UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended July 31, 2015

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

For the transition period from __________ to __________

Commission File Number 000-52393

BIOSHAFT WATER TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

Nevada

98-0494003

(State or other jurisdiction of

incorporation or organization)

(IRS Employer Identification No.)

222 West 6th Street, #400

San Pedro, CA

90731

(Address of principal executive offices)

(Zip Code)

(310) 707-2553

(Registrant’s telephone number, including area code)

N/A

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] YES [ ] NO

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

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


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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) [ ] YES [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. [ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 117,611,170 common shares issued and outstanding as of September 15, 2015.

BIOSHAFT WATER TECHNOLGY, INC.

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3. Quantitative and Qualitative Disclosures About Market Risk	10
Item 4. Controls and Procedures	11
PART II - OTHER INFORMATION	11
Item 1. Legal Proceedings	11
Item 1A. Risk Factors	11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3. Defaults Upon Senior Securities	11
Item 4. Mine Safety Disclosures	11
Item 5. Other Information	11
Item 6. Exhibits	12
SIGNATURES	14

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited interim financial statements for the three month period ended July 31, 2015 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.

INDEX TO UNAUDITED FINANCIAL STATEMENTS


Financial Statements of Bioshaft Water Technology, Inc.

	Condensed Balance Sheets as of July 31, 2015 and April 30, 2015 (unaudited)	F-1

	Condensed Statements of Operations for the Three Months Ended July 31, 2015 and 2014 (unaudited)	F-2

	Condensed Statements of Cash Flows for the Three Months Ended July 31, 2015 and 2014 (unaudited)	F-3

	Notes to the Condensed Financial Statements (unaudited)	F-4

BIOSHAFT WATER TECHNOLOGY, INC.

CONDENSED BALANCE SHEETS

(unaudited)


		July 31,		April 30,
		2015		2015
ASSETS
Current Assets
	Cash	$	80	$	20,975
	Accounts receivable, net allowance for doubtful accounts of $193,630 and $182,030, respectively		84,590		58,955
	Other current assets		697		957
	Deferred costs of goods sold		715,189		711,489
Total Current Assets			800,556		792,376

Property and equipment, net			-		-

Deposits			1,000		1,000

TOTAL ASSETS		$	801,556	$	793,376

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES
Current Liabilities
	Accounts payable and accrued expenses	$	465,347	$	569,664
	Accounts payable and accrued expenses - related party		911,873		831,583
	Deferred revenue		402,041		370,419
	Deferred revenue - related party		599,121		497,713
	Accrued interest		88,265		65,230
	Note payable		1,197,390		1,147,390
	Related party notes payable		69,800		69,800
TOTAL LIABILITIES			3,733,837		3,551,799

	Commitments and contingencies

STOCKHOLDERS' DEFICIT
	Preferred stock, $0.001 par value; 25,000,000 shares authorized, none issued and outstanding		-		-
	Common stock, $0.001 par value; 300,000,000 shares authorized, 117,611,170 and 117,611,170 issued and outstanding, respectively		117,611		117,611
	Additional paid-in capital		20,285,598		20,285,598
	Accumulated deficit		(23,335,490)		(23,161,632)
TOTAL STOCKHOLDERS' DEFICIT			(2,932,281)		(2,758,423)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	801,556	$	793,376

See accompanying notes to financial statements.

F-1

BIOSHAFT WATER TECHNOLOGY, INC.

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)


		For the Three Months Ended		For the Three Months Ended
		July 31, 2015		July 31, 2014

REVENUES
	Net revenue from projects	$	13,764	$	117,380
TOTAL REVENUES			13,764		117,380

COST OF REVENUES			-		131,382

GROSS PROFIT (LOSS)			13,764		(14,002)

OPERATING EXPENSES
	Selling, general, and administrative		51,697		45,879
	Advertising, marketing, and promotions		218		177
	Consulting fees		108,400		123,900
	Depreciation		-		279
TOTAL OPERATING EXPENSES			160,315		170,235

LOSS FROM OPERATIONS			(146,551)		(184,237)

OTHER INCOME (EXPENSE)
	Interest income (expense), net		(27,307)		(20,684)
TOTAL OTHER INCOME (EXPENSE)			(27,307)		(20,684)

LOSS BEFORE PROVISION FOR INCOME TAXES			(173,858)		(204,921)

PROVISION FOR INCOME TAXES			-		-

NET LOSS		$	(173,858)	$	(204,921)

NET LOSS PER SHARE: BASIC AND DILUTED		$	(0.00)	$	(0.00)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED			117,611,170		109,302,474

See accompanying notes to financial statements.

F-2

BIOSHAFT WATER TECHNOLOGY, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)


	For the Three Months Ended		For the Three Months Ended
	July 31, 2015		July 31, 2014

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(173,858)	$	(204,921)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation expense		-		279
Bad debt expense		11,600		-
Changes in operating assets and liabilities:
Accounts receivable		(37,235)		43,216
Deferred costs of goods sold		(3,700)		(246,250)
Other assets		260		-
Accounts payable and accrued expenses		(992)		(98,286)
Deferred revenues		133,030		247,051
Net cash used in operating activities		(70,895)		(258,911)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		50,000		60,000
Proceeds from related party notes payable		-		65,000
Proceeds from issuance of stock		-		105,000
Net cash provided by financing activities		50,000		230,000

Change in cash during the year		(20,895)		(28,911)
Cash at beginning of year		20,975		37,338
Cash at end of year	$	80	$	8,427

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	4,272	$	-
Cash paid for income taxes	$	-	$	-

See accompanying notes to financial statements.

F-3

BIOSHAFT WATER TECHNOLOGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 1 - GENERAL ORGANIZATION AND BUSINESS

Bioshaft Water Technology, Inc. (the “Company”) was originally incorporated under the laws of the state of Nevada on March 8, 2006. The Company owns worldwide patented technology and is in the business of designing, manufacturing and installing wastewater (sewage) treatment plants using its technology.

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. The Company has used cash flows from operations and incurred net losses of approximately $23 million since inception. The Company currently has limited liquidity, and does not yet have sufficient revenues to cover operating costs over an extended period of time. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors cause significant doubt regarding the Company to continue as a going concern.

Management anticipates that the Company will be dependent, for the foreseeable future, on additional investment capital through notes payable or sales of common stock to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Basis of Presentation

The accounting policies of the Company are in accordance with the accounting principles generally accepted in the United States of America and are presented in United States dollars (“USD”). Outlined below are those policies considered particularly significant. The accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position of the Company as of July 31, 2015, and the results of its operations and cash flows for the three months ended July 31, 2015. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission. The Company believes that the disclosures in the unaudited financial statements are adequate to make the information presented not misleading. The operating results of the Company on a quarterly basis may not be indicative of operating results for the full year. For further information, refer to the financial statements and notes included in the Company’s Form 10-K for the year ended April 30, 2015.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

F-4

BIOSHAFT WATER TECHNOLOGY, INC.

NOTES CONDENSED TO FINANCIAL STATEMENTS

(unaudited)

Fair Value of Financial Instruments

The Company follows accounting guidance issued by the Financial Accounting Standards Board (“FASB”) on “Fair Value Measurements” for assets and liabilities measured at fair value on a recurring basis. The FASB defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, the FASB requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:


Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities.

Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The Company discloses the estimated fair value for all financial instruments for which it is practicable to estimate fair value. As of July 31, 2015 and April 30, 2015, the fair value of short-term financial instruments including cash, accounts receivable, accounts payable and accrued expenses, costs in excess of billings on uncompleted projects, billings in excess of costs and estimated earnings on uncompleted projects, and accrued interest approximates book value due to their short-term maturity. The fair value of property and equipment is estimated to approximate its net book value. The fair value of debt obligations approximates their face values due to their short-term maturities and/or the rates of interest associated with the underlying obligation.

Basic Loss per Common Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Under the treasury stock method, the exercise price of an award, if any, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the estimated tax benefits that would be recorded in paid-in capital, if any, when an award is settled are assumed to be used to repurchase shares in the current period.

The Company excluded 36,100,000 and 6,100,000 common stock equivalents outstanding for the three months ended July 31, 2015 and 2014, respectively, as their exercise prices were in excess of the average closing market price of the Company’s common stock, causing their effects to be anti-dilutive using the treasury stock method.

Revenue Recognition

For contracts in which the Company can reasonably estimate the costs, the percent complete and are responsible for the overall project administration, the Company recognizes revenues based on the percentage-of-completion method, measured by the percentage of cost incurred to date to estimated total cost for each contract. That method is used because management considers total cost to be the best available measure of progress on contracts. Because of inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term.

F-5

BIOSHAFT WATER TECHNOLOGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

For contracts in which the Company cannot reasonably estimate the costs and the percent complete, the Company recognizes revenues using the completed contract method. Typically, these contracts are isolated to international contracts whereby the Company is providing equipment and limited installation. Under the completed contract basis, contract costs are recorded to a deferred asset account and billings and/or cash received are recorded to a deferred revenue liability account during the periods of construction. All revenues, costs, and profits are recognized in operations upon completion of the contract. A contract is considered completed when all costs except insignificant items have been incurred and the equipment is accepted by the end user.

Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation. Selling, general, and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability may result in revisions to costs and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period. No profit is recognized on change orders until they have been approved by the customer.

The asset, deferred costs of goods sold, represents costs incurred on current projects which have not been allocated to the particular project or the contract has not been completed and typically relate to deposits paid or incurred to third party vendors in which the services and or equipment has not been provided. The liability, deferred revenue, represents billings in excess of revenues recognized or amounts in which the Company has received in connection with contracts being recognized under the completed contract method. Contract retentions are included in accounts receivable. As of April 30, 2015, $22,302 was included within deferred revenues in which related to contracts being accounted for under the percent completion method. This amount was recognized during the three months ended July 31, 2015.

New Accounting Pronouncements

The FASB issues Accounting Standard Updates (“ASUs”) to amend the authoritative literature in the Accounting Standards Codification (“ASC”). There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date, other than noted below, either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, "Presentation of Financial Statements - Going Concern", which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early application is permitted. Management is still in the process of assessing the impact of ASU 2014-15 on the Company’s consolidated financial statements.

F-6

BIOSHAFT WATER TECHNOLOGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 3 - LOANS PAYABLE

$1,047,390 Note Payable

On August 21, 2014, the Company was notified that the $60,000 advance, $500,000 convertible note payable and $25,000 secured note payable and accrued interest of $487,799 on such was sold by the holder to a related entity of the holder. On August 21, 2014, the Company entered into a note agreement for $1,047,390. Under the terms of the agreement, the note incurs interest at 7.5% per annum, the holder received 5,000,000 bonus shares of common stock and is due July 7, 2015. In addition, if the Company does not raise $5.0 million in equity capital by July 7, 2015, which was not the case, the holder will receive 30,000,000 warrants to purchase shares of the Company's common stock at $0.025 per share. In connection with the new agreement, the $500,000 convertible note and accrued interest on such is no longer convertible into common stock and warrants to purchase 10,000,000 shares of common stock held by the current holder, which were received in connection with a previous transaction, were cancelled. The Company accounted for the transaction as an extinguishment due to the significant change in the future expected cash flows, which was in excess of 10%, due to the change in interest rate, removal of the conversion feature, cancelation of warrants and issuance of 5,000,000 shares of common stock. The total loss recorded in connection with this extinguishment was $474,142. In determining the loss on extinguishment the Company determined the fair market value of the beneficial conversion feature, warrants and shares of common stock on August 21, 2014. Although, the issuance of the 30,000,000 million warrants was contingent upon a future event, the value was taken into consideration in the loss calculation as the holder didn't have a performance commitment to receive such shares and the Company viewed the raising of capital as a market condition to receiving such. As of July 31, 2015, accrued interest on the note payable was approximately $80,706.

$100,000 Note Payable

On December 24, 2014, the Company secured a $100,000 note payable, accruing interest at 7.5% per annum being due December 24, 2015. The proceeds were used for operating purposes. The loan payable is with the same party as the $1,047,390 note payable disclosed above.

$50,000 Note Payable

On June 9, 2015, the Company secured a $50,000 note payable, accruing interest at 7.5% per annum being due June 9, 2016. The proceeds were used for operating purposes. The loan payable is with the same party as the $1,047,390 note payable disclosed above.

NOTE 4 - STOCKHOLDERS’ DEFICIT

Stock Issued for Cash

In July 2014, the Company sold 1,500,000 shares of common stock at $0.07 per share resulting in proceeds of $105,000.

In August 2014, the Company sold 2,200,000 shares of common stock to a member of the board of directors at $0.068 per share resulting in proceeds of $150,000.

F-7

BIOSHAFT WATER TECHNOLOGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 5 - RELATED PARTY TRANSACTIONS

Consulting Contracts

As of July 31, 2015, the Company has consulting contracts with three related parties for total annual compensation of $393,600. Total amounts due to these related parties, including reimbursable expenses, as of July 31, 2015 and April 30, 2015 were $533,904 and $453,617, respectively. The amounts are included in accounts payable and accrued expenses - related parties on the accompanying balance sheets.

As of July 31, 2015 and April 30, 2015, a former officer and current shareholder of the Company is due $206,000 for prior consulting services performed which is included in accounts payable and accrued expenses - related parties on the accompanying balance sheets. There were no payments made on this obligation during the three months ended July 31, 2015.

As of July 31, 2015 and April 30, 2015, another consultant, shareholder and officer of the Company is due a net $171,966 which is included within accounts payable and accrued expenses - related parties on the accompanying balance sheets. There were no payments made on this obligation during the nine months ended July 31, 2015.

Revenues

From time to time, the Company enters into contracts with an entity controlled by a board member to provide waste water plants. These contracts are typically for waste water plants located in the middle east in which the board member's company has operations. Under these contracts, the Company supplies completed waste water treatment units and the customer performs the installation. As of July 31, 2015 and April 30, 2015, the Company capitalized costs of $482,514 and $478,814, respectively, related to these contracts in which expenditures had been made but the equipment had not been delivered or accepted by the end customer. As of July 31, 2015 and April 30, 2015, the Company has recorded within deferred revenues - related party $599,121 and $497,713, respectively. These amount represents amounts in which have been received from the related party but the revenue has not been recognized as the equipment has not been delivered or accepted. As of July 31, 2015 and April 30, 2015, the Company had $0 and $11,600, respectively, due from the related party recorded in accounts receivable. The Company typically records revenues and expenses in connection with these contracts using the completed contract method as their services primarily relate to the sale of equipment to the related party. The related party is typically responsible for the installation and management of the project. The Company recognizes revenues and costs when acceptance of the waste water plants are received.

Loans Payable

In July 2014, the Company entered into a promissory note for $65,000 with an entity controlled by a significant shareholder and a member of the board of directors. The promissory note incurs interest at 15% per annum, compounding monthly, with principal and interest due July 25, 2015. Subsequent to this agreement, an additional $4,800 was provided to the Company, bringing the total due to the related party as of July 31, 2015 and April 30, 2015 to $69,800. The proceeds were used to fund operations.

Sales of Common Stock

See Note 4 for discussion regarding sales of common stock to a related party.

F-8

BIOSHAFT WATER TECHNOLOGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 6 - SUBSEQUENT EVENTS

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to July 31, 2015 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

F-9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

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

As used in this quarterly report, the terms "Bioshaft", "we", "us", "our" and "our company" mean Bioshaft Water Technology, Inc., a Nevada corporation, unless otherwise indicated.

Corporate History

We were incorporated on March 8, 2006, under the laws of the State of Nevada as “Pointstar Entertainment Corp.”. Effective September 28, 2007, we completed a merger with our subsidiary, “Bioshaft Water Technology, Inc.”, also a Nevada corporation. As a result, we changed our name from “Pointstar Entertainment Corp.” to “Bioshaft Water Technology, Inc.”. Our stock symbol is “BSHF”.

Our principal executive offices are located at 222 West 6th Street, #400, San Pedro, CA 90731 and our telephone number is (310) 707-2553.

We do not have any subsidiaries.

Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.

Our Current Business

We are currently engaged in treating both industrial waste-water, primarily from the food and beverage sector and domestic waste-water where containerized/modular plants can be deployed on a permanent or temporary basis along with our technology’s ability to provide expansion (upgrade/retrofit) to existing domestic activated sludge wastewater plants worldwide.

On September 18, 2007, we entered into an asset purchase agreement with Hans Bio Shaft Limited and Hassan Hans Badreddine, pursuant to which we acquired from Hans Bio Shaft U.K. Patent GB2390365 titled “Waste Water Treatment Plant and Method” and related United States and European patent applications for the design of a certain waste water treatment plant system. In consideration for the U.K. patent and related United States and European patent applications.

With the completion of the asset purchase agreement, we changed our business to the business of designing and manufacturing both industrial and domestic waste water treatment plant systems, using our patented Bioshaft unit, the Bioshaft System, along with the development of our modular anoxic anaerobic digester (“MAAD”) technology used to treat the primarily high strength industrial wastewater.

On August 6, 2008, we entered into a loan agreement with Premier Financial and Marketing Co. Ltd., in respect of a loan in the amount of $500,000 at the rate of interest of 15% per annum payable in full on August 6, 2009. The loan was used for general working capital purposes. The loan bears interest at the rate of 15% per annum with interest to be paid monthly in arrears on the last business day of each month, commencing August 31, 2008. The principal and all accrued and unpaid interest was due to be paid in full on August 11, 2009. On March 6, 2013, Premier agreed to extend the loan agreement until August 11, 2013. On August 21, 2014, the convertible loan was sold by the holder and the terms of the note were amended.

On March 6, 2009, we entered a loan agreement with Premier pursuant to which Premier loaned our company $25,000 for the purposes of working capital. The loan bears interest at the rate of 15% per annum with interest to be paid monthly in arrears on the last business day of each month, commencing March 6, 2010. The principal and accrued interest were due on March 6, 2010. On September 6, 2011, Premier agreed to extend the loan agreement until September 6, 2012. On March 6, 2013, Premier agreed to further extend the loan until March 6, 2014. On August 21, 2014, the convertible loan was sold by the holder and the terms of the note were amended.

On February 23, 2012, we entered into an amending agreement to a loan agreement and promissory note to modify the loan agreement and promissory note we originally entered into with Premier on August 6, 2008. The parties have agreed to amend the loan agreement to provide for a conversion feature. Pursuant to the amending agreement, any amounts outstanding under the loan are convertible at the price of $0.025 per share of common stock upon the provision of seven days’ notice by the lender.

In June 2014, Premier advanced an additional $60,000 to our company, pursuant to which formal terms were not been established. On August 21, 2014, the convertible loan was sold by the holder and the terms of the note were amended.

On August 21, 2014, we entered into an assignment agreement with Premier and Six Capital Ltd. with an effective date of July 7, 2014, wherein Premier sold the $60,000 advance, $500,000 convertible note payable and $25,000 secured note payable and accrued interest (totaling $585,000) to Six Capital. Pursuant to this assignment our company is no longer required to convert the principal debt into shares.

Also on August 21, 2014, we entered into a loan agreement and general security agreement with Six Capital with an effective date of July 7, 2014, pursuant to which Six Capital will lend our company the principal sum of $1,047,390 which represents the outstanding note balances and accrued interest as of July 7, 2014. The loan agreement with Six Capital matures on July 7, 2015, the proceeds of which will be used for working capital. The loan bears an interest rate of 7.5% per annum calculated and compounded monthly. The principal may be prepaid at any time in whole or in part without penalty, together with all interest accrued and unpaid to the date of such prepayment.

Additional terms to the loan agreement include the following:

Our company issued 5,000,000 bonus common shares to Six Capital on closing date of July 7, 2014;

In the event that our company is unable to raise $5,000,000 through the issuance of our common shares within 12 months of the date of the loan agreement, our company will grant to Six Capital 30,000,000 share purchase warrants, dated July 7, 2015 with each warrant entitling Six Capital to purchase one common share of our company at an exercise price of $0.025 per share for a period of five years from the date of issuance.

10,000,000 warrants in our company held by Six Capital for the purchase of 10,000,000 shares of our common stock at a price of $0.025 per share have been cancelled.

Six Capital also purchased the ability to convert $500,000 of the debt at $0.025 per share from Premier which would grant Six Capital the ability to receive an additional 20,000,000 shares being the original conversion feature of the debt. This conversion feature has been cancelled.

Effective February 23, 2012, we entered into an assignment of debt wherein we have agreed to accept $250,000 as consideration for the assignment of obligations under a loan agreement with Pedernales Brewing Company, LLC and Lee Hereford. Pursuant to the terms of the assignment of debt, we agreed to absolutely and unconditionally assign, transfer and set over all of our right, title and interest in and to the loan. Further to the terms, we have the right to repurchase the loan for the remaining principal balance plus unpaid interest.

On October 15, 2012, we entered into an international distributor agreement with Zuhier Ahmad Zahran & Co. (“ZAZCo”), a company operated by our director, Zuhier Ahmad Zahran. Under the distributor agreement ZAZCo will assist our company in the promotion, sale, marketing and distribution of our products in the Kingdom of Saudi Arabia and any other mutually agreed upon countries for a period of two years, which is currently still in effect on a month to month basis. The purchase prices for our products shall be in response to specific project requirements. The difference between ZAZCo’s purchase price and ZAZCo’s selling price to its customers shall be ZAZCo’s sole remuneration for sale of our products. ZAZCo shall be free to determine the resale prices of our products and shall, in good faith, use its commercially reasonable efforts to reasonably price our products so as to be competitive in the territory in respect of other competitive or similar products offered in the territory.

On July 1, 2013, we entered into a consulting agreement with Canadian Environmental Designers Inc., a company operated by our director, Bashir Amin, to assist our company in marketing, sales and business development. Under the terms of the consulting agreement, Canadian Environmental Designers Inc. shall be paid by our company as per direct costs to the projects being worked on. Additionally special pre-approved expenses are invoiced and paid by our company within 30 days. The term of the consulting agreement was through June 30, 2014 and our company is currently engaged with Canadian Environmental Designers Inc. on a month to month basis.

On July 1, 2013, we entered into a consulting agreement with Hydro E+, LLC to assist our company in corporate finance, marketing and business development matters. For its services, Hydro E+ received compensation of $7,000 on execution of the consulting agreement and will receive $7,000 every 30 days afterward. The term of the agreement was until June 30, 2014 and our company is currently engaged with Hydro E+ on a month to month basis.

Effective February 1, 2014, we entered into a consulting agreement with Sustainable Water Corp., a company operated by our officer and director, Imad A. Yassine in his capacity as a consultant, and as chief operating officer and chief financial officer of our company. Under the terms of the consulting agreement, Sustainable Water Corp. will receive a monthly consulting fee of $15,000. The term of this agreement is for a period of two years, expiring on January 31, 2016.

In July 2014, we entered into two promissory notes totaling $65,000 with Sustainable Water Corp., a company operated by our officer and director, Imad A. Yassine. The promissory note incurs interest at 15% per annum, compounding monthly, with principal and interest due July 25, 2015. An additional $4,800 was advanced to our company and thus the total amounts outstanding as of July 31, 2015 are $69,800. The proceeds were used to fund operations.

On December 24, 2014, our company secured a $100,000 promissory note with Six Capital, accruing interest at 7.5% per annum and maturing on December 24, 2015. The note does not bear any conversion feature. The proceeds were used for operating purposes.

On June 9, 2015, our company secured a $50,000 note payable with Six Capital, accruing interest at 7.5% per annum being due June 9, 2016. The note does not bear any conversion feature. The proceeds were used for operating purposes.

Results of Operations

Three Months Summary


	Three Months Ended July 31,
	2015		2014
Total revenue	$	13,764	$	117,380

Cost of revenues		-		131,382
Total operating expenses		160,315		170,235
Total other (income) expense		27,307		20,684
Net loss	$	(173,858)	$	(204,921)

Revenues

During the three months ended we earned revenues of $13,764, a decrease of $103,616, compared to $117,380 for the prior year's comparable period. The decrease in revenues for the three months ended July 31, 2015 is directly related to our Company recognizing revenues in the prior year under the percentage of completion method and under the completed contract method for the current year.

During the current fiscal year, our Company has four projects which are being accounted for under the completed contract method as both are based upon the delivery of equipment and limited installation services. During the quarter ended July 31, 2015, the Company completed one of the projects, which was being accounted for under the percentage completion method, for which the remaining revenue was recorded without additional expenditures for the three months ended July 31, 2015. As of July 31, 2015, our Company has deferred revenues of $1,001,162 and deferred costs of $715,189 in connection with four projects. Our Company expects to record the revenues and costs related to these projects in Q2 or Q3 of fiscal 2016. The Company's revenues will continue to be inconsistent until a pipeline of such contacts is established.

Cost of Revenues

Cost of revenues decreased to $0, a decrease of $131,382 during the three months ended July 31, 2015 from $131,382 during the three months ended July 31, 2014.

The decrease in cost of revenues is directly related to our Company recognizing less revenues during the current period. In addition, during the three months ended July 31, 2014, our Company cost overruns of $47,620 related to one of our Company's projects.

Expenses


	Three Months Ended July 31,
	2015		2014
Selling, general and administrative	$	51,697	$	45,879
Advertising, marketing and promotions		218		177
Consulting fees		108,400		123,900
Depreciation		-		279

Total operating expenses

160,315

170,235

Total operating expenses during the three months ended July 31, 2015 decreased as compared to the comparative period in 2014 primarily due to decreases in selling, general and administrative expenses, consulting fees and depreciation. The decrease in operating loss during the three months ended July 31, 2015 was primarily due to the Company's emphasis on reducing general and administrative costs and consulting fees. The comparable prior period includes salary paid to one additional consultant for which services were discontinued in the middle of fiscal 2015.

Liquidity and Financial Condition

Working Capital

As of July 31, 2015, our total current assets were $800,556 and our total current liabilities were $3,733,837 and we had a working capital deficit of $2,933,281.

Cash Flows


	Three Months Ended July 31,
	2015		2014
Net cash flows used in operating activities	$	(70,895)	$	(258,911)
Net cash flows provided by (used in) investing activities	$	Nil	$	Nil
Net cash flows provided by financing activities	$	50,000	$	230,000
Net decrease in cash during period	$	(20,895)	$	(28,911)

The decrease in cash used in operating activities primarily relates to our continued net loss from operations as cash flows generated from operations is not yet sufficient enough to cover our expenditures. The decrease in cash flow from financing activities is a direct result of proceeds from notes payable, proceeds from related party notes payable and the sales of common stock to fund operations in the prior year.

Future Financing

We have recently had significant increases in revenues and accounts receivable, however, the continuance of such cannot be assured. If revenues were to decrease, we would have significant difficulty sustaining our operations without additional support. The ability of our company to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new stockholders and our ability to maintain profitable operations.

Management believes that our cash on hand, cash equivalents, and any cash revenue provided by our operating activities will be insufficient to meet our working capital requirements for the next twelve month period. We estimate that we will require an additional $2,770,000 over the next twelve month period to fund our operating cash shortfall. We plan to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirements for the next twelve months primarily through the private placement of our equity securities. There are no assurances that we will be able to obtain funds required for our continued operation. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful and sufficient market acceptance of our products and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Plan of Operation

During the next twelve month period, we intend to:

(a)

penetrate the waste water treatment industry worldwide by stressing the cost advantages and space saving capabilities of the BioShaft System.

(b)

build up a network of strategic alliances with several types of companies, including contractors that specialize in the construction of water treatment plants, engineering firms that work with municipalities and firms that specialize in “build own operate” project utilities.

(c)

form a partnership with a Chinese manufacturer that we can outsource to, and fabricate up to two BioShaft units per month within the first three months.

(d)

implement our pilot project in Southern California where we will setup and operate a packaged unit in order to complete the municipal permitting process for the California commission on environmental quality.

(e)

the small footprint and default generation of biogas gives BioShaft the unique ability among competitors to take on very high organic contaminant loads. Typically 400% to 500% of the maximum competitors quote.

(f)

BioShaft offering is most superior in:

brewery wastewater;

ii.

dairy wastewater;

iii.

dairy processing wastewater - cheese, yogurt, etc.

(g)

fill the positions of vice president of marketing and three sales engineers.

Not accounting for our working capital deficit of $2,933,281, we have estimated that we will require an additional $2,770,000 based on our projected cash flow from existing and future revenues to carry out our business plan for the next twelve months. In the event we do not have the funds necessary to cover our projected operating expenses for the next twelve month period, we may be required to raise additional funds through the issuance of equity securities, through loans or through debt financing. There can be no assurance that we will be successful in raising any required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities.

If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.

Capital Expenditures

We do not have any material commitments for capital expenditures and management does not anticipate that we will spend additional material amounts on capital expenditures in the near future.

Employees

We plan to employ a number of executive officers including a vice president of marketing and three sales engineers by approximately January 2016. We anticipate that we may spend up to $108,000 per month to employee officers and employees and up to $50,000 in payroll taxes. We do and will continue to outsource contract employment as needed.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

Our financial statements have been prepared in accordance with the U.S. GAAP. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.

The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of significant accounting policies.

Use of Estimates

Revenue Recognition

For contracts in which our company can reasonably estimate the costs and the percent complete, our company recognizes revenues based on the percentage-of-completion method, measured by the percentage of cost incurred to date to estimated total cost for each contract. That method is used because management considers total cost to be the best available measure of progress on contracts. Because of inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term.

For contracts in which our company can't reasonably estimate the costs and the percent complete, our company recognizes revenues using the completed contract method. Typically, these contracts are isolated to international contracts whereby our company is providing equipment and limited installation. Under the completed contract basis, contract costs are recorded to a deferred asset account and billings and/or cash received are recorded to a deferred revenue liability account during the periods of construction. All revenues, costs, and profits are recognized in operations upon completion of the contract. A contract is considered completed when all costs except insignificant items have been incurred and the equipment is delivered to the end user.

Recent Accounting Pronouncements

The FASB issues Accounting Standard Updates (“ASUs”) to amend the authoritative literature in the Accounting Standards Codification (“ASC”). There have been a number of ASUs to date that amend the original text of ASC. Our company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to our company or (iv) are not expected to have a significant impact on our company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a "smaller reporting company", we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Management's Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits


Exhibit Number	Description
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2 filed on June 13, 2006)
3.2	By-laws (incorporated by reference from our Registration Statement on Form SB-2 filed on June 13, 2006)

3.3

Certificate of Amendment (incorporated by reference from our Current Report on Form 8-K filed on August 6, 2007)

3.4

Articles of Merger filed with the Secretary of State of Nevada on September 24, 2007 and which is effective September 28, 2007 (incorporated by reference from our Current Report on Form 8- K filed on September 28, 2007)

(10)

Material Contracts

10.1

Asset Purchase Agreement dated September 18, 2007 between Hans Bio Shaft Limited, Hassan Hans Badreddine and our company (incorporated by reference from our Current Report on Form 8-K filed on September 24, 2007)

10.2

Patent Assignment Agreement dated September 18, 2007 between Hans Bio Shaft Limited and our company (incorporated by reference from our Current Report on Form 8-K filed on September 24, 2007)

10.3

Stock Option Plan of our company dated December 15, 2007 (incorporated by reference from our Quarterly Report on Form 10-QSB filed on March 17, 2008)

10.4

Loan Agreement made as of August 6, 2008 between our company and Premier Financial and Marketing Co. Ltd. (incorporated by reference from our Quarterly Report on Form 10-Q filed on September 12, 2008)

10.5

Form of Promissory Note made as of August 6, 2008 between our company and Premier Financial and Marketing Co. Ltd. (incorporated by reference to our Current Report on Form 8-K filed on August 19, 2008)

10.6

General Security Agreement made as of August 6, 2008 between our company and Premier Financial and Marketing Co. Ltd. (incorporated by reference to our Current Report on Form 8-K filed on August 19, 2008)

10.7

Loan Agreement made as of March 6, 2009 between our company and Premier Financial and Marketing Co. Ltd. (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 14, 2012)

10.8

Form of Promissory Note Agreement made as of March 6, 2009 between our company and Premier Financial and Marketing Co. Ltd. (incorporated by reference to our Quarterly Report on Form 10-Q filed on December 16, 2013)

10.9

General Security Agreement made as of March 6, 2009 between our company and Premier Financial and Marketing Co. Ltd. (incorporated by reference to our Quarterly Report on Form 10-Q filed on December 16, 2013)

10.10

Stock Option Agreement made as of August 15, 2011 between our company and Canadian Environmental Consulting (incorporated by reference from our Quarterly Report on Form 10-Q filed on September 19, 2011)

10.11

Amending Agreement dated February 23, 2012 between our company and Premier Financial Marketing Co. Ltd. (incorporated by reference from our Current Report on Form 8-K filed on March 7, 2012)


Exhibit Number	Description
10.12	Assignment Agreement made as of February 23, 2012 between our company and Six Capital Limited (incorporated by reference from our Current Report on Form 8-K filed on March 7, 2012)
10.13	Non-Disclosure Agreement made as of July 1, 2012 between our company and Canadian Environmental Designers, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 14, 2012)
10.14	International Distribution Agreement made as of October 15, 2012 between our company and Zuhier Ahmad Zahran & Co. (incorporated by reference to our Quarterly Report on Form 10-Q filed on December 21, 2012)
10.15	Consulting Agreement made as of July 1, 2013 between our company and Hydro E+, LLC (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 23, 2013)
10.16	Consulting Agreement made as of July 1, 2013 between our company and Canadian Environmental Designers, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 23, 2013)
10.17	Consulting Agreement made as of February 1, 2014 between our company and Sustainable Water Corp. (incorporated by reference to our Quarterly Report on Form 10-Q filed on March 14, 2014)
10.18	Assignment Agreement dated July 7, 2014 between our company, Six Capital Ltd. and Premier Financial and Marketing Co. Ltd. (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 15, 2014)
10.19	Loan Agreement dated July 7, 2014 between our company and Six Capital Ltd. (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 15, 2014)
10.20	Promissory Note dated July 7, 2014 between our company and Six Capital Ltd. (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 15, 2014)
10.21	General Security Agreement dated July 7, 2014 between our company and Six Capital Ltd. (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 15, 2014)
10.22	Promissory Note dated July 23, 2014 between our company and Sustainable Water Corp. (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 15, 2014)
10.23	Promissory Note dated July 25, 2014 between our company and Sustainable Water Corp. (incorporated by reference to our Quarterly Report on Form 10-Q filed on September 15, 2014)
(14)	Code of Ethics
14.1	Code of Ethics and Business Conduct dated effective July 1, 2008 (incorporated from our Annual Report on Form 10-KSB/A filed on August 14, 2008)
(31)	Rule 13a-14(a)/15d-14(a) Certifications
31.1*	Section 302 Certification under Sarbanes-Oxley Act of 2002 of Principal Executive Officer
31.2*	Section 302 Certification under Sarbanes-Oxley Act of 2002 of Principal Financial Officer and Principal Accounting Officer
(32)	Section 1350 Certifications
32.1*	Section 906 Certification under Sarbanes-Oxley Act of 2002 of Principal Executive Officer
32.2*	Section 906 Certification under Sarbanes-Oxley Act of 2002 of Principal Financial Officer and Principal Accounting Officer
(101)*	Interactive Data File
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

SIGNATURES

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


		BIOSHAFT WATER TECHNOLOGY, INC.

Date: September 21, 2015	By:	/s/ Bashar Amin
		Bashar Amin
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Date: September 21, 2015	By:	/s/ Imad Kamel Yassine
		Imad Kamel Yassine
		Chief Operating Officer, Chief Financial Officer, Secretary, Treasurer and Director
		(Principal Financial Officer and Principal Accounting Officer)

BIOSHAFT WATER TECHNOLOGY, INC. 10-Q