727-677-9408

 

Florida Registered Agent LLC

7901 4th St N STE 300

St. Petersburg, FL 33702

T: 850-807-4500

agent@floridaregisteredagent.net

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies of all communications, including communications sent to agent for service, should be sent to: 

 

Amy K. Maliza, Esq.
di Santo Law, PLLC

429 Lenox Avenue, 4th Floor

Miami Beach, FL 33139

(305) 587-2699

amaliza@disantolaw.com

 

Approximate date of commencement of proposed sale to the public:

 

From time to time after this registration statement is declared effective.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer: ¨ Accelerated filer: ¨ Non-accelerated filer: Smaller reporting company: 
      Emerging growth company: 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a), may determine.

 

 

 
 

  

 

 

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS

 

SUBJECT TO COMPLETION ON JANUARY 23, 2022

 

ENERGY AND WATER DEVELOPMENT CORP.

 

145,533,359 SHARES OF COMMON STOCK

 

This prospectus relates to the offer and resale of up to an aggregate of 145,533,359 shares of common stock, par value $0.001 per share (the “Common Stock”), of Energy and Water Development Corp. (“EAWD,” the “Company,” “we,” “us” or “our”) held by selling stockholders. The holders of the Common Stock are each referred to herein as a “Selling Stockholder” and collectively as the “Selling Stockholders.”

 

This prospectus also covers any additional shares of common stock that may become issuable to the Selling Stockholders by reason of stock splits, stock dividends, and other events.

 

The Selling Stockholders, or their respective transferees, pledgees, donees or other successors-in-interest, may sell the Common Stock through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. The Selling Stockholders may sell any, all or none of the securities offered by this prospectus, and we do not know when or in what amount the Selling Stockholders may sell their Common Stock hereunder following the effective date of this registration statement. We provide more information about how a Selling Stockholder may sell its Common Stock in the section titled “Plan of Distribution” on page 32 of this prospectus.

 

We are registering the Common Stock on behalf of the Selling Stockholders, to be offered and sold by them from time to time. We will not receive any proceeds from the sale of our common stock by the Selling Stockholders in the offering described in this prospectus.

 

We are an “emerging growth company” and a “smaller reporting company” as such terms are defined under federal securities laws, and, as such have elected to take advantage of certain reduced public company reporting requirements for this prospectus and may elect to do so in future filings.

 

This prospectus describes the general manner in which the Common Stock may be offered and sold. Please see “Plan of Distribution” on page 32 of this prospectus for more information. For more information regarding the Selling Stockholders, see “Selling Stockholders” on page 23 of this prospectus.

 

If necessary, the specific manner in which the Common Stock may be offered and sold will be described in a supplement to this prospectus.

 

Our common stock is listed for trading on the OTCQB. At the close of business on January 20, 2023, the closing price of our common stock was $0.077. The trading price of our common stock has been and may continue to be, subject to wide price fluctuations in response to various factors, many of which are beyond our control, including those described under the heading “Risk Factors” beginning on page 11 of this prospectus.

 

An investment in our common stock is speculative and involves a high degree of risk. Investors should carefully consider the risk factors and other uncertainties described in this prospectus before purchasing our common stock. See “Risk Factors” beginning on page 11.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL, ACCURATE, OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 

 

The date of this prospectus is January [  ], 2023.

 

 

 
 

 

TABLE OF CONTENTS

 

  Page
ABOUT THIS PROSPECTUS ii
INDUSTRY AND MARKET DATA ii
TRADEMARKS ii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION iii
PROSPECTUS SUMMARY 1
SUMMARY OF THE OFFERING 10
RISK FACTORS 11
CAPITALIZATION 22
USE OF PROCEEDS 22
SELLING STOCKHOLDERS 23
PLAN OF DISTRIBUTION 32
MARKET PRICE FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS 34
DIVIDEND POLICY 35
DESCRIPTION OF THE BUSINESS 36
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 43
MANAGEMENT AND BOARD OF DIRECTORS 51
EXECUTIVE AND DIRECTOR COMPENSATION 54
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 56
DESCRIPTION OF CAPITAL STOCK 59
INTERESTS OF NAMED EXPERTS AND COUNSEL 64
EXPERTS 64
LEGAL MATTERS 64
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES 64
WHERE YOU CAN FIND ADDITIONAL INFORMATION 64
INDEX TO FINANCIAL STATEMENTS F-1

 

 

 

 

i 
 

 

ABOUT THIS PROSPECTUS

 

This prospectus constitutes a part of a registration statement on Form S-1 (together with all amendments and exhibits thereto, the “Registration Statement”) filed by us with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”). As permitted by the rules and regulations of the SEC, this prospectus omits certain information contained in the Registration Statement, and reference is made to the Registration Statement and related exhibits for further information with respect to EAWD and the securities offered hereby. With regard to any statements contained herein concerning the provisions of any document filed as an exhibit to the Registration Statement or otherwise filed with the SEC, in each instance reference is made to the copy of such document so filed. Each such statement is qualified in its entirety by such reference.

Neither we nor the Selling Stockholders have authorized anyone to provide you with information or make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor the Selling Stockholders take any responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: neither we nor the Selling Stockholders have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside the United States.

 

 

INDUSTRY AND MARKET DATA

 

We are responsible for the disclosure in this prospectus. However, this prospectus includes industry data that we obtained from internal surveys, market research, and publicly available information and industry publications. The market research, publicly available information and industry publications that we use generally state that the information contained therein has been obtained from sources believed to be reliable. The information therein represents the most recently available data from the relevant sources and publications, and we believe remains reliable. We did not fund and are not otherwise affiliated with any of the sources cited in this prospectus. Forward-looking information obtained from these sources is subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this prospectus.

 

 

TRADEMARKS

 

We own or have rights to use various trademarks, service marks, and trade names that we use in connection with the operation of our business. We use our “EAWD” trademark and related design marks in this prospectus. This prospectus may also contain trademarks, service marks, and tradenames of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names, or products in this prospectus is not intended to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks, and trade names referred to in this prospectus may appear without the ®, TM, or SM symbols, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable owner of these trademarks, service marks and trade names.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

 

Certain statements contained in this prospectus may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended.  Such forward-looking statements include, but are not limited to, statements regarding our Company and management’s expectations, hopes, beliefs, intentions, or strategies regarding the future, including our financial condition and results of operations. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

 

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Other important factors that we think could cause our actual results to differ materially from expected results are summarized below, including the ongoing impact of the current outbreak of the novel coronavirus ("COVID-19"), on the U.S., regional and global economies, the U.S. sustainable energy market, and the broader financial markets. The current outbreak of COVID-19 has also impacted, and is likely to continue to impact, directly or indirectly, many of the other important factors below and the risks described in this Form S-1 and in our filings under the Exchange Act. Other factors besides those listed could also adversely affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In particular, it is difficult to fully assess the impact of COVID-19 at this time due to, among other factors, uncertainty regarding the severity and duration of the outbreak domestically and internationally, uncertainty regarding the effectiveness of federal, state and local governments’ efforts to contain the spread of COVID-19 and respond to its direct and indirect impact on the global economy and economic activity, including the timing of the successful distribution of an effective vaccine.

 

Statements regarding the following subjects, among others, may be forward-looking:

 

  · negative impacts from a continued spread of COVID-19, including on the U.S. or global economy or on our business, financial position, or results of operations;

 

  · market trends in our industry, energy markets, commodity prices, interest rates, the debt and lending markets, or the general economy;

 

  · our plans and expectations regarding future financial results, expected operating results;

 

  · the sufficiency of our cash and our liquidity;

 

  · development of new products and improvements to our existing products;

 

  · our manufacturing capacity and manufacturing costs;

 

  · the adequacy of our agreements with our suppliers;

 

  · our ability to obtain financing, our ability to comply with debt covenants or cure any defaults;

 

  · availability of opportunities to participate in climate solutions including energy efficiency and renewable energy projects and our ability to complete potential new opportunities in our pipeline;

 

  · actions and initiatives of federal, state and local governments and changes to federal, state and local government policies, regulations, tax laws and rates and the execution and impact of these actions, initiatives and policies;

 

  · our ability to obtain and maintain financing arrangements on favorable terms, including securitizations;

 

  · general volatility of the securities markets in which we participate;

 

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  · the impact of weather conditions, natural disasters, accidents or equipment failures, or other events that disrupt our operations or negatively impact the value of our assets;

 

  · availability of and our ability to attract and retain qualified personnel; and

 

  · our understanding of our competition.

  

Forward-looking statements are based on beliefs, assumptions and expectations as of the date of this prospectus. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements after the date of this prospectus, whether as a result of new information, future events or otherwise.

 

The risks included here are not exhaustive. Other sections of this registration statement may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

 

 

 

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PROSPECTUS SUMMARY

 

This summary highlights information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. You should read this entire prospectus and should consider, among other things, the matters set forth under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto appearing elsewhere in this prospectus, and the exhibits to the registration statement of which this prospectus is a part before making your investment decision. This prospectus contains forward-looking statements and information relating to EAWD. See “Cautionary Note Regarding Forward-Looking Statements” above.

 

In this prospectus, the terms “EAWD,” the “Company,” “we,” “us,” “our” or “ours” refer to Energy and Water Development Corp. and its wholly owned subsidiaries.

 

Company Overview

 

Energy and Water Development Corp. (the “Company” or “EAWD”) was originally incorporated as a Delaware corporation named Wealthhound.com, Inc. in 2000 and was converted to a Florida corporation under the name Eagle International Holdings Group Inc. on December 14, 2007.

 

On March 10, 2008, the Company changed its name to Eurosport Active World Corporation and on March 17, 2008, the Company entered into an Agreement and Plan of Acquisition (the “Acquisition Agreement”) with Inko Sport America, LLC (“ISA”), a privately-held Florida limited liability company wherein all of the members of ISA exchanged their membership interests in ISA for shares of the Company. In connection with the closing of the Acquisition Agreement, the Company adopted ISA’s business plan and the Company’s current officers and directors were elected to their positions. This transaction was accounted for as a recapitalization effected by a share exchange, wherein ISA was considered the acquirer for accounting and financial reporting purposes. ISA was administratively dissolved in September 2010.

 

In September 2019, the Company changed its name to Energy and Water Development Corp. to more accurately reflect the Company’s purpose and business sector.  

 

The Company has two wholly-owned subsidiaries in Germany, Energy and Water Development Deutschland GmbH (“EAWD Deutschland”) and EAWD Logistik GmbH (“EAWD Logistik”), to ensure the Company is positioned to service its growing business in one of the EU’s most environmentally progressive countries.

The Business

 

We are an engineering services company formed as an outsourcing green tech platform, focused on sustainable water and energy solutions.

 

  · EAWD builds water and energy systems out of existing, proven technologies, utilizing our technical know-how to customize solutions to meet our clients needs.
  · EAWD designs, builds, and operates Off-Grid EV Charging Stations.
  · EAWD commercializes proven technologies for the sustainable generation of energy and water.
  · EAWD offers design, construction, maintenance and specialty consulting services to private companies, government entities and non-government organizations (NGOs) for the sustainable supply of energy and water.

 

In view of the increased world-wide demand for water and energy, our business goals are focused on self-sufficient energy supplied water generation and green energy production. To accomplish this, we set out to establish an outsourcing green tech platform, providing engineering and technical consultation services to design the most sustainable technological solutions that can provide water and energy. We also intend to secure all required technical, maintenance, education, and training related to the identified technology solutions. To this end the Company has sought potential collaboration with green tech research and development centers in Europe and has established its operating subsidiaries in Hamburg Germany, where we have started to assemble our patent-pending innovative off-grid, self-sufficient energy supply atmosphere water generation (“AWG”) systems (EAWD Off-Grid AWG Systems). EAWD Deutschland and EAWD Logistik operate in in Hamburg, Germany to meet the increasing demands of water and energy generation projects in Germany as well as to operate the solar powered EAWD Off-Grid EV Charging Stations, EAWD’s newest product.

 

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The green tech industry is constantly evolving due to ongoing and increasing water scarcity as well as increased energy needs in the world.  Therefore, we believe that by designing sustainable and renewable solutions to these problems, EAWD will become an essential component of a rapidly growing industry with many new markets.

 

The green tech industry is complex because it still requires increased promotion and public education about its potential. Furthermore, regulations in each country are different and, in many cases, several segments are regulated by both national and local (state, provincial, municipal) governments. EAWD’s approach seeks to assist businesses with the growth and development of their general operations by ensuring the efficient, profitable, and sustainable supply/generation of water and energy allowing our potential customers to focus on their business while adopting strategies of sustainability. Using our own EAWD Off-Grid AWG Systems, EAWD Off-Grid EV Charging Stations, EAWD Off-Grid Power Systems, EAWD Off-Grid Water Purification Systems, and other identified technology, products, and services licensed or purchased from third party sources, we are delivering and installing a product set that suits the green technology water and/or energy needs of our customers. By using the state-of-the art technological solutions and technologies identified, designed, and provided by EAWD and its collaborators, we believe that our potential clients will be free to focus on the performance of their operations as well as with the water and energy consumption or generation regulations within their industry. Our clients may be businesses seeking to upgrade their business processes, NGOs or governmental entities seeking to apply green technology solutions for the water and energy they supply to their constituencies.

 

We continue to be a development stage company. The Company presently assembles its EAWD Off-Grid AWG Systems and EAWD Off-Grid EV Charging Stations at its workshop in Germany and outsources most of its engineering and technical services as well as services relating to the promotion, selling, and distribution of its products. We presently have only nine employees: Ms. Velazquez, our Chief Executive Officer, Vice-Chairman of the Board of Directors, and a significant stockholder, Mr. Hofmeier, our Chief Technology Officer, Chairman of the Board of Directors, and a significant stockholder, two engineers, two technicians, one accountant assistant, and two assemblers. Ms. Velazquez and Mr. Hofmeier are married.

 

We seek to focus on three main aspects of the water and energy business: (1) generation, (2) supply, and (3) maintenance. We seek to assist private companies, government entities and municipalities, and NGOs to build profitable and sustainable supplies/generation capabilities of water and energy as required by selling them the required technology or technical service to enhance their productivity/operability. With its outsourced technical arm and its commission-based global network of distributors, the Company expects to create sustainable added value to each project it takes on while generating revenue from the sale of own EAWD Off-Grid AWG Systems, EAWD Off-Grid EV Charging Stations, EAWD Off-Grid Power Systems, and EAWD Off-Grid Water Purification Systems, royalties from the commercialization of energy and water in certain cases, and the licensing of our innovated technologies; as well as from its engineering, technical consulting, and project management services.

 

The following table depicts the Company’s service and product offerings to its clients.

 

 

 

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We provide customized technology solutions and technical services, based upon client need and preference, which may include any or all of the following:

 

  · water and energy generation
  · off-grid electric vehicle charging stations
  · technical assistance
  · strategic and financial partnering
  · project management

 

The Company also focuses on addressing areas of the industry which concentrate on new technological and engineering concepts relating to water and energy generation and those related components that assist in advancing the green tech industry. These include:

 

  · advancement of EAWD Off-Grid AWG Systems
  · development of techniques to attain self-sufficient supply of energy
  · advancement of new ideas on energy generation, storage and management implementation
  · designing, prototyping, and arranging the manufacture of new water and energy generation systems
  · designing and prototyping off-grid self-sufficient power systems
  · designing and prototyping solar powered charging stations for electric vehicles

 

Our Vision

 

The size of the global market for atmospheric water generators was estimated at USD 959.85 million in 2020, reached USD 1,074.01 million in 2021, and at a compound annual growth rate (CAGR) of 14.75%, is expected to reach USD 2,515.19 million by 2027. (Source: Atmospheric Water Generator Market 2022 Report published by 360i Research)

 

The main market dynamics to consider are the growing numbers of AWGs across various end-use verticals and versus the high energy consumption, production cost, and high carbon footprint of such technology. Our research and development activities in AWG technology have led us to develop novel technologies that overcome these negative dynamics (such as our EAWD Off-Grid AWG Systems).

 

The mission of EAWD is to provide sustainable water generation systems based on high efficiency, renewable sources and to provide off-grid self-sufficient energy supply solutions. Through a combination of the best design and configuration of state-of-the-art technology-assisted solutions, EAWD has created a completely self-sufficient off the grid energy generation and water production system, which can be simultaneously used to meet potable water requirements and the electrical energy needs of the industrial sector.

 

EAWD promotes and commercializes its green technology solutions via commission-based distributers and agents worldwide.

 

Through our BlueTech Alliance for Water Generation, established in December 2020, we have state-of-the-art technology partners, technology transfer agreements, and technology representation agreements in place relating to aspects of renewable energy and water supply. These unique key relationships offer important selling features and capabilities that differentiated EAWD from its competitors.

 

The Company plans to generate revenue from the sale of EAWD Off-Grid AWG Systems, the development, sale, and operation of the EAWD Off-Grid EV Charging Stations, sale of EAWD Off-Grid Power Systems, and EAWD Off-Grid Water Purification Systems, royalties from the commercialization of energy and water in certain cases, and the licensing of our innovated technologies; as well as from its engineering, technical consulting, and project management services. 

 

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Our Products

 

The technological solutions offered by our Company are the following:

 

EAWD Off-Grid AWG Systems

 

Today, atmospheric water generators (AWGs) are standard equipment in many places; however, operating AWGs requires high amounts of energy that is often not available in the places where they are needed most, making the price for the generated water very high.  Our innovative EAWD Off-Grid AWG Systems are designed to have an internal power supply and ability to generate power.  Our EAWD Off-Grid AWG Systems produce sufficient quantities of potable water even in very dry and hot climate conditions and can be scaled to almost any size, community, and/or population. Presently, AWGs are largely used in Asian and African countries. The majority of manufacturers of AWGs, which rely on dehumidifying, are located in China. Almost every U.S. based AWG brand is also supplied by manufacturers in China.

 

By contrast, EAWD uses a proven German technology for condensate water from the air based on A/C technology.  We believe that this method allows higher, more efficient, sustainable performance and a larger quantity of water generation because of its internal power supply and because it does not require high humidity to function. EAWD has licensed the rights to use this German AWG technology for ninety-nine years; however, thanks to our continued research and development efforts, the Company has designed a new, innovative and more efficient configuration that allows the substantial amount of energy required to operate the equipment to be supplied by the equipment itself. Our EAWD Off-Grid AWG Systems line is different in size from the standard AWG line. Our EAWD Off-Grid AWG Systems are energy self-sufficient and can condense large amounts of water out of the atmosphere and we believe they could be a solution in countries around the world that deal with issues of water scarcity.

 

Our EAWD Off-Grid AWG System with an internal power supply, works by first “inhaling” large volumes of air, then cooling the air down to the dew point, and finally collecting, filtering, and mineralizing the resulting condensed water. Through this process, pure drinking water is created that meets the quality standards of the World Health Organization (WHO).  In regions with high temperatures and high humidity levels, a single system can generate more than 300,000 liters of water per day. Our EAWD Off-Grid AWG Systems line starts at 2,640 gallons/day and can expand the water supply to one acre-feet/day, which we believe, in effect, is essentially the ability to produce an unlimited supply of water. As a certified vendor of the United Nations (UN) Global Marketplace, EAWD is introducing the EAWD Off-Grid AWG and Power Systems to the UN with the hopes of initially supplying the equipment to large cluster of agencies established in key locations for humanitarian response as well as refugee camps around the world in need of fresh water.

 

EAWD Off-Grid Water Purification Systems

EAWD also seeks to respond to the growing need for drinking water by proposing a water purification solution utilizing solar, photovoltaic energy and, when applicable, a mini-windmill or other alternate source of renewable energy. The design of the system is ready to be built and delivered on demand.

Generally, drinking water is produced by passing sea water, lake water, river water, or stagnant water through several stages of purification and treatment until it is rendered drinkable in accordance with WHO standards. In the case of sea or stagnant water, we recommend a treatment via reverse osmosis membranes, which permits the retention of dissolved solids and results in obtaining water of drinking quality. If the water being treated emanates from lakes or rivers, we recommend treatment via an ultrafiltration membrane which functions by retaining suspended materials such as colloids, viruses and bacteria. The systems proposed by EAWD are containerized and contain all the equipment necessary to function autonomously, in part due to an automatic cleansing system that can be accessed remotely via satellite or the internet. Moreover, the machines use available renewable energy sources such as solar or wind to function.

EAWD Off-Grid EV Charging Stations

 

The global electric vehicle market was valued at $162.34 billion in 2019, and is projected to reach $802.81 billion by 2027, registering a CAGR of 22.6%. Asia-Pacific was the highest revenue contributor, accounting for $84.84 billion in 2019, and is estimated to reach $357.81 billion by 2027, with a CAGR of 20.1%. North America is estimated to reach $194.20 billion by 2027, at a significant CAGR of 27.5%. Asia- Pacific and Europe collectively accounted for around 74.8% share in 2019, with the former constituting around 52.3% share. North America and Europe are expected to witness considerable CAGRs of 27.5% and 25.3%, respectively, during the forecast period. The cumulative share of these two segments was 40.1% in 2019, and is anticipated to reach 51.0% by 2027. (Source: Electric Vehicle Fluids Market Global Forecast to 2030 2021 Report from Markets and Markets.)

 

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There is also an increasing consensus among European truck manufacturers and industry stakeholders that battery electric trucks (BETs) will play a dominant role in the decarbonization of the road freight sector. Most truck makers including Daimler, DAF, MAN, Scania and Volvo are now focusing on bringing BETs to the mass market for all vehicle segments, including long-haul, starting from 2024. For this, a network of public high-power and overnight charging points needs to be rolled out across Europe no later than 2024.

 

Based on our patent-pending Off-Grid Power System, EAWD has developed an innovative design and configuration of off-grid charging stations for BETs and electric vehicles in Germany. Our product is the first off-grid solution available in Europe for charging the BETs and electric passenger vehicles that are currently on the roads of Europe. EAWD plans to establish up to 1,700 charging stations throughout Germany starting with 40 locations scheduled to be deployed in the fourth quarter of 2022.

 

EAWD Off-Grid Power Systems

 

Today, batteries for stationary storage have become a commodity, but in order to reduce the duration, complexity and cost of the installation, and to increase its capacity or relocate a system over time as well as to reduce its carbon footprint and environmental impact, we offer a complete Electrical Energy Storage System (EESS) and Energy Management System (EMS) for a wide range of customers and applications, including microgrids and EV fast charging stations. A highly capable energy management system which secures the efficient energy supply and storage of energy. Example: with elements such as software and Battery Management System (BMS) our systems can allow controlled and optimized battery cell management.

 

This product portfolio includes systems and complete services for solar power generation in the building envelope. A high-quality frameless glass solar panel with a super-matte surface, which secures a high-performance energy source.

 

In contrast to classic solar systems on the roof, EAWD combines the highest standards of aesthetics with high efficiency energy generation. With these solutions, EAWD supports its customers on their way to CO2 neutrality and the search for alternative renewable energies.

 

Worldwide Business Relationships

 

EAWD has commission-based independent agents and distributors strategically placed around the world in Germany, Mexico, United States, India, Canada, Australia, Colombia, Nepal, Kenya, Morocco, and Thailand to promote and sell EAWD’s technology solutions.

 

We believe that this worldwide presence through our agents and distributors will provide us access to the most important markets in need of water, energy, and energy management solutions.

 

JOBS Act and the Implications of Being an Emerging Growth Company

 

The United States Congress passed the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), which provides for certain exemptions from various reporting requirements applicable to public companies that are reporting companies and are “emerging growth companies.” We are an “emerging growth company” as defined in Section 3(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (as amended by the JOBS Act, enacted on April 5, 2012), and we will continue to qualify as an “emerging growth company” until the earliest to occur of: (a) the last day of the fiscal year during which we have total annual gross revenues of $1.07 billion (as such amount is indexed for inflation every five years by the SEC) or more; (b) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act (December 31, 2024); (c) the date on which we have, during the previous three-year period, issued more than $1,000,000,000 in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer,” as defined in Exchange Act Rule 12b–2. Therefore, we expect to continue to be an emerging growth company for the foreseeable future.

 

Generally, a registrant that registers any class of its securities under Section 12 of the Exchange Act is required to include in the second and all subsequent annual reports filed by it under the Exchange Act a management report on internal control over financial reporting and, subject to an exemption available to registrants that meet the definition of a “smaller reporting company” in Exchange Act Rule 12b-2, an auditor attestation report on management’s assessment of internal control over financial reporting. However, for so long as we continue to qualify as an emerging growth company, we will be exempt from the requirement to include an auditor attestation report in our annual reports filed under the Exchange Act, even if we do not qualify as a “smaller reporting company.” In addition, as an emerging growth company, we are able to avail ourselves to the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and to not present to our stockholders a nonbinding advisory vote on executive compensation, obtain approval of any golden parachute payments not previously approved or present the relationship between executive compensation actually paid and our financial performance.

 

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Current Projects

 

EAWD Off-Grid EV Charging Stations - The Company has leased 24,000 sq. mi of land in Kassel, Germany, where it is establishing the first large off-grid charging station location for electric trucks and passenger vehicles in Germany and Europe. With enough solar panels installed, each charging station is proposed to generate at least five MWh of solar energy per day and have a total capacity of at least one MWp. More than 2,400 MWh of energy storage capacity will be used in lithium battery systems (LFP), to ensure the continuous use and availability of energy. The system is low voltage AC coupled, which will ensure easy integration and expansion of the system in the future. The different elements of EAWD’s system form a “micro grid” that is isolated and independent from the public power grid. It will have a capacity up to one MW of instant and continuous power. The charging points will be of 300 KW of power, with the capacity to charge two trucks simultaneously of 150 KW each, of course it will also be able to charge any other electric vehicle since it has the most common and standard connections/adapters in Europe.

 

A solar powered EAWD Off-Grid AWG System has been built in Hamburg to be used as the showcase for the water generation at the larger project in Gruneheide Germany, where it is expected to produce up to six million gallons of water per day.

 

The Company has completed the manufacture and installation of the first of forty planned solar powered EAWD Off-Grid EV Charging Stations for electric long-haul trucks in Hamburg, Germany. Our charging stations are the first off-grid charging station available for these e-trucks in Europe and the Company plans to contract with companies that own these electric long-haul trucks to provide fleet charging as well as to install them in public places for per-use fees.

 

COVID-19 is an incomparable global public health emergency that has affected almost every industry and has caused the worst global economic contraction of the past 80 years (IMF). Concerted global efforts achieved the development of vaccines that have helped to reduce a person´s risk of contracting the virus. However, the current war in Ukraine led us as well to considering the changes in consumer behavior and demand, purchasing patterns, re-routing of the supply chain, dynamics of current market forces, and the significant interventions of governments; As a consequence of the foregoing, the following projects have been delayed but the Company continues to make progress on their fulfillment:


EAWC Tecnologias Verdes, S.A.P.I. de CV Purchase – EAWC-TV functions as a distributor of EAWD products and engineering services.  In 2020, EAWC-TV placed a USD $550,000 initial order for a solar powered EAWD Off-Grid AWG System which was built in Germany and delivered to the customer in accordance with the purchase agreement. The Company is currently negotiating the purchase of three additional units by the same customer.

 

His Will Innovations (South Africa) Contract – On May 8, 2019, the Company signed a sales contract for the sale of a solar powered EAWD Off-Grid AWG System to a South African customer for a purchase price of $2,800,000. The build out of the equipment began in the fourth quarter of 2019, however because of delays due to COVID-19, the expected completion date has been pushed to late 2022. The foregoing description of the purchase contract does not purport to be complete and is qualified in its entirety by reference to the copy of such contract filed as Exhibit 10.8 to this registration statement.

 

Summary Risk Factors

 

Investing in our securities involves risks. You should carefully consider the risks described in the “Risk Factors” section beginning on page 11 before deciding to invest in our securities. If any of these risks actually occur, our business, financial condition and/or results of operations would likely be materially adversely affected. In each case, the trading price of our securities would likely decline, and you may lose all or part of your investment. The following is a summary of some of the principal risks we face:

 

Risks Related to Our Business, Operations and Financial Condition

 

·Our Ability To Continue As A Going Concern Is In Substantial Doubt Absent Obtaining Adequate New Debt Or Equity Financings.

 

·We Need Additional Capital To Fund Our Growing Operations, And We May Not Be Able To Obtain Sufficient Capital And May Be Forced To Limit The Scope Of Our Operations Or Cease Operations Altogether.

 

·Loss Of Key Personnel Critical For Management Decisions Would Have An Adverse Impact On Our Business.

 

·We Expect Significant Competition For Our Products And Services.
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·The Requirements Of Being A Public Company May Strain Our Resources And Distract Our Management.

 

·International Regulation May Adversely Affect Our Planned Product Sales.

 

·Product Liability Associated With The Production, Marketing And Sale Of Our Products, And/Or The Expense Of Defending Against Claims Of Product Liability, Could Materially Deplete Our Assets And Generate Negative Publicity Which Could Impair Our Reputation.

 

·Product Defects Could Result In Costly Fixes, Litigation And Damages.

 

·We Currently Have Identified Significant Deficiencies In Our Internal Control Over Financial Reporting That, If Not Corrected, Could Result In Material Misstatements Of Our Financial Statements.

 

·If We Fail To Maintain An Effective System Of Internal Control Over Financial Reporting, We May Not Be Able To Accurately Report Our Financial Results. As A Result, Current And Potential Shareholders Could Lose Confidence In Our Financial Reporting, Which Would Harm Our Business And The Trading Price Of Our Stock.

 

Risks Related to Intellectual Property

 

·In The Conduct Of Our Business, We Will Rely Upon The Use Of Patents And Intellectual Property Owned By Other Entities, Which Are Non-Exclusive.

 

·We May Not Be Able To Obtain Patents Or Other Intellectual Property Rights Necessary To Protect Our Proprietary Technology And Business.

 

·Our Business May Suffer If It Is Alleged Or Determined That Our Technology Or Another Aspect Of Our Business Infringes The Intellectual Property Of Others.

 

Risks Related to Our Common Stock

 

·Our Stock Price May Be Volatile, And You May Not Be Able To Sell Your Shares For More Than What You Paid Or At All.

 

·We Will Be Subject To The “Penny Stock” Rules Which Will Adversely Affect The Liquidity Of Our Common Stock.

 

·Our Securities Are Traded on the OTCQB, Which May Not Provide As Much Liquidity For Our Investors As More Recognized Senior Exchanges Such As The Nasdaq Stock Market Or Other National Or Regional Exchanges.

 

·Financial Industry Regulatory Authority (“FINRA”) Sales Practice Requirements May Also Limit A Stockholder’s Ability To Buy And Sell Our Common Stock, Which Could Depress The Price Of Our Common Stock.

 

·An Investment In The Company’s Common Stock Is Extremely Speculative And There Can Be No Assurance Of Any Return On Any Such Investment.

 

·The Exercise Or Conversion Of Currently Outstanding Securities Or Issuance Of Additional Share Of Our Common Stock Or Preferred Stock Would Further Dilute Holders Of Our Common Stock.

 

·We May Issue Additional Shares Of Common Stock Under An Employee Incentive Plan (Including The 2022 Plan), Or May Issue Preferred Stock. Any Such Issuances Would Dilute The Interest Of Our Stockholders And Likely Present Other Risks.

 

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Risks Related to the Company

 

·Our Executive Officers And Directors Collectively Have The Power To Control Our Management And Operations And Have A Significant Majority In Voting Power On All Matters Submitted To The Stockholders Of The Company.

 

·We Have No Intention Of Declaring Dividends On Our Common Stock In The Foreseeable Future.

 

·Our Officers And Directors Are Located Outside Of The U.S., So It Will Be Difficult To Effect Service Of Process And Enforcement Of Legal Judgments Upon Our Officers And Directors.

 

·The Limited Public Company Experience Of Our Management Team Could Adversely Impact Our Ability To Comply With The Reporting Requirements Of U.S. Securities Laws.

 

·EAWD is an “emerging growth company” under the Jumpstart Our Business Startups Act. We cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our shares of common stock less attractive to investors.

 

·Laws And Regulations Governing International Business Operations Could Adversely Impact EAWD.

 

Risks Related to COVID-19, Acts of God, and Cyber Security

 

·Unpredictable Events, Such As The COVID-19 Outbreak, And Associated Business Disruptions Could Seriously Harm Our Future Revenues And Financial Condition, Delay Our Operations, Increase Our Costs And Expenses, And Affect Our Ability To Raise Capital.

 

·Our Business Has Been Impacted By The Supply Chain Delays caused by the COVID-19 Pandemic.

 

·Our Business Could Be Negatively Affected By Security Threats, Including Cybersecurity Threats, And Other Disruptions.

  

Risks Related to This Offering

 

·Investors Who Buy Shares At Different Times Will Likely Pay Different Prices.
·The Sale Of All Of The Securities Registered For Resale In This Prospectus And Future Sales Of Substantial Amounts Of Our Common Stock In The Public Markets, Or The Perception That Such Sales Could Occur, Could Cause The Market Price Of Our Common Stock To Drop Significantly, Even If Our Business Is Doing Well.

 

Corporate Information

 

We were incorporated in Florida in 2008 and have operations based in Hamburg, Germany.

 

Our website is www.energy-water.com. Our website and the information contained therein, or connected thereto, are not intended to be incorporated into this Registration Statement on Form S-1.

 

Our principal executive offices are located at 7901 4th Street N STE #4174, St Petersburg, Florida. Our telephone number is 727-677-9408, and our website is www.energy-water.com. Our operations in Germany are located at the office address Ballindamm 3, 20095 Hamburg. Our Telephone number is +49 40 809 08 1354.

 

The transfer agent for our common stock is Worldwide Stock Transfer, LLC, located at One University Plaza, Suite 505, Hackensack, NJ 07601, Phone: (201) 820-2008, Fax: (201) 820-2010.

 

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JOBS Act and the Implications of Being an Emerging Growth Company

 

The United States Congress passed the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), which provides for certain exemptions from various reporting requirements applicable to public companies that are reporting companies and are “emerging growth companies.” We are an “emerging growth company” as defined in Section 3(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (as amended by the JOBS Act, enacted on April 5, 2012), and we will continue to qualify as an “emerging growth company” until the earliest to occur of: (a) the last day of the fiscal year during which we have total annual gross revenues of $1.07 billion (as such amount is indexed for inflation every five years by the SEC) or more; (b) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act (December 31, 2024); (c) the date on which we have, during the previous three-year period, issued more than $1,000,000,000 in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer,” as defined in Exchange Act Rule 12b–2. Therefore, we expect to continue to be an emerging growth company for the foreseeable future.

 

Generally, a registrant that registers any class of its securities under Section 12 of the Exchange Act is required to include in the second and all subsequent annual reports filed by it under the Exchange Act a management report on internal control over financial reporting and, subject to an exemption available to registrants that meet the definition of a “smaller reporting company” in Exchange Act Rule 12b-2, an auditor attestation report on management’s assessment of internal control over financial reporting. However, for so long as we continue to qualify as an emerging growth company, we will be exempt from the requirement to include an auditor attestation report in our annual reports filed under the Exchange Act, even if we do not qualify as a “smaller reporting company.” In addition, as an emerging growth company, we are able to avail ourselves to the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and to not present to our stockholders a nonbinding advisory vote on executive compensation, obtain approval of any golden parachute payments not previously approved or present the relationship between executive compensation actually paid and our financial performance. We have irrevocably elected to comply with new or revised accounting standards even though we are an emerging growth company.

 

COVID-19 Pandemic Update and the War in Ukraine

 

The ongoing outbreak of Coronavirus (COVID-19) has caused significant disruptions to national and global economies and government activities. However, during this time, we have continued to conduct our operations to the fullest extent possible, while responding to the outbreak with actions that include:

 

  coordinating closely with our suppliers and customers;

 

  instituting various aspects of our business continuity programs; and

 

  planning for and working aggressively to mitigate disruptions that may occur.

 

COVID-19 is an incomparable global public health emergency that has affected almost every industry and has caused the worst global economic contraction of the past 80 years (IMF). The concerted global efforts achieved the development of vaccines that have helped to reduce a person´s risk of contracting the virus. However, the current war in Ukraine leads us to also consider the changes in consumer behavior and demand, purchasing patterns, re-routing of the supply chain, dynamics of current market forces, and the significant interventions of governments; Disruptive activities could include the temporary closure of our manufacturing facilities and those used in our supply chain processes, restrictions on the export or shipment of our products, significant cutback of ocean container delivery from Germany, business closures in impacted areas, and restrictions on our employees’ and consultants’ ability to travel and to meet with customers. The extent to which COVID-19 impacts our results will depend on future developments, which still uncertain and cannot be predicted, including new information which may emerge concerning the severity of the current conflict as well as virus variants and the actions to contain it or treat its impact, among others. COVID-19 and the war in Ukraine could also continue to result in social, economic and labor instability in the countries in which we or our customers and suppliers operate.

 

If workers at one or more of our offices or the offices of our suppliers or manufacturers become ill or are quarantined and in either or both events are therefore unable to work, our operations could be subject to disruption. Further, if our manufacturers become unable to obtain necessary raw materials or components, we may incur higher supply costs or our manufacturers may be required to reduce production levels, either of which may negatively affect our financial condition or results of operations.

 

In light of these challenges, the Company is focusing its efforts on supporting key areas of our business that will help us to stabilize in the new environment and strategize for what comes next. Those key areas are: crisis management and response, workforce, operation and supply chain, finance and liquidity, tax, trade and regulatory, as well as strategy and brand.

 

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SUMMARY OF THE OFFERING

 

Securities offered by the Selling Stockholders 145,533,359 shares of common stock, par value $0.001 per share
   
Selling Stockholders See “Selling Stockholders” beginning on page 23
   
Shares of common stock outstanding prior to the offering (1)  192,869,220 shares
   
Shares of common stock outstanding after the offering (1) 192,869,220 shares
   
Use of Proceeds We will not receive any proceeds from the sale or other disposition of the shares of common stock covered by this prospectus
   
Trading Symbol Our common stock is presently quoted on the OTCQB under the symbol “EAWD.”
   
Risk Factors Investing in our securities involves a high degree of risk and purchasers of our securities may lose their entire investment. See “Risk Factors” starting on page 11 and the other information included and incorporated by reference into this prospectus for a discussion of risk factors you should carefully consider before deciding to invest in our securities. 
   
Dividends We do not currently anticipate paying dividends on our common stock. Any declaration and payment of future dividends to holders of our common stock will be at the sole discretion of the Board and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends, and other considerations that our Board deems relevant. See “Dividend Policy.”
   
Voting Rights

Shares of our Common Stock are entitled to one vote per share.

 

Shares of our Series A Preferred Stock are entitled to five votes per share and each share of Series A Preferred Stock is convertible into five shares of Common Stock.

 

(1)Unless we indicate otherwise, the number of shares of our common stock outstanding is based on 192,869,220 shares of common stock outstanding on January 20, 2023, but does not include 15,618,000 shares of our common stock that were reserved for equity awards under our Energy and Water Development Corp. 2022 Long Term Incentive Plan adopted on September 12, 2022 or 48,904,880 shares of common stock issuable upon conversion of our outstanding Series A Preferred Stock.

 

 

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RISK FACTORS

 

An investment in our Common Stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this prospectus, before making an investment decision. If any of the following risks actually occurs, our business, financial condition, or results of operations could suffer. In that case, the trading price of our shares of Common Stock could decline and you may lose all or part of your investment. See “Cautionary Statement Regarding Forward-Looking Statements” above for a discussion of forward-looking statements and the significance of such statements in the context of this prospectus.

 

Risks Related to Our Business, Operations and Financial Condition 

 

Our Ability To Continue As A Going Concern Is In Substantial Doubt Absent Obtaining Adequate New Debt Or Equity Financings.

 

Our continued existence is dependent upon us obtaining adequate working capital to fund all of our planned operations. Working capital limitations continue to impinge on our day-to-day operations, thus contributing to continued operating losses. Thus, if we are unable to raise funds to fund the assembling and commercialization of our technological solutions, we may not be able to continue as a going concern and you will lose your investment. We have incurred accumulated operating losses since inception and had working capital deficits at the end of September 2022.

 

Our independent accounting firm has included in its report the qualification that these conditions raise a substantial doubt about the Company’s ability to continue as a going concern. The report also states that the financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

We Need Additional Capital To Fund Our Growing Operations, And We May Not Be Able To Obtain Sufficient Capital And May Be Forced To Limit The Scope Of Our Operations Or Cease Operations Altogether.

 

We need additional capital to fund our operations and we may not be able to obtain such capital, which would cause us to limit or cease our operations entirely. The conditions of the global credit markets may adversely affect our ability to raise capital in the future. If adequate additional financing is not available on reasonable terms or at all, we may not be able to execute our business plans and may have to modify them accordingly or even suspend them.

 

Even if we do find a source of additional capital, we may not be able to negotiate favorable terms and conditions for receiving the additional capital. Any future capital investments will dilute or otherwise materially and adversely affect the holdings or rights of our existing shareholders. In addition, new equity or debt securities issued by us to obtain financing could have rights, preferences and privileges senior to our Common Stock. We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.

 

Loss Of Key Personnel Critical For Management Decisions Would Have An Adverse Impact On Our Business.

 

Our success depends upon the continued contributions of our executive officers and/or key employees, particularly with respect to providing the critical management decisions and contacts necessary to manage product development, marketing, and growth within our industry. Competition for qualified personnel can be intense and there are a limited number of people with the requisite knowledge and experience. The loss of the services of any of our executive officers or other key employees for any reason could have a material adverse effect on our business, operating results, financial condition, and cash flows.

 

We Expect Significant Competition For Our Products And Services.

 

Some of our competitors and potential competitors are well established and have substantially greater financial, research and development, technical, manufacturing and marketing resources than we have today. If these larger competitors decide to focus on the development of Self Sufficient Energy Supplied Atmosphere Water Generators (AWGs), Water Purification products or Waste to Energy technological solutions, they could have the manufacturing, marketing and sales capabilities to complete research, development and commercialization of these products more quickly and effectively than we can.  As of today, there can also be no assurance that current and future competitors will not develop new or enhanced technical services technologies or more cost-effective systems.

 

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The Requirements Of Being A Public Company May Strain Our Resources And Distract Our Management.

 

We are required to comply with various regulatory and reporting requirements, including those required by the Securities and Exchange Commission. Complying with these reporting and other regulatory requirements is time-consuming and may result in increased costs to us and could have a negative effect on our business, results of operations and financial condition.

 

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and requirements of the Sarbanes-Oxley Act of 2002, as amended, or SOX. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. SOX requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources.

 

These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business and results of operations.

 

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

 

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board of Directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

 

International Regulation May Adversely Affect Our Planned Product Sales.

 

As a part of our marketing strategy, we plan to market and sell our technical services and technological solutions internationally. In addition to regulation by the U.S. government, our technological solutions will be subject to environmental and safety regulations in each country in which we market and sell. While we have already received regulatory approval in some countries, including Mexico and India, we anticipate that regulations will vary from country to country and will vary from those of the United States. The difference in regulations and the laws of foreign countries may be significant and, in order to comply with the laws of these foreign countries, our suppliers may have to implement manufacturing changes or alter product design, or we may need to modify our marketing efforts. Any changes in our business practices or products will require response to the laws of foreign countries and may result in additional expense to the Company and either reduce or delay product sales.

 

Product Liability Associated With The Production, Marketing And Sale Of Our Products, And/Or The Expense Of Defending Against Claims Of Product Liability, Could Materially Deplete Our Assets And Generate Negative Publicity Which Could Impair Our Reputation.

 

The production, marketing and sale of our products have inherent risks of liability in the event of product failure or claim of harm caused by product operation. Furthermore, even meritless claims of product liability may be costly to defend against. We do not currently have product liability insurance for our products. We may not be able to obtain this insurance on acceptable terms or at all. Because we may not be able to obtain insurance that provides us with adequate protection against all or even some potential product liability claims, a successful claim against us could materially deplete our assets. Moreover, even if we are able to obtain adequate insurance, if a successful claim in excess of our insurance coverage is made, then we may have to make such payments that could materially deplete our assets and any claim against us could generate negative publicity, which could impair our reputation and adversely affect the demand for our products, our ability to generate sales and our profitability.

 

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Product Defects Could Result In Costly Fixes, Litigation And Damages.

 

Our business exposes us to potential product liability risks that are inherent in the design, manufacture and sale of our products. If there are claims related to defective products (under warranty or otherwise), particularly in a product recall situation, we could be faced with significant expenses in replacing or repairing the product. For example, our products combine raw materials, machined parts and other product components from suppliers who provide certifications of quality on which we rely. Should these product components be defective and pass undetected into finished products, or should a finished product contain a defect, we could incur significant costs for repairs, re-work and/or removal and replacement of the defective product. In addition, if a dispute over product claims cannot be settled, arbitration or litigation may result, requiring us to incur attorneys’ fees and exposing us to the potential of damage awards against us.

 

   

We Currently Have Identified Significant Deficiencies In Our Internal Control Over Financial Reporting That, If Not Corrected, Could Result In Material Misstatements Of Our Financial Statements.

 

In connection with the audit of our financial statements as of and for the years ended December 31, 2021 and 2020, we identified significant deficiencies in our internal control over financial reporting and a general understanding of U.S. GAAP. As such, there is a reasonable possibility that a misstatement of our financial statements will not be prevented or detected on a timely basis.

 

As we have thus far not needed to comply with Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes Oxley Act” or “SOX”), neither we nor our independent registered public accounting firm has performed an evaluation of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. In light of the deficiency, we believe that it is possible that certain control deficiencies may have been identified if such an evaluation had been performed.

 

We are working to remediate the deficiencies or material weaknesses. We have taken steps to enhance our internal control environment and plan to take additional steps to remediate the material weaknesses. For a discussion of our remediation plan, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Internal Control over Financial Reporting” in our Annual Report on Form 10-K for the year ended December 31, 2021.

 

Although we plan to complete this remediation process as quickly as possible, we are unable, at this time to estimate how long it will take; and our efforts may not be successful in remediating the deficiencies or material weaknesses.

 

If We Fail To Maintain An Effective System Of Internal Control Over Financial Reporting, We May Not Be Able To Accurately Report Our Financial Results. As A Result, Current And Potential Shareholders Could Lose Confidence In Our Financial Reporting, Which Would Harm Our Business And The Trading Price Of Our Stock.

 

Members of our Board of Directors are inexperienced with U.S. GAAP and the related internal control procedures required of U.S. public companies. Management has determined that our internal audit function is also significantly deficient due to insufficient qualified resources to perform internal audit functions.

 

We are a smaller reporting company with limited resources. Therefore, we cannot assure investors that we will be able to maintain effective internal controls over financial reporting based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The Company has deficiencies over financial statements recording in areas of recording revenue and expenses in proper cut off as well as proper classification of accounts. For these reasons, we are considering the costs and benefits associated with improving and documenting our disclosure controls and procedures and internal controls and procedures, which includes (i) hiring additional personnel with sufficient U.S. GAAP experience and (ii) implementing ongoing training in U.S. GAAP requirements for our CFO and accounting and other finance personnel. If the result of these efforts are not successful, or if material weaknesses are identified in our internal control over financial reporting, our management will be unable to report favorably as to the effectiveness of our internal control over financial reporting and/or our disclosure controls and procedures, and we could be required to further implement expensive and time-consuming remedial measures and potentially lose investor confidence in the accuracy and completeness of our financial reports which could have an adverse effect on our stock price and potentially subject us to litigation.

 

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Risks Related to Intellectual Property

 

In The Conduct Of Our Business, We Will Rely Upon The Use Of Patents And Intellectual Property Owned By Other Entities, Which Are Non-Exclusive.

 

Our business utilizes various technologies that are the subject of patents owned by other entities or for which we do not have exclusive ownership or licenses. The use of such patented technologies is dependent upon the cooperation of those entities and our agreements with them. There can be no assurances that any of our agreements will be extended beyond their current term or that such cooperation with the entities that control the patents will continue in the future. Our success depends on our ability to continue to use the patented technologies identified in our recommended technical solutions and water or energy plant designs and the ability of the patent owners to maintain patent protection for their products in the United States and in other countries and to enforce such patents. There can be no assurance that any of the patents relating to the technologies that we use will be deemed valid and enforceable against third-party infringement or that our products will not infringe any third-party patent or intellectual property. Moreover, any patent claims relating to our technologies may not be sufficiently broad to protect our solutions. In addition, issued patent claims may be challenged, potentially invalidated or potentially circumvented. Our rights to use the intellectual property of others may not afford us protection against competitors with similar technologies or permit the commercialization of the products and/or solutions incorporating these technologies without infringing third-party patents or other intellectual property rights.

 

We May Not Be Able To Obtain Patents Or Other Intellectual Property Rights Necessary To Protect Our Proprietary Technology And Business.

 

Our commercial success depends to a significant degree upon our ability to develop new or improved technologies and products, and to obtain patents or other intellectual property rights or statutory protection for these technologies and products in the United States and other countries. We will seek to patent concepts, components, processes, designs and methods, and other inventions and technologies that we consider have commercial value or that will likely give us a technological advantage. Despite devoting resources to the research and development of proprietary technology, we may not be able to develop technology that is patentable or protectable. Patents may not be issued in connection with pending patent applications, and claims allowed may not be sufficient to allow us to use the inventions that they create exclusively. Furthermore, any patents issued could be challenged, re-examined, held invalid or unenforceable or circumvented and may not provide sufficient protection or a competitive advantage. In addition, despite efforts to protect and maintain patents, competitors and other third parties may be able to design around our patents or develop products similar to our products that are not within the scope of their patents.

 

Finally, patents provide certain statutory protection only for a limited period of time that varies depending on the jurisdiction and type of patent. The statutory protection term of certain patents may expire and, thereafter, the underlying technology of such patents can be used by any third-party including competitors.

 

Prosecution and protection of the rights sought in patent applications and patents can be costly and uncertain, often involve complex legal and factual issues and consume significant time and resources. In addition, the breadth of claims allowed in our patents, their enforceability and our ability to protect and maintain them cannot be predicted with any certainty. The laws of certain countries may not protect intellectual property rights to the same extent as the laws of the United States. Even if our patents are held to be valid and enforceable in a certain jurisdiction, any legal proceedings that we may initiate against third parties to enforce such patents will likely be expensive, take significant time and divert management's attention from other business matters. We cannot assure that any of the issued patents or pending patent applications will provide any protectable, maintainable or enforceable rights or competitive advantages to us.

 

In addition to patents, we will rely on a combination of copyrights, trademarks, trade secrets and other related laws and confidentiality procedures and contractual provisions to protect, maintain and enforce our proprietary technology and intellectual property rights. However, our ability to protect our brands by registering certain trademarks may be limited. In addition, while we will generally enter into confidentiality and nondisclosure agreements with our employees, consultants, contract manufacturers, distributors and resellers and with others to attempt to limit access to and distribution of our proprietary and confidential information, it is possible that:

 

  · misappropriation of our proprietary and confidential information, including technology, will nevertheless occur;

 

  · our confidentiality agreements will not be honored or may be rendered unenforceable;

 

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  · third parties will independently develop equivalent, superior or competitive technology or products;

 

  · disputes will arise with our current or future strategic licensees, customers or others concerning the ownership, validity, enforceability, use, patentability or registrability of intellectual property; or

 

  · unauthorized disclosure of our know-how, trade secrets or other proprietary or confidential information will occur.

 

We cannot assure that we will be successful in protecting, maintaining, or enforcing our intellectual property rights. If we are unsuccessful in protecting, maintaining, or enforcing our intellectual property rights, then our business, operating results and financial condition could be materially adversely affected, which could:

 

  · adversely affect our relationships with current or future distributors and resellers of our products;

 

  · adversely affect our reputation with customers;

 

  · be time-consuming and expensive to evaluate and defend;

 

  · cause product shipment delays or stoppages;

 

  · divert management’s attention and resources;

 

  · subject us to significant liabilities and damages;

 

  · require us to enter into royalty or licensing agreements; or

 

  · require us to cease certain activities, including the sale of products.

 

If it is determined that we have infringed, violated or are infringing or violating a patent or other intellectual property right of any other person or if we are found liable in respect of any other related claim, then, in addition to being liable for potentially substantial damages, we may be prohibited from developing, using, distributing, selling or commercializing certain of our technologies and products unless we obtain a license from the holder of the patent or other intellectual property right. We cannot assure that we will be able to obtain any such license on a timely basis or on commercially favorable terms, or that any such licenses will be available, or that workarounds will be feasible and cost-efficient. If we do not obtain such a license or find a cost-efficient workaround, our business, operating results and financial condition could be materially adversely affected, and we could be required to cease related business operations in some markets and restructure our business to focus on our continuing operations in other markets.

 

Our Business May Suffer If It Is Alleged Or Determined That Our Technology Or Another Aspect Of Our Business Infringes The Intellectual Property Of Others.

 

The markets in which we will compete are characterized by the existence of a large number of patents and trade secrets and also by litigation based on allegations of infringement or other violations of intellectual property rights. Moreover, in recent years, individuals and groups have purchased patents and other intellectual property assets for the purpose of making claims of infringement to extract settlements from companies like ours. Also, third parties may make infringement claims against us that relate to technology developed and owned by one of our suppliers for which our suppliers may or may not indemnify us. Even if we are indemnified against such costs, the indemnifying party may be unable to uphold its contractual obligations and determining the extent such of such obligations could require additional litigation. Claims of intellectual property infringement against us or our suppliers might require us to redesign our products, enter into costly settlements or license agreements, pay costly damage awards or face a temporary or permanent injunction prohibiting us from marketing or selling our products or services. If we cannot or do not license the infringed intellectual property on reasonable terms or at all, or substitute similar intellectual property from another source, our revenue and operating results could be adversely impacted. Additionally, our customers and distributors may not purchase our products if they are concerned that they may infringe third party intellectual property rights. Responding to such claims, regardless of their merit, can be time consuming, costly to defend in litigation, divert management's attention and resources, damage our reputation and cause us to incur significant expenses. The occurrence of any of these events may have a material adverse effect on our business, financial condition and operating results.

 

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Risks Related to Our Common Stock

 

Our Stock Price May Be Volatile, And You May Not Be Able To Sell Your Shares For More Than What You Paid Or At All.

 

Our stock price may be subject to significant volatility, and you may not be able to sell shares of Common Stock at or above the price you paid for them or at all. The trading price of our Common Stock may be subject to fluctuations in in response to various factors.

 

We Will Be Subject To The “Penny Stock” Rules Which Will Adversely Affect The Liquidity Of Our Common Stock.

 

The Securities and Exchange Commission (the “SEC"), has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. We expect the market price of our Common Stock will be less than $5.00 per share and therefore we will be considered a “penny stock” according to SEC rules. This designation requires any broker-dealer selling these securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules limit the ability of broker-dealers to solicit purchases of our Common Stock and therefore reduce the liquidity of the public market for our shares should one develop.

  

Our Securities Are Traded on the OTCQB, Which May Not Provide As Much Liquidity For Our Investors As More Recognized Senior Exchanges Such As The Nasdaq Stock Market Or Other National Or Regional Exchanges.

 

Our Common Stock is currently quoted on OTCQB under the symbol “EAWD”. The OTC Markets are inter-dealer, over-the-counter markets that provide significantly less liquidity than the Nasdaq Stock Market or other national or regional exchanges. Securities traded on the OTC Markets are usually thinly traded, highly volatile, have fewer market makers and are not followed by analysts. The SEC’s order handling rules, which apply to Nasdaq-listed securities, do not apply to securities quoted on the OTC Markets. Quotes for stocks included on the OTC Markets are not listed in newspapers. Therefore, prices for securities traded solely on the OTC Markets may be difficult to obtain and holders of our securities may be unable to resell their securities at or near their original acquisition price, or at any price.

 

Financial Industry Regulatory Authority (“FINRA”) Sales Practice Requirements May Also Limit A Stockholder’s Ability To Buy And Sell Our Common Stock, Which Could Depress The Price Of Our Common Stock.

 

FINRA has adopted rules that require a broker-dealer to have reasonable grounds for believing that the investment is suitable for that customer before recommending an investment to a customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. Thus, the FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may limit your ability to buy and sell our shares of Common Stock, have an adverse effect on the market for our shares of Common Stock, and thereby depress our price per share of Common Stock.

 

An Investment In The Company’s Common Stock Is Extremely Speculative And There Can Be No Assurance Of Any Return On Any Such Investment.

 

Our Common Stock is currently quoted on the OTCQB maintained by OTC Markets Group, Inc. under the symbol “EAWD”; however, an investment in the Company’s Common Stock is extremely speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment. The market price of our Common Stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market and other factors, many of which we have little or no control over. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our Common Stock, regardless of our actual or projected performance.

 

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The Exercise Or Conversion Of Currently Outstanding Securities Or Issuance Of Additional Share Of Our Common Stock Or Preferred Stock Would Further Dilute Holders Of Our Common Stock.

 

We currently have outstanding securities that convert into shares of our common stock, including preferred stock that converts into shares of our common stock and debt that converts into shares of our common stock. Our Series A Preferred Stock converts at a rate of 5 shares common stock for 1 share of Series A Preferred. Our Board of Directors has authority, without action or vote of our shareholders, to issue shares of common and preferred stock. We may issue shares of our common stock or preferred stock to complete a business combination or to raise capital. Such stock issuances could be made at a price that reflects a discount from the then-current trading price of our common stock. These conversions and issuances would dilute our stockholders' ownership interest, which among other things would have the effect of reducing their influence on matters on which our stockholders vote. In addition, our stockholders and prospective investors may incur additional dilution if holders of warrants, whether currently outstanding or subsequently granted, exercise their warrants to purchase shares of our common stock or if our convertible debt holders convert their debt.

We May Issue Additional Shares Of Common Stock Under An Employee Incentive Plan (Including The 2022 Plan), Or May Issue Preferred Stock. Any Such Issuances Would Dilute The Interest Of Our Stockholders And Likely Present Other Risks.

We may issue a substantial number of additional share of common stock under our employee incentive plan (including the 2022 Plan) or we may issue preferred stock. The issuance of additional securities:

 

  · may significantly dilute the equity interests of our investors;

 

  · may subordinate the rights of our stockholders if preferred stock is issued with rights senior to those afforded our common stock;

 

  · could cause a change in control if a substantial number of securities are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and

 

  · may adversely affect prevailing market prices for our common stock.

 

Risks Related to the Company

 

Our Executive Officers And Directors Collectively Have The Power To Control Our Management And Operations And Have A Significant Majority In Voting Power On All Matters Submitted To The Stockholders Of The Company.

 

Ms. Velazquez, our Chief Executive Officer and Vice-Chairman of the Board of Directors and Mr. Hofmeier, our Chief Technology Officer and Chairman of the Board of Directors, who are married to each other, together own approximately 35% of our outstanding Common Stock and 100% of our outstanding Series A Preferred Stock, which, on an as-converted basis represents an approximate aggregate 48% of the outstanding Common Stock. Accordingly, these individuals have a significant influence in determining the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all or substantially all of our assets. Due to such significant ownership position held by our insiders, new investors may not be able to effect a change in our business or management, and therefore, shareholders would have no recourse as a result of decisions made by management. The interests of our directors may differ from the interests of the other stockholders and thus result in corporate decisions that are disadvantageous to other shareholders.

 

Our shareholders are not entitled to cumulative voting rights. Consequently, the election of directors and all other matters requiring shareholder approval will be decided by majority vote. Management currently beneficially owns a majority of our outstanding common stock. Consequently, management has the ability to influence control of the operations of the Company and, acting together, will have the ability to influence or control substantially all matters submitted to stockholders for approval, including: Election of our board of directors; Removal of directors; Amendment to the Company’s Articles of Incorporation or Bylaws; and adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination.

 

These stockholders have complete control over our affairs. Accordingly, this concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the common stock.

 

17 
 

 

We Have No Intention Of Declaring Dividends On Our Common Stock In The Foreseeable Future.

 

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future, as we intend to use any excess cash to fund our operations. The decision to pay cash dividends on our common stock rests with our board of directors and will depend on our earnings, unencumbered cash, capital requirements and financial condition. Investors in our common stock should not expect to receive dividend income on their investment, and investors will be dependent on the appreciation of our common stock to earn a return on their investment.

 

Our Officers And Directors Are Located Outside Of The U.S., So It Will Be Difficult To Effect Service Of Process And Enforcement Of Legal Judgments Upon Our Officers And Directors.

 

Our officers and directors are located outside of the United States and reside in Germany.  As a result, it may be difficult to effect service of process within the United States and enforce judgments of the US courts obtained against our executive officers and directors.  Particularly, our shareholders may not be able to:

 

  · Effect service of process in the U.S. on any of our officers and directors;
     
  · Enforce judgments obtained in U.S. courts against our officers and directors based upon the civil liability provisions of the U.S. federal securities laws;
     
  · Enforce, in a court outside of the U.S., judgments of U.S. courts based on the civil liability provisions of the U.S. federal securities laws; and
     
  · Bring an original action in a court in South Africa to enforce liabilities against any of our officers and directors based upon the U.S. federal securities laws.

 

The Limited Public Company Experience Of Our Management Team Could Adversely Impact Our Ability To Comply With The Reporting Requirements Of U.S. Securities Laws.

 

Our management team has limited public company experience, which could impair our ability to comply with legal and regulatory requirements, including complying with federal securities laws and making required disclosures on a timely basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including establishing and maintaining internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Exchange Act, which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in the Company. 

 

EAWD is an “emerging growth company” under the Jumpstart Our Business Startups Act. We cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our shares of common stock less attractive to investors.

 

EAWD is and will remain an “emerging growth company” until the earliest to occur of (a) the last day of the fiscal year during which its total annual revenues equal or exceed $1.07 billion (subject to adjustment for inflation), (b) the last day of the fiscal year following the fifth anniversary of its initial public offering (December 31, 2024), (c) the date on which the Company has, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (d) the date on which the Company is deemed a “large accelerated filer” (with at least $700 million in public float) under the Exchange Act.”).

 

For so long as EAWD remains an “emerging growth company” as defined in the JOBS Act, it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” as described in further detail in the risk factors below. We cannot predict if investors will find its shares of common stock less attractive because we will rely on some or all of these exemptions. If some investors find the Company’s shares of common stock less attractive as a result, there may be a less active trading market for its shares of common stock and its stock price may be more volatile.

 

18 
 

 

If the Company avails itself of certain exemptions from various reporting requirements, its reduced disclosure may make it more difficult for investors and securities analysts to evaluate the Company and may result in less investor confidence.

 

The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies”. EAWD meets the definition of an “emerging growth company” and so long as it qualifies as an “emerging growth company,” it will not be required to:

 

  · have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

 

  ·

comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

 

  · submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

 

  · disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

 

Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $250 million or annual revenues of less than $100 million during the most recently completed fiscal year.

 

However, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.

 

Laws And Regulations Governing International Business Operations Could Adversely Impact EAWD.

 

The US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), and the Bureau of Industry and Security at the US Department of Commerce (“BIS”) administer certain laws and regulations that restrict US persons and, in some instances, non-US persons, in conducting activities, transacting business with or making investments in certain countries, governments, entities and individuals subject to US economic sanctions.

 

Our international operations subject us to these laws and regulations, which are complex, restrict business dealings with certain countries, governments, entities, and individuals, and are constantly changing. Further restrictions may be enacted, amended, enforced or interpreted in a manner that materially impacts our operations. From time to time, certain subsidiaries have limited business dealings in countries subject to comprehensive sanctions.

 

We may sell our products and/or provide related services, to distributors and other purchasing bodies in such countries. These business dealings expose us to a heightened risk of violating applicable sanctions regulations. Violations of these regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment.

 

We have established policies and procedures designed to assist with compliance with such laws and regulations. However, there can be no assurance that these will prevent us from violating these regulations in every transaction in which we may engage. As such a violation could adversely affect our reputation, business, financial condition, results of operations and cash flows.

 

19 
 

 

Risks Related to COVID-19, Acts of God, and Cyber Security

 

Unpredictable Events, Such As The COVID-19 Outbreak, And Associated Business Disruptions Could Seriously Harm Our Future Revenues And Financial Condition, Delay Our Operations, Increase Our Costs And Expenses, And Affect Our Ability To Raise Capital.

 

The outbreak of COVID-19 originating in Wuhan, China, sometime around December 2019, has since rapidly increased its exposure globally. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. The pandemic has impacted and may further impact the United States and the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates and interest rates. Due to the speed with which the situation is developing, the global breadth of its spread and the range of governmental and community reactions thereto, there is uncertainty around its duration, ultimate impact and the timing of recovery. Therefore, the pandemic could lead to an extended disruption of economic activity and the impact on our consolidated results of operations, financial position, and cash flows could be material.

 

As a result of the adverse impact that the COVID-19 pandemic is having on our economy and the economies of the countries in which we plan to do business, the pandemic may affect our operations, including our supply chain distribution systems, production levels and research and development activities. In addition, any preventive or protective actions that governments implement or that we adopt in response to the COVID-19 pandemic, such as travel restrictions, quarantines, and limited operations of governmental agencies, may interfere with the ability of our employees, vendors, and suppliers to perform their respective responsibilities and obligations relative to the conduct of our business. Additionally, government regulations that have been imposed in response to the COVID-19 pandemic may cause delays our freight processes, which would result in higher shipping costs. In addition, social distancing guidelines could have an adverse impact on our research and development activities as our laboratories are not operating at full capacity.

 

The impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity. Further, the resulting global economic downturn has negatively impacted the ability of certain of our customers to make payments on a timely basis, adversely impacting our cash flows from operations. We do not yet know the full extent of the impact of the COVID-19 pandemic or its resulting economic impact, which could have a material adverse effect on our liquidity, capital resources, operations, and business.

 

We are also monitoring the impact of COVID-19 on our talent recruitment and retention efforts. If members of our management and other key personnel in critical functions across our organization are unable to perform their duties or have limited availability due to COVID-19, we may not be able to execute on our business strategy and/or our operations may be negatively impacted. The loss or limited availability of the services of one or more of our executive officers or other key personnel, or our inability to recruit and retain qualified executive officers or other key personnel in the future could, at least temporarily, have a material adverse effect on our business, financial condition, and results of operations. Qualified individuals are in high demand, and we may incur significant costs to attract them, particularly at the executive level. We may face difficulty in attracting and retaining key talent for a number of reasons, including delays in the recruiting and hiring process as a result of the COVID-19 pandemic.

 

Our business, financial condition, and results of operations could be materially adversely affected by unfavorable results in future employment litigation matters as a result of COVID-19. Our employees may sue us due to possible exposure to COVID-19 while working at one of our facilities or sites. In addition, employees may challenge decisions to implement protective measures such as contact tracing on the basis of local privacy laws due to the increased collection of employee medical information. Litigation matters, regardless of their merits or their ultimate outcomes, are costly, divert management’s attention and may materially adversely affect our reputation and demand for our products. We cannot predict with certainty the eventual outcome of litigation matters. An adverse outcome of litigation or legal matters could result in us being responsible for paying significant damages.

 

Any of these negative effects resulting from litigation matters could materially adversely affect our business, financial condition or results of operations. To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described herein.

 

The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions taken to contain it or treat its impact.

 

20 
 

 

Additionally, COVID-19 has caused significant disruptions to the global financial markets, which could impact our ability to raise additional capital.  There is also a risk that other countries or regions may be less effective at containing COVID-19, or it may be more difficult to contain if the outbreak reaches a larger population or broader geography, in which case the risks described herein could be elevated significantly.

 

Our Business Has Been Impacted By The Supply Chain Delays caused by the COVID-19 Pandemic.

 

With the global spread of the ongoing novel COVID-19 pandemic in 2020, we have implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on our employees and business. We have experienced supply chain delays, including delays in shipments from abroad. In addition, we could experience payment delays from customers if they are negatively impacted by the pandemic. The business of our suppliers and other commercial partners, our corporate development objectives and the value of and market for our common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown and the other risks and uncertainties associated with the pandemic could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties which we face.

 

Our Business Could Be Negatively Affected By Security Threats, Including Cybersecurity Threats, And Other Disruptions.

 

We, or third parties with whom we do business, may become the target of cyberattacks or information security breaches that could result in the unauthorized release, misuse, loss or destruction of proprietary and other information, or other disruption of business operations that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information, and corruption of data. We face various security threats, including cybersecurity threats to gain unauthorized access to sensitive information or to render data or systems unusable; threats to the security of our facilities and infrastructure or third-party facilities and infrastructure, such as processing plants and pipelines, and threats from terrorist acts. The potential for such security threats has subjected our operations to increased risks that could have a material adverse effect on our business. In particular, our implementation of various procedures and controls to monitor and mitigate security threats and to increase security for our information, facilities and infrastructure may result in increased capital and operating costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring. If any of these security breaches were to occur, they could lead to losses of sensitive information, critical infrastructure or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations or cash flows. Cybersecurity attacks in particular are becoming more sophisticated and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and systems, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information, and corruption of data. These events could lead to financial losses from remedial actions, loss of business or potential liability.

 

Risks Related to This Offering

 

Investors Who Buy Shares At Different Times Will Likely Pay Different Prices.

 

Investors who purchase shares in this offering at different times will likely pay different prices, and so may experience different levels of dilution and different outcomes in their investment results. The Selling Stockholders may sell such shares at different times and at different prices. Investors may experience a decline in the value of the shares they purchase from the Selling Stockholder in this offering as a result of sales made by us in future transactions at prices lower than the prices they paid.

The Sale Of All Of The Securities Registered For Resale In This Prospectus And Future Sales Of Substantial Amounts Of Our Common Stock In The Public Markets, Or The Perception That Such Sales Could Occur, Could Cause The Market Price Of Our Common Stock To Drop Significantly, Even If Our Business Is Doing Well.

Sales of a substantial number of shares of our Common Stock in the public market could occur at any time. This prospectus registers up to 146,876,592 shares of Common Stock for resale by the Selling Stockholders. Depending on market liquidity at the time, sales of such shares may cause the trading price of our common stock to fall. Additionally, the sale of a substantial number of shares of our common stock, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

 

These sales, any future sales of a substantial number of shares of our Common Stock in the public market or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Common Stock. Despite such a decline in the public trading price, certain securityholders may still experience a positive rate of return on the securities they purchased due to the lower price that they purchased their shares compared to other public investors and be incentivized to sell its securities when others are not.

 

21 
 

 

CAPITALIZATION

 

The following table sets forth our actual cash and cash equivalents and our capitalization as of September 30, 2022, and as adjusted for any effect from this offering.

 

The pro forma information set forth in the table below is illustrative only and will be adjusted based on the assumed public offering price and other terms of this offering determined at pricing.

 

You should read this information in conjunction with “Managements’ Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited financial statements and related notes appearing in our Quarterly Report on Form 10-Q for the period ended September 30, 2022.

 

   As of September 30, 2022 
   Actual
(Unaudited)
   Pro forma 
CASH  $56,983   $56,983 
           
STOCKHOLDERS’ DEFICIT          
Preferred stock, par value $.001 per share; 500,000,000 shares authorized, 9,780,976 shares issued and outstanding at September 30, 2022   9,781    9,781 
Common stock, par value $0.001 per share, 1,000,000,000 shares authorized, 177,870,062 and shares issued and outstanding as of September 30, 2022 and 177,870,062 shares issued and outstanding as adjusted   177,870    177,870 
Additional paid-in capital   23,386,295    23,386,295 
Accumulated deficit   (23,940,116)   (23,940,116)
Accumulated other comprehensive income   91,683    91,683 
Total stockholders’ deficit  $(274,487)   (274,487)
Total capitalization  $(274,487)   (274,487)

 

USE OF PROCEEDS

 

All of the shares of common stock covered by this prospectus are being sold by the Selling Stockholders. We will not receive any proceeds from these sales of shares of our common stock.

 

The Selling Stockholders will pay any underwriting discounts and commissions and expenses incurred by the Selling Stockholders for brokerage, accounting, tax, or legal services or any other expenses incurred by the Selling Stockholders in disposing of the shares. We will bear all other costs, fees, and expenses incurred in effecting the registration of the shares covered by this prospectus, including, without limitation, all registration and filing fees, and fees and expenses of our counsel and our accountants.

 

22 
 

 

SELLING STOCKHOLDERS

 

We have prepared this prospectus to allow the Selling Stockholders or their successors, assignees or other permitted transferees to sell or otherwise dispose of, from time to time, up to 145,533,359 shares of our common stock. The shares of common stock being offered under this prospectus were acquired by the Selling Stockholders in various private offerings and were sold pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated under the Securities Act. In connection therewith, the investors made to us certain representations, warranties, covenants, and conditions customary for private placement investments.

 

The table below presents information regarding the Selling Stockholders and the shares of our common stock that they may sell or otherwise dispose of from time to time under this prospectus. Beneficial ownership is determined under Section 13(d) of the Exchange Act and generally includes voting or investment power with respect to securities and including any securities that grant the Selling Stockholders the right to acquire common stock within 60 days of January 20, 2023. Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to the shares, subject to community property laws where applicable.

We do not know when or in what amounts the Selling Stockholders may sell or otherwise dispose of the shares covered hereby. We currently have no agreements, arrangements or understandings with the Selling Stockholders regarding the sale of any of the shares by them other than the registration rights agreement described below. The Selling Stockholders might not sell any or all of the shares covered by this prospectus or may sell or dispose of some or all of the shares other than pursuant to this prospectus. Because the Selling Stockholders may not sell or otherwise dispose of some or all of the shares covered by this prospectus and because there are currently no agreements, arrangements or understandings with respect to the sale or other disposition of any of the shares, we cannot estimate the number of the shares that will be held by the Selling Stockholders after completion of the offering.

 

Each Selling Shareholder has indicated to us that neither it nor any of its affiliates has held any position or office or had any other material relationship with us in the past three years except as described in the footnotes to the table.

 

The shares of common stock being offered under this prospectus may be offered for sale from time to time during the period the registration statement of which this prospectus is a part remains effective, by or for the accounts of the Selling Stockholders named below.

 

   Shares of Common Stock 
Name of Selling Stockholder  Beneficially
Owned Prior to
the Sale of all
Shares covered by
this prospectus
   Covered by
this prospectus
   Beneficially
Owned After
the Sale of all
Shares covered by
this prospectus (1)
   As a Percent of
Total Outstanding
After the Sale of
Shares covered by
this prospectus (2)
 
RALPH M HOFMEIER   27,918,378    27,918,378         
IRMA VELAZQUEZ   21,159,353    21,159,353         
IRMA VELAZQUEZ DIAZ   18,356,035    18,356,035         
ANDREA HOFMEIER   8,000,000    8,000,000         
EUGENE HUNT   5,892,949    5,892,949         
JASON FOLIE   5,830,553    5,830,553         
TIMOTHY MEISNER   5,213,832    5,213,832         
GARY RODNEY   6,250,000    4,375,000    1,875,000    * 
NATHANIEL A. MEYER   3,000,000    3,000,000         
CRAIG J. THEUNINCK   2,635,000    2,635,000         
DANA SCHNEPF   2,500,000    2,500,000         
TYLER PERRY   2,275,471    2,275,471         
BRIAN QUIRAM   2,000,000    2,000,000         
DANE SCHENDEL   1,916,666    1,916,666         
AARON DAVID BERNARD   1,875,000    1,875,000         
BENJAMIN ROBERT BURNS   1,350,000    1,350,000         
CHRISTIAN LHEISSON   1,236,669    1,236,669         
DAN ZIEGLER   800,108    800,108         
PERRY SANOY   790,000    790,000         

 

 

 23

 

 

JACQUELINE YOUNG   733,565    733,565         
LAYNE VANDERWERF   725,000    725,000         
ROBERT JAMES BURNS   600,000    600,000         
FON CONSULTING, LLC (3)   600,000    600,000         
MICHAEL TODD MORET   600,000    600,000         
REID OLSON   600,000    600,000         
JAMES LEE MARTIN   550,000    550,000         
COLTER MEISNER   500,000    500,000         
MICAELA MEISNER   500,000    500,000         
DWAYNE NYMAN   500,000    500,000         
DAVID PATER   500,000    500,000         
PIERRE SANOY   500,000    500,000         
JOHN J. VANDEBERGHE   500,000    500,000         
JOAN MARIE BURNS   493,332    493,332         
RICK FRENCHETTE & MICHELLE FRENCHETTE JT TEN   440,000    440,000         
COREY E. HOFFMAN   415,000    415,000         
CHAD ALLEN CARTENS   400,000    400,000         
CHRISTOPHER TIERNEY   400,000    400,000         
TIM BURNS   383,332    383,332         
DOUGLAS JURGENS   370,000    370,000         
ELIZABETH R. JOHNSON   350,000    350,000         
MINDY L. MCCOLLOW   350,000    350,000         
STEVEN THOMA   320,000    320,000         
CARMEN LAURA PORTILLA Y PIRIS   311,200    311,200         
CLYDE R. PARKS   300,000    300,000         
DENIS MAINS   286,051    286,051         
RODNEY LORENZ   280,000    280,000         
DONALD JOHN HOTTER III & JUDY MAE HOTTER   270,000    270,000         
RONALD FEGER   268,246    268,246         
GERALD DEAN KRENZKE   253,333    253,333         
ANTJE MEISNER   250,000    250,000         
HANS U. GLATTLI   240,000    240,000         
ASHLEY CHRISTINA EVERETT   230,512    230,512         
LANCE MUELLER   230,000    230,000         
MARK W. SPEAR & MINDI M. SPEAR   230,000    230,000         
TROY MEISNER   225,882    225,882         
GREEN DIMENSIONS LTD (4)   221,667    221,667         
JOSEPH DEDEK   220,000    220,000         
DANNY C. PETERSON   220,000    220,000         

 

 24

 

 

 

RODNEY LORENZ & MELISSA LORENZ JT TEN   210,000    210,000         
FLOYD BAYNES   200,000    200,000         
JEREMY BAYNES   200,000    200,000         
WAYNE A BIEBER   200,000    200,000         
WAYNE CLEGG   200,000    200,000         
FARIBO WEST MALL LLC (5)   200,000    200,000         
KATHLEEN FROEMMING   200,000    200,000         
STEVE HAYES   200,000    200,000         
ADAM KOPESKY   200,000    200,000         
PHIL KOPESKY   200,000    200,000         
BENJAMIN SCHNEPF   200,000    200,000         
SHELIA TEPLEY   200,000    200,000         
BRIAN DOUGLAS ZIEGLER   200,000    200,000         
RICK FUERSTENAU   194,000    194,000         
MICHAEL RIEKEN & MEGAN RIEKEN JT TEN   180,000    180,000         
RICK FRECHETTE & MICHELLE FRECHETTE JT TEN   166,666    166,666         
JOSEPH MURILLA   166,666    166,666         
RICKY THEUNINCK   160,000    160,000         
DAVE ARNFELT   156,000    156,000         
JAY L. BARGMAN   155,000    155,000         
MARK BALLMAN & BARBARA BALLMAN JT WROS   150,000    150,000         
SUSANTI K. CHOWDHURY   150,000    150,000         
JOSEPH WILLIAM DEGEN   150,000    150,000         
SHAWN KIERSCHT   150,000    150,000         
REID OLSON & LAURA OLSON JT WROS   133,333    133,333         
DONALD QUIRAM   125,000    125,000         
JOSEPH W & PATRICIA G ABRAMS FAMILY TRUST (6)   123,811    123,811         
JUDY MEISNER   119,230    119,230         
RON MEISNER   119,230    119,230         
ALAN CORDS   113,333    113,333         
JAY LEE BARGMAN & JULIE JUANITA BARGMAN   110,000    110,000         
DUANE & LYNN HUNT   110,000    110,000         
ROBERT A. GILBERTSON & CAROL K. GILBERTSON   110,000    110,000         
CHRIS JESSENBERGER   108,000    108,000         

 

 25

 

 

 

CHARLES TEYLOR   103,333    103,333         
MELVA BARGMAN   100,000    100,000         
ROBERT T DAVIS   100,000    100,000         
TODD FOX   100,000    100,000         
ROBERT W FROEMMING & JANIS A FROEMMING JT WROS   100,000    100,000         
RYAN KARL FROMM   100,000    100,000         
TYMOTHY LEO GARRY   100,000    100,000         
TERRY TODD GENS   100,000    100,000         
EUGENE HUNT & PATRICIA HUNT JT TEN   100,000    100,000         
DOUGLAS JUGENS & JEANENE JURGENS   100,000    100,000         
TRENT MEISNER   100,000    100,000         
GENE OKERLUND   100,000    100,000         
RANDY RAYMOND OLINGER   100,000    100,000         
DAVID PFARR   100,000    100,000         
MARK RICHARDSON   100,000    100,000         
GARY RUDOLF   100,000    100,000         
DON SOUTHWICK   100,000    100,000         
NEAL WILLIAM SPEAR   100,000    100,000         
RUSELL LEE SPEAR & ROSE MARIE SPEAR   100,000    100,000         
SVEIN VILAND   100,000    100,000         
PAUL WINGERT   100,000    100,000         
LANCE MEYER & EMILY MEYER JT TEN   84,000    84,000         
PATRICK ELY   80,000    80,000         
VICTOR THOMAS GARY   80,000    80,000         
KENTON GENS   80,000    80,000         
ADAM HAHN   80,000    80,000         
JOHN SPRENGELER   80,000    80,000         
JEAN – LOUIS TOFFEL   80,000    80,000         
MAX C. EMBACHER   78,947    78,947         
GERLACH & CO. FBO DAVID CHAMBOVEY (7)   76,924    76,924         
ANDREAS RASMUSSEN   76,000    76,000         
MATTHEW MORE   73,333    73,333         
CHARLES QUAST   73,333    73,333         
STEVE COLEN   70,250    70,250         
MARA RICHARDSON   70,000    70,000         
MICHAEL J. SOUTHWICK   70,000    70,000         
MARK B RICHARDSON   69,999    69,999         
THOMAS J KRAUS   66,666    66,666         
THOMAS WINGERT   66,666    66,666         
RON BOELTER   60,000    60,000         

 

 26

 

 

 

TIMOTHY BRUCE DAGGETT   60,000    60,000         
GERLACH & CO. FBO LAURENT ROTEN (8)   60,000    60,000         
BEN HOLTHUS   60,000    60,000         
BRANNON JOSEPH KANTEN   60,000    60,000         
FRANK PETRUSNEK   60,000    60,000         
TINA REINE   60,000    60,000         
BRIAN EDWARD SCHAAF   60,000    60,000         
JAMES IRWIN   59,615    59,615         
RAEANN NIEMAN   59,615    59,615         
TERESA STOSKOPF   56,667    56,667         
MARK R. GEORGE   52,500    52,500         
TIMOTHY ACKERMAN & SUSAN ACKERMAN   50,000    50,000         
DAVID ARNFELT   50,000    50,000         
SHELLEY ANN AUSTIN   50,000    50,000         
CAROL BARTELT   50,000    50,000         
BILL HLAVAC   50,000    50,000         
AVI KEINAN   50,000    50,000         
DAVID KUGLIN & SARA KUGLIN   50,000    50,000         
MIKE MORET   50,000    50,000         
JORDAN RICHARDSON   50,000    50,000         
JOE ROSE & JULIE ROSE   50,000    50,000         
KEITH SCHECHINGER & DAWN SCHECHINGER JT TEN   50,000    50,000         
KARI ELIZABETH SOUTHWICK   50,000    50,000         
JAMES A THEUNINCK   50,000    50,000         
MICHELLE JEAN THIELE   50,000    50,000         
MITCHELL VOEHL   50,000    50,000         
PAUL WESTHOFF   50,000    50,000         
JACKI ANDERSON   45,000    45,000         
DOMINIQUE MORAND   42,345    42,345         
ROBERT PETERSON JR.   42,000    42,000         
KURT HANKINS   40,000    40,000         
SHELBY KETCHMARK   40,000    40,000         
NICK KLASEUS & MARY KLASEUS JT WROS   40,000    40,000         
SCOTT RILEY & PAM RILEY JT TEN   40,000    40,000         
MITCHELL ZOZA   40,000    40,000         
SCOTT CAMPBELL   38,000    38,000         
CHAD SISCO   37,735    37,735         

 

 27

 

 

 

JESSIE MONTANA HOTTER   36,000    36,000         
LACEY CORDS   33,333    33,333         
BRENT JOSEPH DAUK   33,333    33,333         
DILLION FRECHETTE   33,333    33,333         
MATTHEW ALAN REICHEL   33,333    33,333         
KEVIN THIELE   33,333    33,333         
GEORGE DENN   31,000    31,000         
DAVID HAWKINS   30,683    30,683         
ASHLEY E. CHIPMAN   30,000    30,000         
TIFFANY N. CHIPMAN   30,000    30,000         
RICK FUERSTENAU & MARCIA FUERSTENAU   30,000    30,000         
CHARLES HOLLADAY & LINDA HOLLADAY   30,000    30,000         
CARSON QUAST   28,266    28,266         
HUNTER MEISNER   28,000    28,000         
IAN MEISNER   28,000    28,000         
MARISSA AUTUMN SOUTHWICK   28,000    28,000         
JOSEPH MULLER   27,522    27,522         
DENNIS MULCAHEY   27,333    27,333         
SELENA M ELY   26,666    26,666         
JEREMY DE CORY   26,000    26,000         
REBECCA J BROCK   25,516    25,516         
HEIDI CLOBES   25,000    25,000         
JONATHAN C DAVIS   25,000    25,000         
VERONICA L. DAVIS   25,000    25,000         
MITCH DENN   25,000    25,000         
TRENT ARTHUR LANGENWALTER   25,000    25,000         
JUSTIN MICHAEL MEISNER   25,000    25,000         
LLOYD TELFORD & VENOUS MEMARI JT TEN   25,000    25,000         
BILL WIEBELHAUS   25,000    25,000         
LINDSEY MICHELLE WRIGHT   25,000    25,000         
ROBERT SANTOS NESPEREIRA   24,500    24,500         
ILONA MUENZER   23,530    23,530         
MAYAN METZLER   23,333    23,333         
CALEY ANN CLOBES   21,204    21,204         
SUMMER DE LA CRUZ   20,769    20,769         
DAMIAN BURE & DANIELLE BURE JT TEN   20,000    20,000         
ALEXA CORDS   20,000    20,000         
TYLER DANIEL COWDIN   20,000    20,000         
PATRICIA ELIAS   20,000    20,000         
MEGAN M. ELY   20,000    20,000         
MIKE ELY & SELENA ELY JT TEN   20,000    20,000         
DOUGLAS FLAUTE   20,000    20,000         

 

 28

 

 

 

RONALD HASLIP & JOANNE HASLIP   20,000    20,000         
THOMAS E HEWITT   20,000    20,000         
NORBERT HOLTZER   20,000    20,000         
MARK JOHNSON   20,000    20,000         
SEAN KLUGHERZ   20,000    20,000         
MONTE LARSON   20,000    20,000         
JOHNNIE NOVELLA MEISNER   20,000    20,000         
MATT OSWALD   20,000    20,000         
JEROD RUDOLF   20,000    20,000         
ANTHONY SCORNAVACCA JR   20,000    20,000         
JEREMY W SODER   20,000    20,000         
MIRANDA ELIZABETH SOUTHWICK   20,000    20,000         
THOMAS VANDEGRIFT   20,000    20,000         
YARON WAINBERG   20,000    20,000         
KEN MEGER   19,230    19,230         
JEFFREY LEE SCHNEIDER   19,230    19,230         
ANA BEATRIZ DOMINGUEZ ORGANERO   19,141    19,141         
RICHARD BENGTSON   19,000    19,000         
ANA BEATRIZ DOMINGUEZ   18,561    18,561         
JEN TRUE   17,241    17,241         
RICHARD JOSEPH KAHNKE   16,666    16,666         
DAKOTA WILLIAM THIELE   16,666    16,666         
BRUCE BENNETT   15,000    15,000         
ANTHONY RAHM   15,000    15,000         
FREDERIEKE MARIAHELENE (F.M.H) SHOUTE   15,000    15,000         
CRAIG MARIHART   14,100    14,100         
PIERRE-ALAIN FREY   14,050    14,050         
ALLAN ABBE & MARILYN ABBE JT TEN   13,333    13,333         
KYLE FRECHETTE   13,333    13,333         
NICOLE FRECHETTE   13,333    13,333         
TED JEWISON   13,333    13,333         
CRAIG OGDEN   13,333    13,333         
JAMIE SCHUMANN   13,333    13,333         
ANDREW BLAKE WEIMERT   13,333    13,333         
ROBERT JOHN WINGERT   13,333    13,333         
COREY SACK   13,332    13,332         
MICHEL THIEREN   11,000    11,000         
DAVID CZAP   10,600    10,600         
MATTHEW MULLER   10,189    10,189         
JORDAN HARRELL   10,100    10,100         

 

 29

 

 

 

BRYCE ANDERSON & JACKI ANDERSON   10,000    10,000         
STEVE BEETCH   10,000    10,000         
ADAM ERHART BRITTON   10,000    10,000         
KIP E BRUENDER   10,000    10,000         
ELISABETH JACQUOT   10,000    10,000         
DESMOND KOSMOSKI   10,000    10,000         
JEFFREY F LAGREW   10,000    10,000         
AARON LEWIS   10,000    10,000         
DIEGO ANDRES LHERISSON   10,000    10,000         
KEVIN MOCK   10,000    10,000         
ROB ROLOFF & LINDAL ROLOFF   10,000    10,000         
GARRICK RUDOLF   10,000    10,000         
SPENCER RUDOLF   10,000    10,000         
JENNA RYAN   10,000    10,000         
BOB SCHMIDT   10,000    10,000         
ROBERT P. THOMAS   10,000    10,000         
TERRY TRICKEY & CHRISTINE TRICKEY JT TEN   10,000    10,000         
THOMAS WEISKE   10,000    10,000         
MCKENZIE ZUNIGA   10,000    10,000         
CHELSEA KAY JENNE   9,409    9,409         
ADAM BRINCKMAN   8,000    8,000         
GEORGE JORDAN & BETTE P JORDAN JT TEN   8,000    8,000         
ANNA REGINA BURNS   6,666    6,666         
JOSEPH MICHAEL BURNS   6,666    6,666         
STEVEN J MARCOTTE   6,666    6,666         
JEREMIAH SACK   6,666    6,666         
DYLAN SMICK   6,666    6,666         
KATERI WIENER   6,666    6,666         
THOMAS GEELAN   5,189    5,189         
ANDREW BOCK & EVA BOCK   5,000    5,000         
MADISON CLARK   5,000    5,000         
MORGAN GOETTL   5,000    5,000         
SARAH LILLIAN HARRELL   5,000    5,000         
QAISER HASSAN   5,000    5,000         
GUY MIREZKY   5,000    5,000         
SHANE CRAIG NELSON   5,000    5,000         
JEFF PRANGE   5,000    5,000         
CARTER QUAST   5,000    5,000         
JEFF REITER & BRANDI REITER JT WROS   5,000    5,000         
WILLIAM L. SHRADER   5,000    5,000         
ALBERT DOSSA   4,975    4,975         
AUSTIN JOHN SNOW   4,000    4,000         
BRUCE JORDAN   3,290    3,290         

 

 30

 

 

 

NICK ARNFELT & BLAKE ARNFELT   3,000    3,000         
RICHARD KELLY   3,000    3,000         
JULITTA MIHM   3,000    3,000         
ERIC GLEASON   2,667    2,667         
JOSEPH SPITZER   2,545    2,545         
PHILLIP R. CARSON   2,500    2,500         
JAQUELYNNE A. RICHARDSON   2,500    2,500         
DENNIS THOMPSON   2,333    2,333         
DYLAN THOMPSON   2,333    2,333         
ZOIE BURTON   2,000    2,000         
CHRISTINE TRICKEY   2,000    2,000         
JULIAN HAMBURGER   1,500    1,500         
KATHLEEN A FORRESTER   1,334    1,334         
JERRY KROEGER (GERALD LEE KROEGER)   700    700         
Total   145,553,359    145,553,359           

 

* Less than 1%

 

(1)We do not know when or in what amounts a Selling Stockholder may offer shares for sale. The Selling Stockholders might not sell any or might sell all of the shares offered by this prospectus. Because the Selling Stockholders may offer all or some of the shares pursuant to this offering, and because there are currently no agreements, arrangements or understandings with respect to the sale of any of the shares, we cannot estimate the number of the shares that will be held by the Selling Stockholders after completion of the offering. However, for purposes of this table, we have assumed that, after completion of the offering, none of the shares covered by this prospectus will be held by the Selling Stockholders.

 

(2)Based on 192,869,220 shares of common stock outstanding on January 20, 2023.

 

(3)Steven Saltzstein and Len Panzer each have voting and disposition power over these shares.

 

(4)Sagi Green has voting and disposition power over these shares.

 

(5)David R Froemming has voting and disposition power over these shares.

 

(6)Joseph Abrams has voting and disposition power over these shares.

 

(7)David Chambovey has voting and disposition power over these shares.

 

(8)Laurent Roten has voting and disposition power over these shares.

 

The Selling Stockholders, or their partners, pledgees, donees, transferees or other successors may sell up to all of the shares of our common stock shown in the table above pursuant to this prospectus in one or more transactions from time to time as described below under “Plan of Distribution.” However, the Selling Stockholders are not obligated to sell any of the shares of our common stock offered by this prospectus.

 

31 
 

 

PLAN OF DISTRIBUTION

 

We are registering the shares of Common Stock to permit the resale of these shares of Common Stock by the Selling Stockholders and any of their transferees, pledgees, assignees, donees, and successors-in-interest from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the Selling Stockholders of the shares of Common Stock. We will bear all fees and expenses incident to the registration of the shares of Common Stock.

 

Each Selling Stockholder of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the OTCQB or OTCQX or stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:

 

  · ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
  · block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
  · purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
  · an exchange distribution in accordance with the rules of the applicable exchange;
  · privately negotiated transactions;
  · settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;
  · in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
  · through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
  · a combination of any such methods of sale; or
  · any other method permitted pursuant to applicable law.

 

The Selling Stockholders may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.

 

Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

 

In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

 

The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. It is our understanding that no Selling Stockholder has any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

 

Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus.

 

32 
 

 

We plan to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

 

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

 

 

33 
 

 

MARKET PRICE FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

 

(a) Market Information.

 

Our common stock is currently quoted on the OTCQB under the trading symbol “EAWD.” Quotations on the OTCQB reflect inter-dealer prices, without retail mark-up, mark-down commission, and may not represent actual transactions. On January 20, 2023, the last reported sale price of our common stock was $0.077 per share.

 

The following table sets forth for the indicated periods the high and low intra-day sales price per share for our common stock for the four quarters of 2021, the four quarters of 2022 and as of January 20, 2023.

  

   High   Low 
2021: First Quarter  $0.76   $0.15 
2021: Second Quarter  $0.45   $0.17 
2021: Third Quarter  $0.59   $0.05 
2021: Fourth Quarter*  $1.00   $0.0001 
           
2022: First Quarter  $0.45   $0.15 
2022: Second Quarter  $0.25   $0.16 
2022: Third Quarter  $0.21   $0.05 
2022: Fourth Quarter  $0.08   $0.02 
           
2023: First Quarter to date  $0.09   $0.03 

———————

*From September 28, 2021 to October 27, 2021, public quotes of the Company’s stock were temporarily removed from the OTC marketplace due to the Company’s late filing of its Annual Report on Form 10-K for the year-ended December 31, 2020 and the Quarterly Reports on Form 10-Q for the subsequent two quarters in accordance with Exchange Act Rule 15c-211. During that period, there was no public trading market for the Company’s shares and several anomalous “trades” for $0.0001 that were likely the result of privately negotiated transactions occurred. These prices do not have any relation to the market value of the shares and do not reflect a “trading price” as the term is commonly used and therefore such amounts have been excluded from this table.

 

Penny Stock

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

 

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

 

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

 

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These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, shareholders may have difficulty selling our securities.

 

(b) Holders.

 

As of January 20, 2023, there were 846 record holders of 192,869,220 shares of the Company’s common stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, registered clearing agencies, banks, and other fiduciaries. The transfer agent of our common stock is Worldwide Stock Transfer, LLC.

  

(c) Options

 

None.

 

(d) Securities authorized for issuance under equity compensation plans.

 

Effective as of September 12, 2022, the Board of Directors adopted the Energy and Water Development Corp. 2022 Long Term Incentive Plan (the “2022 LTIP”). Under the 2022 LTIP, the Company reserved 17,493,000 shares of common stock to grant shares of common stock of the Company to employees and individuals who perform services for the Company. The purpose of the 2022 LTIP is to attract and retain the best available personnel for positions of substantial responsibility, to provide incentives to individuals who perform services for the Company, and to promote the success of the Company’s business. The 2022 LTIP permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and other stock or cash awards as the Board of Directors may determine.

 

DIVIDEND POLICY

 

We have never declared nor paid any cash dividends on our common stock, and currently intend to retain all of our cash and any earnings for use in our business and, therefore, do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends on our common stock will be at the discretion of the Board of Directors and will be dependent upon our consolidated financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.

 

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DESCRIPTION OF THE BUSINESS

 

Company Overview

 

Energy and Water Development Corp. (the “Company” or “EAWD”) was originally incorporated as a Delaware corporation named Wealthhound.com, Inc. in 2000 and was converted to a Florida corporation under the name Eagle International Holdings Group Inc. on December 14, 2007.

 

On March 10, 2008, the Company changed its name to Eurosport Active World Corporation and on March 17, 2008, the Company entered into an Agreement and Plan of Acquisition (the “Acquisition Agreement”) with Inko Sport America, LLC (“ISA”), a privately-held Florida limited liability company wherein all of the members of ISA exchanged their membership interests in ISA for shares of the Company. In connection with the closing of the Acquisition Agreement, the Company adopted ISA’s business plan and the Company’s current officers and directors were elected to their positions. This transaction was accounted for as a recapitalization effected by a share exchange, wherein ISA was considered the acquirer for accounting and financial reporting purposes. ISA was administratively dissolved in September 2010.

 

In September 2019, the Company changed its name to Energy and Water Development Corp. to more accurately reflect the Company’s purpose and business sector.  

 

The Company has two wholly-owned subsidiaries in Germany, Energy and Water Development Deutschland GmbH (“EAWD Deutschland”) and EAWD Logistik GmbH (“EAWD Logistik”), to ensure the Company is positioned to service its growing business in one of the EU’s most environmentally progressive countries.

The Business

 

We are an engineering services company formed as an outsourcing green tech platform, focused on sustainable water and energy solutions.

 

  · EAWD builds water and energy systems out of existing, proven technologies, utilizing our technical know-how to customize solutions to meet our clients needs.
  · EAWD designs, builds, and operates Off-Grid EV Charging Stations.
  · EAWD commercializes proven technologies for the sustainable generation of energy and water.
  · EAWD offers design, construction, maintenance and specialty consulting services to private companies, government entities and non-government organizations (NGOs) for the sustainable supply of energy and water.

 

In view of the increased world-wide demand for water and energy, our business goals are focused on self-sufficient energy supplied water generation and green energy production. To accomplish this, we set out to establish an outsourcing green tech platform, providing engineering and technical consultation services to design the most sustainable technological solutions that can provide water and energy. We also intend to secure all required technical, maintenance, education, and training related to the identified technology solutions. To this end the Company has sought potential collaboration with green tech research and development centers in Europe and has established its operating subsidiaries in Hamburg Germany, where we have started to assemble our patent-pending innovative off-grid, self-sufficient energy supply atmosphere water generation systems (EAWD Off-Grid AWG Systems). EAWD Deutschland and EAWD Logistik operate in in Hamburg, Germany to meet the increasing demands of water and energy generation projects in Germany as well as to operate the solar powered EAWD Off-Grid EV Charging Stations, EAWD’s newest product.

 

The green tech industry is constantly evolving due to ongoing and increasing water scarcity as well as increased energy needs in the world.  Therefore, we believe that by designing sustainable and renewable solutions to these problems, EAWD will become an essential component of a rapidly growing industry with many new markets.

 

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The green tech industry is complex because it still requires increased promotion and public education about its potential. Furthermore, regulations in each country are different and, in many cases, several segments are regulated by both national and local (state, provincial, municipal) governments. EAWD’s approach seeks to assist businesses with the growth and development of their general operations by ensuring the efficient, profitable, and sustainable supply/generation of water and energy allowing our potential customers to focus on their business while adopting strategies of sustainability. Using our own EAWD Off-Grid AWG Systems, EAWD Off-Grid EV Charging Stations, EAWD Off-Grid Power Systems, EAWD Off-Grid Water Purification Systems, and other identified technology, products, and services licensed or purchased from third party sources, we are delivering and installing a product set that suits the green technology water and/or energy needs of our customers. By using the state-of-the art technological solutions and technologies identified, designed, and provided by EAWD and its collaborators, we believe that our potential clients will be free to focus on the performance of their operations as well as with the water and energy consumption or generation regulations within their industry. Our clients may be businesses seeking to upgrade their business processes, NGOs or governmental entities seeking to apply green technology solutions for the water and energy they supply to their constituencies.

 

We continue to be a development stage company. The Company presently assembles its EAWD Off-Grid AWG Systems and EAWD Off-Grid EV Charging Stations at its workshop in Germany and outsources most of its engineering and technical services as well as services relating to the promotion, selling, and distribution of its products. We presently have only nine employees: Ms. Velazquez, our Chief Executive Officer, Vice-Chairman of the Board of Directors, and a significant stockholder, Mr. Hofmeier, our Chief Technology Officer, Chairman of the Board of Directors, and a significant stockholder, two engineers, two technicians, one accountant assistant, and two assemblers. Ms. Velazquez and Mr. Hofmeier are married.

 

We seek to focus on three main aspects of the water and energy business: (1) generation, (2) supply, and (3) maintenance. We seek to assist private companies, government entities and municipalities, and NGOs to build profitable and sustainable supplies/generation capabilities of water and energy as required by selling them the required technology or technical service to enhance their productivity/operability. With its outsourced technical arm and its commission-based global network of distributors, the Company expects to create sustainable added value to each project it takes on while generating revenue from the sale of own EAWD Off-Grid AWG Systems, EAWD Off-Grid EV Charging Stations, EAWD Off-Grid Power Systems, and EAWD Off-Grid Water Purification Systems, royalties from the commercialization of energy and water in certain cases, and the licensing of our innovated technologies; as well as from its engineering, technical consulting, and project management services.

 

The following table depicts the Company’s service and product offerings to its clients.

 

 

 

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We provide customized technology solutions and technical services, based upon client need and preference, which may include any or all of the following:

 

  · water and energy generation
  · off-grid electric vehicle charging stations
  · technical assistance
  · strategic and financial partnering
  · project management

 

The Company also focuses on addressing areas of the industry which concentrate on new technological and engineering concepts relating to water and energy generation and those related components that assist in advancing the green tech industry. These include:

 

  · advancement of EAWD Off-Grid AWG Systems
  · development of techniques to attain self-sufficient supply of energy
  · advancement of new ideas on energy generation, storage and management implementation
  · designing, prototyping, and arranging the manufacture of new water and energy generation systems
  · designing and prototyping off-grid self-sufficient power systems
  · designing and prototyping solar powered charging stations for electric vehicles

 

Our Vision

 

The size of the global market for atmospheric water generators was estimated at USD 959.85 million in 2020, reached USD 1,074.01 million in 2021, and at a compound annual growth rate (CAGR) of 14.75%, is expected to reach USD 2,515.19 million by 2027. (Source: Atmospheric Water Generator Market 2022 Report published by 360i Research)

 

The main market dynamics to consider are the growing numbers of AWGs across various end-use verticals and versus the high energy consumption, production cost, and high carbon footprint of such technology. Our research and development activities in AWG technology have led us to develop novel technologies that overcome these negative dynamics (such as our EAWD Off-Grid AWG Systems).

 

The mission of EAWD is to provide sustainable water generation systems based on high efficiency, renewable sources and to provide off-grid self-sufficient energy supply solutions. Through a combination of the best design and configuration of state-of-the-art technology-assisted solutions, EAWD has created a completely self-sufficient off the grid energy generation and water production system, which can be simultaneously used to meet potable water requirements and the electrical energy needs of the industrial sector.

 

EAWD promotes and commercializes its green technology solutions via commission-based distributers and agents worldwide.

 

Through our BlueTech Alliance for Water Generation, established in December 2020, we have state-of-the-art technology partners, technology transfer agreements, and technology representation agreements in place relating to aspects of renewable energy and water supply. These unique key relationships offer important selling features and capabilities that differentiated EAWD from its competitors.

 

The Company plans to generate revenue from the sale of EAWD Off-Grid AWG Systems, the development, sale, and operation of the EAWD Off-Grid EV Charging Stations, sale of EAWD Off-Grid Power Systems, and EAWD Off-Grid Water Purification Systems, royalties from the commercialization of energy and water in certain cases, and the licensing of our innovated technologies; as well as from its engineering, technical consulting, and project management services.

 

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Our Products

 

The technological solutions offered by our Company are the following:

 

EAWD Off-Grid AWG Systems

 

Today, atmospheric water generators (AWGs) are standard equipment in many places; however, operating AWGs requires high amounts of energy that is often not available in the places where they are needed most, making the price for the generated water very high.  Our innovative EAWD Off-Grid AWG Systems are designed to have an internal power supply and ability to generate power.  Our EAWD Off-Grid AWG Systems produce sufficient quantities of potable water even in very dry and hot climate conditions and can be scaled to almost any size, community, and/or population. Presently, AWGs are largely used in Asian and African countries. The majority of manufacturers of AWGs, which rely on dehumidifying, are located in China. Almost every U.S. based AWG brand is also supplied by manufacturers in China.

 

By contrast, EAWD uses a proven German technology for condensate water from the air based on A/C technology.  We believe that this method allows higher, more efficient, sustainable performance and a larger quantity of water generation because of its internal power supply and because it does not require high humidity to function. EAWD has licensed the rights to use this German AWG technology for ninety-nine years; however, thanks to our continued research and development efforts, the Company has designed a new, innovative and more efficient configuration that allows the substantial amount of energy required to operate the equipment to be supplied by the equipment itself. Our EAWD Off-Grid AWG Systems line is different in size from the standard AWG line. Our EAWD Off-Grid AWG Systems are energy self-sufficient and can condense large amounts of water out of the atmosphere and we believe they could be a solution in countries around the world that deal with issues of water scarcity.

 

Our EAWD Off-Grid AWG System with an internal power supply, works by first “inhaling” large volumes of air, then cooling the air down to the dew point, and finally collecting, filtering, and mineralizing the resulting condensed water. Through this process, pure drinking water is created that meets the quality standards of the World Health Organization (WHO).  In regions with high temperatures and high humidity levels, a single system can generate more than 300,000 liters of water per day. Our EAWD Off-Grid AWG Systems line starts at 2,640 gallons/day and can expand the water supply to one acre-feet/day, which we believe, in effect, is essentially the ability to produce an unlimited supply of water. As a certified vendor of the United Nations (UN) Global Marketplace, EAWD is introducing the EAWD Off-Grid AWG and Power Systems to the UN with the hopes of initially supplying the equipment to large cluster of agencies established in key locations for humanitarian response as well as refugee camps around the world in need of fresh water.

 

EAWD Off-Grid Water Purification Systems

EAWD also seeks to respond to the growing need for drinking water by proposing a water purification solution utilizing solar, photovoltaic energy and, when applicable, a mini-windmill or other alternate source of renewable energy. The design of the system is ready to be built and delivered on demand.

Generally, drinking water is produced by passing sea water, lake water, river water, or stagnant water through several stages of purification and treatment until it is rendered drinkable in accordance with WHO standards. In the case of sea or stagnant water, we recommend a treatment via reverse osmosis membranes, which permits the retention of dissolved solids and results in obtaining water of drinking quality. If the water being treated emanates from lakes or rivers, we recommend treatment via an ultrafiltration membrane which functions by retaining suspended materials such as colloids, viruses and bacteria. The systems proposed by EAWD are containerized and contain all the equipment necessary to function autonomously, in part due to an automatic cleansing system that can be accessed remotely via satellite or the internet. Moreover, the machines use available renewable energy sources such as solar or wind to function.

EAWD Off-Grid EV Charging Stations

 

The global electric vehicle market was valued at $162.34 billion in 2019, and is projected to reach $802.81 billion by 2027, registering a CAGR of 22.6%. Asia-Pacific was the highest revenue contributor, accounting for $84.84 billion in 2019, and is estimated to reach $357.81 billion by 2027, with a CAGR of 20.1%. North America is estimated to reach $194.20 billion by 2027, at a significant CAGR of 27.5%. Asia- Pacific and Europe collectively accounted for around 74.8% share in 2019, with the former constituting around 52.3% share. North America and Europe are expected to witness considerable CAGRs of 27.5% and 25.3%, respectively, during the forecast period. The cumulative share of these two segments was 40.1% in 2019, and is anticipated to reach 51.0% by 2027. (Source: Electric Vehicle Fluids Market Global Forecast to 2030 2021 Report from Markets and Markets.)

 

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There is also an increasing consensus among European truck manufacturers and industry stakeholders that battery electric trucks (BETs) will play a dominant role in the decarbonization of the road freight sector. Most truck makers including Daimler, DAF, MAN, Scania and Volvo are now focusing on bringing BETs to the mass market for all vehicle segments, including long-haul, starting from 2024. For this, a network of public high-power and overnight charging points needs to be rolled out across Europe no later than 2024.

 

Based on our patent-pending Off-Grid Power System, EAWD has developed an innovative design and configuration of off-grid charging stations for BETs and electric vehicles in Germany. Our product is the first off-grid solution available in Europe for charging the BETs and electric passenger vehicles that are currently on the roads of Europe. EAWD plans to establish up to 1,700 charging stations throughout Germany starting with 40 locations scheduled to be deployed in the fourth quarter of 2022.

 

EAWD Off-Grid Power Systems

 

Today, batteries for stationary storage have become a commodity, but in order to reduce the duration, complexity and cost of the installation, and to increase its capacity or relocate a system over time as well as to reduce its carbon footprint and environmental impact, we offer a complete Electrical Energy Storage System (EESS) and Energy Management System (EMS) for a wide range of customers and applications, including microgrids and EV fast charging stations. A highly capable energy management system which secures the efficient energy supply and storage of energy. Example: with elements such as software and Battery Management System (BMS) our systems can allow controlled and optimized battery cell management.

 

This product portfolio includes systems and complete services for solar power generation in the building envelope. A high-quality frameless glass solar panel with a super-matte surface, which secures a high-performance energy source.

 

In contrast to classic solar systems on the roof, EAWD combines the highest standards of aesthetics with high efficiency energy generation. With these solutions, EAWD supports its customers on their way to CO2 neutrality and the search for alternative renewable energies.

 

Worldwide Business Relationships

 

EAWD has commission-based independent agents and distributors strategically placed around the world in Germany, Mexico, United States, India, Canada, Australia, Colombia, Nepal, Kenya, Morocco, and Thailand to promote and sell EAWD’s technology solutions.

 

We believe that this worldwide presence through our agents and distributors will provide us access to the most important markets in need of water, energy, and energy management solutions.

 

Current Projects

 

EAWD Off-Grid EV Charging Stations - The Company has leased 24,000 sq. mi of land in Kassel, Germany, where it is establishing the first large off-grid charging station location for electric trucks and passenger vehicles in Germany and Europe. With enough solar panels installed, each charging station is proposed to generate at least five MWh of solar energy per day and have a total capacity of at least one MWp. More than 2,400 MWh of energy storage capacity will be used in lithium battery systems (LFP), to ensure the continuous use and availability of energy. The system is low voltage AC coupled, which will ensure easy integration and expansion of the system in the future. The different elements of EAWD’s system form a “micro grid” that is isolated and independent from the public power grid. It will have a capacity up to one MW of instant and continuous power. The charging points will be of 300 KW of power, with the capacity to charge two trucks simultaneously of 150 KW each, of course it will also be able to charge any other electric vehicle since it has the most common and standard connections/adapters in Europe.

 

A solar powered EAWD Off-Grid AWG System has been built in Hamburg to be used as the showcase for the water generation at the larger project in Gruneheide Germany, where it is expected to produce up to six million gallons of water per day.

 

The Company has completed the manufacture and installation of the first of forty planned solar powered EAWD Off-Grid EV Charging Stations for electric long-haul trucks in Hamburg, Germany. Our charging stations are the first off-grid charging station available for these e-trucks in Europe and the Company plans to contract with companies that own these electric long-haul trucks to provide fleet charging as well as to install them in public places for per-use fees.

 

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COVID-19 is an incomparable global public health emergency that has affected almost every industry and has caused the worst global economic contraction of the past 80 years (IMF). Concerted global efforts achieved the development of vaccines that have helped to reduce a person´s risk of contracting the virus. However, the current war in Ukraine led us as well to considering the changes in consumer behavior and demand, purchasing patterns, re-routing of the supply chain, dynamics of current market forces, and the significant interventions of governments; As a consequence of the foregoing, the following projects have been delayed but the Company continues to make progress on their fulfillment:


EAWC Tecnologias Verdes, S.A.P.I. de CV Purchase – EAWC-TV functions as a distributor of EAWD products and engineering services.  In 2020, EAWC-TV placed a USD $550,000 initial order for a solar powered EAWD Off-Grid AWG System which was built in Germany and delivered to the customer in accordance with the purchase agreement. The Company is currently negotiating the purchase of three additional units by the same customer.

 

His Will Innovations (South Africa) Contract – On May 8, 2019, the Company signed a sales contract for the sale of a solar powered EAWD Off-Grid AWG System to a South African customer for a purchase price of $2,800,000. The build out of the equipment began in the fourth quarter of 2019, however because of delays due to COVID-19, the expected completion date has been pushed to late 2022. The foregoing description of the purchase contract does not purport to be complete and is qualified in its entirety by reference to the copy of such contract filed as Exhibit 10.8 to this registration statement.

 

Patent, Trademark, License and Franchise Restrictions and Contractual Obligations and Concessions

 

The Company has filed applications to register its name and logo as trademarks with the United States Patent and Trademark Office (USPTO) to secure its corporate identity.

 

The Company has filed an application to patent its EAWD Off-Grid AWG Systems with the World Intellectual Property Organization (WIPO) and the USPTO.

 

The Company has filed an application to patent its EAWD Off Grid Self Sufficient Electric Vehicle Charging Station with the World Intellectual Property Organization (WIPO) and the USPTO.

 

Competition

 

Regarding the Atmospheric Water Generation Process, we compete by providing innovative systems assembled with state-of-the-art technologies and that contain self-sufficient power supplies, which make them more sustainable and profitable than the traditional solutions. We also set ourselves apart by providing services that are valued by our customers such as reliable sales relationships, product innovations, and responses to changing market/business needs.

 

The market witnesses the presence of a diversified array of large and small scale manufacturers resulting in a significant level of competition in the global market. The competition in the market, both in the residential and commercial sectors, is projected to grow in intensity and is characterized by the demand for advanced and reliable atmospheric water generator units. Rising demand for industrial-size AWGs, particularly in regions facing water shortages, is expected to create opportunities for new market players such as EAWD through 2027. Moreover, current research that is focused on increasing overall product efficiency in the industry is anticipated to open new avenues for market players over the coming years. According to an atmospheric water generator market size report (published by Grand View Research in 2020), some of the prominent players in the atmospheric water generator (AWG) market include: Akvo Atmospheric Water Systems Pvt. Ltd., Dew Point Manufacturing, Saisons Trade & Industry Private Limited, Water Maker India Pvt. Ltd., Planets Water, Water Technologies International, Inc. (WTII), SkyWater Air Water Machines, Drinkable Air, Hendrx Water, Atlantis Solar, GENAQ Technologies S.L.Air2Water LLCEcoloBlue, Inc and Watergen. On some level, each of these companies faces the two main industry challenges: carbon footprint and high-power requirement.

 

As per the report, the global renewable energy industry was accounted for $881.7 billion in 2020, and is expected to reach $1,977.6 billion by 2030, growing at a CAGR of 8.4% from 2021 to 2030. The most popular renewable energy sources currently are: Solar energy. Wind energy. Hydro energy. Tidal energy. Geothermal energy. Biomass energy. As for the sector of electromobility in a base-case scenario, EV-charging demand could reach 23 TWh per year in Germany by 2030 or up to 43 TWh in an accelerated-adoption scenario, an 8 percent increase over current energy demand. This accelerated scenario corresponds to 16 million EVs in Germany by 2030, an increase in line with studies commissioned by the European Union and spurred by its proposed ICE vehicle ban as well as improving engine-efficiency rates. The solar charging has a very small print in the industry and EAWD consider itself as pioneer of Off Grid Charging stations in the eMobility industry, since as today no records could be found about the existence of full off grid charging stations.

 

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Government Regulation

 

The manufacturing, processing, testing, packaging, labeling, and advertising of the technologies that we sell may be subject to regulation by one or more U.S. federal agencies, including the Food and Drug Administration, the Federal Trade Commission, the U.S. Department of Agriculture, the Environmental Protection Agency, and by the standards provided by the U.S. Department of Health and Human Services and the World Health Organization for drinking water. Our operations may also be regulated by various agencies of states, localities, and foreign countries in which consumers reside. Currently, the technologies we intend to use in our solutions and our services are not subject to any governmental regulation in the United States although it is possible that the FDA may choose to regulate the quality of water produced from atmospheric water generating machines in the near future.

 

Since the Company may be subject to a wide range of regulation covering every aspect of our business as mentioned above, we cannot predict the nature of any future U.S. laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative orders, when and if promulgated, would have on the business in the future. Although the regulation of water is less restrictive than that of drugs and food additives, we cannot offer assurance that the current statutory scheme and regulations applicable to water will remain less restrictive. Further, we cannot assure you that, under existing laws and regulations, or if more stringent statutes are enacted, regulations are promulgated, or enforcement policies are adopted, we are or will be in compliance with these new statutes, regulations or enforcement policies without incurring material expenses or adjusting our business strategy. Any laws, regulations, enforcement policies, interpretations or applications applicable to our business could require the reformulation of products, all of which are supplied by third parties, to meet new standards or the recall or discontinuance of certain products not capable of reformulation, additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling or scientific substantiation.

 

Employees

 

We presently have only nine employees: Ms. Velazquez, our Chief Executive Officer, Vice-Chairman of the Board of Directors, and a significant stockholder, Mr. Hofmeier, our Chief Technology Officer, Chairman of the Board of Directors, and a significant stockholder, two engineers, two technicians, one accountant assistant, and two assemblers.

 

Over time, we may be required to hire employees or continue to engage independent contractors in order to execute the projects necessary to grow and develop the business. These decisions will be made by our officers and directors, if and when appropriate. We work with commission-based agents and distributors to promote and sell the Company’s technology solutions. These agents and distributors are independent contractors with whom we have contractual relationships and are compensated solely based on commission.

 

Legal Proceedings

 

Due to the nature of the Company's business, the Company may at times be subject to claims and legal actions. The Company accrues liabilities when it is probable that future costs will be incurred, and such costs can be reasonably estimated. Such accruals are based on developments to date and the Company’s estimates of the outcomes of these matters. Other than litigation that may arise in the usual course of business, the Company is currently involved in the following legal proceedings:

 

EAWD vs Packard and Co-Defendant Nick Norwood - Case number 18-031011 CA-01 Miami-Dade County Circuit Court. The Company is requesting the proof of payment for shares issued in 2008.

 

Reports to Securities Holders

 

We provide an annual report that includes audited financial information to our shareholders. We make our financial information equally available to any interested parties or investors through compliance with the disclosure rules for a small business issuer under the Exchange Act. We are subject to disclosure filing requirements including filing Form 10-K annually and Form 10-Q quarterly. In addition, we will file Form 8-K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549.

 

The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

INTRODUCTORY STATEMENT

 

The following discussion should be read in conjunction with our audited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward-looking statements in the following discussion and elsewhere in this prospectus and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or our behalf. We disclaim any obligation to update forward-looking statements.

 

Narrative Description of the Business

 

We are an engineering services company formed as an outsourcing green tech platform, focused on sustainable water and energy solutions.

 

Addressing challenges post-COVID-19 and current war in Ukraine.

 

COVID-19 is an incomparable global public health emergency that has affected almost every industry and has caused the worst global economic contraction of the past 80 years (IMF). The concerted global efforts achieved the development of vaccines that have helped to reduce a person´s risk of contracting the virus. However, the current war in Ukraine lead us as well to considering the changes in consumer behavior and demand, purchasing patterns, re-routing of the supply chain, dynamics of current market forces, and the significant interventions of governments; Disruptive activities could include the temporary closure of our manufacturing facilities and those used in our supply chain processes, restrictions on the export or shipment of our products, significant cutback of ocean container delivery from Germany, business closures in impacted areas, and restrictions on our employees’ and consultants’ ability to travel and to meet with customers. The extent to which COVID-19 impacts our results will depend on future developments, which still uncertain and cannot be predicted, including new information which may emerge concerning the severity of the current conflict as well as virus variants and the actions to contain it or treat its impact, among others. COVID-19 and the war in Ukraine could also continue to result in social, economic and labor instability in the countries in which we or our customers and suppliers operate.

 

If workers at one or more of our offices or the offices of our suppliers or manufacturers become ill or are quarantined and in either or both events are therefore unable to work, our operations could be subject to disruption. Further, if our manufacturers become unable to obtain necessary raw materials or components, we may incur higher supply costs or our manufacturers may be required to reduce production levels, either of which may negatively affect our financial condition or results of operations.

 

In light of these challenges, the Company is focusing its efforts on supporting key areas of our business that will help us to stabilize in the new environment and strategize for what comes next. Those key areas are: crisis and management response, workforce, operation and supply chain, finance and liquidity, tax, trade and regulatory, as well as strategy and brand.

 

43 
 

 

Results of Operations

 

Results of Operations for the Three Months ended September 30, 2022 Compared to the three Months ended September 30, 2021

 

The following table sets forth our operations for each of the periods presented.

 

   For the Three Months Ended 
   September 30, 
   2022   2021 
   (unaudited)   (unaudited) 
GENERAL and ADMINISTRATIVE EXPENSES          
Marketing fees  $129,714   $1,357 
Officers’ salaries and payroll taxes   128,545    68,195 
Professional fees   106,853    68,272 
Travel and entertainment   5,920    13,696 
Other general and administrative expenses   146,268    56,356 
TOTAL GENERAL and ADMINISTRATIVE EXPENSES   517,300    207,876 
           
LOSS FROM OPERATIONS   (517,300)   (207,876)
           
OTHER INCOME (EXPENSE)          
Change in fair value of derivative liability       (178,673)
Other expense   (134,599)    
Interest income (expense), net       (115,506)
TOTAL OTHER INCOME (EXPENSE)   (134,599)   (294,179)
           
NET LOSS  $(651,899)   (502,055)

 

Revenue

 

The Company recognized no revenue during the three months ended September 30, 2022 and 2021.

 

Cost of equipment sold

 

The Company recognized no cost of equipment sold during the three months ended September 30, 2022 and 2021.

 

General and Administrative Expense

 

General and administrative expense increased by $309,424 to $517,300 for the three months ended September 30, 2022 from $207,876 for the three months ended September 30, 2021.

 

The increase in general and administrative expenses was primarily due to an increase in professional fees of $38,581, officer’s salaries of $60,350, other general and administrative expenses of $89,912, and marketing fees of $128,357.

 

Other Income (Expense)

 

The Company had other expense of $134,599 for the three months ended September 30, 2022 compared to other expense of $294,179 for the three months ended September 30, 2021. The decrease in other expense is primarily the result of a reduction in interest expense of $115,506 and reduction in change in fair value of derivative by $178,673 offset by an increase in other expense of $134,599, which mostly consists of foreign currency gains and losses.

 

44 
 

 

Net Loss

 

Net loss increased by $149,844 to $651,899 for the three months ended September 30, 2022 from $502,055 for the three months ended September 30, 2021. This increase was attributable to the net increases and decreases as discussed above.

 

Results of Operations for the Nine Months ended September 30, 2022 Compared to the Nine Months ended September 30, 2021

 

The following table sets forth our operations for each of the periods presented.

 

   For the Nine Months Ended 
   September 30, 
   2022   2021 
   (unaudited)   (unaudited) 
GENERAL and ADMINISTRATIVE EXPENSES          
Marketing fees  $223,313   $168,832 
Officers’ salaries and payroll taxes   364,818    225,472 
Professional fees   398,593    159,538 
Travel and entertainment   24,368    13,696 
Other general and administrative expenses   384,559    103,169 
TOTAL GENERAL and ADMINISTRATIVE EXPENSES   1,395,651    670,707 
           
LOSS FROM OPERATIONS   (1,395,651)   (670,707)
           
OTHER INCOME (EXPENSE)          
Change in fair value of derivative liability   243,653    4,820 
Other expense   (267,013)    
Interest income (expense), net   (125,712)   (673,701)
TOTAL OTHER INCOME (EXPENSE)   (149,072)   (668,881)
           
NET LOSS   (1,544,723)   (1,339,588)

 

Revenue

 

The Company recognized no revenue during the nine months ended September 30, 2022 and 2021.

 

Cost of equipment sold

The Company recognized no cost of equipment sold during the nine months ended September 30, 2022 and 2021.

 

General and Administrative Expense

 

General and administrative expense increased by $724,944 to $1,395,651 for the nine months ended September 30, 2022 from $670,707 for the nine months ended September 30, 2021. The increase in general and administrative expenses was primarily due to an increase in professional fees of $239,055, officer’s salaries of $139,346, other general and administrative expenses of $281,390, and marketing fees of $54,481.

 

Other Income (Expense)

 

The Company had other expense of $149,072 for the nine months ended September 30, 2022 compared to other expense of $668,881 for the nine months ended September 30, 2021. The decrease in expense is primarily the result of a reduction in interest expense of $547,989 and an increase in the gain on change in fair value of derivative by $238,833 offset by an increase in other expense of $267,013, which mostly consists of foreign currency gains and losses.

 

Net Loss

 

Net Loss increased by $205,135 to a $1,544,723 net loss for the nine months ended September 30, 2022 from a $1,339,588 net loss for the nine months ended September 30, 2021. This increase in net loss was attributable to the net increases and decreases as discussed above.

 

45 
 

 

Comparison of the fiscal years ended December 31, 2021 and December 31, 2020

 

The following table sets forth our operations for each of the years presented.

 

   For the Year Ended 
   December 31, 
   2021   2020 
         
REVENUE          
Revenue   550,000     
TOTAL REVENUE   550,000     
           
COST OF EQUIPMENT SOLD          
Cost of equipment sold   350,000     
TOTAL COST OF EQUIPMENT SOLD   350,000     
           
GROSS PROFIT   200,000     
           
GENERAL and ADMINISTRATIVE EXPENSES          
Marketing fees  $174,892   $20,402 
Officers’ salaries and payroll taxes   300,732    6,000,000 
Professional fees   416,989    535,488 
Travel and entertainment   22,953    33 
Management fees to affiliate       325,000 
Other general and administrative expenses   222,229    278,821 
TOTAL GENERAL and ADMINISTRATIVE EXPENSES   1,137,795    7,159,744 
           
LOSS FROM OPERATIONS   (937,795)   (7,159,744)
           
OTHER INCOME (EXPENSE)          
Change in fair value of derivative liability   (1,269,266)   1,257,473 
Interest income (expense), net   (830,405)   (1,690,513)
TOTAL OTHER INCOME (EXPENSE)   (2,099,671)   (433,040)
           
NET LOSS   (3,037,466)   (7,592,784)

 

Revenue

 

During the year ended December 31, 2021, the Company recognized $550,000 of revenue that was previously deferred in 2020, pending the inspection of equipment pursuant to a sales agreement. For the fiscal year 2020, we generated no revenue.

 

Cost of equipment sold

 

The equipment sold was manufactured by third-party fabricators in accordance with EAWD’s specifications at a cost to EAWD of $350,000, which was recognized along with the revenue during the year ended December 31, 2021. No costs were recognized in fiscal year 2020.

 

Gross profit

 

EAWD recognized a gross profit of $200,000 from the sale of equipment as discussed above for the year ended December 31, 2021, upon recognition of revenue. The Company had no gross profit for the year ended December 31, 2020.

 

General and Administrative Expense

 

General and administrative expense decreased by $6,021,949 or 84.1% to $1,137,795 for the year ended December 31, 2021 from $7,159,744 for the year ended December 31, 2020. The following discussion provides further explanation of the change in each item.

 

46 
 

 

The largest element of change was a decrease in officer’s salaries by $5,699,268 or 95% to $300,732 as compared to $6,000,000 for the year ended December 31, 2020. The decrease resulted primarily from the two following events. First, in the first quarter of 2020 the Company issued a combination of common and preferred stock whose value totaled $1,175,000 for our CEO and $1,063,000 for our COO in satisfaction of accrued salary accumulated during the previous years. Second, during the fourth quarter of 2020 the Company issued a combination of common and preferred stock whose value totaled $2,850,000 for each of our CEO and COO as a bonus for among other things, successfully structuring the Company’s first equipment sale. The Company also issued preferred stock whose value totaled $300,000 for both our CEO and COO as settlement of unpaid accrued salaries.

 

Additionally, the decrease in general and administrative expenses was primarily due to a reduction in management fees to affiliate by $325,000 as the contract with EAWC-TV was terminated as of December 31, 2020 and a reduction in professional fees of $118,499 as a result of lower accounting fees, litigation fees, legal fees and SEC matters. Those decreases were offset by an increase in marketing expense and travel and entertainment of $154,490 and $22,920, respectively, as a result of the Company’s efforts to increase branding and outreach.

 

Other Income

 

Other income (expense) increased expense by $1,666,631 from a $433,040 net expense (2020) to a $2,099,671 net expense (2021) primarily as a result of a reduction of interest expense of $860,108 as a result of reduced interest and amortization of debt discount, offset by an increase in the loss on the fair value of derivative liabilities by $2,526,739.

 

Net Loss

 

Net loss decreased by $4,555,318 to $3,037,466 for the year ended December 31, 2021, when compared to $7,592,784 for the year ended December 31, 2020. As discussed above, this decrease was primarily attributable to the compensation bonus and conversion of accrued salary into stock and increase in general and administrative expenses in 2020 along with revenue recognized in 2021, partially offset by the increase in other expense in 2021.

 

LIQUIDITY and CAPITAL RESOURCES

 

We had $56,983 cash and a working capital deficit of $413,089 at September 30, 2022. We had cash of $589,668 and a working capital deficit of $757,053 at December 31, 2021. Our operating and capital requirements in connection with supporting our operations will continue to be significant. Since inception, our losses from operations and working capital requirements have been satisfied through the deferral of payment for services performed by our founders and related parties discussed more fully below.

 

We have sustained operating losses since our operations began. At September 30, 2022 and December 31, 2021, we had a working deficit of $23,940,116 and $22,395,393, respectively. The Company cannot predict how long it will continue to incur further losses or whether it will ever become profitable as this is dependent upon the reduction of certain expenses and success in obtaining more project contracts, among other things. These conditions raise substantial doubt about the entity’s ability to continue as a going concern.

 

We have satisfied our cash and working capital requirements in the nine months ended September 30, 2022, through the sale of common stock.

 

Comparison of Cash Flows for the Nine Months Ended September 30, 2022 and 2021

 

   Nine Months Ended
September 30,
 
   2022   2021 
Net cash used in operating activities  $(1,318,574)  $(949,115)
Net cash used in investing activities   (78,123)   (4,301)
Net cash provided by financing activities   891,000    1,014,461 
Effect of exchange rate changes on cash   (26,988)   (13,933)
Net (decrease) increase in cash  $(532,685)  $47,112 

 

47 
 

 

Net cash used in operating activities

 

We used $1,318,574 of cash in our operating activities in 2022 compared to $949,115 used in 2021. The increase in cash used of $369,459 includes a net loss of $1,544,723, offset by non-cash expenses of $360,965 principally related to amortization of debt discount and deferred financing costs of $63,296, depreciation expense of $7,778, foreign transaction adjustments of $265,444, and common stock issued for services of $268,100, offset by a change in fair value of derivative liability of $243,653, as well as cash used in working capital items in the amount of $134,816 principally related to an increase in inventory of $272,143 and a decrease in accounts payable and accrued expenses and due to related party of $23,212, offset by an increase in due to officers of $85,169, a decrease in prepaid expenses and other current assets of $75,370.

 

Cash Flows from Investing Activities

 

The Company used $78,123 and $4,301 in cash from financing activities to purchase property and equipment during the nine months ended September 30, 2022 and 2021, respectively.

 

Cash Flows from Financing Activities

 

We received $891,000 (2022) and $1,014,461 (2021) in cash provided from financing activities. The net decrease of $123,461 is due primarily to a $369,500 decrease in financing through issuance of convertible loans, a $54,500 increase in payments of convertible loans payable, and a $24,000 decrease due to costs associated entering the equity line of credit, offset by an increase of $324,539 from proceeds from the sale of stock and subscriptions.

 

Comparison of Cash Flows for the Years Ended December 31, 2021 and December 31, 2020

 

Cash Flows from Operating Activities

 

We used $1,556,268 of cash in our operating activities in 2021 compared to $869,393 used in 2020. The increase in cash used of $686,875 includes a net loss of $3,037,466, offset by non-cash expenses of $2,204,699 principally related to amortization of debt discount and deferred financing costs of $770,134, depreciation expense of $299, change in fair value of derivative liability of $1,269,266, and common stock issued for services of $165,000, as well as cash used in working capital items in the amount of $723,501 principally related to an increase in inventory of $204,533, an increase of prepaid expenses and other current assets of $435,150, a decrease in due to related party of $28,929, and a decrease in accrued management fees and due to officers of $70,482, offset by a decrease in deferred cost of $350,000 and an increase in accounts payable and accrued expenses of $218,096.

 

Cash Flows from Investing Activities

 

We used $4,299 of cash to purchase property and equipment for the year ended December 31, 2021. No cash was used or provided from our investing activities in 2020.

 

Cash Flows from Financing Activities

 

We received $2,162,208 and $881,440 in cash from financing activities in 2021 and 2020, respectively. Cash flow from financing activities of $2,162,208 is primarily due to increased financing in 2021 through $1,888,208 in proceeds from the sale of shares and subscriptions to purchase common shares and $369,500 in proceeds from convertible loans payable, offset by repayments of convertible loans payable in the amount of $95,500.

 

Financial Position

 

Total Assets – At September 30, 2022 the Company had $976,663 representing $56,983 in cash, $54,822 in accounts receivable, $416,509 in inventory, $300,790 in prepaid expenses and other current assets, $69,862 in property and equipment, and $77,697 in operating lease right-of-use asset.

 

At December 31, 2021, the Company had $1,326,738 total assets representing $589,668 in cash, $55,169 in accounts receivable, $196,553 in inventory, $432,082 in prepaid expenses and other current assets, $3,834 in property and equipment, and $49,432 in operating lease right-of-use assets.

 

48 
 

 

PLAN OF OPERATION AND FUNDING

 

We expect to generate more revenues which should, grow in time and lead to a positive cash flow. In the near future, we expect that working capital requirements will continue to be funded through lines of credit, convertible loans and/or further issuances of other securities in sufficient quantities that we will be able to meet our working capital requirement from these possible sources. Additional issuances of equity or convertible debt will result in dilution to our current shareholders.

 

We seek to focus on three main aspects of the water and energy business: (1) generation, (2) supply, and (3) maintenance. We seek to assist private companies, government entities and NGO’s to build profitable and sustainable supplies/generation capabilities of water and energy as required, by selling them the required technology or technical service to enhance their productivity/operability. With its outsourced technical arm and its commission-based global network of vendors, the Company expects to create sustainable added value to each project it takes on while generating revenue from the sale of EAWD Off-Grid AWG Systems, EAWD Off-Grid EV Charging Stations, EAWD Off-Grid Power Systems, and EAWD Off-Grid Water Purification Systems, royalties from the commercialization of energy and water in certain cases, and the licensing of our innovated technologies; as well as from its engineering, technical consulting, and project management services.

 

Through our BlueTech Alliance for Water Generation, established in December 2020, we have state-of-the-art technology partners, technology transfer agreements, and technology representation agreements in place relating to aspects of renewable energy and water supply. These unique key relationships offer important selling features and capabilities that differentiated EAWD from its competitors.

 

The Company plans to generate revenue from the sale of EAWD Off-Grid AWG Systems, EAWD Off-Grid EV Charging Stations, EAWD Off-Grid Power Systems, and EAWD Off-Grid Water Purification Systems, royalties from the commercialization of energy and water in certain cases, and the licensing of our innovated technologies, as well as from its engineering, technical consulting, and project management services. 

 

MATERIAL COMMITMENTS

 

Employment Agreements

 

The Company entered into employment agreements with each of Irma Velazquez, its Chief Executive Officer and Vice Chairman of the Board, and Ralph Hofmeier, its Chairman of the Board and Chief Technology Officer, effective August 4, 2022 (together, the “Executive Employment Agreements”). Under the Executive Employment Agreements, the Company agreed to pay each of Ms. Velazquez and Mr. Hofmeier an annual base salary of €200,000 per year with discretionary cash and equity bonuses available based on the Board’s assessment of the executive’s performance against applicable performance objectives as well as Company performance. Any increase to the annual base salary is subject to approval by the Company’s Board of Directors. The foregoing descriptions of the Executive Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the copy of each agreement filed as Exhibits 10.2 and 10.3 to this registration statement.

 

The Company also entered into employment agreement with 4 other employees, effective during the 3rd quarter of 2021.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We have no off-balance sheet arrangements.

 

GOING CONCERN

 

The next operational step to accomplish is to achieve sufficient sales volume to yield positive net income. Due to the timing of the project build out, the Company has not currently recorded any revenue and consequently has incurred operating losses since it began operations (December 2012) totaling $23,940,116 at September 30, 2022. During the three and nine months ended September 30, 2022, the Corporation incurred net losses of $651,899 and $1,544,723, respectively. The Company also had a working capital deficit of $413,089 at September 30, 2022. 

 

The Company’s ability to transition to profitable operations is dependent upon achieving a level of revenue adequate to support its cost structure. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business and availability to sufficient resources.

 

49 
 

 

At the filling date of this report, management is working to conclude the sales in Germany and in other regions of the world relating to the previously approved proposals, which would bring a growing revenue. Managements plans to expand the sales operations by greater market penetration of the agricultural, industrial and community development markets with its innovative water and energy generation solution. Management also plans to raise additional funds through the issuance of equity securities, from deposits related to customer purchase orders, and, if necessary, loans from management and third-party lenders. Management also plans to reduce expenses by centralizing the assembly, logistics and administrative operations of the Company into a larger, self-sufficient, off-grid location that will be able to house the storage of supplies and inventory, as well as provide space for assembly and administrative operations. The Company is also planning to acquire its own electric vehicles to reduce its supply transportation costs.

 

The ability of the Company to continue as a going concern depends upon its ability to generate sales or obtain additional funding to finance operating losses until the Corporation is profitable.

 

CRITICAL ACCOUNTING POLICIES

 

Our critical accounting policies are set forth in Note 2 to the condensed financial statements.

 

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

We do not expect the adoption of recently issued accounting pronouncements as discussed in Note 3 to have a significant impact on our results of operations, financial position or cash flow.

 

50 
 

 

MANAGEMENT AND BOARD OF DIRECTORS

 

The following table lists, as of the date of this prospectus, the names, ages and positions of the individuals who serve as executive officers and directors of EAWD:

 

Name   Age   Principal Positions with Us
Ms. Irma Velazquez   54   Chief Executive Officer, Secretary, and Vice-Chairman of the Board of Directors
Mr. Ralph Hofmeier   59   Chief Technology Officer, and Chairman of the Board of Directors

 

No members of our Board of Directors are independent using the definition of independence under Nasdaq Listing Rule 5605(a)(2) and the standards established by the SEC. Prior to closing the offering we plan to increase the size the Board of Directors to satisfy Nasdaq’s requirement that the majority of the Board of Directors be independent.

 

Set forth below is a brief description of the background and business experience of our directors, our director nominees, and executive officers.

 

Ms. Irma Velazquez brings to the Company her certified expertise of sustainable development and emerging technologies, along with her extensive experience and managerial skills on large-scale project management. Ms. Velazquez worked from 1997 to 2010 in United Nations agencies such as the World Health Organization, Farmaciens Sans Frontieres, Red Cross and Crescent Societies (IFRC) where she served in the positions of Information Technology Manager, Sustainable Development Manager and Programme Manager, leading the strategic development and execution of corporate vision for operations, communications, and marketing, as well as a Disaster & Crisis Management Coordinator, where she demonstrated the ability to govern complex programs and organizations, which drove development and implementation of business plans, operational structures, processes, and procedures. From 2012 to August 2022, Ms. Velazquez acted as Chief Operations Officer and Vice-Chairman of the Board of Directors of EAWD. She is currently the Chief Executive Officer and Vice Chairman of the Board of Directors. Ms. Velazquez has a Master in Sciences from the Erasmus University of Rotterdam and has experience in diplomatic negotiations and proven experience building positive relationships with government entities, agencies, and private sector partners. Ms. Velazquez speaks French, English and Spanish.

 

Mr. Ralph Hofmeier has a mechanical engineering background. He has worked in companies such as Powermax Energy & Business Solutions Inc., where from 2003 to 2008 he served as President. From the merger of that company with EAWD in 2008 until August 2022, he served as President, Chief Executive Officer and Chairman of the Board of Directors of EAWD. He is currently the Chief Technology Officer and remains the Chairman of the Board of Directors. Mr. Hofmeier speaks German and English.

 

Over the last 20 years, Mr. Hofmeier has established and developed several multinational companies in green tech distribution and commercialization, such as Powermax LLC, Powermax Inc and Powermax GmbH. With a solid track record of investment and financial joint ventures and his prior multicultural experience throughout the European and American markets, we believe that Mr. Hofmeier brings our Board and our Company a clear vision of business development, investor relations and joint ventures.

 

Family Relationships

 

Mr. Hofmeier and Ms. Velazquez are married.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, none of our directors or officers, during the past ten years has:

 

  · been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

  · had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which the person was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

 

51 
 

 

 

  · been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, the person's involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or been associated with persons engaged in any such activity;

 

  · been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

 

  · been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 

  · been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Except as set forth in this prospectus, to the Company’s knowledge, none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates, or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

 

Term of Office

 

Directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our Board of Directors and hold office until removed by the Board of Directors.

 

Committees of the Board of Directors

 

Our Board of Directors currently has no separate committees, and our board of directors acts as the audit committee and the compensation committee. The functions of those committees are being undertaken by our Board because we do not currently have any independent directors and our Board believes that the establishment of committees of our Board would not provide any benefits to our Company and could be considered more form than substance. We do not have yet, an audit committee financial expert serving on our board of directors.

 

Shareholder Communications

 

Although we do not have a formal policy regarding communications with the Board, shareholders may communicate with the Board by writing to us at 7901 4th Street N STE #4174, St Petersburg, Florida, 33702 Attention: Corporate Secretary or email to investor.relations@energy-water.com.

 

Shareholders who would like their submission directed to a member of the board may so specify, and the communication will be forwarded, as appropriate.

 

52 
 

 

Oversight of Risk Management

 

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic risks, financial risks, legal and regulatory risks and others, such as the impact of competition. Management is responsible for the day-to-day management of the risks that we face, while our Board has responsibility for the oversight of risk management. In its risk oversight role, our Board of Directors is responsible for satisfying itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Our Board of Directors assesses major risks facing our Company and options for their mitigation in order to promote our stockholders’ interests in the long-term health of our Company and our overall success and financial strength. A fundamental part of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for us. The involvement of our full Board of Directors in the risk oversight process allows our Board of Directors to assess management’s appetite for risk and also determine what constitutes an appropriate level of risk for our Company. Our Board of Directors regularly includes agenda items at its meetings relating to its risk oversight role and meets with various members of management on a range of topics, including corporate governance and regulatory obligations, operations and significant transactions, risk management, insurance, pending and threatened litigation and significant commercial disputes.

 

Code of Business Conduct and Ethics

 

Our Board of Directors has adopted a code of ethical conduct that applies to our principal executive officer, principal financial officer and senior financial management. This code of ethical conduct is embodied within our Code of Business Conduct and Ethics, which applies to all persons associated with our Company, including our directors, officers and employees (including our principal executive officer, principal financial officer, principal accounting officer and controller). In order to satisfy our disclosure requirements under Item 5.05 of Form 8-K, we will disclose amendments to, or waivers of, certain provisions of our Code of Business Conduct and Ethics relating to our chief executive officer, chief financial officer, chief accounting officer, controller or persons performing similar functions on our website promptly following the adoption of any such amendment or waiver.

 

 

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EXECUTIVE AND DIRECTOR COMPENSATION

 

Compensation of Named Executive Officers

 

The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during years ended 2022 and 2021 awarded to, earned by or paid to our executive officers.

 

Summary Compensation Table

 

The following table sets forth the compensation earned by our named executive officers for the years ended December 31, 2022 and 2021.

 

Name and Principal Position   Year     Salary
($)
    All Other
Compensation
($)
    Total
($)
 
Irma Velazquez     2022       210,757 (1)           210,757  
Chief Executive Officer     2021       150,000             150,000  
                                 
Ralph Hofmeier     2022       210,757 (1)           210,757  
Chief Technology Officer     2021       150,000             150,000  
                                 
Gary Rodney     2022       84,000             84,000  
Interim Chief Financial Officer     2021       49,000             49,000  

———————

(1)Converted from Euros to U.S. Dollars using the yearly average EUR/USD conversion rate of 1.053783 (Source: https://www.ofx.com/en-us/forex-news/historical-exchange-rates/yearly-average-rates/).

 

Outstanding Equity Awards at Fiscal Year End

 

There were no outstanding equity awards held by of our executive officers as of September 30, 2022.

   

Compensation of Directors

 

During the year ended December 31, 2021, no director of the Company received compensation from us.

 

Employment Agreements

 

The Company entered into employment agreements with each of Irma Velazquez, its Chief Executive Officer and Vice Chairman of the Board, and Ralph Hofmeier, its Chairman of the Board and Chief Technology Officer, effective August 4, 2022 (together, the “Executive Employment Agreements”). Under the Executive Employment Agreements, the Company agreed to pay each of Ms. Velazquez and Mr. Hofmeier an annual base salary of €200,000 per year with discretionary cash and equity bonuses available based on the Board’s assessment of the executive’s performance against applicable performance objectives as well as Company performance. Any increase to the annual base salary is subject to approval by the Company’s Board of Directors. The foregoing descriptions of the Executive Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the copy of each agreement filed as Exhibits 10.2 and 10.3 to this registration statement.

 

Consulting Agreements

 

Effective as of June 3, 2021, the Company entered into a consulting services agreement with InfoQuest Technologies Inc., whereby Mr. Gary Rodney agreed to provide services to the Company as its Interim Chief Financial Officer as an independent contractor. Pursuant to the consulting agreement, Mr. Rodney receives a monthly fee of $7,000. The consulting agreement has an initial term of one (1) year and is automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew. The foregoing description of the consulting agreement does not purport to be complete and is qualified in its entirety by reference to the copy of such agreement filed as Exhibit 10.16 to this registration statement. Effective as of January 18, 2023, Mr. Rodney has resigned as Interim Chief Financial Officer of the Company and the consulting agreement with InfoQuest Technologies Inc. has been terminated.

 

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EAWD 2022 Long Term Incentive Plan

 

Effective as of September 12, 2022, the Board of Directors adopted the Energy and Water Development Corp. 2022 Long Term Incentive Plan (the “2022 LTIP”). Under the 2022 LTIP, the Company reserved 17,493,000 shares of common stock to grant shares of common stock of the Company to employees and individuals who perform services for the Company. The purpose of the 2022 LTIP is to attract and retain the best available personnel for positions of substantial responsibility, to provide incentives to individuals who perform services for the Company, and to promote the success of the Company’s business. The 2022 LTIP permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and other stock or cash awards as the Board of Directors may determine.

 

Pension Benefits and Nonqualified Deferred Compensation

 

The Company does not maintain any qualified retirement plans or non-qualified deferred compensation plans for its employees or directors.

 

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth the number of shares of our voting stock beneficially owned, as of January 20, 2023, by (i) those persons known by us to be owners of more than 5% of our common stock, (ii) each director, (iii) our Named Executive Officers, and (iv) all executive officers and directors as a group:

 

      Common Stock       Series A Preferred Stock  
Name and address of beneficial owner.     No. of
Shares
      % of
Class (1)
      No. of
Shares
      % of
Class (2)
 
Directors and Officers                                
Ms. Irma Velazquez     39,515,388       20.48 %     4,778,488       47.04 %
7901 4th Street N STE #4174, St Petersburg, Florida 33702                                
                                 
Mr. Ralph Hofmeier     27,918,378       14.48 %     5,002,488       52.96 %
7901 4th Street N STE #4174, St Petersburg, Florida 33702                                
                                 
All officers and directors as a group (two persons)     67,433,766       34.96 %     9,780,976       100.00 %
5% Security Holders: None                                

———————

(1) Applicable percentages are based on 192,869,220 common shares outstanding, as of January 20, 2023, adjusted as required by rules of the SEC. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Unless otherwise indicated in the footnotes to this table, we believe that each of the stockholders named in the table has sole voting and investment power with respect to the shares of common stock indicated as beneficially owned by them.
   
(2) Applicable percentages are based on 9,780,976  Series A preferred shares outstanding, adjusted as required by rules of the SEC. Series A preferred shares provide for voting rights at 5 votes per preferred share and are convertible into 5 shares of common stock per preferred share.

  

 Certain Relationships and Related Transactions

 

The following is a summary of transactions since the periods ended September 30, 2022 and December 31, 2021 to which we have been a party in which the amount involved exceeded the lesser of (i) $120,000 or (ii) one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our then directors, executive officers or holders of more than 5% of any class of our stock at the time of such transaction, or any members of their immediate family, had or will have a direct or indirect material interest. See also “Executive Compensation” for additional information regarding compensation of related parties.

 

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Due to Officers

 

Amounts due to officers as of September 30, 2022 and December 31, 2021 are comprised of the following:

 

   September 30,
2022
   December 31,
2021
 
   (Unaudited)     
Irma Velazquez:          
Accrued salaries  $46,480   $ 
Accrued expenses        
Total due to Irma Velazquez   46,480     
           
Ralph Hofmeier:          
Accrued salaries  $45,304   $17,485 
Accrued expenses   13,236     
Total due to Ralph Hofmeier   58,540    17,485 
           
Gary Rodney:          
Accrued salaries   112,000     
Accrued expenses        
Total due to Gary Rodney   112,000     
Total due to officers  $217,020   $17,485 

 

Unsecured advances due to officers represent unreimbursed Corporation expenses paid by the officers on behalf of the Corporation. These advances are non-interest bearing and are due on demand.

 

Accrued salaries represent amounts accrued in accordance with the employment agreements for Mr. Hofmeier, the Company’s President, Chief Executive Officer and Chairman of the Board, and Ms. Velazquez, the Company’s Chief Operating Officer and Vice-Chairman. Mr. Hofmeier and Ms. Velazquez are also significant stockholders.

 

Customer Deposit

 

EAWC-TV functions as a distributor of EAWD product. In 2019, EAWC-TV, having secured EAWD’s first customer, has placed a $550,000 order for a solar powered EAWD Off-Grid AWG System for one of its customers. EAWC-TV and the Company on December 13, 2019 agreed to accept a $303,742 reduction in the balance owed by EAWD to EAWC-TV as a deposit with EAWD related to this order. The deposit was satisfied through delivery of the equipment. The equipment was built in Germany.

 

In 2020, manufacture of the unit was delayed due to Covid-19 related issues. The Company and EAWC-TV agreed as it had done in 2019, to clear the outstanding balances in the D/T/F EAWC-TV and the outstanding balance it carried in its accounts payable account for administrative services, which it did on December 26, 2020 which resulted in an additional down payment of $193,497. EAWC-TV has an unpaid balance on the equipment of $54,822 and 55,169 as of September 30, 2022 and December 31, 2021, respectively, which represents the balance of the Company’s outstanding accounts receivable as of September 30, 2022 and December 31, 2021. Ralph Hofmeier owns 5% of the issued and outstanding stock of EAWC-TV and, other than the right to vote on issues presented to stockholders, he has no control over the management or operations of the company.

  

Related Person Transaction Policy

 

Our Board considers and approves or disapproves any related person transaction. The Company’s written policies and procedures on related party transactions cover any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which: (i) the Company (or any subsidiary) is a participant; (ii) any related party has or will have a direct or indirect interest; and (iii) the aggregate amount involved (including any interest payable with respect to indebtedness) will or may be expected to exceed $120,000, except that there is no $120,000 threshold for members of the audit committee (if any). A related party is any: (i) person who is or was (since the beginning of the two fiscal years preceding the last fiscal year, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director; (ii) greater than five percent (5%) beneficial owner of the Company’s common stock; or (iii) immediate family member of any of the foregoing. An immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and any person (other than a tenant or employee) sharing the same household as such person.

 

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In determining whether to approve or ratify a related party transaction, the Board, or disinterested directors, as applicable, will take into account, among other factors it deems appropriate: (i) whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; (ii) the nature and extent of the related party’s interest in the transaction; (iii) the material terms of the transactions; (iv) the importance of the transaction both to the Company and to the related party; (v) in the case of a transaction involving an executive officer or director, whether the transaction would interfere with the performance of such person’s duties to the Company; and (vi) in the case of a transaction involving a non-employee director or a nominee for election as a non-employee director (or their immediate family member), whether the transaction would disqualify the director or nominee from being deemed an “independent” director, and whether the transaction would disqualify the individual from serving on the audit committee or the compensation committee (if any) or other committees of the Board under applicable exchange and other regulatory requirements.

 

The Board only approves those related party transactions that are on terms comparable to, or more beneficial to us than, those that could be obtained in arm’s length dealings with an unrelated third party.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who own more than ten percent (10%) of the Common Stock to file with the SEC the initial reports of ownership and reports of changes in ownership of common stock. Officers, directors and greater than ten percent (10%) stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. During the fiscal year ended December 31, 2021, we believe that all reports required to be filed by such persons pursuant to Section 16(a) were filed on a timely basis.

 

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DESCRIPTION OF CAPITAL STOCK

 

This description is intended as a summary and is qualified in its entirety by reference to our amended and restated articles of incorporation (our “Articles”) and amended and restated bylaws, which are filed, or incorporated by reference, as exhibits to the registration statement of which this prospectus forms a part and to the applicable provisions of Florida law.

 

Authorized Capital

 

Our authorized capital stock consists of 1,000,000,000 shares of Common Stock, par value $0.001 per share and 500,000,000 shares of preferred stock, par value $0.001 per share, with 50,000,000 shares designated as Series A preferred stock. As of September 30, 2022, there were 177,870,062 shares of Common Stock outstanding and 9,780,976 shares of Series A preferred stock outstanding.

 

Common Stock

 

The following is a summary of the material rights and restrictions associated with our Common Stock.

 

Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, and do not have cumulative voting rights. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our Board of Directors out of funds legally available for dividend payments. All outstanding, shares of common stock are fully paid and nonassessable and the shares of common stock to be issued upon completion of this offering will be fully paid and nonassessable. The holders of common stock have no preferences or rights of cumulative voting, conversion, or pre-emptive or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. In the event of any liquidation, dissolution or winding-up of our affairs, holders of common stock will be entitled to share ratably in any of our assets remaining after payment or provision for payment of all of our debts and obligations and after liquidation payments to holders of outstanding shares of preferred stock, if any.

 

Preferred Stock

 

The following is a summary of the material rights and restrictions associated with our Preferred Stock.

 

We are authorized to issue 500,000,000 shares of preferred stock, $0.001 par value per share. Pursuant to our Articles, the Board is authorized to authorize and issue preferred stock and to fix the designations, preferences and rights of the preferred stock pursuant to a board resolution without further stockholder authorization. Our Board may designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, redemption rights, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series. The issuance of preferred stock could have the effect of restricting dividends on our Common Stock, diluting the voting power of our Common Stock, impairing the liquidation rights of our Common Stock, or delaying, deterring, or preventing a change in control. Such issuance could have the effect of decreasing the market price of our Common Stock.

 

Series A Preferred Stock

 

1.Dividends.  Series A Preferred  Stock  shall  be  treated  pari  passu  with Common Stock except that the dividend on each share of Series A Preferred Stock shall be equal to the amount of the dividend declared and paid on each share of Common Stock multiplied by the Conversion Rate.

 

2.Liquidation, Dissolution, or Winding Up.  In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, Series A Preferred Stock shall be treated pari passu, with Common Stock except that the payment on each share of Series A Preferred Stock shall be equal to the amount of the payment on each share of Common Stock multiplied by the Conversion Rate.

 

3.Voting.  On any matter presented to the shareholders of the Company for their action or consideration at any meeting of shareholders of the Company (or by written consent of shareholders in lieu of meeting), each holder of outstanding shares of Series A Preferred Stock shall be entitled to cast the number of votes equal to the number of shares of Series A Preferred Stock held by such holder as of the record date for determining shareholders entitled to vote on such matter multiplied by the Conversion Rate. Except as provided by law or by the other provisions of the Articles, holders of Series A Preferred Stock shall vote together with the holders of Common Stock as a single class.

 

59 
 

 

4. Conversion.  The “Conversion Rate” means that each share of Series A Preferred Stock is convertible into five shares of Common Stock.

 

  a. Optional Conversion.  Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time.

 

  b. Mandatory Conversion.  Upon either (a) the closing of the sale of shares of Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $25,000,000.00 of gross proceeds to the Company or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least sixty-five percent (65%) of the then outstanding shares of Series A Preferred, all outstanding shares of Series A Preferred Stock shall automatically be converted into shares of Common Stock, at the then-effective Conversion Rate.

 

The foregoing description of the Series A Preferred Stock does not purport to be complete and is qualified in its entirety by reference to the provisions of the Amended and Restated Articles of Incorporation filed as Exhibit 3.1 to this registration statement, which is incorporated by reference herein.

 

Dividends

 

We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our Board and depends upon our earnings, if any, our capital requirements and financial position, and general economic conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

 

Long Term Incentive Plan

 

Effective as of September 12, 2022, the Board of Directors adopted the Energy and Water Development Corp. 2022 Long Term Incentive Plan (the “2022 LTIP”). Under the 2022 LTIP, the Company reserved 17,493,000 shares of common stock to grant shares of common stock of the Company to employees and individuals who perform services for the Company. The purpose of the 2022 LTIP is to attract and retain the best available personnel for positions of substantial responsibility, to provide incentives to individuals who perform services for the Company, and to promote the success of the Company’s business. The 2022 LTIP permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and other stock or cash awards as the Board of Directors may determine.

 

Convertible loans payable

 

As of September 30, 2022 and December 31, 2021, the balance of convertible loans payable net of discount was $39,999 and $176,703, respectively.

 

During the year ended December 31, 2021, the Company issued two convertible loans in the aggregate amount of $404,000. The notes bear interest at 8% per annum and all mature within one year. On October 21, 2021, the Maturity Date of the $304,000 loan was extended from March 25, 2022 to April 21, 2022. The embedded beneficial conversion features in the notes meet the definition of a derivative and requires bifurcation and liability classification, at fair value. The fair value of the derivative liability as of the date of issuance was $746,672 and was recorded as a discount of the notes.

 

Derivative Liability

 

The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted, and all additional convertible debentures and warrants are included in the value of the derivative liabilities. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and revalued at each reporting period.

 

60 
 

 

Based on the various convertible notes described above, the fair value of applicable derivative liabilities on notes and change in fair value of derivative liability are as follows as of September 30, 2022 and December 31, 2021:

 

   Total 
Balance of derivative liability as of December 31, 2020  $310,641 
Change due to issuances   746,672 
Change due to exercise / redemptions   (1,972,419)
Change in fair value   1,269,266 
Balance of derivative liability as of December 31, 2021  $354,160 
Change due to issuances    
Change due to exercise / redemptions   (110,507)
Change in fair value   (243,653)
Balance of derivative liability as of September 30, 2022 (Unaudited)  $ 

 

 

A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s derivative liabilities that are categorized within Level 3 of the fair value hierarchy for the periods ended September 30, 2022 and December 31, 2021 is as follows:

 

     

September 30,

2022

     

December 31,

2021

 
    (Unaudited)          
Stock price     $0.19 – 0.20       $0.16 – 0.45  
Exercise price     $0.09 – 0.11       $0.03 – 0.20  
Contractual term (in years)     0.64 – 0.68       0.27 – 1  
Volatility (annual)     1,313% – 1,368%       149% – 2,095%  
Risk-free rate     0.51% – 0.78%       0.04% – 0.39%  

   

The foregoing assumptions are reviewed quarterly and are subject to change based primarily on management’s assessment of the probability of the events described occurring. Accordingly, changes to these assessments could materially affect the valuations.

 

Financial Liabilities Measured at Fair Value on a Recurring Basis

 

Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet under Derivative liability – warrants and derivative liabilities:

  

      Fair Value measured at September 30, 2022 (Unaudited)  
      Quoted prices in       Significant other       Significant       Fair value at  
      active markets       observable inputs       unobservable inputs       September 30,  
      (Level 1)       (Level 2)       (Level 3)       2022  
Derivative liability   $     $     $     $  
Total   $     $     $     $  

   

    Fair value measured at December 31, 2021  
    Quoted prices in     Significant other     Significant     Fair value at  
    active markets     observable inputs     unobservable inputs     December 31  
    (Level 1)     (Level 2)     (Level 3)     2021  
Derivative liability   $     $     $ 354,160     $ 354,160  
Total   $     $     $ 354,160     $ 354,160  

 

There were no transfers between Level 1, 2 or 3 during the three and nine months ended September 30, 2022 and 2021.

 

During the three and nine months ended September 30, 2022 the Company recorded gains of $0 and $243,653, respectively, and for the three and nine months ended September 30, 2021, the Company recognized loss of $178,673 and gain of $4,820, respectively, from the change in fair value of derivative liability.

 

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Anti-Takeover Effects of Certain Provisions of Our Amended and Restated Articles of Incorporation and Our Bylaws.

 

Provisions of our amended and restated articles of incorporation, as amended, and our bylaws could make it more difficult to acquire us by means of a merger, tender offer, proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, which are summarized below, are expected to discourage types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because negotiation of these proposals could result in an improvement of their terms.

 

Calling of Special Meetings of Stockholders. 

 

Our Bylaws provide that special meetings of the stockholders, unless otherwise prescribed by statute, may be called by the Company’s board of directors, the chairman of the board, the president or the holders of shares entitled to cast not less than 20% of the votes at that meeting. If a special meeting is called by anyone other than the Board of Directors or the President or the Chairman of the Board, then the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by other written communication to the Chairman of the Board, the President, any Vice President or the Secretary of the corporation. The officer receiving the request forthwith shall cause notice to be given to the shareholders entitled to vote, in accordance with the provisions of the By-Laws, that a meeting will be held at the time requested by the person or persons calling the meeting, so long as that time is not less than 15 nor more than 60 days after the receipt of the request.

 

Removal of Directors; Vacancies. Any director may resign effective upon giving oral or written notice to the Chairman of the Board, the President, the Secretary or the Board of Directors, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation of a director is effective at a future time, the Board of Directors may elect a successor to take office when the resignation becomes effective. Vacancies on the Board of Directors may be filled by a majority of the remaining directors, or if the number of directors then in office is less than a quorum by (i) unanimous written consent of the directors then in office, (ii) the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice, or (iii) a sole remaining director; however, a vacancy created by the removal of a director by the vote or written consent of the shareholders or by court order may be filled only by the affirmative vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute at least a majority of the required quorum), or by the unanimous written consent of all shares entitled to vote thereon. Each director so elected shall hold office until the next annual meeting of the shareholders and until a successor has been elected and qualified, or until his or her death, resignation or removal. A vacancy or vacancies in the Board of Directors shall be deemed to exist (i) in the event of the death, resignation or removal of any director, (ii) if the Board of Directors by resolution declares vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony, (iii) if the authorized number of directors is increased, or (iv) if the shareholders fail, at any meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be elected at that meeting. The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors, but any such election by written consent, other than to fill a vacancy created by removal, shall require the consent of the holders of a majority of the outstanding shares entitled to vote thereon. A director may not be elected by written consent to fill a vacancy created by removal except by unanimous consent of all shares entitled to vote for the election of directors.

 

Amendment of Bylaws. Our Bylaws provide that new Bylaws may be adopted or the Bylaws may be amended or repealed by the vote or written consent of holders of a majority of the outstanding shares entitled to vote. Our Bylaws provide that new Bylaws may be adopted or the Bylaws may be amended or repealed by the board of directors.

 

Transfer Agent and Registrar

 

Worldwide Stock Transfer, LLC, One University Plaza, Suite 505, Hackensack, NJ 07601, Phone: (201) 820-2008, Fax: (201) 820-2010.

 

Quotation of Common Stock

 

Our Common Stock is currently quoted on the OTCQB under the symbol “EAWD”.  Our securities are currently highly illiquid, and subject to large swings in trading price, and are only traded on a sporadic and limited basis. On January 20, 2023, the last reported sale price per share for our Common Stock as reported was $0.077.

 

62 
 

 

Offers Outside the United States

 

Other than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

  

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INTERESTS OF NAMED EXPERTS AND COUNSEL

 

None.

 

EXPERTS

 

The Company’s financial statements for the year ended December 31, 2021, included in this prospectus have been audited by TAAD LLP, an independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.

 

The Company’s financial statements for the year ended December 31, 2020, included in this prospectus have been audited by WithumSmith+Brown, PC, an independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.

 

LEGAL MATTERS

 

The law firm of di Santo Law PLLC has provided opinions regarding the validity of the shares of our common stock offered pursuant to this prospectus. The address of di Santo Law PLLC is 429 Lenox Avenue, Miami Beach, FL 33139.

 

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES

 

Our directors and officers are indemnified as provided by the Florida corporate law and our bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

WHERE YOU CAN FIND ADDITIONAL INFORMATION

 

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and file reports, proxy statements and other information with the SEC. The SEC’s website contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of that site is http://www.sec.gov.

 

We have filed a registration statement on Form S-1 with the SEC under the Securities Act of 1933, as amended, with respect to the securities offered in this prospectus. This prospectus, which is filed as part of a registration statement, does not contain all of the information set forth in the registration statement, some portions of which have been omitted in accordance with the SEC’s rules and regulations. Statements made in this prospectus as to the contents of any contract, agreement or other document referred to in this prospectus are not necessarily complete and are qualified in their entirety by reference to each such contract, agreement or other document that is filed as an exhibit to the registration statement. The registration statement may be inspected without charge at the public reference facilities maintained by the SEC, and copies of such materials can be obtained from the Public Reference Section of the SEC at prescribed rates. You may obtain additional information regarding our Company on our website, located at www.energy-water.com.

 

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INDEX TO FINANCIAL STATEMENTS

 

Reports of Independent Registered Public Accounting Firm TAAD LLP (PCAOB ID #5854) F-2
 Reports of Independent Registered Public Accounting Firm WithumSmith + Brown, PC (PCAOB ID #100) F-3
   
Audited Financial Consolidated Statements  
Consolidated Balance Sheets as of December 31, 2021 and 2020 F-5
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2021 and 2020 F-6
Consolidated Statements of Changes in Stockholders' Deficit for the years ended December 31, 2021 and 2020 F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020 F-8
Notes to Consolidated Financial Statements F-10
   
Unaudited Interim Condensed Consolidated Financial Statements  
Condensed Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021 F-24
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021 (Unaudited) F-25
Condensed Consolidated Statements of Changes in Stockholders' Deficit for the three and nine months ended September 30, 2022 and 2021 (Unaudited) F-26
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (Unaudited) F-28
Notes to Condensed Consolidated Financial Statements F-29

 

 

 

F-1 
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Shareholders of Energy and Water Development Corp. and Subsidiary

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Energy and Water Development Corp. and Subsidiary (the “Company”) as of December 31, 2021, the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for the year then ended, and the related notes to consolidated financial statements (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

 

Going Concern Matter

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 4 to the consolidated financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

Critical Audit Matters

 

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 

F-2 
 

Convertible Notes

 

Description of the Matter

 

As discussed in Notes 11 to the consolidated financial statements, the Company had various debt instruments which included conversion features requiring bifurcation and separate accounting. Management evaluated the required accounting, significant estimates, and judgments around the valuation for these embedded derivatives. These embedded derivatives were initially measured at fair value and have subsequently been remeasured to fair value at each reporting period and at settlement.

 

There is no current observable market for these types of features and, as such, the Company determined the fair value of the embedded derivatives using a Black-Scholes model to measure the fair value of the bifurcated derivative. As a result, a high degree of auditor judgment and effort was required in performing audit procedures to evaluate the conclusions reached by management, as well as the inputs to the Company’s Black-Scholes model.

 

How We Addressed the Matter in Our Audit

 

Our principal audit procedures performed to address this critical audit matter included the following:

 

·We obtained an understanding of the controls and processes surrounding the evaluation, initial measurement, and revaluation of the bifurcated derivatives.
·We verified note amount, interest rate and maturity date to the supporting documentation and debt agreement, and examined terms and conditions of the note and confirmed the ending balance to the note holder.
·We evaluated management’s assessment and the conclusions reached to ensure these instruments were recorded in accordance with the relevant accounting guidance.
·We evaluated the fair value of the bifurcated derivatives that included testing the valuation models and assumptions utilized by management. We reviewed and tested the fair value model used, significant assumptions, and underlying data used in the model.
·We considered the adequacy of the disclosures in the financial statements in relation to convertible debt.

 

 

 

 

/s/ TAAD LLP

We have served as the Company’s auditor since 2021.

 

Diamond Bar, California

April 14, 2022

 

 

F-3 
 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors and Stockholders

Energy and Water Development Corp.

 

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Energy and Water Development Corp. (the “Company”) as of December 31, 2020, and the related statements of operations, stockholders’ deficit, and cash flows for the year then ended, and the related notes to financial statements (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

 

/s/ WithumSmith+Brown, PC

We have served as the Company’s auditor from June 2021 through November 2021.

 

Orlando, Florida

September 30, 2021

 

F-4 
 

 

Energy and Water Development Corp. and Subsidiary

Consolidated Balance Sheets

 

         
   December 31, 
   2021   2020 
         
ASSETS          
CURRENT ASSETS:          
Cash  $589,668   $12,047 
Accounts receivable   55,169    52,761 
Inventory   196,553     
Deferred cost       350,000 
Prepaid expenses and other current assets   432,082    14,184 
TOTAL CURRENT ASSETS   1,273,472    428,992 
           
Property and equipment, net   3,834     
Operating lease right-of-use asset   49,432     
           
TOTAL ASSETS  $1,326,738   $428,992 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
CURRENT LIABILITIES:          
Accounts payable and accrued expenses  $941,309   $748,926 
Accounts payable - related party   124,370    153,300 
Deferred revenue       550,000 
Convertible loan payables, net of discount   176,703    149,241 
Due to officers   17,485    84,676 
Derivative liability   354,160    310,641 
Current portion of operating lease liability   39,148     
Common stock subscriptions liability   377,350     
TOTAL CURRENT LIABILITIES   2,030,525    1,996,784 
           
Operating lease liability, net of current portion   10,283     
TOTAL LIABILITIES   2,040,808    1,996,784 
           
COMMITMENTS AND CONTINGENCIES        
           
STOCKHOLDERS' DEFICIT:          
Preferred stock, par value $.001 per share; 500,000,000 shares authorized, 9,780,976 shares issued and outstanding at December 31, 2021 and December 31, 2020   9,781    9,781 
Common stock, par value $.001 per share; 1,000,000,000 shares authorized, 143,840,643 and 123,316,886 shares issued and outstanding at December 31, 2021 and 2020, respectively   143,840    123,316 
Common stock subscriptions, 15,855,000 and 10,040,000 shares at December 31, 2021 and 2020, respectively   792,745    1,504,000 
Additional paid in capital   20,777,401    16,153,038 
Accumulated deficit   (22,395,393)   (19,357,927)
Accumulated other comprehensive income   (42,444