UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~June~~September 30, 2015

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

For the transition period from_____ to _____

STW RESOURCES HOLDING CORP

(Exact Name of Registrant as Specified in Charter)

Nevada	000-52654	26-1945743
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)
3424 South County Road 1192 Midland, Texas 79706		(432) 686-7777
(Address of Principal Executive Offices)		(Registrant’s Telephone Number)

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

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

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 to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

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

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]

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

As of ~~October~~November 624, 2015, there were 35,844,548 shares of the issuer’s common stock, $0.001 par value per share, outstanding.

TABLE OF CONTENTS
		Page
PART I	FINANCIAL INFORMATION
Item 1	Unaudited Condensed Consolidated Financial Statements:	1
	Condensed Consolidated Balance Sheets as of June 30, 2015 (Unaudited) and December 31, 2014	1
	Condensed Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and December 31, 2014	1
	Condensed Consolidated Statements of Operations (Unaudited) for the three and six month periods ended June 30, 2015 and 2014	2
	Condensed Consolidated Statements of Operations (Unaudited) for the three and nine month periods ended September 30, 2015 and 2014	2
	Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited) for the six months ended June 30, 2015	3
	Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited) for the nine months ended September 30, 2015	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the six month periods ended June 30, 2015 and 2014	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine month periods ended September 30, 2015 and 2014	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3332
Item 4	Controls and Procedures	4239
PART II	OTHER INFORMATION
Item 1	Legal proceedings	4240
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	4442
Item 3	Defaults upon Senior Securities	4543
Item 5	Other information	4544

~~Table of Contents~~i

PART I

ITEM 1. FINANCIAL STATEMENTS

STW Resources Holding Corp

Condensed Consolidated Balance Sheets

		June 30, 2015				December 31, 2014
			September 30, 2015				December 31, 2014
ASSETS		~~(Unaudited)~~	(Unaudited)
Current Assets
Cash		$	~~28,030~~$	--		$	~~137,524~~$	137,524
Accounts receivable, trade, net			~~2,592,932~~	1,612,968			~~3,493,918~~	3,493,918
Accounts receivable from related parties			--	--			~~7,980~~	7,980
Deferred project costs			~~1,994,245~~	1,416,423			~~480,000~~	480,000
Prepaid expenses and other current assets			~~447,639~~	462,082			~~329,475~~	329,475
Assets of discontinued operations			~~113,015~~	--			~~1,078,142~~	1,078,142
~~Total Current Assets~~	Total Current Assets		~~5,175,861~~	3,491,473			~~5,527,039~~	5,527,039
Long Term Assets
Property and equipment, net			~~997,628~~	949,386			~~1,203,082~~	1,203,082
TOTAL ASSETS		$	~~6,173,489~~$	4,440,859		$	~~6,730,121~~$	6,730,121
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Book overdraft		$	~~609,611~~$	671,037		$	--$	--
Accounts payable			~~2,960,629~~	3,055,185			~~3,467,690~~	3,467,690
Payable to related parties:
Black Pearl Energy, LLC			~~69,680~~	167,286			~~1,276,588~~	1,276,588
Crown Financial, LLC			~~1,592,252~~	1,345,855			~~2,034,810~~	2,034,810
Dufrane Nuclear, Inc.			~~80,732~~	47,767			--	--
Accrued compensation - officers			948,380				873,380
Accrued compensation – officers				1,013,380				873,380
Current portion of notes payable, net of discounts, including $1,685,211and $1,077,235 payable to related parties, respectively			8,053,635				5,869,484
Current portion of notes payable, net of discounts, including $1,595,672 and $1,077,235 payable to related parties, respectively				7,627,546				5,869,484
Sales and payroll taxes payable			~~2,013,354~~	2,475,066			~~2,197,768~~	2,197,768
Insurance premium finance contract payable			~~330,198~~	186,044			~~208,271~~	208,271
Accrued expenses and interest			~~2,246,567~~	2,508,728			~~1,727,734~~	1,727,734
Deferred revenue			~~2,196,313~~	1,404,668			~~680,000~~	680,000
Accrued compensation			~~436,875~~	401,366			~~495,934~~	495,934
Accrued board compensation			--	254,531			~~496,067~~	496,067
Fees payable in common stock			~~191,724~~	1,289,891			~~2,783,711~~	2,783,711
Stock subscriptions payable			~~117,000~~	117,000			~~27,000~~	27,000
Liabilities of discontinued operations			~~1,898,802~~	1,059,168			~~2,584,164~~	2,584,164
Derivative liability			~~283,161~~	22,701			~~802,340~~	802,340
~~Total Current Liabilities~~	Total Current Liabilities		~~24,028,913~~	23,647,219			~~25,524,941~~	25,524,941
Notes payable, net of discount and current portion, $540,919 and $623,159 payable to related parties, respectively			~~1.867,679~~	2,616,282			~~2,093,217~~	2,093,217
Total Liabilities			~~25,896,592~~	26,263,501			~~27,618,158~~	27,618,158
Commitments and contingencies (Note 9)
Stockholders' Deficit
Preferred stock, par value $0.001 per share, 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively			--				--
Preferred stock, par value $0.001 per share, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively				--				--
Common stock; $0.001 par value; 191,666,667shares authorized, 35,239,048 and 28,194,953 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively			35,242				28,197
Common stock; $0.001 par value; 191,666,667 shares authorized, 35,844,548 and 28,194,953 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively				35,847				28,197
Additional paid in capital			~~24,099,362~~	24,242,826			~~18,383,411~~	18,383,411
Accumulated deficit			~~(43,508,853~~	)(45,749,846	)		~~(39,112,171~~	)(39,112,171	)
Total Stockholders' Deficit of STW Resources Holding Corp.			~~(19,374,249~~	)(21,471,173	)		~~(20,700,563~~	)(20,700,563	)
Non-controlling interest in subsidiary			~~(348,854~~	)(351,469	)		~~(187,474~~	)(187,474	)
Total Stockholders’ Deficit			~~(19,723,103~~	)(21,822,642	)		~~(20,888,037~~	)(20,888,037	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	~~6,173,489~~$	4,440,859		$	~~6,730,121~~$	6,730,121

See accompanying notes which are an integral part of these unaudited condensed consolidated financial statements.

-1-

Table of Contents

STW Resources Holding Corp

Condensed Consolidated Statements of Operations

For the three and ~~six~~nine month periods ended ~~June~~September 30, 2015 and 2014 (Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
Revenues:
Water treatment services	$	~~118~~1,~~859~~063,219		$	10162,~~051~~846		$	~~267~~1,~~770~~330,989		$	10172,~~051~~897
Energy and construction services		2,~~468~~844,~~601~~351			3,~~045~~100,~~588~~205			47,~~517~~362,~~743~~094			58,~~157~~258,~~913~~119
Related parties services revenue		--			1756,~~104~~232			354			3591,~~138~~370
Net revenues		23,~~587~~907,~~460~~570			3,~~072~~319,~~743~~283			48,~~785~~693,~~867~~437			58,~~203~~522,~~102~~386
Cost of revenues		12,~~717~~775,~~706~~727			32,~~346~~765,~~112~~557			35,~~004~~780,~~985~~712			57,~~108~~873,~~280~~837
Gross Profit		~~869~~1,~~754~~131,843			~~(273~~553,~~369~~726	)		12,~~780~~912,~~882~~725			94648,~~822~~549
Operating expenses
Research and development		~~1,310~~--			~~56,465~~--			7,435			151,955
Sales and marketing		3950,~~547~~400			~~144~~163,~~335~~547			~~265~~316,~~860~~260			~~215~~379,~~816~~362
General and administrative		2,~~031~~693,~~969~~622			23,~~655~~205,~~612~~399			46,~~292~~986,~~420~~042			47,~~535~~740,~~110~~510
Depreciation and amortization		4148,~~420~~240			925,~~951~~748			71119,~~308~~548			2147,~~543~~291
Total operating expenses		2,~~114~~792,~~246~~262			23,~~866~~394,~~363~~694			47,~~637~~429,~~023~~285			48,~~924~~319,~~424~~118
Loss from operations		(1,~~244~~660,~~492~~419	)		(32,~~139~~840,~~732~~968	)		(24,~~856~~516,~~141~~560	)		(47,~~829~~670,~~602~~569	)
Interest expense, including related party interest of $38,318 and $54,164 for the three months ended June 30, 2015 and 2014, respectively, and $68,202 and $96,883 for the six months ended June 30, 2015 and 2014, respectively.		(1,418,157	)		(462,188	)		(2,595,741	)		(861,616	)
Interest expense, including related party interest of $42,730 and $9,796 for the three months ended September 30, 2015 and 2014, respectively, and $113,128 and $29,389 for the nine months ended September 30, 2015 and 2014, respectively.		(833,126	)		(491,913	)		(3,428,867	)		(1,353,529	)
Change in derivative liability		1260,~~353,429~~461			(~~456~~834,~~809~~930	)		1,~~627~~887,~~209~~670			(~~443~~1,~~536~~278,466	)
Loss from continuing operations	$	(12,~~309~~233,~~220~~084	)	$	(4,~~058~~167,~~729~~811	)	$	(36,~~824~~057,~~673~~757	)	$	(610,~~134~~302,~~754~~564	)
(Loss) income from operations of discontinued entities		(329,217)			14,951			(733,389)			(363,767)
Loss from operations of discontinued entities		(10,524	)		(1,141,849	)		(743,913	)		(1,505,616	)
Net Loss		(12,~~638~~243,~~437 )~~608	)		(45,~~043~~309,~~778~~660	)		(46,~~558~~801,~~062 )~~670	)		(611,~~498~~808,~~521~~180	)
Share of net income (loss) of subsidiary attributable to non-controlling interest		(802,~~347~~615	)		10(135,~~641~~366	)		(~~161~~163,~~380~~995	)		(30166,~~928~~294	)
Net Loss of STW Resources Holding Corp.	$	(12,~~558~~240,~~090~~993	)	$	(45,~~054~~174,~~419~~294	)	$	(46,~~396~~637,~~682~~675	)	$	(611,~~467~~641,~~593~~886	)
Loss per common share – basic and diluted	$	(0.0506	)	$	(0.1719	)	$	(0.1421	)	$	(0.2949	)
Weighted average shares outstanding - basic and diluted		32,151,614			23,611,937			31,090,024			22,094,923
Weighted average shares outstanding – basic and diluted		35,753,309			27,006,992			32,160,646			23,657,068

See accompanying notes which are an integral part of these unaudited condensed consolidated financial statements.

-2-

Table of Contents

STW Resources Holding Corp

Condensed Consolidated Statement of Stockholders’ Deficit (Unaudited)

For the ~~six~~nine months ended ~~June~~September 30, 2015

	Common Stock $0.001 Par				~~Additional Paid In~~		~~Accumulated~~			~~Non- Controlling~~			~~Stockholders’~~
	Number		Amount		Additional Paid In Capital		Accumulated Deficit			Non- Controlling Interest			Stockholders’ Deficit
Balance, December 31, 2014		28,194,953	$	28,197	$	18,383,411	$	(39,112,171	)	$	(187,474	)	$	(20,888,037	)
Shares issued to employees from fees payable in common stock		2,~~192~~548,~~834~~334		2,~~194~~549		1,~~748~~819,~~732~~477								1,~~750~~822,~~926~~026
Shares issued to consultants from fees payable in common stock		2,~~102~~152,456		2,~~103~~153		1,~~649~~682,~~743~~193								1,~~651~~684,~~846~~346
Shares issued as board of director fees		908,658		909		674,091								675,000
Shares issued for subscriptions stock payable		15,385		15		9,985								10,000
Shares issued upon conversion of notes payable and accrued interest		276,391		276		355,684								355,960
Shares issued in connection with the 2015 Transfer Agreements as origination fees		525,000		525		420,475								421,000
Shares issued for financing fees		~~500~~700,000		~~500~~700		~~279~~319,~~500~~769								~~280~~320,~~000~~469
Shares issued per Saltech & Black Pearl Energy Agreements		523,371		523		305,182								305,705
Shares issued per Salttech & Black Pearl Energy Agreements		523,371		523		305,182								305,705
Value of warrants issued as debt issuance costs						272,559								272,559
Net loss for the period								(46,~~396~~637,~~682~~675	)		(~~161~~163,~~380~~995	)		(46,~~558~~801,~~062~~670	)
Balance, June 30, 2015		35,239,048	$	35,242	$	24,099,362	$	(43,508,853	)	$	(348,854	)	$	(19,723,103	)
Balance, September 30, 2015		35,844,548	$	35,847	$	24,242,826	$	(45,749,846	)	$	(351,469	)	$	(21,822,642	)

See accompanying notes which are an integral part of these unaudited condensed consolidated financial statements.

-3-

Table of Contents

STW Resources Holding Corp

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the ~~six~~nine month periods ended ~~June~~September 30, 2015 and 2014

	Six Month Periods Ended June 30:
	Nine Month Periods Ended September 30:
	2015			2014
Cash flows from operating activities – continuing operations
Net loss of STW Resources Holding Corp	$	(36,~~824~~057,~~673~~757	)	$	(610,~~134~~302,~~754~~564	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		71119,~~308~~548			2147,~~630~~291
Change in fair value of derivative liability		(1,~~627~~887,~~209~~670	)		~~443~~1,~~536~~278,466
Financing costs of notes payable		~~606~~412,~~089~~590			42,~~592~~594
Change in fair value of debt instruments converted to equity		--			(272,980	)
Amortization of discount and debt issuance costs		1,~~354~~773,~~148~~640			90137,~~833~~902
Share-based compensation		12,~~472~~714,~~448~~684			13,~~655~~486,~~444~~606
Changes in working capital:
(Increase) Decrease in accounts receivable		~~788~~1,~~007~~880,950			(~~652~~885,~~609~~391	)
(Increase) Decrease in deferred project costs		(1936,~~514,245~~423	)		--
(Increase) Decrease in prepaid expenses and other current assets		(~~118~~132,~~200~~607	)		(~~593~~448,~~133~~145	)
Increase (Decrease) in accounts payable		~~232~~247,~~599~~664			1,~~192~~792,~~132~~032
Increase (Decrease) in sales and payroll taxes payable		~~329~~789,~~823~~142			1,~~657~~773,~~246~~511
Increase (Decrease) in deferred revenue		1724,~~516,313~~668			--
Increase (Decrease) in accrued expenses and interest		~~542~~804,~~905~~188			~~871,573~~--
Increase (Decrease) in accrued compensation		(4581,~~896~~405	)		~~306~~230,~~164~~219
Increase (Decrease) in accrued board compensation		~~178~~433,~~933~~464			--
Net cash used in operating activities		(37,650	)		(1,372,326	)
Net cash provided by/used in operating activities		804,676			(3,120,459	)
Cash flows from investing activities – continuing operations
Purchase of equipment, net of equipment loans		(170,035	)		(~~107~~470,~~431~~689	)
Net cash used in investing activities		(170,035	)		(~~107~~470,~~431~~689	)
Cash flows from financing activities – continuing operations
Book overdraft		~~609~~671,~~611~~037			~~(8,211~~--	)
Stock subscriptions payable		100,000			~~540,000~~--
Related party accounts receivables		7,980			12(14,~~471~~236	)
Related party accounts payables, credit facilities, notes, and advances		(~~631~~755,~~537~~688	)		1,~~156~~435,~~036~~493
Increase (Decrease) in insurance premium finance contract payable		~~121~~(22,~~927~~227	)		~~526~~362,~~462~~256
Proceeds from notes payable		2,~~119~~629,000			80364,~~000~~137
Principal payments of notes payable		(~~623~~1,~~798~~752,438	)		(95197,~~496~~369	)
Proceeds from issuance of common stock		--			~~122~~1,221,500
Debt issuance costs		(~~131~~146,000	)		--
Net cash provided by financing activities – continuing operations		1731,~~572,183~~664			23,~~333~~171,~~762~~781
Net increase in cash – continuing operations		1,~~364~~366,~~498~~305			~~854~~(419,~~005~~367	)
Cash flows from operating activities – discontinued operations
Net loss	$	(~~733~~743,~~389~~913	)	$	(~~363~~1,~~767~~505,616	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation of discontinued entities		18,681			94134,~~857~~989
Loss on disposition of property and equipment of discontinued entities		114,809			--39,861
Change in working capital:
Changes in working capital:
(Increase) Decrease in assets of discontinued operations		1,184,~~582~~584			(1553,~~585,872~~217	)
Increase (Decrease) in liabilities of discontinued operations held for sale		(2,005,981	)		1,660,622
Increase (Decrease) in liabilities of discontinued operations		(2,005,981	)		2,686,566
Net cash used in operating activities - discountinued operations		(1,421,298	)		(194,160	)
Net cash (used)/provided by operating activities – discontinued operations		(1,431,820	)		802,583
Cash flows from investing activities – discontinued operations
Cash flows from financing activities – discontinued operations
Principal payments of notes payable of discontinued operations		(52,694	)		--
Principal payments of notes payable of discontinued entities		(72,009	)		(74,753	)
Net cash provided by financing activities – discontinued operations		(5272,~~694~~009	)		--(74,753	)
Net increase in cash – discontinued operations		(1,473,992	)		(194,160	)
Net decrease in cash – discontinued operations		(1,503,829	)		727,830
Net increase (decrease) in cash		(~~109~~137,~~494~~524	)		~~659~~308,~~845~~463
Cash at beginning of period		137,524			4,699
Cash at end of period	$	~~28,030~~--		$	~~664~~313,~~544~~162

(Continued)

-4-

Table of Contents

STW Resources Holding Corp

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the ~~six~~nine month periods ended ~~June~~September 30, 2015 and 2014

Supplemental cash flow information:
Cash paid for interest	$	84105,~~708~~557	$	1219,~~679~~803
Cash paid for income taxes	$	--	$	--
Non-cash investing and financing activities:
Shares issued from common stock subscriptions payable	$	10,000	$	~~150~~160,000
Value of shares issued to employees as compensation	$	1,~~750~~822,~~926~~026	$	~~301~~1,~~625~~011,375
Value of shares issued to consultants	$	1,~~651~~684,~~846~~346	$	~~352~~775,~~175~~575
Value of shares issued as board fees	$	675,000	$	558,157
Value of shares issued in connection with extension of notes payable	$	--	$	6768,~~354~~616
Value of shares issued in payment of accrued PIK interest	$	--	$	~~510~~540,~~769~~777
Value of shares issued upon conversion of notes payable and accrued interest	$	355,960	$	1,588,074
Shares issued for 2015 Transfer Agreement origination fees	$	421,000	$	--
Shares issued for Financing Fees	$	~~280~~320,~~000~~469	$	--
Value of shares issued as charitable contributions	$	--	$	110,000
Shares issued per Salttech & Black Pearl Energy Agreements	$	305,705	$	--
Value of warrants issued as debt issuance costs	$	272,559	$	--
Value of conversion feature of JMJ convertible note payable	$	--	$	50,000
Value of derivative associated with convertible note payable	$	--	$	715,981

See accompanying notes which are an integral part of these unaudited condensed consolidated financial statements.

-5-

Table of Contents

STW Resources Holding Corp

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~Six~~Nine Month Periods Ended ~~June~~September 30, 2015 and 2014

NOTE 1 – NATURE OF THE BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying condensed consolidated financial statements of STW Resources Holding Corp and its subsidiaries (“STW,” “we,” “us, “our” and “our Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the rules and regulations of the Securities and Exchange Commission. Accordingly, the unaudited condensed financial statements do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending December 31, 2015, or for any other interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended December 31, 2014, which are included in the Company’s Annual Report on Form 10-K for such year as filed on April 3, 2015. During the ~~six~~nine months ended ~~June~~September 30, 2015, the Company decided to shut down the operations of its Energy and Oilfield businesses. Accordingly, some information included in our form 10-K may not be comparable to the information included in this form 10-Q. The December 31, 2014 condensed consolidated balance sheet was derived from the audited consolidated balance sheet included in the Company’s Annual Report on Form 10-K for such year as filed on April 3, 2015, see Reclassifications below.

History of the Company

STW Resources Holding Corp, is a corporation formed to utilize state of the art water reclamation technologies to reclaim fresh water from highly contaminated oil and gas hydraulic fracture flow-back salt water that is produced in conjunction with the production of oil and gas. STW has been working to establish contracts with oil and gas operators for the deployment of multiple water reclamation systems throughout Texas, Arkansas, Louisiana and the Appalachian Basin of Pennsylvania and West Virginia. STW, in conjunction with energy producers, operators, various state agencies and legislators, is working to create an efficient and economical solution to this complex problem. The Company is also evaluating the deployment of water processing technologies in the municipal wastewater and potable water industry. The Company is also involved in the desalination of brackish water and seawater for industrial and municipal use.

The Company’s operations are located in the United States of America and the principal executive offices are located at 3424 South County Road 1192, Midland, Texas 79706.

Consolidation policy

The unaudited condensed consolidated financial statements for the three and ~~six~~nine months ended ~~June~~September 30, 2015, include the accounts of the STW Resources Holding Corp and its wholly owned subsidiaries: STW Water Process & Technologies LLC and STW Pipeline Maintenance & Construction, LLC. The condensed consolidated financial statements for the three and ~~six~~nine months ended ~~June~~ September 30, 2014, include STW Resources Holding Corp and STW Pipeline Maintenance & Construction, LLC as STW Water Process & Technologies, LLC was not established prior to the quarterly period ended ~~June~~September 30, 2014. All significant intercompany transactions and balances have been eliminated in consolidation.

STW Oilfield Construction LLC and the Company’s 75% owned subsidiary STW Energy, LLC have been reported as discontinued operations.

The Company also consolidates any variable interest entities (VIEs), of which it is the primary beneficiary, as defined. The Company does not have any VIEs that need to be consolidated at this time. When the Company does not have a controlling interest in an entity, but exerts a significant influence over the entity, the Company would apply the equity method of accounting.

-6-

Table of Contents

Reclassifications

Certain reclassifications were made to the prior period condensed consolidated financial statements to conform to the current period presentation. There was no change to the previously reported net loss. Additionally, the financial statements for ~~June~~September 30, 2014, and December 31, 2014, ~~and March 31, 2015~~ have been revised for the discontinued operations (See Note 8).

Non-Controlling interest

On June 25, 2013, the Company invested in a limited liability company (“LLC”) by obtaining a 75% interest in STW Energy Services, LLC (“STW Energy”). The non-controlling interest in STW Energy is held by Crown Financial, LLC, a Texas Limited Liability Company (“Crown” or “Crown Financial”). As of December 31, 2014, $2,500 was recorded as the equity of the non-controlling interest in our consolidated balance sheet representing the third-party investment in STW Energy, with a cumulative net loss attributable to non-controlling interests of $187,474 for the year ended December 31, 2014. During the three and ~~six~~nine month period ended ~~June~~September 30, 2015, a net loss attributable to the non-controlling interest of $805,~~347~~615 and $~~161~~163,~~380~~995, respectively, was incurred. As of ~~June~~September 30, 2015, the net deficit interest in the subsidiary held by the non-controlling interest is $~~348~~351,~~854.~~471

Going Concern

The Company’s condensed consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $4345,~~508~~749,~~853~~846 as of ~~June~~September 30, 2015, and as of that date was delinquent in payment of $2,~~013~~475,~~354~~066 of sales and payroll taxes. As of ~~June~~September 30, 2015, $56,~~546~~493,~~655~~616 of notes payable were in default. Since its inception in January 2008 through ~~December~~September 3130, ~~2014~~2015, management had raised equity and debt financing of approximately $2123,000,000 to fund operations and provide working capital. The cash resources of the Company are insufficient to meet its planned business objectives without additional financing. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern.

There can be no assurance that the Company can successfully accomplish these steps and it is uncertain that the Company will achieve a profitable level of operations and obtain additional financing. There can be no assurance that any additional financing will be available to the Company on satisfactory terms and conditions, if any at all.

The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

-7-

Table of Contents

Use of Estimates

Condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States require 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 revenues and expenses during the reporting period. Among other things, management has estimated the collectability of its accounts receivable, the valuation of long lived assets, the assumptions used to calculate its derivative liabilities, and equity instruments issued for financing and compensation. Actual results could differ from those estimates.

Accounts Receivable

Trade accounts receivable, net of allowance for doubtful accounts consists primarily of receivables from oil & gas services fees. Management determines the allowance for doubtful accounts based on historical losses and current economic conditions. On a continuing basis, management analyzes delinquent receivables, and once these receivables are determined to be uncollectible, they are written off either against an existing allowance account or as a direct charge to the condensed consolidated statement of operations. As of ~~June~~September 30, 2015 and December 31, 2014, the allowances for doubtful accounts were ~~zero~~$40,390 and $6,773, respectively.

-7-

Table of Contents

Loan Discounts

The Company amortizes loan discounts over the term of the loan using the effective interest method.

Concentration of Credit Risk

A financial instrument that potentially subjects the Company to concentration of credit risk is cash. The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits to $250,000 per owner per institution. At ~~June~~September 30, 2015, there were no account balances per institution that would have exceeded the $250,000 insurance limit.

The Company anticipates entering into long-term fixed-price contracts for its services with select oil and gas producers and municipal utilities. The Company will control credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures.

As of ~~June~~September 30, 2015, three vendors accounted for 1815%, 128% and 115% of total accounts payable. During the three months ended ~~June~~September 30, 2015, three vendors accounted for 5855%, 159%, and 85% of total purchases. During the ~~six~~nine months ended ~~June~~September 30, 2015, three vendors accounted for 6359%, 1813%, and 87% of total purchases. As of December 31, 2014, three vendors accounted for 20% of total accounts payable. During the year ended December 31, 2014, two vendors accounted for 69% of total purchases.

As of ~~June~~September 30, 2015, three customers accounted for 3445%, 3334% and 137% of accounts receivable. During the three months ended ~~June~~September 30, 2015, three customers accounted for 7567%, 1219% and 76% of net revenues. During the ~~six~~nine months ended ~~June~~September 30, 2015, three customers accounted for 7471%, 812% and 87% of net revenues. As of December 31, 2014, three customers accounted for 43%, 11% and 3% of accounts receivable. During the year ended December 31, 2014, three customers accounted for 39%, 11% and 7% of total revenues.

Fair Value of Financial Instruments

“Fair value” is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company’s financial instruments consist of cash, accounts receivable, notes payable, accounts payable, accrued expenses and derivative liabilities. The carrying value for all such instruments except convertible notes payable and derivative liabilities approximates fair value due to the short-term nature of the instruments. Our derivative liabilities are recorded at fair value (see Note 5).

-8-

Table of Contents

We determine the fair value of our financial instruments based on a three-level hierarchy for fair value measurements under which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect management’s use of assumptions to external and internal information. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair-value hierarchy:

Level 1 — Valuations based on unadjusted quoted market prices in active markets for identical securities. Currently, we do not have any items classified as Level 1.

Level 2 — Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. Currently, we do not have any items classified as Level 2.

Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement, and involve management judgment. We use the Black-Scholes-Merton option pricing model (“Black-Scholes”) to determine the fair value of the financial instruments.

If the inputs used to measure fair value fall in different levels of the fair value hierarchy, a financial security’s hierarchy level is based upon the lowest level of input that is significant to the fair value measurement.

-8-

Table of Contents

Our derivative liabilities consist of embedded conversion features on debt, price protection features on warrants, and are classified as Level 3 liabilities. We use Black-Scholes to determine the fair value of these instruments (see Note 5).

Management has used the simplified Black Scholes model to estimate fair value of derivative instruments. Management believes that as a result of the relatively short term nature of the warrants and convertibility features, a lattice model would not result in a materially different valuation.

The following table presents certain financial instruments measured and recorded at fair value on the Company’s condensed consolidated balance sheets on a recurring basis and their level within the fair value hierarchy as of ~~June~~September 30, 2015 and December 31, 2014.

	Level 1		Level 2		Level 3		Total
Fair value of Derivative Liability at June 30, 2015	$	--	$	--	$	283,161		$	283,161
Fair value of Derivative Liability at September 30, 2015	$	--	$	--	$	22,701		$	22,701
Fair value of Derivative Liability at December 31, 2014	$	--	$	--	$	802,340		$	802,340

Accounting for Derivatives Liabilities

The Company evaluates stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. Financial instruments classified as a derivative instrument isare marked-to-market at each balance sheet date and recorded as an asset or a liability with the change in fair value adjusted through the statement of operations in other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification to a liability are recorded at the fair value of the instrument on the reclassification date.

Certain of the Company’s embedded conversion features on debt, with anti-dilution provisions, and price protection features on outstanding common stock warrants are treated as derivatives for accounting purposes. The common stock purchase warrants were not issued with the intent of effectively hedging any future cash flow, fair value of any asset or liability. The warrants do not qualify for hedge accounting, and as such, all future changes in the fair value of these warrants are recognized currently in earnings until such time as the warrants are exercised, expire or the related rights have been waived. These common stock purchase warrants do not trade in an active securities market. The Company estimates the fair value of these warrants and embedded conversion features as derivative liabilities contracts using the Black-Scholes model (see Note 5).

-9-

Table of Contents

Equity Instruments Issued to Non-Employees for Acquiring Goods or Services

Issuances of the Company’s common stock for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. When it is appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values at each of those interim financial reporting dates.

Long-lived Assets and Intangible Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

The Company had no such asset impairments during the ~~six~~nine months ending ~~June~~September 30, 2015 or 2014. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and services under development will continue. Either of these could result in future impairment of long-lived assets.

-9-

Table of Contents

Revenue Recognition

~~During~~Services ~~the~~Revenues ~~year~~from ~~ended December 31, 2014, the Company entered into~~ Master Services Agreements (“MSA”) with several major oil & gas companies. These MSAs authorize the Company to provide a range of oil & gas support services including oilfield site construction and maintenance, pipeline maintenance, oil rig cleaning, site preparation, energy support services, and other oil & gas support services. The Company bills these customers pursuant to purchase orders issued under the MSAs. The revenues billed include hourly labor fees and equipment usage fees. The Company recognized revenues from these contracts as the services are performed under the customer purchase orders and no further performance obligations exist, generally in the form of a customer approval. During the three and six months ended June 30, 2015, the Company recognized $2,468,601and $4,518,097, respectively of revenues from these services contracts, which included zero and $354, respectively of revenues from related parties. During the three and six months ending June 30, 2014, the Company realized revenue of $3,062,692 and $5,193,052, respectively from services contracts, which included $17,104 and $35,138, respectively of the service revenue was from related parties.

During the year ended December 31, 2014, the Company entered into Master Services Agreements (“MSA”) with several major oil & gas companies. These MSAs authorize the Company to provide a range of oil & gas support services including oilfield site construction and maintenance, pipeline maintenance, oil rig cleaning, site preparation, energy support services, and other oil & gas support services. The Company bills these customers pursuant to purchase orders issued under the MSAs. The revenues billed include hourly labor fees and equipment usage fees. The Company recognized revenues from these contracts as the services are performed under the customer purchase orders and no further performance obligations exist, generally in the form of a customer approval. During the three and nine months ended September 30, 2015, the Company recognized $2,844,351 and $7,362,448, respectively of revenues from these services contracts, which included zero and $354, respectively of revenues from related parties. During the three and nine months ending September 30, 2014, the Company realized revenue of $3,156,437 and $8,349,489, respectively from services contracts, which included $56,232 and $91,370, respectively of the service revenue was from related parties.

Contract Revenue and Cost Recognition on Engineering and Design Services

During the nine month period ended September 30, 2015, the Company completed a contract to design, build and deliver custom design, engineering and construction of the Horizon City Municipal Utility District Reverse Osmosis (RO) Concentrator facility to Horizon City, Texas. As of December 31, 2014, the Company reported deferred revenue of none and deferred costs of $136,898 related to this contract. Total revenues of $934,558 and costs of $713,464 were recognized during the nine month period ended September 30, 2015, upon completion of the contract and acceptance of the concentrator facility.

The Company recognizes revenue on a contract once the services or products are delivered or completed and accepted by the customer. This is based on a thorough analysis of the written contract. Revenues from these contracts are recognized when the customer has passed credit tests and collection is reasonable assured and amounts are fixed and determinable.

Business Segments

The Company has three reportable segments, (1) water reclamation services, (2) oil & gas services and (3) corporate operations. Segment information is reported in Note 10.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

-10-

Table of Contents

The Company maintains a valuation allowance with respect to deferred tax assets. The Company established a valuation allowance based upon the potential likelihood of realizing the deferred tax asset in the future. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any reduction in the valuation allowance will be included in income in the year of the change in estimate.

The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on its condensed consolidated balance sheets at ~~June~~September 30, 2015 and December 31, 2014, respectively.

Common Stock and Common Stock Warrants Issued to Employees

The Company uses the fair value recognition provision of ASC 718, “Stock Compensation,” which requires the Company to recognize the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments. The Company uses the Black-Scholes option pricing model to calculate the fair value of any equity instruments on the grant date.

At ~~June~~September 30, 2015 and December 31, 2014, the Company had no grants of employee common stock options or warrants outstanding.

-10-

Table of Contents

Loss per Share

The basic net loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the period. The diluted net loss per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive shares arising from debt or equity instruments. Diluted net loss per share is the same as basic net loss per share due to the lack of dilutive items. As of ~~June~~September 30, 2015 and December 31, 2014, the Company had 14 17,~~036~~793,~~978~~525 and 14,442,977 shares issuable upon conversion or exercise, respectively, which have been excluded as their effect is anti-dilutive.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized on the straight-line method over the following estimated useful lives:

Computer equipment and software	3 years
Furniture	3 years
Tools, equipment, and vehicles	3-5 years
Leasehold improvements	remaining life of lease

Stock Subscriptions Payable

The initial balance of stock subscriptions payable as of December 31, 2014, was $27,000 representing 41,539 shares to be issued. During the three and ~~six~~nine months ended ~~June~~September 30, 2015, zero and $10,000, respectively of these stock subscriptions payable were issued representing zero and 15,385, respectively shares of common stock. In the second quarter the Company received $100,000 in proceeds for additional common stock to be issued. The remaining balance of stock subscriptions payable as of ~~June~~September 30, 2015, is $117,000 representing 126,154 shares to be issued.

-11-

Table of Contents

Fees Payable in Common Stock

During the three and ~~six~~nine months ended ~~June~~September 30, 2015, the Company agreed to issue a net of 15,~~663~~738,~~334~~834 and 2 8,~~676~~315,~~596~~430 shares, respectively, valued at $~~991~~1,~~801~~242,436 and $12,~~826~~985,~~450~~686 in payment of performance bonuses, employment signing bonuses, consulting fees, and interest. During the three and ~~six~~nine months ended ~~June~~September 30, 2015, the Company issued an aggregate of 3605,~~209,740~~500 and 56,~~595~~200,~~052~~552 shares, respectively, of its common stock, valued at $2144,~~196,150~~069 and $4,~~335~~106,~~434~~421, respectively, in payment of performance bonuses, employment signing bonuses, consulting fees, and interest which left a remaining balance in fees payable in common stock of $~~191~~1,~~724~~289,894, or ~~391~~ 5,~~306~~474,640 shares.

Payroll tax liabilities

As of September 30, 2015, the Company reported $2,475,066 of sales and payroll taxes payable. The payroll taxes payable includes $935,000 of estimated IRS trust fund penalties as of September 30, 2015 and December 31, 2015. These penalties have not been assessed by the IRS.

On July 22, 2015, the Company entered into an installment agreement with the IRS for the payment of $80,000 monthly on its past payroll taxes. It’s the Company’s understanding from conversations with the IRS collections division that provided the Company makes all of its installment payments timely, the IRS will not assess the 100% trust fund tax penalty. If the Company were to default on its installment payment agreement, the IRS may assess an additional $750,000 of trust fund penalties.

Recently Issued Accounting Standards

Recent accounting pronouncements did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

-11-

NOTE 2 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at ~~June~~September 30, 2015 and December 31, 2014:

	June 30, 2015			December 31, 2014
	September 30, 2015			December 31, 2014
Office furniture and equipment	$	29,467		$	29,467
Tools and yard equipment		673,942			621,995
Vehicles and construction equipment		477,187			635,220
Facilities and leasehold improvements		15,933			15,933
Total, cost		1,196,529			1,302,615
Accumulated Depreciation and Amortization		(~~198~~247,~~901~~143	)		(99,533	)
Property and equipment, net	$	~~997~~949,~~628~~386		$	1,203,082

Depreciation and amortization expense for the three and ~~six~~nine month periods ended ~~June~~September 30, 2015 were $4148,~~420~~240 and $71119,~~308~~548, respectively. Depreciation and amortization expense for both the three and ~~six~~nine month periods ended ~~June~~September 30, 2014 were $925,~~951~~748 and $2147,~~543~~291, respectively.

NOTE 3 – RECEIVABLE FROM FACTOR, NET OF UNAPPLIED CUSTOMER CREDITS

Accounts Purchase Agreement – Crown Financial, LLC

On June 21, 2013, STW Energy entered into an Accounts Purchase Agreement (the “Accounts Purchase Agreement”) with Crown Financial, LLC (“Crown Financial”) under the Texas Finance Code, pursuant to which Crown Financial might, at its sole discretion, purchase certain of the STW Energy’s eligible accounts receivable. Upon any acquisition of an account receivable, Crown would advance to STW Energy up to 80% of the face amount of the account receivable; provided however, that based upon when each invoice gets paid, Crown should pay STW Energy on the related invoice less fess and prior advances. Each account receivable purchased by Crown would be subject to a discount fee of 1.5% of the gross face amount of such purchased account for each 30 day period (or part thereof) the purchased account remains unpaid. Crown would generally have full recourse against STW Energy in the event of nonpayment of any such purchased account.

The Accounts Purchase Agreement contains covenants that are customary for agreements of this type and appoints Crown as attorney in fact for various activities associated with the purchased accounts receivable, including opening STW Energy’s mail, endorsing its name on related notes and payments, and filing liens against related third parties. The failure to satisfy covenants under the Accounts Purchase Agreement or the occurrence of other specified events that constitute an event of default could result in the acceleration of the repayment obligations of the Company or Crown enforcing its rights under the Security Agreement and take possession of the collateral. The Accounts Purchase Agreement contains provisions relating to events of default that are customary for agreements of this type. As of the date of this report there were no accounts in default.

The Accounts Purchase Agreement shall remain valid until terminated by either party upon 30 days written notice. The Accounts Purchase Agreement is secured by a security interest in substantially all of STW Energy’s assets pursuant to the terms of a Security Agreement. As of September 30, 2015 and December 31, 2014, respectively, there were no accounts receivables subject to recourse due to nonpayment of the purchased accounts.

-12-

Table of Contents

The Accounts Purchase Agreement shall remain valid until terminated by either party upon 30 days written notice. The Accounts Purchase Agreement is secured by a security interest in substantially all of STW Energy’s assets pursuant to the terms of a Security Agreement. As of June 30, 2015 and December 31, 2014, respectively, there were no accounts receivables subject to recourse due to nonpayment of the purchased accounts.

NOTE 4 – NOTES PAYABLE

The Company’s notes payable at ~~June~~September 30, 2015 and December 31, 2014, consisted of the following:

	June 30,			December 31,
	September 30,			December 31,
Name	2015			2014
14% convertible notes	$	2,296,342		$	2,296,342
12% convertible notes		100,000			100,000
2015 transfer agreements		1290,~~375,~~000			--
GE Ionics note		2,100,000			2,100,000
Deferred compensation notes		279,095			279,095
Revenue participation notes		2,371,500			2,337,500
STW Resources revenue participation notes		764,500			764,500
Crown Financial note		620,459			702,698
Dufrane note payable		545,879			725,000
Black Pearl note payable		777,096			--
Dufrane note payable		555,879			725,000
Other short-term debt		55,000			55,000
2015 Q2 short term financing		486,000			--
2015 Q3 ST Loans		606,000			--
Viewpoint Securities		191,469			--
Capital lease obligations		24,184			30,437
STW Resources revenue participation notes – Upton project		1,607,000			1,573,000
Crown Financial note		570,306			702,698
Equipment finance contracts		46,569			110,000
Discontinued operations L/T debt		--			(752,441	)
Equipment finance contracts		48,168			110,000
Total notes payable		10,739,440			7,983,631
Capital lease obligations		25,388			30,437
Less: current portion		(8,123,158	)		(5,890,414	)
Total notes payable		11,089,927			7,983,631
Net long term portion notes payable	$	2,616,282		$	2,093,217
Less: current portion		(9,222,248	)		(5,890,414	)
Current portion notes payable	$	8,123,158		$	5,890,414
Net long term portion notes payable	$	1,867,679		$	2,093,217
Current portion notes payable	$	9,222,248		$	5,890,414
Less items as follows:
Unamortized loan discounts and loan fees		~~568~~453,~~337~~343			20,930
Discontinued operations		~~600~~42,~~276~~269			--
Total current portion of notes payable, net of discounts	$	87,~~053~~627,~~635~~546		$	5,869,484

14% Convertible Notes

As of June 30, 2015 and December 31, 2014, the aggregate principal balances of the 14% convertible notes are $2,296,342 and $2,296,342, respectively. During the six month period ended June 30, 2015, the Company had no activity on these notes. As of June 30, 2015, the total of outstanding 14% convertible notes was $2,296,342 of which $2,264,800 matured on or before June 30, 2015 and were in default, however, as of October 6, 2015, none of the note holders have declared the notes in default. During the six month period ended June 30, 2014, the Company converted principal and accrued interest of $973,869 in exchange for 1,628,335 shares of the Company’s common stock. The value of the stock issued was $781,337 resulting in additional interest expense of $192,532 upon the conversion of convertible debt. During the three month period ended June 30, 2014, the Company converted principal and accrued interest of $741,912 in exchange for 1,545,650 shares of the Company’s common stock. The value of the stock issued was $927,390 resulting in additional interest expense of $185,478 upon the conversion of convertible debt. At June 30, 2014, the total of outstanding 14% convertible notes was $2,326,517 of which $294,752 matured on November 30, 2013 and was in default; however, none of the note holders had declared the notes in default. During the six month period ended June 30, 2013, the Company converted principal of $25,000. The Company did not convert any principal or accrued interest of the 14% convertible notes during the three months ending June 30, 2013.

-13-

Table of Contents

~~As of June 30, 2015 and December 31, 2014, $171,892 of the~~ 14% ~~convertible~~Convertible ~~notes is payable to related parties.~~Notes

As of September 30, 2015 and December 31, 2014, the aggregate principal balances of the 14% convertible notes were $2,296,342 and $2,296,342, respectively. During the nine month period ended September 30, 2015, the Company had no activity on these notes. As of September 30, 2015, the total of outstanding 14% convertible notes was $2,296,342 of which $2,264,800 matured on or before September 30, 2015 and were in default, however, as of November 24, 2015, none of the note holders have declared the notes in default. The 14% convertible notes are convertible into 6,445,866 shares of the Company’s common stock. During the nine month period ended September 30, 2014, the Company converted principal and accrued interest of $983,437 in exchange for 1,648,267 shares of the Company’s common stock. The Company also issued 2,628 shares for the extension of a note valued at $3,628. The value of the stock issued was $812,607 resulting in additional interest expense of $214,234 upon the conversion of convertible debt. During the three month period ended September 30, 2014, the Company converted principal and accrued interest of $9,568 in exchange for 19,933 shares of the Company’s common stock. Additionally, the Company issued 2,628 shares for the extension of a note valued at $3,628. The value of the stock issued was $31,270 resulting in additional interest expense of $21,702. As September 30, 2014, the total of outstanding 14% convertible notes is $2,326,517 of which $488,210 matured on or before September 30, 2014 and is in default, however, as of December 22, 2014, none of the note holders have declared the notes in default.

As of September 30, 2015 and December 31, 2014, $171,892 of the 14% convertible notes is payable to related parties.

12% Convertible Notes

Between April 2009 and November 2010, the Company issued a series of 12% convertible notes payable to accredited investors that matured on November 30, 2011 and are currently in default. At ~~June~~September 30, 2015, the remaining balance was $100,000. In connection with the issuance of the 12% convertible notes, the Company also issued 273,583 warrants to purchase common stock at an exercise price of $0.12 per share that expire at various dates through 2015. The 12% convertible notes are convertible into 1,~~454~~485,~~053~~303 shares of the Company’s common stock.

During the three and ~~six~~nine months ended ~~June~~September 30, 2015, the Company has had no activity on the 12% convertible notes. The notes are currently in default, however, as of ~~October~~November 624, 2015, ~~2015,~~ the note holders have not declared the notes in default. During the ~~three~~nine ~~and six~~ months ended ~~June~~September 30, 2014, the Company ~~had no activity and~~ issued 1,137,417 shares of its common stock valued at $614,205 in payment of $225,000 of principal and $116,225 of accrued interest (total of $341,225)~~, respectively~~. The conversion of these notes payable and accrued interest for common stock resulted in a non-cash charge of $272,980 to the derivative liability upon the conversion of convertible debt. During the three months ended September 30, 2014, there was no activity.

Other Short-Term Debt

On January 1, 2014, the Company issued a $30,000 short term note to an investor, MKM Capital. The note bears interest at 8% and matured on January 1, 2015. The balance of the note payable as of ~~June~~September 30, 2015 and December 31, 2014, was $30,000. It is currently in default, however, as of ~~October~~November 624, 2015, MKM capital has not declared the note in default.

In September 2014, the Company entered into short term loan agreements with seven accredited investors for short term notes of $145,000 to be used to sustain daily operating activities. The notes matured in October 2014 with a 5% transaction fee at maturity and the lenders were entitled to receive 18% interest if the notes were not paid at maturity. As additional consideration for the loan, the Company agreed to issue the lenders an aggregate of 171,667 shares of common stock. These shares were included in the "Fees Payable in Common Stock" and were expensed as interest in the current period. As of ~~June~~September 30, 2015 and December 31, 2014, all but $25,000 of the delinquent loans had been repaid, but as of ~~October~~November 624, 2015, the remaining lender has not declared a default on the payment of his note.

GE Ionics

On August 31, 2010, the Company entered into a Settlement Agreement with GE Ionics (“GE”) relating to a $2,100,000 note payable that was amended on October 30, 2011 (“GE Note”). On May 7, 2012, GE informed the Company that the Company had failed to make any required installment payment that was due and payable under the GE Note and that the Company’s failure to make any such installment payment(s) constituted an event of default under the GE Note. Pursuant to the terms of the GE Note, upon the occurrence of an event of default for any reason whatsoever, GE shall, among other things, have the right to (a) cure such defaults, with the result that all costs and expenses incurred or paid by GE in effecting such cure shall bear interest at the highest rate permitted by law, and shall be payable upon demand; and (b) accelerate the maturity of the GE Note and demand the immediate payment thereof, without presentment, demand, protest or other notice of any kind. Upon an event of default under the GE Note, GE shall be entitled to, among other things (i) the principal amount of the GE Note along with any interest accrued but unpaid thereon and (ii) any and all expenses (including attorney’s fees and expenses) incurred in connection with the collection and enforcement of any rights under the GE Note.

Under the terms of the GE note, interest at the rate of WSJ prime plus 2% is due on the note, upon default, interest is due at the maximum legal rate which is 10% in the state of Texas. The note matured on September 1, 2013, and is in default. Interest on the note through December 31, 2014, has been accrued pursuant to the terms of the note through May 6, 2012, interest upon default on May 7, 2012, has been accrued at the maximum default rate in the state of Texas which is 10%.

-14-

Table of Contents

As of the date hereof, the Company has not repaid any principal or accrued but unpaid interest that has become due and payable under the GE Note.

On May 22, 2013, GE Ionics, Inc. ("GE") filed a lawsuit against STW in the Supreme Court of the State of New York, County of New York, Index No. 651832/2013 (the "GE Lawsuit"). Although the lawsuit arises out of STW's obligations to GE under its Settlement Agreement with GE entered into on August 31, 2010, upon which STW owed GE $2.1 million plus interest. GE elected to forgo suit on the settlement amount and sued STW for the original debt of $11,239,437, plus interest and attorneys' fees (the "Original Debt"). STW filed its Answer asserting that it is entitled to and shall pursue all of its available legal and equitable defenses to the Original Debt, inasmuch as GE had, among other things, failed to discount the Original Debt sued upon by the amounts that it recovered through re-use and re-sale of the equipment it fabricated for STW. Management has not accrued the original amount of the debt because Management has determined the probability of recovery is remote. The lawsuit is currently in the discovery phase of litigation and the parties are actively exploring settlement. (See Note 9)

Deferred Compensation Notes

As of ~~June~~September 30, 2015, and December 31, 2014, the Company had a balance of $279,095 and $279,095 payable under deferred compensation, non-interest bearing, notes to its former Chief Executive Officer and its in house counsel. The notes matured on December 31, 2012, and the notes are in default, however, as of ~~October~~November 624, 2015, none of the note holders have declared the notes in default.

Revenue Participation Notes

As of ~~June~~September 30, 2015 and December 31, 2014, the Company had an outstanding balance of $2764,~~371,~~500 and $2764,~~337,~~500, respectively, of Revenue Participation Notes comprised as follows:

	June 30,		December 31,
	September 30,		December 31,
Name	2015		2014
2012 Revenue Participation Notes	$	165,000	$	165,000
2013 Revenue Participation Notes - STW Resources Salt Water Remediation		302,500		302,500
2013 Revenue Participation Notes - STW Energy		182,000		182,000
2013 Convertible Revenue Participation Notes - STW Pipeline		115,000		115,000
2014 Revenue Participation Notes, Upton Project – STW Water		1,607,000		1,573,000
Total revenue participation notes	$	764,500	$	764,500
Total revenue participation notes	$	2,371,500	$	2,337,500

These notes are more fully described in the notes to the consolidated financial statements for the year ended December 31, 2014, which were included in the Company’s Annual Report on Form 10-K as filed with the SEC on April 3, 2015.

2014 Revenue Participation Notes – STW Resources Upton Project

On September 30, 2014, the Company issued its first note for the new Upton Project. The financing is a senior secured master note (“Master Note”) with a 15% coupon and a maturity of 18 months. According to the terms of the Master Note, the Company should pay interest only in the first three months of the issuance, and commencing on the fourth month of the issuance, the Company should pay equal monthly payment of principal and accrued interest through the maturity date of the Master Note with revenue participation interest. Additionally, the Master Note carries 5% royalty to be distributed based on pro rata ownership by investors in the Master Note. Payments for principal and interest will come solely from the revenue participation fees from water processing contracts related to brackish water. This Agreement, including but not limited to the revenue sharing arrangement, is applicable to the brackish water processing facility being built with the proceeds of the Master Note. As of ~~June~~September 30, 2015, the total principal amount of this financing was $1,607,000. At ~~June~~September 30, 2015, $~~502~~819,~~760~~752 of the principal payments was in default. As of the date of this Report, the investors have not declared a default on the payment of the Master Note.

-15-

Table of Contents

Note payable to Crown Financial, LLC, a related party

On June 26, 2013, STW Energy Services, LLC entered into a loan agreement with Crown Financial, LLC for a $1.0 million loan facility to purchase machinery and equipment for STW Energy Services. Crown Financial, LLC is a related party in that it holds a 25% non-controlling interest in our subsidiary: STW Energy Services, LLC. The note matures on June 25, 2016, and bears interest at 15%. Commencing November 1, 2013, monthly principal and interest payments are due on the note over a thirty-three month period. The note is secured by all assets of STW Energy Services. LLC. As of ~~June~~September 30, 2015 and December 31, 2014, the Company had drawn down $~~620~~570,~~458~~306 and $702,~~697~~698, respectively, of this loan facility. This loan is part of the discontinued operations.

Black Pearl Energy, LLC, a related party

On March 19, 2014, we entered into a Line of Credit Agreement (the "Credit Agreement") with Black Pearl Energy, LLC ("Black Pearl"), an entity controlled by the Company’s former CEO, Stan Weiner, former COO, Lee Maddox, and one of our directors and General Counsel, Grant Seabolt. Pursuant to the Credit Agreement, Black Pearl issued us a $2,000,000 line of credit, of which $1,054,944 had been advanced as of December 31, 2014. The credit was issued in the form of a promissory note (the "Note"). On February 26, 2015, the open balance of the credit line and accrued interest were converted into a note payable, described in more details in the Black Pearl note payable herein below, and the credit line was dissolved.

On February 26, 2015, the Company negotiated an extension on the note payable to Black Pearl for the outstanding balance of $1,079,944 plus $105,363 of accrued interest under the Credit Agreement. The note is to be paid on a monthly basis of $12,000 per month for 48 months and the rest of the payment will become due in February 2019. On March 5, 2015, the note was revised to consolidate the receivables and the payable and reduced the principal and accrued interest to approximately $805,863 and $67,000, respectively. Additionally, we would issue 75,000 shares of common stock to Black Pearl to cure the default and 131,704 shares of common stock in consideration of the extension. These stock awards were accrued as fees payable in common stock when the awards were vested.

As of ~~June~~September 30, 2015 and December 31, 2014, the Company had $777,096 of related party notes payables and zero, respectively, to Black Pearl.

Dufrane Nuclear, Inc. , a related party

As of ~~June~~September 30, 2015 and December 31, 2014, the Company has a related party note payable of $~~555~~545,879 and $725,000, respectively, to Dufrane Nuclear, Inc. a company controlled by Mr. Joshua Brooks, the Company’s Former Chief Operating Officer. During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, the Company made payments on the note of $~~169~~179,121 and zero, respectively, in principal. Dufrane declared the note in default and brought suit on the note (See Legal Proceedings).

2015 Transfer Agreement Convertible Notes Payable

During the ~~six~~nine months ended ~~June~~September 30, 2015, the Company issued $1,375,000 of convertible transfer agreements to four (4) accredited investors. The transfer agreements bear interest at 5% and mature at various dates through October 17, 2015. During the nine months ended September 30, 2015, the Company paid principal of $1,085,000 and interest of $20,539. One of the notes is in default in the amount of $15,000, however, as of November 24, 2015, the note holder has not declared the note in default The remaining transfer agreements are convertible, including accrued interest, into 2476,~~141,827~~201 shares at a conversion price of $0.65 per share. In the event of default, the transfer agreements are convertible at a price equal to the lower of (a) $0.65 or (b) 60% multiplied by the lowest closing trade price of the common shares for the ten (10) trading days immediately prior to the applicable conversion date.

The conversion feature of the 2015 transfer agreements meet the definition of a derivative due to the reset provision to occur upon the issuance of equity based instruments at below $0.65 per share or upon default of the notes and is accounted for as a derivative liability. The Company has determined the value of the conversion feature upon default of this note using the Black-Scholes pricing model to be $1,108,030 as of the date of issuance, of which $479,877 was recorded as a financing cost in the condensed consolidated statement of operations and $628,153 was recorded as a loan discount. In connection with these transfer agreements, the Company issued 525,000 shares of its common stock to the investors valued at $470,500. The Company also incurred third party loan fees of $151,347 on these notes. The value of the conversion feature of $628,153 and $746,847 will be amortized as interest expense over the term of the note under the straight line method, which we believe approximates the effective interest method due to their short term nature. The effective interest rate of these transfer agreements was determined to be 102.5%.

-16-

Table of Contents

2015 Short Term Financing

In the second quarter of 2015, the Company obtained short term loans from three qualified investors totaling $450,000. As part of the short term loans, one investor was given a discount on two notes totaling $73,500 and awarded 650,000 shares of common stock at various prices valued at $340,000 plus 4,000,000 shares, to be issued only in the event of a default, valued at $1,600,000. Another investor was awarded 100,000 shares of common stock at various prices valued at $80,000 plus 500,000 warrants at an exercise price of $0.59 per share. These costs in excess of the stated value were written off as current expenses due to the short term nature of the loans and others were deferred and will be expensed over the life of the short term loans as interest expense.

For the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, interest expense on all notes payable (including related parties in Note 6) described above was $23,~~595~~329,~~741~~083 and $~~861~~1,~~616~~564,896, respectively, which included $1,~~354~~276,~~148~~056 and $58137,~~328~~902, respectively, of amortization of debt discount and debt issuance costs.

Viewpoint Securities

On July 07, 2015, STW and Viewpoint signed a “Payment and Standstill Agreement, wherein the parties agreed that the total Arbitration Award with interest totaled $228,170.92, that Viewpoint would not seek post Award attorneys’ fees from STW, and that so long as STW made bi-weekly payments of $2,000.00, beginning on July 10, 2015, Viewpoint would stay any efforts to collect on the Arbitration Award, and when fully paid, would fully release STW from the Arbitration Award. The Company has made all scheduled payments to date. The balance on September 30, 2015 and December 31, 2014 was $191,469 and zero, respectively.

NOTE 5 - DERIVATIVE LIABILITY

We apply the accounting standard that provides guidance for determining whether an equity-linked financial instrument, or embedded feature, is indexed to an entity’s own stock. The standard applies to any freestanding financial instrument or embedded features that have the characteristics of a derivative, and to any freestanding financial instruments that are potentially settled in an entity’s own common stock.

From time to time, the Company has issued notes with embedded conversion features and warrants to purchase common stock. Certain of the embedded conversion features and warrants contain price protection or anti-dilution features that result in these instruments being treated as derivatives, or there were insufficient shares to satisfy the exercise of the instruments.

During the first quarter of 2015, the Company computed a historical volatility of 315% using daily pricing observations for recent periods. We applied a historical volatility rate of 315% during the period ended ~~June~~September 30, 2015, and future periods, since the Company exited its development stage and commenced commercial operations. We believe this method produces an estimate that is representative of our expectations of future volatility over the expected term of these embedded conversion features.

We currently have no reason to believe that future volatility over the expected remaining life of these warrants and embedded conversion features is likely to differ materially from historical volatility. The expected life is based on the remaining term of the warrants and embedded conversion features. The risk-free interest rate is based on one-year to five-year U.S. Treasury securities consistent with the remaining term of the warrants and embedded conversion features.

-17-

Table of Contents

The following table presents our warrants and embedded conversion options which have no observable market data and are derived using Black-Scholes measured at fair value on a recurring basis, using Level 3 inputs, as of ~~June~~September 30, 2015 and December 31, 2014:

	For the six months ended June 30, 2015			For the year ended December 31, 2014
	For the nine months ended September 30, 2015			For the year ended December 31, 2014
Annual dividend yield		0	%		0	%
Expected life (years)		0.~~50 – 0.~~01			0.6047 - 0.4760
Risk-free interest rate		0.11~~% - 0.25~~	%		0.11% - 0.25	%
Expected volatility		315	%		735	%

	June 30, 2015		December 31, 2014
	September 30, 2015		December 31, 2014
Embedded conversion features	$	~~279~~22,~~011~~701	$	751,439
Warrants		~~4,152~~--		50,901
	$	~~283~~22,~~161~~701	$	802,340

The following table presents the changes in fair value of our warrants and embedded conversion features measured at fair value on a recurring basis for each reporting period-end.

	For the six months ended June 30, 2015			For the year ended December 31, 2014
	For the nine months ended September 30, 2015			For the year ended December 31, 2014
Balance beginning	$	802,340		$	1,630,985
Value of derivative liability associated with JMJ note payable		--			42,592
Value of derivative liability attributable to conversion feature of transfer agreements		1,108,030			--
Value of derivative liability attributable to conversion of notes payable and accrued interest		--			(694,149	)
Change in derivative liability associated with conversion of notes payable and accrued interest		--			(272,980	)
Change in fair value		(1,~~627~~887,~~209~~669	)		95,892
Balance ending	$	~~283~~22,~~131~~701		$	802,340

The increase in fair value of the derivative liability is largely attributable to the derivative liability associated with the conversion feature of the transfer agreement convertible notes payable. The change in the fair value of the derivative liability is attributable to the expiration of some of the warrants that were outstanding.

NOTE 6 – RELATED PARTY TRANSACTIONS

Officers’ Compensation

During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, we incurred $87132,500 and $75112,~~000~~500, respectively, in officers’ compensation due to our Director, former Chairman, and former CEO, Mr. Stanley Weiner. During the three month periods ended ~~June~~September 30, 2015 and 2014, we incurred $45,000 and $37,500, respectively, in officers’ compensation. During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, Mr. Weiner was paid $22,500 and zero, respectively. During the three months ended ~~June~~September 30, 2015 and 2014 Mr. Weiner was paid $22,500 and zero, respectively. As of ~~June~~September 30, 2015 and December 31, 2014, the balances of $478,083 and $413,083, respectively, were payable to Mr. Weiner for his compensation.

During the nine months ended September 30, 2015 and 2014, we incurred zero and $75,000, respectively, in officers’ compensation due to one of our former Directors and former Chief Operating Officer, Mr. Lee Maddox. During the three months ended September 30, 2015 and 2014, we incurred zero and zero, respectively, in officers’ compensation due to Mr. Maddox. During the nine months ended September 30, 2015 and 2014, the Company paid Mr. Maddox $5,000 and zero, respectively. As of September 30, 2015 and December 31, 2014, the balances of $175,500 and $220,500, respectively, were payable to Mr. Maddox for his compensation. In addition $40,000 of the note payable was shifted to Accounts Payable and is still open.

-18-

Table of Contents

During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, we incurred ~~zero~~$96,000 and ~~$75~~zero,~~000,~~ respectively, in officers’ compensation due to one of our ~~former~~ Directors and ~~former Chief Operating~~ Officer, Mr. ~~Lee~~Paul ~~Maddox~~DiFrancesco. During the three months ended ~~June~~September 30, 2015 and 2014, we incurred ~~zero~~$36,000 and ~~$37~~zero,~~500,~~ respectively, in officers’ compensation due to Mr. ~~Maddox~~DiFrancesco. During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, the Company paid Mr. ~~Maddox~~DiFrancesco $3057,~~000~~500 and zero, respectively. As of ~~June~~September 30, 2015 and December 31, 2014, the balances of $~~190~~38,500 and ~~$220~~zero,~~500,~~ respectively, were payable to Mr. ~~Maddox~~DiFrancesco for his ~~compensation~~salary.

During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, we incurred $6071,~~000~~500 and ~~zero~~$67,500, respectively, in ~~officers’~~general ~~compensation~~counsel ~~due~~services tofees ~~one~~expense ofwith ~~our~~Seabolt ~~Directors~~Law ~~and~~Group ~~Officer,~~ Mr. ~~Paul~~Grant ~~DiFrancesco~~Seabolt. During the three months ended ~~June~~September 30, 2015 and 2014, we incurred $3624,000 and ~~zero~~$22,500, respectively, in ~~officers’~~general ~~compensation~~counsel ~~due~~services to fees expense with Seabolt Law Group, a firm owned by our Director and General Counsel, Mr. ~~DiFrancesco~~Seabolt. During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, the Company paid Mr. ~~DiFrancesco~~Seabolt $5221,~~500~~000 and ~~zero~~$22,500, respectively. As of ~~June~~September 30, 2015 and December 31, 2014, the balances of $7230,~~500~~297 and ~~zero~~$166,083, respectively, were payable to ~~Mr.~~Seabolt ~~DiFrancesco~~Law Group for ~~his~~their ~~salary~~services.

~~During~~On ~~the~~December ~~six~~22, ~~months ended June 30~~2014, ~~2015~~the ~~and~~Company ~~2014,~~entered weinto ~~incurred~~a ~~$47,500~~settlement agreement and a $45725,000, ~~respectively,~~note inpayable ~~general~~to ~~counsel~~Dufrane. ~~services~~Under ~~fees~~the ~~expense~~terms ~~with~~of ~~Seabolt~~the ~~Law~~settlement ~~Group~~agreement, athe ~~firm~~333,333 ~~owned~~shares byof ~~our~~common ~~Director~~stock ~~and~~payable ~~General~~was ~~Counsel~~cancelled and $180,000 ~~Mr.~~of ~~Grant~~accrued ~~Seabolt. During~~officers’ ~~the~~compensation ~~three~~payable ~~months~~were ~~ended~~discharged ~~June~~leaving ~~30,~~a ~~2015~~balance ~~and~~of ~~2014,~~accrued weofficers’ ~~incurred~~compensation of $2460,000 ~~and~~as ~~$22,500,~~of ~~respectively~~December 31, in2014. ~~general~~There ~~counsel~~has ~~services~~been ~~fees~~no ~~expense~~additional ~~with~~activity ~~Seabolt~~during ~~Law Group. During~~ the ~~six~~nine months ~~ended~~ending ~~June~~September 30, 2015. ~~and~~The ~~2014,~~balance in the ~~Company~~accrued ~~paid~~officer’s compensations for our former COO, Mr. ~~Seabolt $15~~Brooks,~~000~~ ~~and~~was $1560,000, ~~respectively. As~~at ofboth ~~June~~September 30, 2015 and December 31, 2014~~, the balances of $212,297 and $179,797, respectively, were payable to Seabolt Law Group for their services~~.

OnDuring ~~December~~nine ~~22,~~months ~~2014,~~ended ~~the~~September ~~Company~~30, ~~entered~~2015 ~~into~~and a2014, ~~settlement~~we ~~agreement~~incurred $178,093 and a $~~725~~369,~~000~~983, ~~note~~respectively, ~~payable~~in toCFO, ~~Dufrane.~~audit ~~Under~~preparation, ~~the~~tax, ~~terms~~and ofSEC ~~the~~compliance ~~settlement~~services ~~agreement,~~fees ~~the~~expense ~~333,333~~with ~~shares~~Miranda ofCFO ~~common~~Services, ~~stock~~Inc. ~~payable~~and ~~was~~Miranda ~~cancelled~~& ~~and~~Associates ~~$180,000~~Mr. ofRobert ~~accrued~~J. ~~officers’~~Miranda. ~~compensation~~During ~~payable~~three ~~were~~months ~~discharged~~ended ~~leaving~~September a30, ~~balance~~2015 ofand ~~accrued~~2014, ~~officers’~~we ~~compensation~~incurred of$71,657 and $6070,000, asrespectively, ofin ~~December 31~~CFO, ~~2014.~~audit ~~There~~preparation, ~~has~~tax, ~~been~~and noSEC ~~additional~~compliance ~~activity~~services ~~during~~fees ~~the~~expense ~~six~~with ~~months~~Miranda ~~ending~~CFO ~~June 30~~Services, ~~2015~~Inc. ~~The~~and ~~balance~~Miranda in& ~~the~~Associates, ~~accrued~~a ~~officer’s~~Professional ~~compensations~~Accountancy ~~for~~Corporation, firms owned by our ~~former~~Chief ~~COO~~Financial Officer, Mr. ~~Brooks,~~Miranda. ~~was~~As ~~$60,000~~of atSeptember ~~both June~~ 30, 2015 and December 31, 2014, the balances of $97,863 and $219,271, respectively, were payable to Miranda & Associates for these services.

During ~~six~~nine ~~months~~month periods ended ~~June~~September 30, 2015 and 2014, we incurred $96150,~~436~~000 and $~~317~~150,~~118~~000, respectively, in ~~CFO,~~officers’ ~~audit~~salary ~~preparation,~~due ~~tax,~~to ~~and~~the ~~SEC~~President ~~compliance~~of ~~services~~our ~~fees~~wholly-owned ~~expense with Miranda CFO Services~~subsidiary, ~~Inc.~~STW ~~and~~Pipeline ~~Miranda~~Maintenance & ~~Associates~~Construction, ~~a Professional Accountancy Corporation~~LLC, ~~firms owned by our Chief Financial Officer,~~ Mr. ~~Robert J~~Jennings. ~~Miranda.~~ During three ~~months~~month periods ended ~~June~~September 30, 2015 and 2014, we incurred $4550,~~688~~000 and $~~168~~50,~~520~~000, respectively, in ~~CFO,~~officers’ ~~audit~~salary ~~preparation~~due to Mr. Jennings. During the nine month period ended September 30, ~~tax~~2014, ~~and~~we ~~SEC~~incurred ~~compliance~~with ~~services~~Mr. ~~fees~~Jennings ~~expense~~a ~~with~~signing ~~Miranda~~bonus ~~CFO~~comprised ~~Services~~of 50,000 ~~Inc.~~shares ~~and~~of ~~Miranda~~the &Company’s ~~Associates~~common stock valued at $21,000. As of ~~June~~September 30, 2015 and December 31, 2014, the ~~balances~~balance of ~~$67,207~~zero and $~~219~~121,~~271~~000, ~~respectively,~~was payable to Mr. Jennings for the value of signing bonuses due under his employment agreement. These stock awards were accrued as fees payable toin ~~Miranda~~common &stock ~~Associates~~the ~~for~~awards ~~these~~are ~~services~~vested.

During ~~six~~nine month periods ended ~~June~~September 30, 2015 and 2014, we incurred $~~100~~150,000 and $~~100~~50,000, respectively, in officers’ salary due to the President of our wholly-owned subsidiary, STW ~~Pipeline~~Water ~~Maintenance~~Process &and ~~Construction~~Technologies, LLC, Mr. ~~Jennings~~Murphy. During three month periods ended ~~June~~September 30, 2015 and 2014, we incurred $50,000 and $50,000, respectively, in officers’ salary due to Mr. ~~Jennings~~Murphy. ~~During~~In the ~~six~~second ~~month~~quarter ~~period~~of ~~ended June 30,~~ 2014, we incurred with Mr. ~~Jennings~~Murphy a signing bonus comprised of 50333,~~000~~333 shares of the Company’s common stock valued at $21200,000. As of ~~June~~September 30, 2015 and December 31, 2014, the balance of zero and $~~121~~200,000, was payable to Mr. ~~Jennings~~Murphy for the value of signing bonuses due under his employment agreement. These stock awards were accrued as fees payable in common stock the awards are vested.

During six month periods ended June 30, 2015 and 2014, we incurred $100,000 and none, respectively, in officers’ salary due to the President of our wholly-owned subsidiary, STW Water Process and Technologies, LLC, Mr. Murphy. During three month periods ended June 30, 2015 and 2014, we incurred $50,000 and none, respectively, in officers’ salary due to Mr. Murphy. In the second quarter of 2014, we incurred with Mr. Murphy a signing bonus comprised of 333,333 shares of the Company’s common stock valued at $200,000. As of June 30, 2015 and December 31, 2014, the balance of zero and $200,000, was payable to Mr. Murphy for the value of signing bonuses due under his employment agreement. These stock awards were accrued as fees payable in common stock the awards are vested.

-19-

Table of Contents

Board and Advisory Board Compensation

Directors are expected to timely and fully participate in all regular and special board meetings, and all meetings of committees that they serve on. In December 2011, the Board voted to authorize the issuance of shares in lieu of cash compensation for past services.

Pursuant to the Director Agreements, the Company compensates each of the directors through the initial grant of 33,333 shares of common stock and the payment of a cash fee equal to $1,000 plus travel expenses for each board meeting attended, and $75,000 per year as compensation for serving on our board of directors.

For the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, the Company incurred director fees of $~~225~~479,~~000~~531 and $~~337~~468,~~500~~750, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, the Company issued 908,658 and 930,261 shares of its common stock in payment of director fees, valued at $675,000 and $558,167, respectively. For the three months ended ~~June~~September 30, 2015 and 2014, the Company incurred director fees of $~~112~~254,~~500~~531 and $~~168~~131,~~750~~250, respectively. During the three months ended ~~June~~September 30, 2015 and 2014, the Company issued ~~346,158~~zero and ~~930,261~~zero shares of its common stock in payment of these fees, valued at ~~$225,000~~zero and ~~$558~~zero,~~167,~~ respectively. As of ~~June~~September 30, 2015 and December 31, 2014, the Company has accrued compensation due to its directors (both current and former) of ~~zero~~$254,531 and $~~496~~402,~~067~~317, respectively.

-19-

Table of Contents

Related Party Notes Payable

For a more complete discussion of the notes to Black Pearl Energy, LLC and Dufrane Nuclear see Note 4 – Notes Payable.

Related Party Sales

During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, the Company had related party sales of $354 and $35143,~~138~~378, respectively. During three months ended ~~June~~September 30, 2015 and 2014, the Company had related party sales of zero and $1766,~~104~~000, respectively. Related party sales are a combination of sales to three companies, Black Pearl Energy, LLC, Dufrane Construction, and Dufrane Nuclear Shielding Inc.

Factoring Agreement with Crown Financial, LLC

On January 13, 2014, STW Resource Holding Corp entered into an accounts receivable factoring facility (the “Factoring Facility”) with Crown Financial, LLC ("Crown"), pursuant to an Account Purchase Agreement (the “Factoring Agreement”). The Factoring Agreement is secured through a Security Agreement between the Company, two of our subsidiaries: STW Pipeline Maintenance & Construction, LLC and STW Oilfield Construction, LLC (collectively, the "Subsidiaries") and Crown, by all of the instruments, accounts, contracts and rights to the payment of money, all general intangibles and all equipment of the Company and the Subsidiaries. The Factoring Facility includes a loan in the amount of $4,000,000. Although our former Chief Operating Officer, Lee Maddox, personally guaranteed our full and prompt performance of all of our obligations, representations, warranties and covenants under the Factoring Agreement, pursuant to a Guaranty Agreement for and in consideration of Crown issuing us the Factoring Facility, such guaranty was terminated when Mr. Maddox resigned as our COO in July 2014, pursuant to the terms of the related Termination Agreement.

The Factoring Facility shall continue until terminated by either party upon 30 days written notice. Under the terms of the Factoring Agreement, Crown may, at its sole discretion, purchase certain of the Company’s eligible accounts receivable. Upon any acquisition of an account receivable, Crown will advance to the Company up to 80% of the face amount of the account receivable (the "Purchase Price"); although Crown maintains the right to propose a change in that rate, which we can accept in writing, orally or by accepting funding based on such changed rate. Additionally, based upon when each invoice gets paid, Crown shall pay us a rebate percentage of between 0-18% of the related invoice. Crown will generally have full recourse against us in the event of nonpayment of any such purchased account. Crown has the discretion to also accept a substitute invoice from us for uncollected invoices; if such substitute invoice is not accepted, we will be obligated to pay Crown the Purchase Price of such uncollected invoice plus interest at the maximum lawful interest rate per annum, minus any payments made on the invoice.

-20-

Table of Contents

The Factoring Agreement contains covenants that are customary for agreements of this type and appoints Crown as attorney in fact for various activities associated with the purchased accounts receivable, including opening our mail, endorsing our name on related notes and payments, and filing liens against related third parties. The failure to satisfy covenants under the Factoring Agreement or the occurrence of other specified events that constitute an event of default could result in the acceleration of our repayment obligations or Crown enforcing its rights under the Security Agreement and taking possession of the collateral. The Factoring Agreement contains provisions relating to events of default that are customary for agreements of this type.

As of ~~June~~September 30, 2015 and December 31, 2014, the Company had a related party payable of $1,~~592~~345,~~252~~855 and $2,034,810, respectively to Crown Financial.

NOTE 7 – STOCKHOLDERS’ DEFICIT

Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock with a par value of $0.001 per share. As of ~~June~~September 30, 2015, no preferred shares were issued or outstanding and the Company does not currently have any plans to issue any preferred shares

Common Stock

The Company is authorized to issue up to 191,666,667 shares of common stock with a par value of $0.001 per share. During the ~~six~~nine months ended ~~June~~September 30, 2015, the Company issued common shares as follows:

On January 15, 2015, the Company issued 62,500 shares of common stock to an investor, at a per share price of $1.56, in payment of interest on a short term loan for a value of $97,500 and an additional 170,000 shares of common stock, at a per share price of $1.40 to a consultant for services valued at $238,000.

-20-

Table of Contents

On January 27, 2015, the Company issued 281,167 shares of common stock, at various per share prices, valued at $209,825 to 19 employees for signing bonuses and continued service to the company.

On January 28, 2015, the Company issued 158,335 shares of common stock, at various per share prices, to 7 investors valued at $225,128 in payment of interest on 7 short term loans.

In the first week of February 2015, the Company issued 378,334 shares of common stock, at various per share prices, valued at $344,100 to 4 employees pursuant to their employment contracts.

On February 3, 2015, the Company issued 15,385 shares of common stock, at a per share price of $0.65, to an accredited investor based on a unit offering at $0.65 per unit, increasing capital of the Company by $10,000.

On February 3, 2015, the Company issued 100,000 shares of common stock, at a per share price of $0.68, to an accredited investor for $68,000 in loan origination fees.

On February 6, 2015, the Company issued 150,001 shares of fully vested common stock, at various per share prices, to 3 consultants valued at $119,500 in payment of services rendered in 2014, previously accrued, and the renewal of a 2015 contract.

On February 6, 2015, the Company issued 225,000 shares of common stock, at various per share prices, to 3 accredited investors for $187,000 in loan origination fees.

On February 17, 2015, the Company issued 100,000 shares of common stock, at a per share price of $0.81, to an accredited investor for $81,000 in loan origination fees.

On February 18, 2015, the Company issued 184,975 shares of common stock to an investment group, at a per share price of $0.65, valued at $120,233 for services rendered in procuring investors for the company.

-21-

Table of Contents

On February 19, 2015, the Company issued 100,000 shares of common stock, at a per share price of $0.85, to an accredited investor for $85,000 in loan origination fees.

On February 23, 2015, the Company issued 562,500 shares of common stock to 6 directors, at a per share price of $0.80, valued at $450,000 for services rendered in prior year(s).

On February 24, 2015, the Company issued 100,000 shares of common stock, at a per share price of $0.65, to a consultant for services valued at $65,000.

On February 27, 2015, pursuant to the January 8, 2015 Board of Director’s Minutes, a total of 900,000 shares were issued by the Company to 1 employee and 2 consultants for services performed in 2014. They were issued at a per share price of $0.80 per common share at a total value of $720,000.

On May 14, 2015, the Company issued 341,667 shares of common stock to two consultants valued at $230,501.

On May 15, 2015, the Company issued 26,000 shares of common stock to two consultants valued at $18,610.

On May 18, 2015, the Company issued 206,667 shares of common stock to two consultants valued at $155,000.

On June 12, 2015, the Company issued 500,000 shares of its common stock and warrants to purchase up to 500,000 shares of the Company’s common stock at $0.59 per share to an accreditor investor who provided the Company with a $385,000 original issue discount bridge note, which yielded net proceeds of $350,000 to the Company. The shares were valued at $280,000.

On June 26, 2015 the Company issued 800, 000 shares of common stock to six employees for accrued signing bonuses valued at $677,000. The Company also issued 183,334 shares of common stock to two consultants valued at $137,501.

On June 30, 2015 the Company issued 333, 333 shares of common stock to one employee for an accrued signing bonus valued at $200,000. The Company issued 578,927 shares of common stock valued at $339,039 to satisfy an obligation to Salttech, its contracts with Black Pearl Energy, and a financial obligation to an investor. The Company also issued 346,158 shares of common stock to members of the Board of Directors valued at $225,000. Additionally, the Company issued 239,812 shares of common stock to two consultants valued at $167,500.

AsOn ofJuly ~~June 30~~9, 2015, the ~~Company~~company ~~had~~issued ~~the~~355,500 ~~following~~shares ~~securities~~of ~~outstanding~~common ~~which~~stock ~~gives~~to ~~the~~43 ~~holder~~employees ~~the~~as ~~right~~performance tobonuses. ~~acquire~~The ~~the~~stock ~~Company’s~~was ~~common~~valued ~~stock~~at ~~outstanding:~~$0.20 per share and totaled $71,100.

-2221-

Table of Contents

	Number of
	Underlying
	Common		Exercise
Security	Shares		Price	Expire
Warrants associated with the 12% Convertible Notes		25,000	0.12		2015
Warrants issued to Crown Financial, LLC		666,667	1.20		2016
Warrants issued on $20,000 short term loan		33,333	1.20		2015
Warrants associated with 2013 Revenue Participation Notes		84,205	1.80		2015
Warrants issued with 2013 Unit Share Offerings		333,333	1.20		2015
Warrants issued with 2014 Unit Share Offerings		2,328,542	1.20 – 1.50		2016
Warrants issued with 2013 and 2014 Unit Share Offerings		20,770	1.50		2017
Warrants issued with 2015 Q2 Financing		500,000	0.59		2017
Sub-total of Warrants outstanding		3,991,850
Common stock associated with the 12% Convertible Notes plus accrued interest		1,454,053	0.12		N/A
Common stock associated with Pipeline Convertible Revenue Participation notes		166,910	0.72		N/A
Common stock associated with 14% convertible notes plus accrued interest		6,231,244	0.48		N/A
Common stock associated with 2015 Transfer Agreements		1,734,615	0. 65		N/A
Common stock associated with 2014 Unit Share Offerings		117,000	various		N/A
Common stock payable as fees		341,306	various		N/A
Total		14,036,978

On July 22, 2015, the Company issued 200,000 shares of common stock to an investor as part of the financing agreement. The shares were valued at an average of $0.21 per share and totaled $40,469.

On July 28, 2015, the company issued 50,000 shares of common stock in payment of fees owed to a consultant for service rendered. The shares were valued at $0.65 per share and totaled $32,500.

As of September 30, 2015, the Company had the following securities outstanding which gives the holder the right to acquire the Company’s common stock outstanding:

	Number of
	Underlying
	Common		Exercise
Security	Shares		Price	Expire
Warrants associated with 2013 Revenue Participation Notes		78,788	1.80	2015
Warrants issued with 2013 Unit Share Offerings		333,333	1.20	2015
Warrants issued with 2014 Unit Share Offerings		2,328,542	1.20 – 1.50	2016
Warrants issued with 2013 and 2014 Unit Share Offerings		20,770	1.50	2017
Warrants issued with 2015 Q2 Financing		500,000	0.59	2017
Sub-total of Warrants outstanding		3,261,433
Common stock associated with the 12% Convertible Notes plus accrued interest		1,485,303	0.12	N/A
Common stock associated with Pipeline Convertible Revenue Participation notes		169,306	0.72	N/A
Common stock associated with 14% convertible notes plus accrued interest		6,445,866	0.48	N/A
Common stock associated with 2015 Transfer Agreements		476,201	0. 65	N/A
Common stock associated with 2015 Q3 Financing		354,622
Common stock associated with 2014 Unit Share Offerings		126,154	various	N/A
Common stock payable as fees		5,474,640	various	N/A
Total		17,793,525

Warrants

A summary of the Company’s warrant activity and related information during the ~~six~~nine months ended ~~June~~September 30, 2015 follows:

	Number of Shares	~~Number of Shares~~		Weighted- Average Exercise Price		~~Weighted- Average Exercise Price~~	Remaining Contractual Life (Years)	~~Remaining Contractual Life (Years)~~	Aggregate Intrinsic Value		~~Aggregate Intrinsic Value~~
Outstanding at January 1, 2015		3,634,350	~~3,634,350~~	$	1.27	$	1.2718	~~1.18~~$	851,313	$	~~851,313~~
Issued		500,000	~~500,000~~		0.59		02.5900	~~2.00~~
Exercised		--	--
Forfeited		--	--
Cancelled		--	--
Expired		(872,917	~~(142,500~~)	)	1.12		~~0.75~~
Outstanding at June 30, 2015			3,991,850			$	1.20	0.86		$	792,563
Outstanding at September 30, 2015		3,261,433		$	1.21		0.77	$	763,563
Exercisable		3,261,433	~~3,991,850~~	$	1.21	$	10.2077	~~0.86~~$	763,563	$	~~792,563~~

-2322-

Table of Contents

NOTE 8 – DISCONTINUED OPERATIONS

During the three months ended ~~June~~September 30, 2015, the Company discontinued the operations of STW Energy, LLC and STW Oilfield Construction, LLC. These business units have ceased operations and the Company is in process of disposing of assets and settling liabilities. Because of continued losses, the Company made the decision to close STW Energy, LLC and STW Oilfield Construction, LLC. In the three month period ending ~~June~~September 30, 2015, the company sold or transferred all remaining fixed assets to STW Pipeline Maintenance & Construction, LLC and incurred a loss on the sale of assets of $114,000. No further significant losses are expected.

A summary of assets and liabilities of the discontinued operations is as follows:

		June 30, 2015			December 31, 2014
			September 30, 2015			December 31, 2014
		(Unaudited)
Carrying amounts of major classes of assets included as part of discontinued operations:			(Unaudited)
Carrying amounts of major classes of assets included as part of discontinued operations:
Cash			$	--		$	3,550
Cash		$	--		$	3,550
Accounts receivable, trade, net				--			216,262
Accounts receivable, trade, net			112,979			216,262
Accounts receivable from related parties							511,809
Accounts receivable from related parties						511,809
Prepaid expenses and other current assets				--			111,604
Prepaid expenses and other current assets			36			111,604
	Total Current Assets			--			843,225
Total Current Assets			113,015			843,225
Long Term Assets
Long Term Assets
Property and equipment, net				--			234,917
Property and equipment, net			--			234,917
Total major classes of assets of the discontinued operations.			$	--		$	1,078,142
Total major classes of assets of the discontinued operations.		$	113,015		$	1,078,142

Carrying amounts of major classes of liabilities included as part of discontinued operations:

Book overdraft	$	5662,~~466~~442	$	17,445
Accounts Payable		~~683~~406,~~193~~256		1,055,575
Payable to related parties:
Black Pearl Energy, LLC		~~6,709~~--		94,717
Crown Financial, LLC		~~685~~--		685
Current portion of notes payable, net of discounts		~~600~~42,~~276~~269		752,441
Sales and payroll taxes payable		~~514~~511,~~237~~844		474,075
Accrued expenses and interest		2423,~~072~~194		41,383
Accrued compensation		13,163		147,843
Total major classes of liabilities of the discontinued operations.	$	1,~~898~~059,~~801~~168	$	2,584,164

~~-24-~~Loss from discontinued operations is as follows:

	Nine Month Periods Ended September 30:
	2015			2014
Major classes of line items constituting pre-tax loss from operation of discontinued operations:
Revenues	$	504,699		$	5,488,122
Cost of revenues		(703,312	)		(5,274,669	)
Operating expenses		(309,874	)		(1,467,841	)
Interest expense		(120,617	)		(211,367	)
Loss on the sale of fixed assets		(114,809	)		(39,861	)
Total loss from operation of discontinued operations	$	(743,913	)	$	(1,505,616	)

-23-

Table of Contents

Loss from Discontinued Operations is as follows:

	Three Month Periods Ended September 30:
	2015			2014
Major classes of line items constituting pre-tax loss from operation of discontinued operations:
Revenues	$	-		$	1,477,097
Cost of revenues		15,791			(1,925,650	)
Operating expenses		11,941			(525,957	)
Interest expense		(38,256	)		(127,478	)
Loss on the sale of fixed assets		-			(39,861	)
Total loss from operation of discontinued operations	$	(10,524	)	$	(1,141,849	)

	Six Month Periods Ended June 30:
		2015			2014
Major classes of line items constituting pre-tax loss from operation of discontinued operations:	$	504,699		$	4,011,025
Revenues
Cost of revenues		(719,103	)		(3,349,019	)
Operating expenses		(321,815	)		(941,884	)
Interest expense		(82,361	)		(83,889	)
Loss on the sale of fixed assets		(114,809	)		--
Total loss from operation of discontinued operations	$	(733,389	)	$	(363,767	)

	Three Month Periods Ended June 30:
		2015			2014
Major classes of line items constituting pre-tax loss from operation of discontinued operations:
Revenues	$	23,705		$	2,540,605
Cost of revenues		(126,117	)		(1,929,945	)
Operating expenses		(71,639	)		(549,994	)
Interest expense		(40,357	)		(45,715	)
Loss on the sale of fixed assets		(114,809	)		--
Total loss from operation of discontinued operations	$	(329,217	)	$	14,951

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leased its office facilities under an operating lease that commenced on October 1, 2013 and expires on September 30, 2020. The lease calls for monthly payments of $9,750, plus payment by the Company of all operating expenses, insurance and taxes on the property. The Company has an option until September 30, 2016, to purchase the land and building for $825,500.

During 2014, the Company entered into a capital lease of a modular office trailer. The lease contract calls for forty eight (48) monthly payments of $593 with a purchase option at the end of the lease. The Company determined the value of the capital lease to be $23,300 with an implicit interest rate in the lease of 10%. In July of 2014, the Company entered into a lease for a commercial ice machine with Executive Leasing, Inc. The lease contract calls for Thirty six (36) monthly payments of $505 with a purchase option at the end of the lease. The Company determined the value of the capital lease to be $14,854 with an implicit interest rate in the lease of 12%. As of ~~June~~September 30, 2015 and December 31, 2014, the principal balances on these capital leases totaled $2524,~~388~~184 and $30,438, respectively.

Future minimum lease payments under the capital lease and operating lease as of ~~June~~September 30, 2015, are as follows:

Years ending December 31:	Capital Lease		Operating Lease		Totals
2015	$	615,~~588~~094	$	5829,~~500~~250	$	6544,~~088~~344
2016		136,~~176~~060		117,000		~~130~~123,~~176~~060
2017		83,~~960~~030		117,000		~~125~~120,~~960~~030
2018		--		117,000		117,000
Thereafter		--		204,750		204,750
Total minimum lease payments		2824,~~724~~184		~~614~~585,~~250~~000		~~642~~609,~~974~~184
Less interest		31,~~336~~082
Capital lease obligation		2523,~~388~~102
Less current portion		514,~~332~~850
Long-term capital lease obligation	$	208,~~056~~252

~~-25-~~During the nine months ended September 30, 2015 and 2014, rental expense for all property, including equipment rentals cost of sales, and equipment operating leases was $1,024,094 and $1,697,060, respectively, which includes over $890,000 and $1,565,000, respectively, of equipment rental used on projects and reflected in cost of revenues. Related party rental expense during the nine months ended September 30, 2015 and 2014, was $41,111 and $298,991, respectively.

During the three months ended September 30, 2015 and 2014, rental expense for all property, including equipment rentals cost of sales, and equipment operating leases was $287,567 and $620,133, respectively, which includes over $238,000 and $549,000, respectively, of equipment rental used on projects and reflected in cost of revenues. Related party rental expense during the three months ended September 30, 2015 and 2014, was a credit of $58,944 and $127,064, respectively.

-24-

Table of Contents

During the six months ended June 30, 2015 and 2014, rental expense for all property, including equipment rentals cost of sales, and equipment operating leases was $736,527 and $1,076,926, respectively, which includes over $645,071 and $1,015,516, respectively, of equipment rental used on projects and reflected in cost of revenues. Related party rental expense during the six months ended June 30, 2015 and 2014, was $604 and zero, respectively.

During the three months ended June 30, 2015 and 2014, rental expense for all property, including equipment rentals cost of sales, and equipment operating leases was $408,637 and $688,751, respectively, which includes over $361,923 and $670,458, respectively, of equipment rental used on projects and reflected in cost of revenues. Related party rental expense during the three months ended June 30, 2015 and 2014, was zero for both.

Product Purchase and Manufacturing License Agreement

On June 20, 2014, the Company entered into an exclusive product purchase and manufacturing license agreement with ~~Saltech~~Salttech B.V (“~~Saltech~~Salttech”), a company based in the Netherlands. The agreement provides exclusive rights to purchase ~~Saltech~~Salttech’s DyVaR devices which are used to remove salinity from brackish/brine water streams. The agreement grants to the Company exclusive United States rights to purchase these products for use in the municipal and oil & gas industries. The agreement also grants to the Company the right of first refusal for this technology in North America.

The initial term of the agreement is for five years and is renewable automatically for five years and every five year period unless terminated by written notice of the parties at least three months before the termination date.

The initial royalty for the first year of the agreement was $324,000, payable quarterly beginning with the calendar quarter starting July 1, 2014 as follows: Q3 2014 $60,000, Q4 2014 $60,000, Q1 2015 $100,000 and Q2 2015 $104,000. The Company also agreed to pay a continuing royalty of $240,000 per year for years 2-5, plus 3% of the invoice price of any products sold by the Company under the agreement. The Company also agreed to issue 66,667 shares of its common stock in consideration of this agreement. These stock awards were accrued as fees payable in common stock as the awards are vested and was settled upon the issuance of the shares in June 2015. During the three and ~~six~~nine months ended ~~June~~September 30, 2015, the company paid ~~$100,000~~zero and $~~100~~204,000, respectively in royalties to Salttech.

As of ~~June~~September 30, 2015, the minimum royalty obligation payable under this agreement is as follows:

Years ending December 31:	Minimum Royalty Obligation
2015	$	140,000
2016		240,000
2017		240,000
2018		240,000
Thereafter		120,000
Total minimum lease payments	$	980,000

Indemnities and Guarantees

In addition to the indemnification provisions contained in the Company’s charter documents, the Company will generally enter into separate indemnification agreements with the Company’s directors and officers. These agreements require the Company, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgments, fines and settlements, paid by the individual in connection with any action, suit or proceeding arising out of the individual’s status or service as the Company’s director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which the individual may be entitled to indemnification by the Company. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheets.

-26-

Table of Contents

Employment Agreements

STW Pipeline Maintenance & Construction, LLC, has an employment agreement with Adam Jennings that expired on September 22, 2014, but is renewable by mutual consent of the Company and Mr. Jennings. The employment agreement for Mr. Jennings has been renewed.

Stanley T. Weiner is employed as Chairman and former CEO for a three year term effective February 1, 2015. His base salary is $15,000 monthly ($180,000 annually) during the first year of employment, $22,000 monthly ($264,000 annually) during the second year of employment, and $29,000 monthly ($348,000 annually) during the third year of employment. He ~~could~~may be ~~rewarded~~awarded an annual discretionary bonus up to 100% of his previous ~~six~~nine month salary, and a signing bonus of 400,000 fully vested shares of the Company’s common stock. He will also be awarded quarterly bonuses equal to 50,000 shares of the Company’s common stock. HeAfter the initial three years he would also receive a twelve month severance award in the event of termination. If there is a change in control of the Company the severance would be twenty-four months if terminated. Mr. Weiner resigned as CEO on October 26, 2015.

Paul DiFrancesco is employed as Head of Finance for a three year term effective February 1, 2015. His base salary is $12,000 monthly ($144,000 annually) during the first year of employment, $16,000 monthly ($192,000 annually) during the second year of employment, and $16,000 monthly ($192,000 annually) during the third year of employment. He could be rewarded an annual discretionary bonus up to 100% of his previous six month salary, and a signing bonus of 300,000 fully vested shares of the Company’s common stock. He will also be awarded quarterly bonuses equal to 50,000 shares of the Company’s common stock. He would also receive a twelve month severance award in the event of termination.-25-

~~Grant~~Table ~~Seabolt is employed as General Counsel and Corporate Secretary for a three year term effective February 1, 2015. His base salary is $8,000 monthly ($96,000 annually) during the first year~~ of employment, $9,500 monthly ($114,000 annually) during the second year of employment, and $9,500 monthly ($114,000 annually) during the third year of employment. He could be awarded an annual discretionary bonus up to 100% of his previous six month salary, and a signing bonus of 200,000 fully vested shares of the Company’s common stock. He will be awarded quarterly bonuses equal to 25,000 shares of the Company’s common stock. He would also receive a twelve month severance award in the event of termination.Contents

Paul DiFrancesco is employed as Head of Finance for a three year term effective February 1, 2015. His base salary is $12,000 monthly ($144,000 annually) during the first year of employment, $16,000 monthly ($192,000 annually) during the second year of employment, and $16,000 monthly ($192,000 annually) during the third year of employment. He could be rewarded an annual discretionary bonus up to 100% of his previous nine month salary, and a signing bonus of 300,000 fully vested shares of the Company’s common stock. He will also be awarded quarterly bonuses equal to 50,000 shares of the Company’s common stock. After the initial three years he would also receive a twelve month severance award in the event of termination. If there is a change in control of the Company the severance would be twenty-four months if terminated.

Grant Seabolt is employed as General Counsel and Corporate Secretary for a three year term effective February 1, 2015. His base salary is $8,000 monthly ($96,000 annually) during the first year of employment, $9,500 monthly ($114,000 annually) during the second year of employment, and $9,500 monthly ($114,000 annually) during the third year of employment. He could be awarded an annual discretionary bonus up to 100% of his previous nine month salary, and a signing bonus of 200,000 fully vested shares of the Company’s common stock. He will be awarded quarterly bonuses equal to 25,000 shares of the Company’s common stock. After the initial three years he would also receive a twelve month severance award in the event of termination. If there is a change in control of the Company the severance would be twenty-four months if terminated.

Contingencies

The Company is subject to various claims and contingencies in the normal course of business that arise from litigation, business transactions, or employee-related matters. The Company establishes reserves when it believes a loss is probable and is able to estimate its potential exposure. For reasonably possible loss contingencies, the Company discloses the nature of the loss contingency and an estimate of the possible loss, range of loss, or a statement that such an estimate cannot be made. While actual losses may differ from the amounts recorded and the ultimate outcome of our pending actions is generally not yet determinable, the Company does not believe the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on its business, financial position, results of operations, or cash flows. In all cases, the Company vigorously defends itself unless a reasonable settlement appears appropriate. All items, whereby the Company agrees with the amount of the claim, have been recorded in the current period and are reflected in accounts payable.

GE Ionics, Inc. Lawsuit. On May 22, 2013, GE Ionics, Inc. ("GE") filed a lawsuit against STW in the Supreme Court of the State of New York, County of New York, Index No. 651832/2013 (the "GE Lawsuit"). Although the lawsuit arises out of STW's obligations to GE under its Settlement Agreement with GE entered into on August 31, 2010, upon which STW owed GE $2.1 million plus interest. GE elected to forgo suit on the settlement amount and sued STW for the original debt of $11,239,437, plus interest and attorneys' fees (the "Original Debt"). STW filed its Answer asserting that it is entitled to and shall pursue all of its available legal and equitable defenses to the Original Debt, inasmuch as GE had, among other things, failed to discount the Original Debt sued upon by the amounts that it recovered through re-use and re-sale of the equipment it fabricated for STW. Management has not accrued the original amount of the debt because ~~management~~Management has determined the probability of recovery is remote. The lawsuit is currently in the discovery phase of litigation and the parties are actively exploring settlement. ~~The Company has a note payable of $2,100,000 recorded as its estimated loss on this matter.~~

~~-27-~~Sichenzia and Ross Lawsuit. On June 13, 2014, Sichenzia Ross Friedman Ference LLP filed a lawsuit against the Company in the Supreme Court of New York, County of New York, Index No. 155843/2013, seeking $80,036.22 in legal fees and expenses from the Company. The legal fees and expenses related to Sichenzia Ross’ representation of the Company on SEC matters. On October 8, 2014, the Parties entered into a Settlement Agreement whereby the Company agreed to pay Sichenzia Ross $80,036.22 on or before November 28, 2014 or within three business days of the Company closing its current round of financing. The agreement to pay was secured by the Company providing Sichenzia Ross an “Affidavit of Judgment by Confession” in the amount of $80,036.22 to be filed only if the Company failed to pay the $80,036.22 by the due date, plus a five day cure period ending on December 03, 2014. On December 10, 2014, Sichenzia Ross filed the Judgment by Confession with the Court. The Judgment remains unsatisfied.

Table of Contents

Sichenzia and Ross Lawsuit. On June 13, 2014, Sichenzia Ross Friedman Ference LLP (“Sichenzia Ross”) filed a lawsuit against the Company in the Supreme Court of New York, County of New York, Index No. 155843/2013, seeking $80,036.22 in legal fees and expenses from the Company. The legal fees and expenses related to Sichenzia Ross’ representation of the Company on SEC matters. On October 8, 2014, the Parties entered into a Settlement Agreement whereby the Company agreed to pay Sichenzia Ross $80,036.22 on or before November 28, 2014 or within three business days of the Company closing its current round of financing. The agreement to pay was secured by the Company providing Sichenzia Ross an “Affidavit of Judgment by Confession” in the amount of $80,036.22 to be filed only if the Company failed to pay the $80,036.22 by the due date, plus a five day cure period ending on December 03, 2014. On December 10, 2014, Sichenzia Ross filed the Judgment by Confession with the Court. This has been fully accrued for.

Bob J. Johnson & Associates Lawsuit. Since June 30, 2014, there has been one lawsuit filed on July 14, 2014 against the Company’s subsidiary, STW Water Process & Technologies, LLC (“STW Water”), Bob J. Johnson & Associates, Inc. (BJJA) v. Alan Murphy and STW Water & Process Technologies, LLC, Case No. CV50473 in the 238th District Court of Midland County, Texas (the “BJJA Lawsuit”). BJJA sought to enforce an allegedly enforceable covenant not to compete and a confidentiality agreement signed by Alan Murphy, STW Water’s recently hired President, who was a former vice president and employee of BJJA. On July 14, 2014, BJJA obtained a TRO against Alan Murphy, STW Water and those associated with the Defendants, which, by the Company’s ownership of STW Water, included the Company. The TRO temporarily prohibited the Company, STW Water and Alan Murphy from contacting two key customers of STW and STW Water, Pioneer Energy Resources and the City of St. Stockton, Texas. On July 28, 2014, the Court held a temporary injunction hearing, which resulted in the TRO being dissolved and the Court refusing to further enjoin STW, STW Water or Alan Murphy from competing with BJJA. The case is still on the docket and BJJA has sought some initial discovery from the Company; however, the Company’s counsel is confident that it will not go forward to a trial on the merits, thereby precluding any appreciable risk of a permanent injunction. The Company continues to vigorously defend this lawsuit and Management does not expect to incur any liability beyond its costs of defense.

-26-

Table of Contents

Arbitration Judgment

Viewpoint Securities, LLC Arbitration. On or about July 9, 2012, the Company and Stan Weiner, the Company's chief executive officer, received a demand for arbitration with the American Arbitration Association. The demand was filed by Viewpoint Securities LLC ("VP") who entered into an engagement agreement, dated March 9, 2008 (as amended on March 9, 2008, November 10, 2008, January 1, 2009, February 5, 2010, and December 1, 2010), with STW whereby the Company retained VP to act as its financial and capital markets advisor regarding equity and debt introduced by VP to the Company. The demand alleged breach of contract, breach of the covenant of good faith and fair dealings, negligence prayer for commissions and expenses incurred by VP in its efforts to provide introductions and attempt to provide financing to the Company from March 9, 2008 through February 2, 2012, the date of termination of the Agreement. VP seeks, among other things, $216,217 and a warrant to purchase 566,667 shares of the Company's common stock, payment of a $15,000 promissory note plus 3+ years of interest at 12%, attorneys' fees of $18,000~~.00~~ and costs of arbitration for filing fees and hearing fees. The Company believed it had valid defenses and contested these claims vigorously. On August 18, 2012, VP dismissed Stan Weiner from the claim with prejudice. A final arbitration hearing was held on February 3, 2014. On April 1, 2014, the Arbitrator issued an Award in favor of Viewpoint for $196,727.77 on Viewpoint's claim for $216,217 in fees and expenses, plus $5,541.46 in arbitration hearing fees and expenses; interest shall accrue at the rate of 10% per annum on any unpaid portion of the award commending April 1, 2014. The Arbitrator denied Viewpoint's claims related to the Company's warrants, a $15,000 promissory note plus 12% interest and for $18,000 in attorneys' fees. The Award was final on April 01, 2014, and on October 28, 2014, Viewpoint filed a lawsuit in San Diego County, California Superior Court seeking to enforce its Arbitration Award in Case No. 37-2014-00036027-CU-PA-CTL. On December 08, 2014, the Company filed a Motion to Dismiss the enforcement action due to Viewpoint having forfeited its corporate rights in California due to non-payment of California corporate taxes, and that motion is still pending before the Court. Subsequent to June 30, 2015, on July 07, 2015, STW and Viewpoint signed a “Payment and Standstill Agreement, wherein the parties agreed that the total Arbitration Award with interest totaled $228,170.92, that Viewpoint would not seek post Award attorneys’ fees from STW, and that so long as STW made bi-weekly payments of $2,000~~.00~~, beginning on July 10, 2015, Viewpoint would stay any efforts to collect on the Arbitration Award, and when fully paid, would fully release STW from the Arbitration Award. The Company has made all scheduled payments to date.

United Drilling, Inc. Lawsuit. On May 06, 2015, United Drilling, Inc. filed a lawsuit against STW and Case Drilling and Pump Service, LLC pending in the District Court of the 83rd Judicial District in Pecos County, Texas, styled United Drilling, Inc. v. STW Resources Holding Corp. et al., Cause No. P-287405-83-CV (the “United Lawsuit”). United Drilling provided water well drilling services as a subcontractor to Case Drilling in the amount alleged to be $1,577,883.33 related to Case Drilling providing drilling services to STW Water Process & Technologies, LLC (a wholly owned subsidiary of STW) for Capitan Reef Test Well No. 1, located in Pecos County, Texas (the “Test Well”). Case Drilling did not pay United Drilling; therefore, United Drilling filed the United Lawsuit to attempt to foreclose on an alleged statutory lien on STW’s water lease with the City of Fort Stockton, Texas, on which the Test Well was located. United seeks any monies owed by STW to Case Drilling for the Test Well to be paid to United Drilling. STW has asserted that it had a “turn-key” contract with Case Drilling, which required Case Drilling to deliver a producing water well, which it did not. Accordingly, STW alleges that since it owed nothing to Case Drilling, correspondingly, it owes nothing to United Drilling. In addition to STW filing its Answer and Affirmative Defenses to United Drilling’s claims, it has also filed a counterclaim against United Drilling for wrongfully placing a lien on STW’s Fort Stockton water lease, in that United Drilling’s is not justified as there are no amounts owed by the Company to Case Drilling from which United Drilling could collect for some or all of its subcontractor invoices. STW has also cross-claimed Case Drilling for breach of contract and indemnity related to Case Drilling’s alleged failure to pay its subcontractor, United Drilling. STW and United Drilling have participated in substantive settlement discussions and have a definitive settlement agreement prepared awaiting execution. Based on the Company’s counsel’s legal opinions regarding the invalidity of United Drilling’s lien, the Company does not expect to incur any substantial liability from this matter.

Dufrane Nuclear Shielding, Inc. Counterclaims. On July 16, 2015, Dufrane Nuclear Shielding, Inc., Dufrane Construction, LLC and Joshua C. Brooks filed a counterclaim against STW and its subsidiaries in Case No. CV-50864, pending in the 238th District Court of Midland County, Texas, styled STW Resources Holding Corp., et al. v. Felipe Sanchez, et al. (the “Dufrane Counterclaims”). Dufrane is suing STW over a $725,000 promissory note and an equipment rental agreement, and Joshua C. Brooks is suing STW alleging he was not released from certain guaranty obligations with equipment providers. STW and its subsidiaries filed a general denial and the parties have been working together on an agreed accounting of payments made and the allocations of those payments, with a view towards settling the Dufrane Counterclaims.

-27-

Table of Contents

~~United~~Seaboard ~~Drilling~~International, Inc. Lawsuit. On ~~May~~July 0607, 2015, ~~United~~Seaboard ~~Drilling~~International, Inc. ~~(“United Drilling”)~~ filed a lawsuit against STW and Case Drilling and Pump Service, LLC pending in the District Court of the ~~83rd~~112th Judicial District in Pecos County, Texas, styled ~~United~~Seaboard ~~Drilling~~International, Inc. v. ~~STW~~Case ~~Resources~~Drilling ~~Holding~~& ~~Corp.~~Pump, LLC, et al., Cause No. P-~~7405~~11813-83112-CV (the “~~United~~Seaboard Lawsuit”). ~~United~~Seaboard ~~Drilling~~ provided water well drilling services as a subcontractor to Case Drilling in the amount alleged to be $180,~~577,883~~685.3301related ~~related~~ to Case Drilling providing drilling services to STW Water Process & Technologies, LLC (a wholly owned subsidiary of STW) for Capitan Reef Test Well No. 1, located in Pecos County, Texas (the “Test Well”). Case Drilling did not pay ~~United Drilling~~Seaboard; therefore, ~~United~~Seaboard ~~Drilling~~ filed the ~~United~~Seaboard Lawsuit to attempt to foreclose on an alleged statutory lien on STW’s water lease with the City of Fort Stockton, Texas, on which the Test Well was located. ~~United~~Seaboard ~~Drilling~~ seeks any monies owed by STW to Case Drilling for the Test Well to be paid to United Drilling. STW has asserted that it had a “turn-key” contract with Case Drilling, which required Case Drilling to deliver a producing water well, which it did not. Accordingly, STW alleges that since it owed nothing to Case Drilling, correspondingly, it owes ~~nothing~~noting to ~~United Drilling~~Seaboard. In addition to STW filing its Answer and Affirmative Defenses to United Drilling’s claims, it has also filed a counterclaim against ~~United~~Seaboard ~~Drilling~~ for wrongfully placing a lien on STW’s Fort Stockton water lease, ~~and~~in ~~STW~~that ~~has~~Seaboard’s ~~cross-claimed~~lien ~~Case~~is ~~Drilling~~not ~~for~~justified ~~breach~~as ofthere ~~contract~~are ~~and~~no ~~indemnity~~amounts ~~related~~owed by the Company to Case Drilling’s ~~alleged~~from ~~failure~~which toSeaboard ~~pay~~could collect for some or all of its subcontractor, ~~United Drilling~~invoices. STW ~~and~~has ~~United~~also ~~Drilling~~cross-claimed ~~have~~Case ~~participated~~Drilling infor ~~substantive~~breach ~~settlement~~of ~~discussions~~contract and ~~have~~indemnity arelated ~~definitive~~to ~~settlement~~Case ~~agreement~~Drilling’s ~~prepared~~alleged ~~awaiting~~failure ~~execution~~to pay its subcontractor, Seaboard. Based on the Company’s counsel’s legal opinions regarding the invalidity of ~~United Drilling~~Seaboard’s lien, the Company does not expect to incur any substantial liability from this matter.

~~Dufrane~~Lonestar ~~Nuclear~~West ~~Shielding, Inc~~Enterprises. ~~Counterclaims~~LLC Lawsuit. On ~~July~~September 1618, 2015, ~~Dufrane~~Lonestar ~~Nuclear~~West ~~Shielding~~Enterprises, ~~Inc., Dufrane Construction,~~ LLC ~~(collectively “Dufrane”) and Joshua C. Brooks~~ filed a ~~counterclaim~~lawsuit against STW ~~and its subsidiaries~~ in ~~Case No. CV-50864, pending in~~ the ~~238th~~141st District Court of ~~Midland~~Tarrant County, Texas, styled ~~STW~~Lonestar ~~Resources~~West ~~Holding Corp.~~Enterprises, etLLC ~~al.~~ v. ~~Felipe~~STW ~~Sanchez~~Resources Holding Corp., etCause alNo. 141-281104-15 (the “~~Dufrane~~Lonestar ~~Counterclaims~~Lawsuit”). ~~Dufrane~~It is ~~suing~~believed ~~STW~~that ~~over~~Lonestar aprovided ~~$725,000~~services ~~promissory~~to ~~note~~STW’s ~~and~~subsidiary, anSTW ~~equipment~~Oilfield ~~rental agreement~~Services, ~~and~~which ~~Joshua~~ceased Coperations. ~~Brooks~~Lonestar isseeks ~~suing~~$26,550 ~~STW~~plus ~~alleging~~attorneys’ ~~he was not released from certain guaranty obligations with equipment providers~~fees. STW ~~and~~has ~~its subsidiaries~~ filed a general denial and ~~the~~is ~~parties~~still ~~have~~investigating ~~been working together on an agreed accounting of payments made and~~ the ~~allocations of those payments, with a view towards settling the Dufrane Counterclaims~~matter.

~~Seaboard~~NOTE ~~International,~~10 ~~Inc.~~– ~~Lawsuit.~~SEGMENT On July 07, 2015, Seaboard International, Inc. (“Seaboard”) filed a lawsuit against STW and Case Drilling and Pump Service, LLC pending in the District Court of the 112th Judicial District in Pecos County, Texas, styled Seaboard International, Inc. v. Case Drilling & Pump, LLC, et al., Cause No. P-11813-112-CV (the “Seaboard Lawsuit”). Seaboard provided water well drilling services as a subcontractor to Case Drilling in the amount alleged to be $80,685.01related to Case Drilling providing drilling services to STW Water Process & Technologies, LLC (a wholly owned subsidiary of STW) for Capitan Reef Test Well No. 1, located in Pecos County, Texas (the “Test Well”). Case Drilling did not pay Seaboard; therefore, Seaboard filed the Seaboard Lawsuit to attempt to foreclose on an alleged statutory lien on STW’s water lease with the City of Fort Stockton, Texas, on which the Test Well was located. Seaboard seeks any monies owed by STW to Case Drilling for the Test Well to be paid to United Drilling. STW has asserted that it had a “turn-key” contract with Case Drilling, which required Case Drilling to deliver a producing water well, which it did not. Accordingly, STW alleges that since it owed nothing to Case Drilling, correspondingly, it owes nothing to Seaboard. In addition to STW filing its Answer and Affirmative Defenses to United Drilling’s claims, it has also filed a counterclaim against Seaboard for wrongfully placing alien on STW’s Fort Stockton water lease, and STW has cross-claimed Case Drilling for breach of contract and indemnity related to Case Drilling’s alleged failure to pay its subcontractor, Seaboard. The Company will vigorously defend this lawsuit and does not expect significant liability from this matter. Based on the Company counsel's legal opinions regarding the invalidity of United Drilling’s lien, the Company does not expect to incur any substantial liability from this matter.INFORMATION

We have three reportable segments, (1) water reclamation services, (2) oil & gas services, and (3) corporate overhead, as described herein.

Water reclamation services

The Company plans to provide customized water reclamation services. STW’s core expertise is an understanding of water chemistry and its application to the analysis and remediation of complex water reclamation issues. STW provides a complete solution throughout all phases of a water reclamation project including supplies, analysis, design, evaluation, implementation and operations.

Oil and Gas Services

Our subsidiary, STW Pipeline Maintenance & Construction, LLC, offers a wide a range of oilfield, pipeline construction, maintenance and support services. We employ qualified laborers with years of experience in the oil patch, and Supervisor/Sales people with particular oil patch knowledge in the Permian and Delaware Basins of West Texas, Eastern New Mexico, and in the Eagle Ford of South Texas.

Corporate Operations

Corporate operations expenses include senior management salaries and benefits, accounting and finance, legal, business development, and other general corporate operating expenses.

The accounting policies for the segments are the same as those described in the Summary of Significant Accounting Policies (see Note 1). The following is a list of methodologies that we use for segment reporting that differ from our external reporting:

●	Liabilities including accounts payable, notes payable, and other liabilities are managed at the corporate level and not included in segment operations.

●	Interest expense and change in derivative liabilities are managed at the corporate level and not included in segment operations.

-2928-

Table of Contents

Segment Operations

Six months ended June 30, 2015

Nine months ended September 30, 2015

Water Reclamation

Oil & Gas Services

Corporate Operations

Consolidated Totals

Revenues

~~267~~1,~~770~~330,989

47,~~518~~362,~~097~~448

48,~~785~~693,~~867~~437

Costs of revenues

~~271~~1,~~963~~106,402

24,~~733~~674,~~022~~310

35,~~004~~780,~~985~~712

Operating expenses

~~931~~1,~~725~~296,028

1,~~039~~545,~~647~~986

24,~~665~~587,~~651~~271

47,~~637~~429,~~023~~285

Other income (expense)

(~~968~~1,~~532~~541,197

)

(~~968~~1,~~532~~541,197

)

Segment income (loss)

(~~935~~1,~~918~~071,441

)

~~745~~1,~~428~~142,152

(36,~~634~~128,~~183~~468

)

(36,~~824~~057,~~673~~757

)

Three months ended June 30, 2015

Three months ended September 30, 2015

Water Reclamation

Oil & Gas Services

Corporate Operations

Consolidated Totals

Revenues

~~118~~1,~~859~~063,219

2,~~468~~844,~~601~~351

23,~~587~~907,~~460~~570

Costs of revenues

~~126~~834,~~437~~439

1,~~591~~941,~~269~~288

12,~~717~~775,~~706~~727

Operating expenses

~~397~~364,~~208~~303

~~493~~506,~~754~~339

1,~~223~~921,~~284~~620

2,~~114~~792,~~246~~262

Other income (expense)

(64572,~~728~~665

)

(64572,~~728~~665

)

Segment income (loss)

(~~404~~135,~~786~~523

)

~~383~~396,~~578~~724

(12,~~288~~494,~~012~~285

)

(12,~~309~~233,~~220~~084

)

	Six months ended June 30, 2014
	Nine months ended September 30, 2014
	Water Reclamation			Oil & Gas Services			Corporate Operations			Consolidated Totals
Revenues	$	10172,~~051~~897		$	58,~~193~~349,~~051~~489		$	--		$	58,~~203~~522,~~102~~386
Costs of revenues		--134,458			57,~~108~~739,~~280~~379			--			57,~~108~~873,~~280~~837
Operating expenses		~~219~~598,~~584~~208			1,~~006~~603,~~691~~876			36,~~698~~117,~~149~~034			48,~~924~~319,~~424~~118
Other income (expense)		--			--			(12,~~305~~631,~~152~~994	)		(12,~~305~~631,~~152~~994	)
Segment income (loss)	$	(~~209~~559,~~533~~769	)	$	(~~921~~993,~~920~~766	)	$	(58,~~003~~749,~~301~~028	)	$	(610,~~134~~302,~~754~~563	)

	Three months ended June 30, 2014
	Three months ended September 30, 2014
	Water Reclamation			Oil & Gas Services			Corporate Operations			Consolidated Totals
Revenues	$	10162,~~051~~846		$	3,~~062~~156,~~692~~437		$	--		$	3,~~072~~319,~~743~~283
Costs of revenues		--134,458			32,~~346~~631,~~112~~099			--			32,~~346~~765,~~112~~557
Operating expenses		88378,~~036~~623			~~662~~597,~~802~~186			2,~~115~~418,~~525~~884			23,~~866~~394,~~363~~693
Other income (expense)		--			--			(~~918~~1,~~997~~326,843	)		(~~918~~1,~~997~~326,843	)
Segment income (loss)	$	(77350,~~985~~235	)	$	(~~946~~71,~~222~~848	)	$	(3,~~034~~745,~~522~~727	)	$	(4,~~058~~167,~~729~~810	)

-30-

Table of Contents

Segment Assets

June 30, 2015

September 30, 2015

Water Reclamation

Oil & Gas Services

Corporate Operations

Consolidated Totals

Current Assets

31,~~529~~644,~~556~~260

1,~~203~~548,~~281~~042

~~443~~253,~~024~~312

53,~~175~~445,~~861~~614

Fixed assets

~~484~~478,~~217~~204

~~450~~416,~~042~~647

6354,~~369~~535

~~997~~949,~~628~~386

Other assets

Segment Assets

42,~~013~~122,~~773~~464

1,~~653~~964,~~323~~689

~~506~~304,~~393~~847

64,~~173~~395,~~489~~000

	December 31, 2014
	Water Reclamation		Oil & Gas Services		Corporate Operations		Consolidated Totals
Current Assets	$	1,369,434	$	2,831,798	$	1,325,807	$	5,527,039
Fixed assets		837,602		289,302		76,178		1,203,082
Other assets		--		--		--		--
Segment Assets	$	2,207,036	$	3,121,100	$	1,401,985	$	6,730,121

-29-

Table of Contents

	December 31, 2014
	Water Reclamation		Oil & Gas Services		Corporate Operations		Consolidated Totals
Current Assets	$	1,369,434	$	2,831,798	$	1,325,807	$	5,527,039
Fixed assets		837,602		289,302		76,178		1,203,082
Segment Assets	$	2,207,036	$	3,121,100	$	1,401,985	$	6,730,121

NOTE 11 – SUBSEQUENT EVENTS

Shares Issued

On ~~July~~October 915, 2015, the ~~Company~~company issued ~~355~~a total of 510,~~500~~000 shares of common stock to ~~forty-three~~3 ~~employees~~accredited ~~for~~lenders. ~~performance~~The ~~bonuses~~company issued 120,000 shares of common stock to the first accredited lender in payment for the extension on a note payable. The shares were valued at $710.07 per share for a total of $8,400. The second accredited lender was issued 40,000 shares of common stock in payment for the extension on a note payable and 100,000 shares of common stock in conjunction with their SPA. The shares were valued at $0.07 per share for a total of $9,800. The third accredited lender was issued 250,000 shares of common stock in payment of loan fees that were accrued in the Fees Payable in Common Stock. The shares were valued at $0.18 per share for a total of $45,000.

On ~~July~~October 22, 2015, the ~~Company~~company issued ~~200~~225,000 shares of common stock to aan ~~qualified~~accredited ~~investor~~lender ~~pursuant~~in topayment ~~the~~of ~~terms~~loan offees that were accrued in the ~~loan~~Fees ~~payoff,~~Payable in Common Stock. The shares were valued at $400.33 per share for a total of $74,~~000~~250.

On ~~July~~October 2827, 2015, an accredited lender converted $30,000 of a note payable and the ~~Company~~company issued 50364,~~000~~964 shares of common stock. toThe ashares ~~consultant~~were ~~for services rendered,~~ valued at approximately $~~32,500~~0.08 per share.

A consultant converted outstanding billing for service in the amount of $75,000. On November 2, 2015, the Company issued 50,000 shares of common stock and the remaining shares 50,000 shares of common stock were issued on November 4, 2015. The shares were valued at approximately $0.75 per share.

On November 5, 2015, the company issued 225,000 shares of common stock to an accredited lender in payment of loan fees that were accrued in the Fees Payable in Common Stock. The shares were valued at $0.14 per share for a total of $31,500.

On November 6, 2015, an accredited lender converted $30,000 of a note payable and the company issued 454,545 shares of common stock. The shares were valued at approximately $0.06 per share.

Other Events

InStock ~~August~~repurchase: ~~2015,~~In ~~STW~~October ~~Water Process & Technologies, LLC (STW Water) entered into a lease agreement with MRK Development, LLC (MRK) for the rights to collect, process,~~ and ~~sell~~November ~~the water located on and below the surface of properties owned by MRK. The lease calls for the initial payment of $10~~2015,~~000~~ ~~in cash and~~ the ~~issuance~~Company ofrepurchased ~~100,000 shares of common stock of STW Resources Holding Corp. The lease is for~~ a ~~period~~nominal ofamount ~~30 years with automatic renewals on a year by year basis unless terminated by either party with a 60 day notice. There are additional ‘bonus’ payments~~ of ~~cash~~shares ~~and~~from ~~stock~~some ~~when certain levels~~ of ~~Gallon per Day (GPD) are met. Additionally, there is a Royalty based on a received price of~~ the ~~water~~employees ~~sold on a ‘per 1,000 gallons’ basis. The percentage~~ of the ~~royalty escalates from 10% to 15% dependent on the GPD~~Company.

OnNew ~~August~~Loans: ~~20,~~In ~~2015,~~October ~~Alan~~and ~~Murphy~~November ~~was~~2015, ~~appointed to~~ the Company’s ~~Board~~entered ofinto ~~Directors.~~2 ~~Pursuant~~new toloans ~~the~~from ~~agreement~~accredited ~~with Mr~~lenders. ~~Murphy,~~These ~~the~~are ~~Company~~continuation ~~agreed~~under ~~to pay him~~ the ~~following~~terms ~~compensation: (a) 33,334 shares~~ of the ~~Company’s~~original ~~common~~loans ~~stock~~in ~~upon~~ the ~~execution~~third ofquarter ~~the~~and ~~agreement;~~are ~~(b)~~to ~~a fee at the rate of $75,000 per year ($27,329 for the partial year 2015), which shall~~ be ~~paid~~used ~~solely~~fund at the ~~Company’s discretion in cash or in shares of the Company’s stock; (c) a cash payment of $1,000.00 for each~~ day of attendance at meetings of the Company’s Board of Directors or any other meeting called by the Company and attended by Mr. Murphy; and (d) reimbursement of all reasonable costs of travel, lodging, and entertainment reasonably necessary for Mr. Murphy to ~~carry~~day ~~out~~running ~~his duties, so long as any such expense in excess~~ of ~~$100 is approved in advance by~~ the Company.

In the October 9, 2015 meeting of the Board of Directors the following items were approved; the issuance of 125,000 shares of the Corporation’s restricted common stock to Crown Financial, LLC under a new consulting agreement for management of the accounts receivable and cash management, the increase in salary of Adam Jennings of up to $300,000 and stock of up to 750,000 shares of the Corporation’s restricted common stock, that the Company would seek a third party buyer for the Company’s interest in STW Pipeline, that the Company would authorize up to 1,500,000 shares of the Corporation’s restricted common stock for sales agents in locating a buyer for STW Pipeline, the issuance of 300,000 shares of the Corporation’s restricted common stock for consulting efforts, and that Paul DiFrancesco and Stanley Weiner be issued 2,000,000 shares of the Corporation’s restricted common stock for their efforts on behalf of the Company during 2015.

-30-

Table of Contents

In the October 26, 2015 meeting of the Board of Directors the following items were approved; Stanley Weiner resigned as Chief Executive Officer, President, and Chairman of the Board as well as the positions of CEO, President, and/or Manager of the limited company subsidiaries of the Corporation, Alan Murphy assumed those positions with the exception of the CEO & President of STW Pipeline, which was assumed by Adam Jennings, Mr. Weiner was awarded his rights to severance per his employment contract and his Change in Control Agreement, the Royalty Water Sale Percentages to Executive Personnel were realigned to include Alan Murphy on an equal basis, a date of January 27, 2015 was set for the annual shareholder meeting, and it was resolved to explore alternative methods of satisfying the Dufrane note payable.

In the November 12, 2015 meeting or the Board of Directors the following items were approved; the company interred into a contract with Roth Capital Partners, LLC and that they be issued 250,000 shares of the Corporation’s restricted common stock as part of the initial engagement fee, that the shares of the Corporation’s restricted common stock be issued to McCallan and Crown as per the prior approvals, and that the Company inter into a contract with Ludlow Capital, Inc. for media consulting service for which they will be issued 200,000 shares of the Corporation’s restricted common stock.

Resignation and appointment of Chief Executive Officer

On October 26, 2015, Mr. Stanley Weiner submitted his resignation as Chief Executive Officer, President and Chairman of the Board of Directors of STW Resources Holding Corp. (the “Company”), as well as resignation as Chief Executive Officer, President and/or any executive positions of any of the subsidiaries of the Company, including STW Water Process & Technologies, LLC (and any of its project oriented special purpose entity limited liability companies) and STW Pipeline Maintenance & Construction, LLC. Mr. Weiner’s resignations from various positions with the Company and its subsidiaries were effective immediately. Mr. Weiner’s resignation did not result from any disagreement regarding any matter related to the Company’s operations, policies or practices. As of the date of this report, Mr. Weiner’s only position with the Company is a member on the Board of Directors of the Company.

On the same day, the Company accepted Mr. Weiner’s resignations and simultaneously appointed Mr. Alan Murphy as the Company’s Chief Executive Officer, President and Chairman of the Board of Directors.

Mr. Murphy is 58 years of age and does not maintain a familial relationship with any of the Company's other officers or directors. Mr. Murphy is currently the President of STW Water Process & Technologies, LLC, one of the Company’s subsidiaries. As a water industry expert, he brings the Company 20+ years of extensive industry experience with various municipal, industrial and commercial water & wastewater treatment facilities in consulting, design, engineering, procurement, operations, management and complete project oversight & construction throughout State of Texas.

-31-

Table of Contents

In the month of August 2015 the Company agreed to act as the intermediary agent to an agreement in which two of the current officers of the Company are selling their share of a related party company Black Pearl Energy, LLC, (BPE), to the third owner and withdrawing from BPE. In addition to the Company acting as an intermediary, it entered into an agreement reconciling payments between the Company and the related party company, for which the Company’s Management does not anticipate it having any financial risk or benefit.

On August 17, 2015, management entered into a short term financing with a lender for $375,000. The note contained a $75,000 (or 20%) original issue discount and a legal fee for $5,000. The note will bear interest at 8%. The lender will be granted 250,000 shares of common stock. The Company received $295,000 from the investor.

On August 21, 2015, the Board of Directors approved an agreement with MDM Worldwide Solutions, Inc. (MDM) to handle investor relations for the Company commencing July 15, 2015 and running for six months. Upon acceptance of the agreement the Company will issue 100,000 shares of common stock to MDM. Fees for the service include a monthly retainer of $20,000.

On September 14, 2015, the Board of Directors authorized management to inter into short term financing with three separate lenders for a total of $598,000, $198,000 from each lender. The notes will bear interest at 5% and contains a 10% original issue discount. The notes will be convertible at $0.65 per common share, or 60% of the lowest daily closing bid price for the 10 day period preceding the conversion. In addition each lender will be granted 225,000 shares of common stock. The Company will reserve 2,566,000 shares of common stock with the transfer agent to facilitate the conversion. To-date we have received $100,000 each from two of the investors.

Since June 30, 2015, there has been two new litigations instituted against the Company.

Dufrane Nuclear Shielding, Inc. Counterclaims. On July 16, 2015, Dufrane Nuclear Shielding, Inc., Dufrane Construction, LLC (collectively “Dufrane”) and Joshua C. Brooks filed a counterclaim against STW and its subsidiaries in Case No. CV-50864, pending in the 238th District Court of Midland County, Texas, styled STW Resources Holding Corp., et al. v. Felipe Sanchez, et al. (the “Dufrane Counterclaims”). Dufrane is suing STW over a $725,000 promissory note and an equipment rental agreement, and Joshua C. Brooks is suing STW alleging he was not released from certain guaranty obligations with equipment providers. STW and its subsidiaries filed a general denial and the parties have been working together on an agreed accounting of payments made and the allocations of those payments, with a view towards settling the Dufrane Counterclaims.

Seaboard International, Inc. Lawsuit. On July 07, 2015, Seaboard International, Inc. (“Seaboard”) filed a lawsuit against STW and Case Drilling and Pump Service, LLC pending in the District Court of the 112th Judicial District in Pecos County, Texas, styled Seaboard International, Inc. v. Case Drilling & Pump, LLC, et al., Cause No. P-11813-112-CV (the “Seaboard Lawsuit”). Seaboard provided water well drilling services as a subcontractor to Case Drilling in the amount alleged to be $80,685.01related to Case Drilling providing drilling services to STW Water Process & Technologies, LLC (a wholly owned subsidiary of STW) for Capitan Reef Test Well No. 1, located in Pecos County, Texas (the “Test Well”). Case Drilling did not pay Seaboard; therefore, Seaboard filed the Seaboard Lawsuit to attempt to foreclose on an alleged statutory lien on STW’s water lease with the City of Fort Stockton, Texas, on which the Test Well was located. Seaboard seeks any monies owed by STW to Case Drilling for the Test Well to be paid to United Drilling. STW has asserted that it had a “turn-key” contract with Case Drilling, which required Case Drilling to deliver a producing water well, which it did not. Accordingly, STW alleges that since it owed nothing to Case Drilling, correspondingly, it owes nothing to Seaboard. In addition to STW filing its Answer and Affirmative Defenses to United Drilling’s claims, it has also filed a counterclaim against Seaboard for wrongfully placing a lien on STW’s Fort Stockton water lease, and STW has cross-claimed Case Drilling for breach of contract and indemnity related to Case Drilling’s alleged failure to pay its subcontractor, Seaboard. The Company will vigorously defend this lawsuit and does not expect significant liability from this matter. Based on the Company counsel’s legal opinions regarding the invalidity of United Drilling’s lien, the Company does not expect to incur any substantial liability from this matter.

Default on Note Payable

On July 24, 2015, the Company defaulted on a note payable in the principal amount of $423,500. The Company had 15 days to cure the default but failed to cure the default within this time frame. The note payable provided for a reserve of 4,000,000 shares of the Company’s common stock as security on the note. Upon the Company’s failure to cure the default the 4,000,000 shares of the Company’s restricted common stock was to be released to the note holder.

-32-

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING INFORMATION

The following information should be read in conjunction with STW Resources Holding Corp. and its subsidiaries ("we", "us", "our", or the “Company”) condensed consolidated unaudited financial statements and the notes thereto contained elsewhere in this report. Information in this Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this Form 10-Q that does not consist of historical facts, are "forward-looking statements." Statements accompanied or qualified by, or containing words such as "may," "will," "should," "believes," "expects," "intends," "plans," "projects," "estimates," "predicts," "potential," "outlook," "forecast," "anticipates," "presume," and "assume" constitute forward-looking statements, and as such, are not a guarantee of future performance.

Forward-looking statements are subject to risks and uncertainties, certain of which are beyond our control. Actual results could differ materially from those anticipated as a result of the factors described in the “Risk Factors” and detailed in our other Securities and Exchange Commission filings. Risks and uncertainties can include, among others, fluctuations in general business cycles and changing economic conditions; changing product demand and industry capacity; increased competition and pricing pressures; and advances in technology that can reduce the demand for the Company's products. Consequently, investors should not place undue reliance on forward-looking statements as predictive of future results.

Because of these risks and uncertainties, the forward-looking events and circumstances discussed in this report or incorporated by reference might not transpire. Factors that cause actual results or conditions to differ from those anticipated by these and other forward-looking statements include those more fully described elsewhere in this report and in the “Risk Factors” section of our annual report on Form 10-K.

The Company disclaims any obligation to update the forward-looking statements in this report.

Overview

The Company was formed for the deployment of multiple water reclamation systems throughout Texas to utilize state of the art water reclamation technologies to reclaim fresh water from highly contaminated oil and gas hydraulic fracture flow-back salt water that is produced by oil and gas operators. The Company, in conjunction with energy producers, operators, various state agencies and legislators, is working to create an efficient and economical solution to this complex problem. The Company is also evaluating the deployment of similar technology in the municipal wastewater industry.

Plan of Operations

Due to our recurring net losses and negative cash flows from operations and negative working capital, substantial doubt exists about our ability to continue as a going concern exists.

For the next twelve months, we plan to focus our operation on providing water reclamation services to oil and gas producers and other commercial ventures in Texas. Water reclamation services include treating brackish water for use in fracking operations, landscaping and other commercial applications and reclaiming produced water. During fiscal 2014 and the quarter ended ~~June~~September 30, 2015, we earned most of our revenue through our subsidiary, STW Pipeline Maintenance & Construction, LLC and while we continue to benefit from our ownership of that entity, we shall continue to focus on successfully implementing our water reclamation services.

~~-33-~~As discussed further in the Liquidity and Capital Resources section herein below, we have limited funds to support our operations. Our continuation as a going concern subsequent to September 30, 2015, is dependent on our ability to obtain additional financing to fund the continued operation of our business model for a long enough period to achieve profitable operations. There can be no assurance, however, that such financing will be available or, if it is available, that we will be able to structure such financing on terms acceptable to us and that it will be sufficient to fund our cash requirements until we can reach a level of profitable operations and positive cash flows. If we are unable to obtain the financing necessary to support our operations, we may be unable to continue as a going concern. We currently have no firm commitments for any additional capital.

-32-

Table of Contents

As discussed further in the Liquidity and Capital Resources section herein below, we have limited funds to support our operations. Our continuation as a going concern subsequent to June 30, 2015, is dependent on our ability to obtain additional financing to fund the continued operation of our business model for a long enough period to achieve profitable operations. There can be no assurance, however, that such financing will be available or, if it is available, that we will be able to structure such financing on terms acceptable to us and that it will be sufficient to fund our cash requirements until we can reach a level of profitable operations and positive cash flows. If we are unable to obtain the financing necessary to support our operations, we may be unable to continue as a going concern. We currently have no firm commitments for any additional capital.

The downturn in the United States stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our shares of common stock or the debt securities may cause us to be subject to restrictive covenants. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek additional financing. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

Three months ended ~~June~~September 30, 2015 Compared to the Three Months Ended ~~June~~September 30, 2014

Our revenue, operating expenses and net loss from operations for the three month period ended ~~June~~September 30, 2015 as compared to the three month period ended ~~June~~September 30, 2014, were as follows – some balances on the prior period’s combined financial statements have been reclassified to conform to the current period presentation:

	Three Months Ended June 30:									% Change Increase
	Three Months Ended September 30:
	2015			2014			Change			~~(Decrease)~~	% Change Increase (Decrease)
NET REVENUES	$	23,~~587~~907,~~460~~570		$	3,~~072~~319,~~743~~283		$	~~(485~~588,~~283~~287	)	~~-15.8~~	%	17.7	%
COSTS OF REVENUES		12,~~717~~775,~~706~~727			32,~~346~~765,~~112~~557			(110,~~628,406~~170	)	~~-48.7~~	%	0.4	%
Gross Profit		~~869~~1,~~754~~131,843			~~(273~~553,~~369~~726	)		1578,~~143,123~~117		~~418.2~~	%	104.4	%
OPERATING EXPENSES:
Research & development		~~1,310~~--			~~56,465~~--			~~(55,155~~--	)	~~-97.7~~	%	0.0	%
Sales and marketing		3950,~~547~~400			~~144~~163,~~335~~547			(~~104~~113,~~788~~147	)	~~-72.6~~	%	-69.2	%
General and administrative		2,~~031~~693,~~969~~622			23,~~655~~205,~~612~~399			(~~623~~511,~~643~~777	)	~~-23.5~~	%	-16.0	%
Depreciation		4148,~~420~~240			925,~~951~~748			3122,~~469~~492		~~316.2~~	%	87.4	%
Total operating expenses		2,~~114~~792,~~246~~262			23,~~866~~394,~~363~~694			(~~752~~602,~~117~~432	)	~~-26.2~~	%	-17.7	%
Loss from operations		(1,~~244~~660,~~492~~419	)		(32,~~139~~840,~~732~~968	)		1,~~895~~180,~~240~~549		~~60.4~~	%	41.6	%
Interest expense		(1833,~~418,157~~126	)		(~~462~~491,~~188~~913	)		(~~955~~341,~~969~~213	)	~~206.8~~	%	69.4	%
Change in derivative liability		1260,~~353,429~~461			(~~456~~834,~~809~~930	)		1,~~810~~095,~~238~~391		~~-396.3~~	%	-131.2	%
Loss from continuing operations		(12,~~309~~233,~~220~~084	)		(4,~~058~~167,~~729~~811	)		21,~~749~~934,~~509~~727		~~-67.7~~	%	-46.4	%
Loss from operations of discontinued entities		(~~329~~10,~~217~~524	)		14(1,~~951~~141,849	)		~~(344~~1,~~168~~131,325	)	~~-2,302.0~~	%	-99.1	%
Loss after discontinued operations		(12,~~638~~243,~~437~~608	)		(45,~~043~~309,~~778~~660	)		23,~~405~~066,~~341~~052		~~-59.5~~	%	-57.7	%
Share of net loss of subsidiary attributable to non-controlling interest		(802,~~347~~615	)		10(135,~~641~~366	)		(90132,~~988~~751	)	~~-855.1~~	%	-98.1	%
Net Loss	$	(12,~~558~~240,~~090~~993	)	$	(45,~~054~~174,~~419~~294	)	$	2,~~496~~933,~~329~~301		~~-61.6~~	%	-56.7	%

Net Revenues: During the three months ended September 30, 2015, we realized $1,063,219 of revenues from our water reclamation business segment and $2,844,351 of revenues from our oil & gas services business segment. During the three months ended September 30, 2014, we realized $162,846 in revenues from our water reclamation business segment and $3,156,437 from our oil & gas services business segment. The increase in total revenues of $588,287 during the three months ended September 30, 2015 as compared to the same period in 2014 was mainly caused by the completion of the Horizon City water reclamation services contract that generated $934,558 in revenues from our water reclamation services business segment.

Cost of Revenues: Total costs of revenues for the three months ended September 30, 2015 had an increase of $10,170. Costs of revenues during the three months ended September 30, 2015 and 2014, are comprised of labor, fringe benefits, equipment rental, and other costs of providing water reclamation and oil & gas services.

Gross Profit: During the three months ended September 30, 2015, we realized a gross profit of $1,131,843 from our water reclamation and oil & gas services business segments compared to a gross profit of $553,726 realized during the three months ended September 30, 2014, an increase of $578,117 or 104.4%. The increased gross profit is attributable to our increased revenue in water reclamation business segment and an improvement in our gross profit margins of our oil & gas business segment during the three months ended September 30, 2015.

-33-

Table of Contents

Sales and marketing expenses: Sales and marketing expenses decreased by $113,146 or 69.2% to $50,400 for the three months ended September 30, 2015 from $163,546 for the three months ended September 30, 2014. The decrease in sales and marketing expenses are attributable to decreased sales expenses of our oil & gas services business segment from the execution of management initiatives to cut costs.

General and Administrative Expense: General and administrative expenses decreased by $511,777 or 16.0% to $2,693,622 for the three months ended September 30, 2015 from $3,205,399 for the three months ended September 30, 2014. Our general and administrative expenses for the three months ended September 30, 2015 consisted of professional fees of $184,512, insurance of $6,719, management fees of $214,311, salaries and wages of $1,422,816, director fees of $130,417, and other general & administrative expenses of $734,847, for a total of $2,693,622. Our general and administrative expenses for the three months ended September 30, 2014 consisted of professional fees of $256,729, insurance of $104,014, penalties of $19,523, salaries & wages of $400,122, management fees of $255,649, director fees of $131,250, and other general & administrative expenses of $2,038,112 for a total of $3,205.399.

The primary reasons for the decrease in General and Administrative Expense during the three months ended September 30, 2015 compared to the corresponding period for 2014 was a combination of a decrease of $19,513 in penalties, a decrease of $41,338 in management fees, a decrease of $72,217 in professional fees, a decrease of $97,295 in insurance, a decrease of $833 in board compensation, an increase of $1,022,694 in salaries & wages, and a net decrease of $1,303,275 in other general & administrative expenses. During the three month periods ended September 30, 2015 and 2014, non-cash stock based compensation expenses relating to consulting and other fees included in general and administrative expenses were $462,221 and $1,331,761, respectively.

Interest Expense: Interest expense increased by $341,213 to $833,126 for the three month period ended September 30, 2015 from $491,913 for the three month period ended September 30, 2014. The increase is due to additional interest expenses incurred on additional debt financing incurred by us since September 30, 2014 and additional loan fees and loan discount amortization incurred in new financings during the three months ended September 30, 2015.

Change in derivative liability: During the three month period ended September 30, 2015, we recorded a $260,461 decrease in the fair value of the derivative liability from June 30, 2015. During the three month period ended September 30, 2014, we recorded a $834,930 increase in the derivative liability from June 30, 2014, a difference of $1,095,391 between the three months ended September 30, 2015 and 2014. The decrease in the derivative liability during the three months ended September 30, 2015 is largely attributable to a decrease in the value of shares from $0.37 at June 30, 2015 to $0.23 at September 30, 2015. The increase in the derivative liability during the three months ended September 30, 2014 is attributable to the reduction of the remaining term of outstanding warrants, offset by the effect of increased share values as of September 30, 2014.

Net Loss from continuing operations: Net loss from continuing operations decreased by $1,934,727, or 46.4%, to a net loss of $2,233,084 for the three month period ended September 30, 2015 from a net loss of $4,167,810 for the three month period ended September 30, 2014. This net loss reflects the increased revenues with improved gross margin, less increased operating expenses and change in derivative liability discussed above.

Non-controlling interest in Net Loss: During the three months ended September 30, 2015 and 2014, we reported $2,615 and $135,366 loss, respectively, as the non-controlling interest in the net loss or income of our STW Energy Services, LLC subsidiary. This non-controlling interest in the net loss represents of a 25% non-controlling interest in the net loss of STW Energy Services, LLC, and a subsidiary company.

Income (loss) from discontinued operations: Loss from discontinued operations decreased by $1,131,325 to a Loss from discontinued operations of $10,524 from $1,141,849 for the three months ended September 30, 2014.

-34-

Table of Contents

~~Net~~Nine ~~Revenues: During the three~~ months ended ~~June~~September 30, 2015, weCompared realized $118,859 of revenues from our water reclamation business segment and $2,468,601 of revenues from our oil & gas services business segment. During the three months ended June 30, 2014, we realized $10,051 in revenues from our water reclamation business segment and $3,062,692 from our oil & gas services business segment. The decrease of $485,283 during the three months ended June 30, 2015 as compared to the ~~same~~Nine ~~period~~Months inEnded ~~2014~~September ~~was mainly caused by a decrease of $594,091 in revenues from our oil & gas services business segment which was discontinued during the three months ended June~~ 30, ~~2015. Despite the overall decrease in net revenues, our revenue from water reclamation business segment increased by $108,808 in the three months ended June 30, 2015 as compared to the same period in~~ 2014 ~~because of our increased operational activities in this business segment as compared to start-up activities during the same period in 2014.~~

~~Cost~~Our ofrevenue, ~~Revenues:~~operating ~~Total~~expenses ~~costs~~and ofnet ~~revenues~~loss from operations for the ~~three~~nine ~~months~~month period ended ~~June~~September 30, 2015 ~~were $1,717,706~~ as compared to ~~$3,346,112 for~~ the ~~three~~nine ~~months~~month period ended ~~June~~September 30, 2014, awere ~~decrease~~as offollows ~~$1,628,406~~– orsome ~~48.7%.~~balances ~~The~~on ~~decrease in costs of revenue is attributable to~~ the ~~costs~~prior ofperiod’s ~~revenues~~combined offinancial ~~discontinued~~statements ~~operations~~have inbeen ~~our~~reclassified ~~oil~~to &conform ~~gas~~to ~~services business segment. Costs of revenues during~~ the ~~three~~current ~~months~~period ~~ended June 30, 2015 and 2014, are comprised of labor, fringe benefits, equipment rental, and other costs of providing water reclamation and oil & gas services.~~presentation:

Gross Profit: During the three months ended June 30, 2015, we realized a gross profit of $869,754 from our water reclamation and oil & gas services business segments compared to a gross loss of $273,369 realized during the three months ended June 30, 2014, an increase of $1,143,123 or 418.2%, which was caused by our increased revenue in water reclamation business segment and an improvement in our gross profit margins during the three months ended June 30, 2015 as we discontinued operations of two of our oil & gas services business units in this period.

	Nine Months Ended September 30:
	2015			2014			Change			% Change Increase (Decrease)
NET REVENUES	$	8,693,437		$	8,522,386		$	171,051		2.0	%
COSTS OF REVENUES		5,780,712			7,873,837			(2,093,125	)	-26.6	%
Gross Profit		2,912,725			648,549			2,264,176		349.1	%
OPERATING EXPENSES:
Research & development		7,435			151,955			(144,520	)	-95.1	%
Sales and marketing		316,260			379,362			(63,102	)	-16.6	%
General and administrative		6,986,042			7,740,510			(754,468	)	-9.7	%
Depreciation		119,548			47,291			72,257		152.8	%
Total operating expenses		7,429,285			8,319,118			(889,833	)	-10.7	%
Loss from operations		(4,516,560	)		(7,670,569	)		3,154,009		41.1	%
Interest expense		(3,428,867	)		(1,353,529	)		(2,075,338	)	-153.3	%
Change in derivative liability		1,887,670			(1,278,466	)		3,166,136		-247.7	%
Loss from continuing operations		(6,057,757	)		(10,302,564	)		4,244,807		-41.2	%
Loss from operations of discontinued entities		(743,913	)		(1,505,616	)		761,703		50.6	%
Loss after discontinued operations		(6,801,670	)		(11,808,180	)		5,006,510		-42.4	%
Share of net loss of subsidiary attributable to non-controlling interest		(163,995	)		(166,294	)		2,299		1.4	%
Net Loss	$	(6,637,675	)	$	(11,641,886	)	$	5,004,211		-43.0	%

~~Research~~Net ~~and~~Revenues: ~~development~~During ~~expenses:~~the ~~Research~~nine ~~and~~months ~~development~~ended ~~expenses~~September ~~decreased~~30, by2015, we realized $551,~~155~~330,989 orfrom ~~97.7%~~our towater reclamation business segment and $17,~~310~~362,448 ~~for~~of revenues from our oil & gas services business segment, including $354 of revenues from a related party. During the ~~three~~nine months ended ~~June~~September 30, ~~2015~~2014, we realized $172,897 in revenues from our water reclamation business segment and $568,~~465~~349,489 ~~for~~from our oil & gas services business segment, including $91,370 of revenues from related parties. The $171,051 net increase in revenues between the ~~three~~nine months ended ~~June~~September 30, 2015 and September 30, 2014 is comprised of a $1,158,092 increase in revenues from our water reclamation business segment, net of a $987,041 decrease in revenues from our oil & gas services business segment. The ~~decrease~~increase in ~~research~~water ~~and~~reclamation ~~development~~revenues ~~expenses~~during the nine months ended September 30, 2015 is attributable tothe ~~our~~completion ~~water~~of ~~reclamation~~the Horizon City contract that realized $934,558 of revenues and increased operational activities in this business segment ~~that~~as ~~was~~compared to start-up activities in ~~development~~this business segment during the three months ended ~~June~~September 30, 2014. ~~and~~The decrease in revenues from our oil & gas services business segment is ~~operational~~attributable to our initiatives to focus on more profitable customer projects during the three months ended ~~June~~September 30, 2015 as compared to the three months ended September 30, 2014.

~~Sales~~Cost ~~and~~of ~~marketing expenses~~Revenues: ~~Sales~~Total ~~and~~costs ~~marketing~~of ~~expenses~~revenues ~~decreased~~for bythe nine months ended September 30, 2015 were $~~104~~5,~~788~~780,712 oras ~~72.6%~~compared to $397,~~547~~873,837 for the ~~three~~nine months ended ~~June~~September 30, ~~2015~~2014, ~~from~~a decrease of $~~144~~2,~~355~~093,125 ~~for~~or 26.6%. The decrease in costs of revenue is attributable to our focus on more profitable customer projects during the ~~three~~nine months ended ~~June~~September 30, 2015 as compared to the nine months ended September 30, 2014. ~~The~~Costs ~~decrease~~of inrevenues ~~sales~~as ~~and~~a ~~marketing~~percentage ~~expenses~~of ~~are~~revenues ~~attributable~~were 66% during the nine months ended September 30, 2015 as compared to ~~decreased~~92% ~~expenses~~during ofthe ~~our~~nine ~~oil~~months &ended ~~gas~~September ~~services~~30, ~~business~~2014. ~~segment~~Costs ~~due~~of torevenues during the ~~business~~three ~~units~~months ~~that~~ended ~~were~~September ~~discontinued~~30, 2015 and 2014, are comprised of labor, fringe benefits, equipment rental, and other costs of providing water reclamation and oil & gas services.

~~General~~Gross ~~and Administrative Expense~~Profit: ~~General~~During ~~and administrative expenses decreased $623,643 or 23.5% to $2,031,969 for~~ the ~~three~~nine months ended ~~June~~September 30, 2015 ~~from $2~~,~~655,612~~ ~~for~~we ~~the~~realized ~~three~~a ~~months~~gross ~~ended~~profit ~~June~~of 30$2,912,725 ~~2014.~~from ~~Our~~our ~~general~~water reclamation and ~~administrative~~oil ~~expenses~~& ~~for~~gas ~~the~~services ~~three~~business ~~months~~segments ~~ended~~compared ~~June~~to ~~30,~~a ~~2015 consisted~~gross ofprofit ~~professional fees~~ of $62648,~~449,~~549 ~~insurance~~realized ofduring ~~$47,836,~~the ~~management~~nine ~~fees~~months ofended ~~$227~~September 30,~~231,~~ ~~salaries and wages of $883~~2014,~~799,~~ ~~penalties~~a ofnet ~~$367,~~increase ~~and~~in ~~director~~gross ~~fees~~profit of $~~112~~2,~~500~~264,176 ~~and~~or ~~other~~349.1%. ~~general~~During &the ~~administrative~~nine ~~expenses~~months ofended ~~$697~~September 30,~~787~~ 2014, ~~for~~our awater ~~total~~reclamation ofbusiness ~~$2,031,969.~~had ~~Our~~recently ~~general~~commenced ~~and~~operations ~~administrative~~but ~~expenses~~had ~~for~~limited ~~the~~revenues. ~~three~~The ~~months~~improvement ~~ended~~in ~~June~~our ~~30,~~gross ~~2014~~profit ~~consisted~~is ofattributable ~~professional~~to ~~fees~~our offocus ~~$171,259,~~on ~~consulting~~more ~~fees~~profitable ofcustomer ~~$3,472,~~projects ~~insurance~~during ofthe ~~$52,034,~~nine ~~penalties~~months ofended ~~$479~~September 30,~~762,~~ ~~salaries~~2015 &that ~~wages~~yielded ofa ~~$608,074,~~gross ~~management~~profit ~~fees~~as ofa ~~$644,252,~~percentage ~~director~~of ~~fees~~revenues of ~~$168,750,~~34% ~~and~~as ~~other~~compared ~~general~~8% &during ~~administrative~~the ~~expenses~~nine ofmonths ~~$528,009~~ended ~~for~~September ~~a total of $2~~30,~~655,612~~ 2014.

The primary reasons for the decrease in General and Administrative Expense during the three months ended June 30, 2015 compared to the corresponding period for 2014 was a combination of a decrease of $479,395 in penalties, a decrease of $417,023 in management fees, a decrease of $108,810 in professional fees, and an increase of $381,584 in other general & administrative expenses. During the three month periods ended June 30, 2015 and 2014, non-cash stock based compensation expenses relating to consulting and other fees included in general and administrative expenses were $462,221 and $1,331,761, respectively.

-35-

Table of Contents

~~Interest~~Research ~~Expense~~and development expenses: ~~Interest~~Research ~~expense~~and ~~increased~~development expenses decreased by $~~955~~144,~~069~~520 or 95.1% to $17,~~418,157~~435 for the ~~three~~nine ~~month~~months ~~period~~ ended ~~June~~September 30, 2015 from $~~462~~151,~~188~~955 for the ~~three~~nine ~~month~~months ~~period~~ ended ~~June~~September 30, 2014. The ~~increase~~decrease isin ~~due~~research toand ~~additional~~development ~~interest~~ expenses ~~incurred~~is onattributable ~~additional~~to ~~debt~~our ~~financing~~water ~~incurred~~reclamation bybusiness ussegment ~~since~~that ~~June~~was ~~30,~~in ~~2014~~development ~~and~~during ~~additional~~the ~~loan~~nine ~~fees~~months ~~and~~ended ~~loan~~September ~~discount~~30, ~~amortization~~2014 ~~incurred~~and inis ~~new~~fully ~~financings~~operational during the ~~three~~nine months ended ~~June~~September 30, 2015.

~~Change~~Sales inand ~~derivative~~marketing ~~liability~~expenses: ~~During~~Sales ~~the~~and ~~three~~marketing ~~month~~expenses ~~period~~decreased ~~ended~~by ~~June 30~~$63,102 ~~2015,~~or we16.6% ~~recorded~~to a $1316,~~353,429~~260 ~~decrease~~for in the ~~fair~~nine ~~value~~months ~~of the derivative liability from March 31, 2015. During the three month period~~ ended ~~June~~September 30, ~~2014,~~2015 ~~we recorded a $456,809 increase in the derivative liability~~ from ~~March 31, 2014, a difference of~~ $1379,~~810,238~~362 ~~between~~for the ~~three~~nine months ended ~~June~~September 30, ~~2015 and~~ 2014. The ~~increase~~ ~~in the derivative liability during the three months ended June 30, 2015 is attributable to an a $1,353,429~~ decrease in ~~the~~sales ~~value~~and ofmarketing ~~the~~expenses ~~derivative~~are ~~liability as of June 30, 2015, which is largely~~ attributable to adecreased ~~decrease~~revenues ~~in the value of shares~~ from ~~$0.82~~our atoil ~~March~~& ~~31,~~gas ~~2015~~business tosegment ~~$0.37~~which atreduced ~~June~~sales ~~30,~~related ~~2015~~expenses. The increase in the derivative liability during the three months ended June 30, 2014 is attributable to the reduction of the remaining term of outstanding warrants, offset by the effect of increased share values as of June 30, 2014.

~~Net~~General ~~Loss~~and ~~from~~Administrative ~~continuing operations~~Expense: ~~Net~~General ~~loss~~and ~~from~~administrative ~~continuing~~expenses ~~operations~~ decreased by $2754,~~749,509,~~468 or 679.7%, to a$6,986,042 ~~net~~for ~~loss~~the ofnine months ended September 30, 2015 from $17,~~309~~740,~~220~~510 for the ~~three~~nine ~~month~~months ~~period~~ended September 30, 2014. Our general and administrative expenses for the nine months ended ~~June~~September 30, 2015 consisted ~~from~~professional afees ~~net~~of ~~loss~~$491,199, insurance of $4131,~~058~~372,~~729~~ management fees of $598,136, salaries and wages of $3,489,749, penalties of $377, and board of director fees of $355,417, and other general & administrative expenses of $1,919,792, for ~~the~~a ~~three~~total ~~month~~of ~~period~~$6,986,042. Our general and administrative expenses for the nine months ended ~~June~~September 30, 2014. consisted ~~This~~professional ~~net~~fees ~~loss~~of ~~reflects~~$565,332, ~~the~~consulting ~~increased~~fees ~~revenues~~of ~~with~~$179,154, ~~improved~~insurance ~~gross~~of ~~margin~~$186,841, ~~less~~penalties ~~increased~~of ~~operating~~$826,522, ~~expenses~~salaries & wages of $1,197,105, management fees of $1,247,752, board of director fees of $468,750, and ~~change~~other ingeneral ~~derivative~~& ~~liability~~administrative ~~discussed~~expenses ~~above~~of $3,069,054 for a total of $7,740,510.

~~Non-controlling~~The ~~interest~~primary inreasons ~~Net~~for ~~Loss:~~the ~~During~~decrease in comparing the ~~three~~nine months ended ~~June~~September 30, 2015 ~~and~~to the corresponding period for 2014, wewas ~~reported~~due largely to an $80826,~~347~~522 ~~loss~~decrease ~~and~~in penalties, $10649,~~641~~616 ~~income~~decrease in management fees, ~~respectively~~$179,054 asdecrease ~~the~~in ~~non-controlling~~consulting ~~interest~~fees, offset by a $2,292,694 increase in ~~the~~salaries ~~net~~& ~~loss~~wages orand ~~income~~a net of ~~our~~$1,391,970 ~~STW~~decrease ~~Energy~~in ~~Services,~~other ~~LLC~~general ~~subsidiary~~& administrative expenses. ~~This~~During ~~non-controlling~~the ~~interest~~three inmonth ~~the~~periods ~~net~~ended ~~loss~~September ~~represents~~30, of2015 aand ~~25%~~2014, non-~~controlling~~cash ~~interest~~stock inbased ~~the~~compensation ~~net~~expenses ~~loss~~relating ofto ~~STW~~consulting ~~Energy~~and ~~Services,~~other ~~LLC,~~fees included in general and aadministrative ~~subsidiary~~expenses ~~company~~were $3,365,450 and $1,655,444, respectively.

~~Income~~Interest ~~(loss) from discontinued operations~~Expense: ~~Loss~~Interest ~~from~~expense ~~discontinued operations~~ increased by $~~344~~2,~~168~~075,338 to a$3,428,867 ~~Loss~~for ~~from~~the ~~discontinued~~nine ~~operations~~month ofperiod ~~$329,217~~ended ~~from~~September a30, ~~profit~~2015 offrom $141,~~951~~353,529 for the ~~three~~nine ~~months~~month period ended ~~June~~September 30, 2014. The increase is due to additional interest expenses incurred on additional debt financing incurred by us since September 30, 2014 and additional loan fees and loan discount amortization incurred in new financings during the nine months ended September 30, 2015.

~~Six~~Change in derivative liability: During the nine month period ended September 30, 2015, we recorded a $1,887,670 decrease in the fair value of the derivative liability from January 1, 2015. During the nine month period ended September 30, 2014, we recorded a $1,278,466 increase in the derivative liability from January 1, 2015, a net difference of $3,166,136 between the nine months ended ~~June~~September 30, 2015 ~~Compared~~and 2014. The increase in the derivative liability during the nine months ended September 30, 2015 is attributable to an increase of $1,108,030 related to the ~~Six~~conversion ~~Months~~feature ~~Ended~~of ~~June~~short term notes, reduced by a $1,887,669 decrease in the value of the derivative liability as of September 30, 2015, which is largely attributable to a decrease in the value of shares from $0.84 at December 31, 2014 to $0.23 at September 30, 2015. The increase in the derivative liability during the nine months ended September 30, 2014 is attributable to the reduction of the remaining term of outstanding warrants, offset by the effect of increased share values as of September 30, 2014.

~~Our~~Non-controlling ~~revenue,~~interest ~~operating~~in ~~expenses~~Net ~~and~~Loss: ~~net~~During ~~loss~~the ~~from~~nine ~~operations~~months ~~for~~ended ~~the~~September ~~six~~30, ~~month~~2015 ~~period~~and ~~ended~~2014, ~~June~~we 30reported net losses of $163,995 ~~2015~~and $166,294, respectively, as ~~compared~~the tonon-controlling interest in the ~~six~~net ~~month~~loss ~~period~~of ~~ended~~our ~~June~~STW ~~30,~~Energy ~~2014~~Services, ~~were~~LLC assubsidiary. ~~follows~~This –non-controlling ~~some~~interest ~~balances~~in on the ~~prior~~net ~~period’s~~loss ~~combined~~represents ~~financial~~of ~~statements~~a ~~have~~25% ~~been~~non-controlling ~~reclassified~~interest toin ~~conform~~the tonet ~~the~~loss ~~current~~of ~~period~~STW ~~presentation:~~Energy Services, LLC, and a subsidiary company.

	Six Months Ended June 30:									% Change Increase
	2015			2014			Change			(Decrease)
NET REVENUES	$	4,785,867		$	5,203,102		$	(417,235	)	-8.0	%
COSTS OF REVENUES		3,004,985			5,108,280			(2,103,295	)	-41.2	%
Gross Profit		1,780,882			94,822			1,686,060		1778.1	%
OPERATING EXPENSES:
Research & development		7,435			151,955			(144,520	)	-95.1	%
Sales and marketing		265,860			215,816			50,044		23.2	%
General and administrative		4,292,420			4,535,110			(242,690	)	-5.4	%
Depreciation		71,308			21,543			49,765		231.0	%
Total operating expenses		4,637,023			4,924,424			(287,401	)	-5.8	%
Loss from operations		(2,856,141	)		(4,829,602	)		1,973,461		40.9	%
Interest expense		(2,595,741	)		(861,616	)		(1,734,125	)	201.3	%
Change in derivative liability		1,627,209			(443,536	)		2,070,745		-466.9	%
Loss from continuing operations		(3,824,673	)		(6,134,754	)		2,310,081		-37.7	%
Loss from operations of discontinued entities		(733,389	)		(363,767	)		(369,622	)	-101.6	%
Loss after discontinued operations		(4,558,062	)		(6,498,521	)		1,940,459		-29.9	%
Share of net loss of subsidiary attributable to non-controlling interest		(161,380	)		(30,928	)		(130,452	)	-421.8	%
Net Loss	$	(4,396,682	)	$	(6,467,593	)	$	2,070,911		-32.0	%

Net Loss from continuing operations: Net loss from continuing operations decreased by $4,244,807, or 41.2%, to a net loss of $6,057,757 for the nine month period ended September 30, 2015 from a net loss of $10,302,563 for the nine month period ended September 30, 2014. This net loss reflects the increased revenues with improved gross margin, less increased operating expenses and change in derivative liability discussed above.

Net loss from discontinued operations: Net loss from discontinued operations decreased by $761,703 to a net loss of $743,913 from a net loss of $1,505,616 for the nine months ended September 30, 2014.

-36-

Table of Contents

Net Revenues: During the six months ended June 30, 2015, we realized $267,770 from our water reclamation business segment and $4,518,097 of revenues from our oil & gas services business segment, including $354 of revenues from a related party. During the six months ended June 30, 2014, we realized $10,051 in revenues from our water reclamation business segment and $5,193,051 from our oil & gas services business segment, including $35,138 of revenues from related parties. The $417,235 net decrease in revenues between the six months ended June 30, 2015 and June 30, 2014 is comprised of a $257,719 increase in revenues from our water reclamation business segment, net of a $674,954 decrease in revenues from our oil & gas services business segment. The increase in water reclamation revenues during the six months ended June 30, 2015 is attributable in increased operational activities in this business segment as compared to start-up activities in this business segment during the three months ended June 30, 2014. The decrease in revenues from our oil & gas services business segment is attributable to our discontinued operations during the three months ended June 30, 2015 as compared to the three months ended June 30, 2014.

Cost of Revenues: Total costs of revenues for the six months ended June 30, 2015 were $3,004,985 as compared to $5,108,280 for the six months ended June 30, 2014, a decrease of $2,103,295 or 41.2%. The decrease in costs of revenue is attributable to the costs of revenues of discontinued operations in our oil & gas services business segment. Costs of revenues during the three months ended June 30, 2015 and 2014, are comprised of labor, fringe benefits, equipment rental, and other costs of providing water reclamation and oil & gas services.

Gross Profit: During the six months ended June 30, 2015, we realized a gross profit of $1,780,882 from our water reclamation and oil & gas services business segments compared to a gross profit of $94,822 realized during the six months ended June 30, 2014, a net increase in gross profit of $1,686,060 or 1778.1%. During the six months ended June 30, 2014, our water reclamation business had recently commenced operations but had limited revenues. During the six months ended June 30, 2015, we discontinued operations of two of our oil & gas services business units which resulted in an improvement in our gross profit margins during the three months ended June 30, 2015.

Research and development expenses: Research and development expenses decreased by $144,520 or 95.1% to $7,435 for the six months ended June 30, 2015 from $151,955 for the six months ended June 30, 2014. The decrease in research and development expenses is attributable to our water reclamation business segment that was in development during the six months ended June 30, 2014 and is fully operational during the six months ended June 30, 2015.

Sales and marketing expenses: Sales and marketing expenses increased by $50,044 or 23.2% to $265,860 for the six months ended June 30, 2015 from $215,816 for the six months ended June 30, 2014. The increase in sales and marketing expenses are attributable to increased expenses of our water reclamation services business segment that has experienced rapid sales growth during the six months ended June 30, 2015.

General and Administrative Expense: General and administrative expenses decreased $242,690 or 5.4% to $4,292,420 for the six months ended June 30, 2015 from $4,535,110 for the six months ended June 30, 2014. Our general and administrative expenses for the six months ended June 30, 2015 consisted professional fees of $306,687, insurance of $124,653, management fees of $383,825, salaries and wages of $2,066,933, penalties of $367, and board of director fees of $225,000, and other general & administrative expenses of $1,184,955, for a total of $4,292,420. Our general and administrative expenses for the six months ended June 30, 2014 consisted professional fees of $308,603, consulting fees of $179,154, insurance of $82,827, penalties of $806,999, salaries & wages of $796,983, management fees of $992,102, board of director fees of $337,500, and other general & administrative expenses of $1,030,942 for a total of $4,535,110.

The primary reasons for the decrease in comparing the six months ended June 30, 2015 to the corresponding period for 2014 was due largely to an $806,632 decrease in penalties, $608,278 decrease in management fees, $179,054 decrease in consulting fees, offset by a $1,269,950 increase in salaries & wages and a net of $81,322 increase in other general & administrative expenses. During the three month periods ended June 30, 2015 and 2014, non-cash stock based compensation expenses relating to consulting and other fees included in general and administrative expenses were 3,365,450 and $1,655,444, respectively.

-37-

Table of Contents

Interest Expense: Interest expense increased by $1,734,125 to $2,595,741 for the six month period ended June 30, 2015 from $861,616 for the six month period ended June 30, 2014. The increase is due to additional interest expenses incurred on additional debt financing incurred by us since June 30, 2014 and additional loan fees and loan discount amortization incurred in new financings during the six months ended June 30, 2015.

Change in derivative liability: During the six month period ended June 30, 2015, we recorded a $1,627,209 decrease in the fair value of the derivative liability from January 1, 2015. During the six month period ended June 30, 2014, we recorded a $443,536 increase in the derivative liability from January 1, 2015, a net difference of $2,070,745 between the six months ended June 30, 2015 and 2014. The increase in the derivative liability during the six months ended June 30, 2015 is attributable to an increase of $1,108,030 related to the conversion feature of short term notes, reduced by a $1,627,209 decrease in the value of the derivative liability as of June 30, 2015, which is largely attributable to a decrease in the value of shares from $0.84 at December 31, 2014 to $0.37 at June 30, 2015. The increase in the derivative liability during the six months ended June 30, 2014 is attributable to the reduction of the remaining term of outstanding warrants, offset by the effect of increased share values as of June 30, 2014.

Non-controlling interest in Net Loss: During the six months ended June 30, 2015 and 2014, we reported net losses of $161,380 and $30,928, respectively, as the non-controlling interest in the net loss of our STW Energy Services, LLC subsidiary. This non-controlling interest in the net loss represents of a 25% non-controlling interest in the net loss of STW Energy Services, LLC, and a subsidiary company.

Net Loss from continuing operations: Net loss from continuing operations decreased by $2,310,081, or 37.7%, to a net loss of $3,824,673 for the six month period ended June 30, 2015 from a net loss of $6,134,754 for the six month period ended June 30, 2014. This net loss reflects the increased revenues with improved gross margin, less increased operating expenses and change in derivative liability discussed above.

Net loss from discontinued operations: Net loss from discontinued operations increased by $369,622 to a net loss of $733,389 from a net loss of $363,767 for the six months ended June 30, 2014.

Liquidity, Capital Resources, and Management Plans

Our condensed consolidated financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As presented in the consolidated financial statements, we incurred a net loss of $46,~~558~~637,~~062~~675 during the ~~six~~nine months ended ~~June~~September 30, 2015, and losses are expected to continue in the near term. The accumulated deficit since inception was $4345,~~508~~749,~~853~~846 at ~~June~~September 30, 2015 (Refer to Note 7 for our discussion of stockholder deficit.) We have been funding our operations through private loans and the sale of common stock in private placement transactions. (Refer to Note 4 and Note 7 in the condensed consolidated financial statements for our discussion of notes payable and shares issued, respectively.) Our cash resources are insufficient to meet our planned business objectives without additional financing. These and other factors raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of our company to continue as a going concern.

Management anticipates that significant additional expenditures will be necessary to develop and expand our oil & gas services and water reclamation services business units before significant positive operating cash flows can be achieved. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to ultimately achieve sustainable revenues and profitable operations. At ~~June~~September 30, 2015, we had ~~$28,030~~no of cash on hand. These funds are insufficient to complete our business plan and as a consequence, we will need to seek additional funds, primarily through the issuance of debt or equity securities for cash to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stock holders, in case or equity financing.

-38-

Table of Contents

Management has undertaken steps as part of a plan to improve operations with the goal of sustaining our operations for the next twelve months and beyond. These steps include (a) raising additional capital and/or obtaining financing; (b) executing contracts with oil and gas operators and municipal utility districts; and (c) controlling overhead and expenses. There can be no assurance that the Company can successfully accomplish these steps and it is uncertain that the Company will achieve a profitable level of operations and obtain additional financing. There can be no assurance that any additional financing will be available to the Company on satisfactory terms and conditions, if at all. As of the date of this Report, we have not entered into any formal agreements regarding the above.

In the event the Company is unable to continue as a going concern, the Company may elect or be required to seek protection from its creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence.

Cash, total current assets, total assets, total current liabilities and total liabilities as of ~~June~~September 30, 2015 as compared to December 31, 2014, were as follows:

	June 30, 2015		December 31, 2014
	September 30, 2015		December 31, 2014
Cash	$	~~28,030~~--	$	137,524
Total current assets	$	53,~~175~~491,~~861~~473	$	5,527,039
Total assets	$	64,~~173~~440,~~489~~859	$	6,730,121
Total current liabilities	$	2423,~~028~~647,~~913~~219	$	25,524,941
Total liabilities	$	2526,~~896~~263,~~592~~501	$	27,618,158

At ~~June~~September 30, 2015, we had a working capital deficit of $1820,~~853~~155,~~052~~746 compared to a working capital deficit of $19,997,902 at December 31, 2014. Current liabilities decreased to $2423,~~028~~647,~~913~~219 at ~~June~~September 30, 2015 from $25,524,941 at December 31, 2014, primarily as a result of ~~our~~the ~~derivative~~completion ~~liability~~of a large job and moving the ‘Deferred Revenue’ to 'Sales’.

Our operating activities used net cash of $785,086 for the six months ended June 30, 2015 compared to net cash used in operations of $1,566,486 for the six months ended June 30, 2014. The net cash used in operations for the six months ended June 30, 2015, reflects a net loss of $4,558,062, decreased by $1,876,784 in non-cash charges and by $1,8 96,192 net increase in the working capital accounts. The net cash used in operations for the six months ended June 30, 2014 reflects a net loss of $6,498,5821, decreased by $2,044,984 in non37-~~cash charges and by $2,856,123 increase in the working capital accounts.~~

Our investing activities used cash of $170,035 and $107,431 for the six months ended June 30, 2015 and June 30, 2014, respectively. Our investing activities for the six months ended June 30, 2015 and 2014 are attributable to purchases of equipment, net of related equipment loans.

-39-

Table of Contents

Our operating activities from continuing operations ~~used~~provided net cash of $37804,~~650~~676 for the ~~six~~nine months ended ~~June~~September 30, 2015 compared to net cash used in continuing operations of $13,~~372~~120,~~3266~~459 for the ~~six~~nine months ended ~~June~~September 30, 2014. The net cash ~~used~~from in continuing operations for the ~~six~~nine months ended ~~June~~September 30, 2015, reflects a net loss of $36,~~824~~057,~~673~~757, decreased by $13,~~876~~132,~~784~~792 in non-cash charges and by $13,~~910~~729,~~239~~641 net ~~increase~~decrease in the working capital accounts. The net cash used in continuing operations for the ~~six~~nine months ended ~~June~~September 30, 2014 reflects a net loss of $610,~~134~~302,~~754~~563, decreased by $14,~~981~~719,~~055~~879 in non-cash charges and by $2,~~781~~462,~~374~~226 ~~increase~~net decrease in the working capital accounts.

Our investing activities from continuing operations used cash of $170,035 and $~~107~~470,~~431~~689 for the ~~six~~nine months ended ~~June~~September 30, 2015 and ~~June~~September 30, 2014, respectively. Our investing activities from continuing operations for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014 are attributable to purchases of equipment, net of related equipment loans.

Our financing activities from continuing operations provided cash of $1731,~~572,183~~664 for the ~~six~~nine months ended ~~June~~September 30, 2015, which is comprised of ~~bank~~book overdraft of $~~609~~671,~~611~~037, proceeds of stock subscriptions of $100,000, decrease of $7,980 in related party receivables, repayment of $~~631~~755,~~537~~688 of related party payables, decrease in insurance premium finance contract of $~~121~~22,~~927~~227, proceeds of $2,~~219~~629,000 from notes payable, the repayment of $~~631~~1,~~538~~752,439 of notes payable, and debt issuance costs of $~~131~~146,000. Our financing activities from continuing operations resulted in cash inflow of $23,~~333~~171,~~763~~781 for the ~~six~~nine months ended ~~June~~September 30, 2014, which is represented by $~~8,211~~0 of book overdraft, increase of ~~stock~~$14,236 ~~subscriptions~~in ~~payable~~related ofparty ~~$540~~receivables,~~000,~~ a net increase in related party accounts payable of $1,~~168~~435,~~508~~494, increase in the insurance premium financing of $~~526~~362,~~462~~256, the repayment of $95197,~~496~~369 of notes payable, proceeds from notes payable of $80364,~~000~~137, and proceeds from the issuance of common stock of $~~122~~1,221,500.

Our operating activities from discontinued operations used net cash of $1,~~421~~431,~~298~~820 for the ~~six~~nine months ended ~~June~~September 30, 2015 compared to net cash ~~used~~provided inby ~~discontinue~~discontinued operations of $~~194~~802,~~160~~583 for the ~~six~~nine months ended ~~June~~September 30, 2014. The net cash used in discontinued operations for the ~~six~~nine months ended ~~June~~September 30, 2015, reflects a net loss of $~~733~~743,~~389~~913, decreased by $133,490 in non-cash charges and by $821,~~399~~397 net decrease in the working capital accounts. The net cash used in discontinued operations for the ~~six~~nine months ended ~~June~~September 30, 2014 reflects a net loss of $~~363~~1,~~767~~505,616, decreased by $94174,~~857~~850 in non-cash charges and by $742,~~750~~133,349 increase in the working capital accounts.

Our financing activities from discontinued operations used cash of $5272,~~694~~009 and $74,753 for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, respectively, which isare comprised of the repayment of ~~$52,694 of~~ notes payable.

-40-

Table of Contents

Our financing activities provided cash of $845,627 for the six months ended June 30, 2015, which is comprised of proceeds of stock subscriptions of $100,000, decrease of $7,980 in related party receivables, repayment of $631,537 of related party payables, insurance premium finance contract of $121,927, proceeds of $2,219,000 from notes payable, the repayment of $740,743 of notes payable, and debt issuance costs of $131,000. Our financing activities resulted in cash inflow of $2,333,763 for the six months ended June 30, 2014, which is represented by $8,211 of book overdraft, increase of stock subscriptions payable of $540,000, a net increase in related party accounts payable of $1,168,508, increase in the insurance premium financing of $526,462, the repayment of $95,496 of notes payable, proceeds from notes payable of $80,000, and proceeds from the issuance of common stock of $122,500.

Credit Facility

On March 19, 2014, we entered into a Line of Credit Agreement (the "Credit Agreement") with Black Pearl Energy, LLC ("Black Pearl"), an entity controlled by Stan Weiner and Lee Maddox, the Company’s former Chief Executive Officer and former Chief Operating Officer, respectively, and one of our directors: Grant Seabolt. Pursuant to the Credit Agreement, Black Pearl issued us a $2,000,000 line of credit, approximately $1,010,000 of which has already been advanced to us; the credit was issued in the form of a promissory note (the "Note"). We were to pay back all advanced funds on or before August 1, 2014, although such date would be extended to September 30, 2014 if we dodid not receive gross proceeds of no less than $6,000,000 resulting from either or both of: (a) the consummation of one or more private placements of debt or equity securities, not including the funds received pursuant to the Credit Agreement; or (b) the filing of a registration statement on Form S-1 with the Securities and Exchange Commission (“ SEC ”) for a public offering of our securities. Interest accrues at 11% per annum. To further induce Black Pearl to issue us the line of credit, we agreed to issue them 250,000 restricted shares of our common stock (after which, Black Pearl will own 250,000 (1%) of our common stock) and a $25,000 transaction fee to be paid on the final closing date of the credit line. In the first quarter of 2015 all of this debt was rolled into a related party note.

On February 26, 2015, we negotiated an extension on the note payable to Black Pearl Energy, a Related Party, and established the balance at $1,079,944 plus $105,363 in interest due. The note is to be paid on a monthly basis of $12,000 per month for 48 months and a balloon payment in February of 2019. On March 5, 2015, the note was revised to consolidate the receivables and the payable and net the note down to $805,863 and reduce the interest due to approximately $67,000.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

-38-

Table of Contents

Critical Accounting Policies and Estimates

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2014, for disclosures regarding the Company's critical accounting policies and estimates, as well as updates further disclosed in our interim financial statements as described in this Form 10-Q.

-41-

Table of Contents

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of our fiscal quarter ended ~~June~~September 30, 2015, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon those evaluations, management concluded that our disclosure controls and procedures were not effective as of ~~June~~September 30, 2015, to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Going forward from this filing, the Company intends to work on re-establishing and maintaining disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

During the quarter covered by this Report, there were no changes in our internal control over financial reporting that ~~has~~have materially affected, or isare reasonably likely to materially affect, the registrant's internal control over financial reporting. No remediation has been made in this quarter.

-39-

Table of Contents

Part II – Other Information

Item 1. Legal Proceedings

From time to time, the Company may become a party to litigation or other legal proceedings that it considers to be a part of the ordinary course of its business. The Company is involved currently in legal proceedings described below that could reasonably be expected to have a material adverse effect on its business, prospects, financial condition or results of operations. The Company may become involved in other material legal proceedings in the future.

GE Ionics, Inc. Lawsuit. On May 22, 2013, GE Ionics, Inc. ("GE") filed a lawsuit against STW in the Supreme Court of the State of New York, County of New York, Index No. 651832/2013 (the “"GE Lawsuit”"). Although the lawsuit arises out of STW’'s obligations to GE under its Settlement Agreement with GE ~~(described~~entered ~~more~~into ~~fully~~on inAugust ~~Item 3~~31, ~~GE Ionics Settlement Agreement)~~2010, upon which STW owed GE $2.1 million plus interest,. GE ~~has~~ elected to forgo suit on the settlement amount and ~~sue~~sued STW for the original debt of $11,239,437, plus interest and attorneys’' fees (the “"Original Debt”"). ~~As such,~~ STW filed its Answer ~~and~~asserting ~~asserted~~ that it is entitled to and shall pursue all of its available legal and equitable defenses to the Original Debt, inasmuch as GE ~~has~~had, among other things, failed to discount the Original Debt sued upon by the amounts that it recovered through re-use and re-sale of the equipment it fabricated for STW. Management has not accrued the original amount of the debt because Management has determined the probability of recovery is remote. The lawsuit is currently in the discovery phase of litigation and the parties are actively exploring settlement.

~~-42-~~Sichenzia and Ross Lawsuit. On June 13, 2014, Sichenzia Ross Friedman Ference LLP filed a lawsuit against the Company in the Supreme Court of New York, County of New York, Index No. 155843/2013, seeking $80,036.22 in legal fees and expenses from the Company. The legal fees and expenses related to Sichenzia Ross’ representation of the Company on SEC matters. On October 8, 2014, the Parties entered into a Settlement Agreement whereby the Company agreed to pay Sichenzia Ross $80,036.22 on or before November 28, 2014 or within three business days of the Company closing its current round of financing. The agreement to pay was secured by the Company providing Sichenzia Ross an “Affidavit of Judgment by Confession” in the amount of $80,036.22 to be filed only if the Company failed to pay the $80,036.22 by the due date, plus a five day cure period ending on December 03, 2014. On December 10, 2014, Sichenzia Ross filed the Judgment by Confession with the Court. The Judgment remains unsatisfied.

Table of Contents

Viewpoint Securities, LLC Arbitration. On or about July 9, 2012, the Company and Stan Weiner, the Company's chief executive officer, received a demand for arbitration with the American Arbitration Association. The demand was filed by Viewpoint Securities LLC ("VP") who entered into an engagement agreement, dated March 9, 2008 (as amended on March 9, 2008, November 10, 2008, January 1, 2009, February 5, 2010, and December 1, 2010), with STW whereby the Company retained VP to act as its financial and capital markets advisor regarding equity and debt introduced by VP to the Company. The demand alleged breach of contract, breach of the covenant of good faith and fair dealings, negligence prayer for commissions and expenses incurred by VP in its efforts to provide introductions and attempt to provide financing to the Company from March 9, 2008 through February 2, 2012, the date of termination of the Agreement. VP seeks, among other things, $216,217 and a warrant to purchase 566,667 shares of the Company's common stock, payment of a $15,000 promissory note plus 3+ years of interest at 12%, attorneys' fees of $18,000.00 and costs of arbitration for filing fees and hearing fees. The Company believed it had valid defenses and contested these claims vigorously. On August 18, 2012, VP dismissed Stan Weiner from the claim with prejudice. A final arbitration hearing was held on February 3, 2014. On April 1, 2014, the Arbitrator issued an Award in favor of Viewpoint for $196,727.77 on Viewpoint's claim for $216,217 in fees and expenses, plus $5,541.46 in arbitration hearing fees and expenses; interest shall accrue at the rate of 10% per annum on any unpaid portion of the award commending April 1, 2014. The Arbitrator denied Viewpoint's claims related to the Company's warrants, a $15,000 promissory note plus 12% interest and for $18,000 in attorneys' fees. The Award was final on April 01, 2014, and on October 28, 2014, Viewpoint filed a lawsuit in San Diego County, California Superior Court seeking to enforce its Arbitration Award in Case No. 37-~~2014~~40-00036027-CU-PA-CTL. On December 08, 2014, the Company filed a Motion to Dismiss the enforcement action due to Viewpoint having forfeited its corporate rights in California due to non-payment of California corporate taxes, and that motion is still pending before the Court. Subsequent to June 30, 2015, on July 07, 2015, STW and Viewpoint signed a “Payment and Standstill Agreement, wherein the parties agreed that the total Arbitration Award with interest totaled $228,170.92, that Viewpoint would not seek post Award attorneys’ fees from STW, and that so long as STW made bi-weekly payments of $2,000.00, beginning on July 10, 2015, Viewpoint would stay any efforts to collect on the Arbitration Award, and when fully paid, would fully release STW from the Arbitration Award.

-43-

Table of Contents

~~United~~Viewpoint ~~Drilling~~Securities, ~~Inc.~~LLC ~~Lawsuit~~Arbitration. On ~~May~~or 06about July 9, ~~2015~~2012, ~~United~~the ~~Drilling~~Company and Stan Weiner, ~~Inc~~the Company's chief executive officer, received a demand for arbitration with the American Arbitration Association. ~~(“United~~The ~~Drilling”)~~demand was filed aby ~~lawsuit~~Viewpoint ~~against~~Securities ~~STW~~LLC ~~and~~("VP") ~~Case~~who ~~Drilling~~entered ~~and~~into ~~Pump~~an ~~Service~~engagement agreement, ~~LLC~~dated ~~pending~~March in9, ~~the~~2008 ~~District~~(as ~~Court~~amended ofon ~~the~~March ~~83rd~~9, ~~Judicial~~2008, ~~District~~November in10, ~~Pecos~~2008, ~~County~~January 1, ~~Texas~~2009, ~~styled~~February ~~United~~5, ~~Drilling~~2010, ~~Inc.~~and v.December 1, 2010), with STW ~~Resources~~whereby ~~Holding~~the ~~Corp.~~Company etretained ~~al.,~~VP ~~Cause~~to Noact as its financial and capital markets advisor regarding equity and debt introduced by VP to the Company. ~~P-7405-83-CV~~The (demand alleged breach of contract, breach of the ~~“United~~covenant ~~Lawsuit”).~~of ~~United~~good ~~Drilling~~faith ~~provided~~and ~~water~~fair ~~well~~dealings, ~~drilling~~negligence ~~services~~prayer asfor acommissions ~~subcontractor~~and toexpenses ~~Case~~incurred ~~Drilling~~by VP in ~~the~~its ~~amount~~efforts ~~alleged~~to provide introductions and attempt to beprovide $1financing to the Company from March 9,~~577~~ 2008 through February 2,~~883~~ 2012, the date of termination of the Agreement.33 ~~related~~VP toseeks, ~~Case~~among ~~Drilling~~other ~~providing~~things, ~~drilling~~$216,217 ~~services~~and a warrant to ~~STW~~purchase ~~Water~~566,667 ~~Process~~shares &of ~~Technologies~~the Company's common stock, ~~LLC~~payment (of a ~~wholly~~$15,000 ~~owned~~promissory ~~subsidiary~~note plus 3+ years of ~~STW)~~interest at 12%, attorneys' fees of $18,000 and costs of arbitration for ~~Capitan~~filing ~~Reef~~fees ~~Test~~and ~~Well~~hearing Nofees. 1,The ~~located~~Company inbelieved ~~Pecos~~it ~~County~~had valid defenses and contested these claims vigorously. On August 18, ~~Texas~~2012, (VP dismissed Stan Weiner from the ~~“Test~~claim ~~Well”)~~with prejudice. ~~Case~~A ~~Drilling~~final ~~did~~arbitration ~~not~~hearing ~~pay~~was ~~United~~held ~~Drilling;~~on ~~therefore~~February 3, ~~United~~2014. ~~Drilling~~On ~~filed~~April ~~the~~1, ~~United~~2014, ~~Lawsuit~~the toArbitrator ~~attempt~~issued toan ~~foreclose~~Award onin anfavor ~~alleged~~of ~~statutory~~Viewpoint ~~lien~~for $196,727.77 on ~~STW’~~Viewpoint's ~~water~~claim ~~lease~~for ~~with~~$216,217 ~~the~~in ~~City~~fees ofand ~~Fort Stockton~~expenses, ~~Texas~~plus $5,541.46 onin ~~which~~arbitration ~~the~~hearing ~~Test~~fees ~~Well~~and ~~was~~expenses; ~~located.~~interest ~~United~~shall ~~Drilling~~accrue ~~seeks~~at ~~any~~the ~~monies~~rate ~~owed~~of by10% ~~STW~~per toannum ~~Case~~on ~~Drilling~~any ~~for~~unpaid portion of the ~~Test~~award ~~Well~~commending toApril be1, ~~paid~~2014. toThe ~~United~~Arbitrator ~~Drilling.~~denied ~~STW~~Viewpoint's ~~has~~claims ~~asserted~~related ~~that~~to itthe ~~had~~Company's warrants, a ~~“turn-key”~~$15,000 ~~contract~~promissory ~~with~~note ~~Case~~plus ~~Drilling~~12% interest and for $18,000 ~~which~~in ~~required~~attorneys' ~~Case~~fees. ~~Drilling~~The toAward ~~deliver~~was afinal ~~producing~~on ~~water~~April ~~well~~01, ~~which~~2014, itand ~~did~~on ~~not.~~October ~~Accordingly~~28, ~~STW~~2014, ~~alleges~~Viewpoint ~~that~~filed ~~since~~a itlawsuit ~~owed~~in ~~nothing~~San Diego County, California Superior Court seeking to enforce its Arbitration Award in Case ~~Drilling~~No. 37-2014-00036027-CU-PA-CTL. On December 08, ~~correspondingly~~2014, itthe ~~owes~~Company ~~nothing~~filed a Motion to ~~United~~Dismiss ~~Drilling.~~the Inenforcement ~~addition~~action due to ~~STW~~Viewpoint ~~filing~~having forfeited its ~~Answer~~corporate ~~and~~rights ~~Affirmative~~in ~~Defenses~~California due to ~~United~~non-payment ~~Drilling’s~~of ~~claims~~California corporate taxes, itand ~~has~~that ~~also~~motion ~~filed~~is astill ~~counterclaim~~pending ~~against~~before ~~United~~the ~~Drilling~~Court. ~~for~~Subsequent ~~wrongfully~~to ~~placing~~June a30, ~~lien~~2015, on July 07, 2015, STW’s ~~Fort~~and ~~Stockton~~Viewpoint ~~water~~signed ~~lease,~~a “Payment and ~~STW~~Standstill ~~has~~Agreement, ~~cross-claimed~~wherein ~~Case~~the ~~Drilling~~parties ~~for~~agreed ~~breach~~that ofthe ~~contract~~total ~~and~~Arbitration ~~indemnity~~Award ~~related~~with tointerest ~~Case~~totaled ~~Drilling’s~~$228,170.92, ~~alleged~~that ~~failure~~Viewpoint towould ~~pay~~not ~~its~~seek ~~subcontractor,~~post ~~United~~Award ~~Drilling.~~attorneys’ fees from STW, and ~~United~~that ~~Drilling~~so ~~have~~long ~~participated~~as inSTW ~~substantive~~made ~~settlement~~bi-weekly ~~discussions~~payments ~~and~~of ~~have~~$2,000, abeginning ~~definitive~~on ~~settlement~~July ~~agreement~~10, ~~prepared~~2015, ~~awaiting~~Viewpoint ~~execution.~~would ~~Based~~stay any efforts to collect on the ~~Company~~Arbitration ~~counsel's~~Award, ~~legal~~and ~~opinions~~when ~~regarding~~fully paid, would fully release STW from the ~~invalidity~~Arbitration ofAward. ~~United~~The ~~Drilling's~~Company ~~lien~~has made all scheduled payments to date.

~~Dufrane~~United ~~Nuclear Shielding~~Drilling, Inc. ~~Counterclaims~~Lawsuit. On ~~July~~May 1606, 2015, ~~Dufrane~~United ~~Nuclear Shielding~~Drilling, Inc., ~~Dufrane Construction, LLC (collectively “Dufrane”) and Joshua C. Brooks~~ filed a ~~counterclaim~~lawsuit against STW and ~~its~~Case ~~subsidiaries~~Drilling inand ~~Case~~Pump ~~No. CV-50864~~Service, LLC pending in the ~~238th~~ District Court of ~~Midland~~the 83rd Judicial District in Pecos County, Texas, styled United Drilling, Inc. v. STW Resources Holding Corp., et al., vCause No. ~~Felipe~~P-7405-83-CV ~~Sanchez~~(the “United Lawsuit”). United Drilling provided water well drilling services as a subcontractor to Case Drilling in the amount alleged to be $1,577,883.33 etrelated alto Case Drilling providing drilling services to STW Water Process & Technologies, LLC (a wholly owned subsidiary of STW) for Capitan Reef Test Well No. 1, located in Pecos County, Texas (the “~~Dufrane~~Test ~~Counterclaims~~Well”). ~~Dufrane~~Case isDrilling ~~suing~~did ~~STW~~not ~~over~~pay aUnited ~~$725~~Drilling; therefore,~~000~~ ~~promissory~~United ~~note~~Drilling ~~and~~filed the United Lawsuit to attempt to foreclose on an ~~equipment~~alleged ~~rental~~statutory ~~agreement~~lien on STW’s water lease with the City of Fort Stockton, ~~and~~Texas, ~~Joshua~~on Cwhich the Test Well was located. ~~Brooks~~United isseeks ~~suing~~any monies owed by STW ~~alleging~~to heCase ~~was~~Drilling ~~not~~for ~~released~~the ~~from~~Test ~~certain~~Well ~~guaranty~~to ~~obligations~~be paid to United Drilling. STW has asserted that it had a “turn-key” contract with ~~equipment~~Case ~~providers~~Drilling, which required Case Drilling to deliver a producing water well, which it did not. Accordingly, STW ~~and~~alleges that since it owed nothing to Case Drilling, correspondingly, it owes nothing to United Drilling. In addition to STW filing its ~~subsidiaries~~Answer and Affirmative Defenses to United Drilling’s claims, it has also filed a ~~general~~counterclaim ~~denial~~against ~~and~~United ~~the~~Drilling ~~parties~~for ~~have~~wrongfully ~~been~~placing ~~working~~a ~~together~~lien on anSTW’s ~~agreed~~Fort ~~accounting~~Stockton ofwater ~~payments~~lease, ~~made~~in ~~and~~that United Drilling’s is not justified as there are no amounts owed by the ~~allocations~~Company to Case Drilling from which United Drilling could collect for some or all of ~~those~~its ~~payments~~subcontractor invoices. STW has also cross-claimed Case Drilling for breach of contract and indemnity related to Case Drilling’s alleged failure to pay its subcontractor, ~~with~~United Drilling. STW and United Drilling have participated in substantive settlement discussions and have a ~~view~~definitive ~~towards~~settlement ~~settling~~agreement prepared awaiting execution. Based on the ~~Dufrane~~Company’s ~~Counterclaims~~counsel’s legal opinions regarding the invalidity of United Drilling’s lien, the Company does not expect to incur any substantial liability from this matter.

Seaboard International, Inc. Lawsuit. On July 07, 2015, Seaboard International, Inc. (“Seaboard”) filed a lawsuit against STW and Case Drilling and Pump Service, LLC pending in the District Court of the 112th Judicial District in Pecos County, Texas, styled Seaboard International, Inc. v. Case Drilling & Pump, LLC, et al., Cause No. P-~~11813~~41-112-CV (the “Seaboard Lawsuit”). Seaboard provided water well drilling services as a subcontractor to Case Drilling in the amount alleged to be $80,685.01related to Case Drilling providing drilling services to STW Water Process & Technologies, LLC (a wholly owned subsidiary of STW) for Capitan Reef Test Well No. 1, located in Pecos County, Texas (the “Test Well”). Case Drilling did not pay Seaboard; therefore, Seaboard filed the Seaboard Lawsuit to attempt to foreclose on an alleged statutory lien on STW’s water lease with the City of Fort Stockton, Texas, on which the Test Well was located. Seaboard seeks any monies owed by STW to Case Drilling for the Test Well to be paid to United Drilling. STW has asserted that it had a “turn-key” contract with Case Drilling, which required Case Drilling to deliver a producing water well, which it did not. Accordingly, STW alleges that since it owed nothing to Case Drilling, correspondingly, it owes nothing to Seaboard. In addition to STW filing its Answer and Affirmative Defenses to United Drilling’s claims, it has also filed a counterclaim against Seaboard for wrongfully placing alien on STW’s Fort Stockton water lease, and STW has cross-claimed Case Drilling for breach of contract and indemnity related to Case Drilling’s alleged failure to pay its subcontractor, Seaboard. The Company will vigorously defend this lawsuit and does not expect significant liability from this matter. Based on the Company counsel’s legal opinions regarding the invalidity of United Drilling’s lien, the Company does not expect to incur any substantial liability from this matter.

Table of Contents

Seaboard International, Inc. Lawsuit. On July 07, 2015, Seaboard International, Inc. filed a lawsuit against STW and Case Drilling and Pump Service, LLC pending in the District Court of the 112th Judicial District in Pecos County, Texas, styled Seaboard International, Inc. v. Case Drilling & Pump, LLC, et al., Cause No. P-11813-112-CV (the “Seaboard Lawsuit”). Seaboard provided water well drilling services as a subcontractor to Case Drilling in the amount alleged to be $80,685.01 related to Case Drilling providing drilling services to STW Water Process & Technologies, LLC (a wholly owned subsidiary of STW) for Capitan Reef Test Well No. 1, located in Pecos County, Texas (the “Test Well”). Case Drilling did not pay Seaboard; therefore, Seaboard filed the Seaboard Lawsuit to attempt to foreclose on an alleged statutory lien on STW’s water lease with the City of Fort Stockton, Texas, on which the Test Well was located. Seaboard seeks any monies owed by STW to Case Drilling for the Test Well to be paid to United Drilling. STW has asserted that it had a “turn-key” contract with Case Drilling, which required Case Drilling to deliver a producing water well, which it did not. Accordingly, STW alleges that since it owed nothing to Case Drilling, correspondingly, it owes noting to Seaboard. In addition to STW filing its Answer and Affirmative Defenses to United Drilling’s claims, it has also filed a counterclaim against Seaboard for wrongfully placing a lien on STW’s Fort Stockton water lease, in that Seaboard’s lien is not justified as there are no amounts owed by the Company to Case Drilling from which Seaboard could collect for some or all of its subcontractor invoices. STW has also cross-claimed Case Drilling for breach of contract and indemnity related to Case Drilling’s alleged failure to pay its subcontractor, Seaboard. Based on the Company’s counsel’s legal opinions regarding the invalidity of Seaboard’s lien, the Company does not expect to incur any substantial liability from this matter.

Lonestar West Enterprises. LLC Lawsuit. On September 18, 2015, Lonestar West Enterprises, LLC filed a lawsuit against STW in the 141st District Court of Tarrant County, Texas, styled Lonestar West Enterprises, LLC v. STW Resources Holding Corp., Cause No. 141-281104-15 (the “Lonestar Lawsuit”). It is believed that Lonestar provided services to STW’s subsidiary, STW Oilfield Services, which ceased operations. Lonestar seeks $26,550 plus attorneys’ fees. STW has filed a general denial and is still investigating the matter.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this item. Please refer to our Form 10-K filed with the SEC on April 3, 2015 under item 1.A Risk Factors.

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

The Company has authorized toissuance ~~issue~~of up to 191,666,667 shares of common stock with a par value of $0.001 per share.

Information on any and all equity securities we have sold during the period covered by this Report that were not registered under the Securities Act of 1933, as amended is set forth below:

On ~~May~~July 139, 2015, the ~~Company~~company issued ~~500~~355,~~000~~500 shares of ~~its~~ common stock ~~and warrants~~ to ~~purchase~~43 upemployees toas ~~500,000~~performance ~~shares~~bonuses. ofThe ~~the~~stock ~~Company’s~~was ~~common~~valued ~~stock~~ at $0.5920 per share toand antotaled ~~accreditor investor who provided the Company with a~~ $~~385~~71,~~000 original issue discount bridge note, which yielded net proceeds of $350,000 to the Company~~100.

On ~~May~~July 1422, 2015, the Company issued ~~341~~200,~~667~~000 shares of common stock to ~~two~~an ~~consultants~~investor ~~for~~as ~~value~~part of the financing agreement. The shares were valued at an average of $~~230~~0.21 per share and totaled $40,~~501~~469.

On ~~May~~July 1528, 2015, the ~~Company~~company issued 2650,000 shares of common stock in payment of fees owed to ~~two~~a ~~consultants~~consultant for ~~value~~service ofrendered. The shares were valued at $180.65 per share and totaled $32,~~610~~500.

~~On May 18, 2015, Company issued 206,667 shares of common stock to two consultants for value of $155,000.~~-42-

On July 9, 2015, the Company issued 355,500 shares of common stock to forty-three employees for performance bonuses, valued at $71,100.

On July 22, 2015, the Company issued 200,000 shares of common stock to a qualified investor pursuant to the terms of the loan payoff, valued at $40,000.

On July 28, 2015, the Company issued 50,000 shares of common stock to a consultant for services rendered, valued at $32,500.

-44-

Table of Contents

On October 15, 2015, the company issued a total of 510,000 shares of common stock to 3 accredited lenders. The company issued 120,000 shares of common stock to the first accredited lender in payment for the extension on a note payable. The shares were valued at $0.07 per share for a total of $8,400. The second accredited lender was issued 40,000 shares of common stock in payment for the extension on a note payable and 100,000 shares of common stock in conjunction with their SPA. The shares were valued at $0.07 per share for a total of $9,800. The third accredited lender was issued 250,000 shares of common stock in payment of loan fees that were accrued in the Fees Payable in Common Stock. The shares were valued at $0.18 per share for a total of $45,000.

On October 22, 2015, the company issued 225,000 shares of common stock to an accredited lender in payment of loan fees that were accrued in the Fees Payable in Common Stock. The shares were valued at $0.33 per share for a total of $74,250.

On October 27, 2015, an accredited lender converted $30,000 of a note payable and the company issued 364,964 shares of common stock. The shares were valued at approximately $0.08 per share.

On November 6, 2015, an accredited lender converted $30,000 of a note payable and the company issued 454,545 shares of common stock. The shares were valued at approximately $0.06 per share.

All of the transactions listed above were made pursuant to the exemption from the registration provisions of the Securities Act of 1933, as amended, provided by Section 4(a)(2) of the Securities Act for sales not involving a public offering or Rule 506(b) of Regulation D promulgated by the SEC. The securities issued have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Item 3. Defaults upon Senior Securities

GE Ionics Settlement Agreement

On or about May 22, 2008, STW Resources Holding Corporation entered into a Teaming Agreement, as amended, with GE Ionics, Inc., a Massachusetts corporation (“GE”) (STWR and GE are collectively referred to as the “Parties”). On or about April 4, 2008 STWR and GE entered into a Purchase Order (the “Purchase Order”), pursuant to which there was due and unpaid a debt by STWR to GE in the amount of $11,239,437 as of August 31, 2010 (the “Original Debt”).

On August 31, 2010, the Company entered into a Settlement Agreement relating to a $2,100,000 note payable that was amended on October 30, 2011. On May 7, 2012, GE informed the Company that it had failed to make any required installment payment that was due and payable under the GE Note and that the Company’s failure to make any such installment payment(s) constituted an Event of Default under the GE Note. Pursuant to the terms of the GE Note, upon the occurrence of an Event of Default for any reason whatsoever, GE shall, among other things, have the right to (a) cure such defaults, with the result that all costs and expenses incurred or paid by GE in effecting such cure shall bear interest at the highest rate permitted by law, and shall be payable upon demand; and (b) accelerate the maturity of the GE Note and demand the immediate payment thereof, without presentment, demand, protest or other notice of any kind. Upon an event of default under the GE Note, GE shall be entitled to, among other things (i) the principal amount of the GE Note along with any interest accrued but unpaid thereon and (ii) any and all expenses (including attorney’s fees and expenses) incurred in connection with the collection and enforcement of any rights under the GE Note.

-43-

Table of Contents

Under the terms of the August 31, 2010 note, interest at the rate of WSJ prime plus 2% is due on the note, upon default, interest is due at the maximum legal rate which is 10% in the state of Texas. The note matured on September 1, 2013, and is in default. Interest on the note through December 31, 2014, has been accrued pursuant to the terms of the note through May 6, 2012, interest upon default on May 7, 2012, has been accrued at the maximum default rate in the state of Texas which is 10%.

As of the date hereof, the Company has not repaid any principal or accrued but unpaid interest that has become due and payable under the GE Note.

On May 22, 2013, GE filed a lawsuit against STW in the Supreme Court of the State of New York, County of New York, Index No. 651832/2013 (the “GE Lawsuit”). Although the lawsuit arises out of STW’s obligations to GE under its Settlement Agreement with GE, upon which STW owed GE $2.1 million plus interest, GE has elected to forgo suit on the settlement amount and sue STW for the original debt of $11,239,437, plus interest and attorneys’ fees (the “Original Debt”). As such, STW filed its Answer and asserted that it is entitled to and shall pursue all of its available legal and equitable defenses to the Original Debt, inasmuch as GE has, among other things, failed to discount the Original Debt sued upon by the amounts that it recovered through re-use and re-sale of the equipment it fabricated for STW. Management has not accrued the original amount of the debt because the probability of recovery is remote.

Item 5. Other Information

none

-4544-

Table of Contents

~~ITEM~~Item 6. ~~EXHIBITS~~ Exhibits

EXHIBIT INDEX
Exhibit No.		Description
2.1		Order Confirming the Second Amended Plan of Re-organization of Woozyfly, Inc. (4)
2.2		Agreement and Plan of Merger for proposed merger between Woozyfly, Inc. Merger Sub, and STW Resources, Inc. dated January 17, 2010 (3)
3.1		Articles of Incorporation (1)
3.2		Certificate of Amendment to the Articles of Incorporation (2)
3.3		Certificate of Amendment to the Articles of Incorporation – March 1, 2010 (5)
3.4		Articles of Merger between STW Acquisition, Inc. and STW Resources, Inc. (4)
3.5		Articles of Merger filed with the State of Nevada on March 3, 2010 (6)
4.1		Form of 12% Convertible Note dated August 31, 2010 (8)
4.2		Form of Warrant dated August 31, 2010 (8)
4.3		Form of Promissory Note dated August 31, 2010 (9)
4.4		Form of Warrant for December 2010 Financing (10)
4.5		Extension of Note, by and between STW Resources Holding Corp. and GE Ionics, Inc., dated October 28, 2011 (11)
4.6		Amended and Restated Note effective October 1, 2011 in favor of GE Ionics, Inc. (11)
4.7		Form of November 2011 Warrant (13)
4.8		Note Exchange Form of New Note (15)
4.9		Note Exchange Form of New Warrant (15)
4.10		Form of May 2012 Warrant (16)
10.1		Form of securities Purchase Agreement dated August 31, 2010 (6)
10.2		Form of Escrow Agreement by and between the Company, Viewpoint, and TD Bank, N.A. dated March 31, 2010 (8)
10.4		Form of Settlement Agreement by and between STW Resources Holding Corp and GE Ionics, Inc., dated August 31, 2010 (9)
10.5		Form of Subscription Agreement for December 2010 Financing (10)
10.6		Letter of Intent dated April 17, 2011 (12)
10.7		Amendments to Settlement Agreement dated October 30, 2011, by and between STW Resources Holding Corp. and GE Ionics, Inc. (11)
10.8		Form of November 2011 Subscription Agreement (13)
10.9		Note Exchange Cover Letter (15)
10.10		Note exchange Subscription Agreement Form (15)
10.11		Master Note Agreement with Revenue Participation Subscription Package (15)
10.12		Form of May 2012 Subscription Agreement (16)
10.13		Executive Long Term Agreement between the Company and Stanley Weiner (17)
10.14		Executive Long Term Agreement between the Company and Paul DiFrancesco as Head of Finance (17)
10.15		Executive Long Term Agreements between the Company and Grant Seabolt as General Counsel and Corporate Secretary (17)
16.1		Letter from Weaver & Martin LLC (7)
16.2		Letter from Weaver and Tidwell, LLP (14)
31.1		Certification of the Chief Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of the Principal Executive Officer and Principal Financial Officer pursuant to U.S.C. Section 1350 As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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

-4645-

Table of Contents

(1)	Incorporated by reference to the Registration Statement on Form SB-2, previously filed with the Securities and Exchange Commission on September 26, 2006.
(2)	Incorporated by reference to the Registrant’s Definitive Information Statement on Schedule 14C filed with the Securities and Exchange Commission on September 4, 2008.
(3)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on January 26, 2010.
(4)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on February 19, 2010.
(5)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 2, 2010.
(6)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 9, 2010.
(7)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 5, 2010.
(8)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 16, 2010.
(9)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 22, 2010.
(10)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 10, 2010.
(11)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on November 3, 2011.
(12)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 26, 2011.
(13)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on November 23, 2011.
(14)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on February 2, 2012.
(15)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 10, 2012.
(16)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 11, 2012.
(17)	Incorporated by reference to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 3, 2015.

-4746-

Table of Contents

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 of the undersigned thereunto duly authorized

	STW RESOURCES HOLDING CORP	~~STW RESOURCES HOLDING CORP~~
	(Registrant)	~~(Registrant)~~
Date: October 6, 2015		By: /s/ Stanley T. Weiner
Date: November 24, 2015	By: /s/ Alan Murphy
		Stanley T. Weiner
	Alan Murphy
	President and Chief Executive Officer (Principal Executive Officer)	~~President and Chief Executive Officer (Principal Executive Officer)~~
Date: October 6, 2015		By: /s/ Robert J. Miranda
Date: November 24, 2015	By: /s/ Robert J. Miranda
	Robert J. Miranda	~~Robert J. Miranda~~
	Vice President and Chief Financial Officer (Principal Accounting Officer)	~~Vice President and Chief Financial Officer (Principal Accounting Officer)~~

-4847-

Filing Compare · STW RESOURCES HOLDING CORP.