Rainmaker Worldwide (RAKR) 10-Q2023 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

or

Commission File Number: 000-56311

RAINMAKER WORLDWIDE INC.

(Exact name of registrant as specified in its charter)

(877) 334-3820

(Registrant’s telephone number, including area code)

N/A

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares of the registrant’s Common Stock, $0.001 par value, outstanding as of December 7, 2023 was 487,182,113. The number of shares of the registrant’s Preferred Stock, $0.001 par value, outstanding as of December 7, 2023 was 150,000.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS

This quarterly report on Form 10-Q (“Form 10-Q”) of Rainmaker Worldwide Inc. (the “Company”) includes statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, these forward-looking statements can be identified by the use of such terms as “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately” or the negative or other variations thereon or comparable terminology, although not all forward-looking statements contain these words. They appear in a number of places throughout this Form 10-Q and include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, our results of operations, financial condition, our available cash, liquidity, prospects, growth and strategies, the length of time that we will be able to continue to fund our operating expenses and capital expenditures, our expected financing needs and sources of financing, the industry in which we operate and the trends that may affect our industry or us.

By their nature, forward-looking statements involve risks and uncertainties because they relate to the occurrence and timing of events or circumstances, many of which are beyond the control of the Company. As a result of this, we cannot assure you that the forward-looking statements in this Form 10-Q will prove to be accurate. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Form 10-Q, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this Form 10-Q, they may not be predictive of results or developments in future periods.

Some of the material factors that we believe could cause actual results to differ from those anticipated or predicted include:

You should also read carefully the factors described in the “Risk Factors” section of the Form 10-12GA. Any forward-looking statements that we make in this Form 10-Q speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this Form 10-Q except as required by the federal securities laws.

This Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

RAINMAKER WORLDWIDE INC.

(Formerly Gold and Silver Mining of Nevada Inc.)

Consolidated Balance Sheets

The accompanying notes are an integral part of these consolidated financial statements.

RAINMAKER WORLDWIDE INC.

(Formerly Gold and Silver Mining of Nevada Inc.)

Consolidated Statements of Operations and Comprehensive Loss

The accompanying notes are an integral part of these consolidated financial statements.

RAINMAKER WORLDWIDE INC. (FORMERLY GOLD AND SILVER MINING OF NEVADA, INC.)

Statement of Stockholders’ Equity (deficit) (Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

RAINMAKER WORLDWIDE INC.

(Formerly Gold and Silver Mining of Nevada Inc.)

Consolidated Statements of Cash Flows (Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

Note 1: Nature of Operations and Going Concern

Nature of Operations

Rainmaker Worldwide Inc. (“Rainmaker” or the “Company” or “RAKR”) is a Nevada company which previously operated Rainmaker Worldwide Inc. (Ontario) (“RWI”) until March 31, 2023, with its head office in Peterborough, Ontario, Canada. The Company distributes two main types of energy-efficient, fresh water-producing technologies: (1) Air-to-Water (“AW”), which harvests fresh water from humidity in the atmosphere, and (2) Water-to-Water (“WW”), which transforms seawater or polluted water into drinking water. The technology can be wind, solar, or use conventional power sources (grid or generator), is deployable anywhere, and leaves no carbon trace if renewable resources are deployed.

Rainmaker holds a 12% interest in Rainmaker Holland B.V. (“RHBV”) which consists of the innovation and manufacturing center located in Rotterdam, Netherlands. RAKR will purchase equipment on a favorable cost-plus formula.

Effective April 1, 2023, Rainmaker (RAKR) divested 60% interest in Rainmaker Worldwide Inc. (Ontario) (RWI) and continues to hold a 40% interest. RWI will be the driver of operations in Canada, the Caribbean, Central America and South America. RAKR will retain a management participation and will retain one out of three board seats.

Company History

RWI was incorporated on July 21, 2014, under the Ontario Business Corporations Act. On July 3, 2017, RWI shareholders completed a share exchange with the Company (the “Merger”) pursuant to a share exchange agreement dated June 28, 2017 (the “Share Exchange Agreement”) among the Company, RWI and RWI’s 45 shareholders. Upon completion of the Merger, and in accordance with the terms and provisions of the Share Exchange Agreement, the Company acquired an aggregate of 9,029,562 common shares in the capital of RWI from the RWI Shareholders (being all of the issued and outstanding shares in the capital of RWI) in exchange for an aggregate of 66,818,759 restricted shares of the Company’s common stock, or 7.4 shares for each share of RWI. Therefore, RWI became a wholly owned subsidiary of the Company effective July 3, 2017. The Company’s former name, Gold and Silver Mining of Nevada, Inc. (“CJT”) was changed on April 24, 2017, in expectation of and conditional upon completion of the Merger. The Merger was accounted for as a reverse acquisition with RWI considered the accounting acquirer since the former RWI shareholders remained in control of the combined entity after the transaction. As part of the merger, net liabilities of $235,495 were recognized on the Company’s balance sheet. As a result of the Merger the Company originally traded on the OTC Pink Sheet under the trading symbol RAKR but since then become an SEC filing company and was up-listed to the OTCQB in 2022. The Company has temporarily been relegated to the OCT Pink due to share price. The Company is working on mechanisms to cure that issue. In the meantime, shareholders remain able to trade the stock.

On April 1, 2023, the Company’s wholly owned subsidiary, RWI (Rainmaker Worldwide Inc. (Ontario)), completed the issuance of 13,544,343 representing 60% of the outstanding shares of RWI shares to an investor. As a result, the investor will take over management of RWI, and the Company will retain a 40% ownership interest in RWI. This transaction was completed in accordance with applicable laws and regulations.

Ongoing Partnerships

On July 28, 2022, the Company signed a Joint Development Agreement (“JDA”) with Miranda Environmental and Water Treatment Technologies, Energy, Natural Resources, Engineering, Consulting, Construction and Commerce Inc. (“Miranda”) whose primary operations reside in Ankara, Turkey. This JDA allows for reciprocal distribution rights for all of RAKR’s and Miranda’s combined technologies and fosters a long-term technological integration strategy between the two companies. The first result of this JDA was achieved in May of 2023 with a purchase order from Turks and Caicos. Delivery to Turks and Caicos has occurred and commissioning is expected by end of November, 2023. We will also deliver an Air-to-Water machine to be commissioned alongside the water treatment plant.

Going Concern

The Company has incurred continuing losses from its operations and has an accumulated deficit of $73,782,619. There are no assurances the Company will be able to raise capital on acceptable terms or that cash flows generated from its operations will be sufficient to meet its current operating costs and required debt service. If the Company is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its business, which could harm its financial condition and operating results. These conditions raise substantial doubt about the Company’s ability to continue ongoing operations. These consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financing to enable it to meet its operating needs including current and future sales orders. In addition, revenues are being forecasted at the operational level.

Note 2: Significant Accounting Policies

Basis of Preparation

The consolidated and non-consolidated financial statements presented are for the entity Rainmaker and its wholly owned subsidiary, Rainmaker Worldwide Inc. (Ontario) as a consolidated entity until March 31, 2023, the point at which 60% of the subsidiary was acquired by a related party. The financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”).

The preparation of the consolidated and non-consolidated financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

All accounting policies are chosen to ensure the resulting financial information satisfies the concepts of relevance and reliability.

Foreign Currency Translation

The reporting currency of the Company is the United States dollar. The financial statements of the subsidiary located outside of the United States is measured in its functional currency: Until March 31, 2023, Rainmaker Worldwide Inc. (Ontario) reported in Canadian dollars. Monetary assets and liabilities of this subsidiary are translated at the exchange rate at the balance sheet date. Income and expense items are translated using average annual exchange rates. Non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive income in the consolidated balance sheets.

Intangible Assets

No Intangible Assets.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.

Depreciation is provided at rates estimated to write off the cost of the relevant assets less their estimated residual values by equal annual amounts over their expected useful lives. Residual values and expected useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Depreciation periods for the Company’s property and equipment are as follows:

 Schedule of Estimated Useful Lives of Property and Equipment

Embedded Conversion Features

Until December 31, 2021, the Company evaluated embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature did not require derivative treatment under ASC 815, the instrument was evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features. On January 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method and reviewed and calculated the impact on the outstanding financial instruments as of this adoption date concluding there was no impact.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses a Monte Carlo simulation model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Demonstration Equipment

Demonstration equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.

Depreciation for the demonstration equipment is at a rate estimated to write off the cost of the equipment less its estimated residual value by an equal annual amount over its expected useful life. The residual value and expected useful life of the demonstration equipment is reviewed and adjusted, if appropriate, at the end of each reporting period.

Revenue Recognition

In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services. On January 1, 2018, the Company adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers using the modified retrospective method, and the Company determined the new guidance does not change the Company’s policy of revenue recognition.

The Company generates its revenue through the direct sales of water production and purification systems. A contract with a customer is established once an agreement is signed and the initial down payment is received. Each transaction price is established in the signed contract. Unearned revenue is recognized upon receipt of the down payment for the system. The revenue is recognized once title of the system transfers to the customer. The nature of the business of equipment sales implies there is only one performance obligation, which is delivery of the end product to the customer. Our contracts outline each party’s rights and obligations including the terms and timing of payments. Another source of revenue is in exchange for operating, maintenance and professional services to these joint ventures. That revenue is recognized in the period it is earned.

In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements, ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. Accordingly, the Company recognizes revenue from grants and contracts in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.

Revenues recognized at September 30, 2023 and September 30, 2022 are $78,912 and nil, respectively.

Related Party Transactions

Parties are considered to be related if one party has the ability to directly or indirectly control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.

Share-based Payment Expense

The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers, and consultants. Share-based awards to employees are measured at the fair value of the related share-based awards. Share-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of shares are valued using the fair value of the shares at the time of grant; issuances of options are valued using the Black-Scholes model with assumptions based on historical experience and future expectations.

Financial Liabilities and Equity Instruments

Financial liabilities and equity instruments are classified and accounted for as debt or equity according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

Marketing, Advertising and Promotional Costs

As required by Generally Accepted Accounting Principles of the United States, the Company records marketing costs as an expense in the year to which such costs relate. The Company does not defer amounts on its year-end consolidated balance sheets with respect to marketing costs. Advertising costs are expensed as incurred.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.

Loss per Share

The Company reports loss per share in accordance with ASC 260, “Earnings per Share”. Basic loss per share is computed by dividing net loss by the weighted average number of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock and other potentially dilutive securities outstanding during the year. The Company has options, debentures and other potentially dilutive instruments extending to the latest date of July 1, 2027.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

Income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted by the date of the statement of financial position.

Equity-Settled Transactions

The costs of equity-settled transactions with employees are measured by reference to the fair value at the date on which they are granted.

The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“the vesting date”). The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and the corresponding amount is represented in share-based compensation reserve.

No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the share-based payment arrangement or is beneficial to the employee as measured at the date of modification.

Inventory

Inventory and work in progress are valued at the lower of cost and net realizable value. The production cost of inventory includes an appropriate proportion of depreciation and production overheads based on the ratio of indirect vs. direct costs. Cost is determined on the following bases: Raw materials and consumables are valued at cost on a first in, first out (FIFO) basis; finished products are valued at raw material cost, labor cost and a proportion of manufacturing overhead expenses.

Financial Instruments

ASC 820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a fair value hierarchy prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants.

Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

Level 3 - Significant unobservable inputs that cannot be corroborated by market data.

The Company’s policy is to recognize transfers into and out of Level 3 as of the date of the event or change in the circumstances that caused the transfer. There were no such transfers during the periods being reported.

Customer Concentration

Due to the infancy of the Company’s market penetration, current sales are concentrated on a limited number of customers.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company maintains the majority of its cash accounts at a commercial bank. Cash balances are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to CAD100,000 per commercial bank. From time to time, cash in deposit accounts may exceed the insurance limits thus the excess would be at risk of loss. For the purposes of the statement of cash flows we consider all cash and highly liquid investments with maturities of 90 days or less to be cash equivalents. As of September 30, 2023, the Company had no cash equivalents.

Customer Deposits

The typical arrangement for customer deposits for purchases of Company products is 50% down at the time of ordering. The Company records the deposit as a current liability reflecting the obligation to provide the goods or services to the customer or to return the money. When the Company earns the deposit amount, the current liability will be debited, and sales revenues will be credited.

Note 3: Convertible Notes Payable

The Convertible Notes Payable are defined below.

An $8,200 convertible note that came into the Company through the July 3, 2017 merger. On July 26, 2022, this note required derivative treatment. On September 30, 2023, the derivative value of this note was $2,355.

On September 14, 2020, the Company issued a Senior Secured Convertible Promissory Note in the amount of $3,105,896.72 bearing interest of 10% per annum with a maturity date of 3 years from the anniversary date of the funding advance and is convertible into shares of Common Stock equal to 85% multiplied by the average of the 5 closing prices of the Common Stock immediately preceding the Trading Day that the Company receives a Notice of Conversion with a floor price of $0.15. On October 1, 2020, the amount of $1,850,000 was advanced to the Company. The balance of the principal of this note is made up of the principal and interest on the existing promissory notes totaling $1,100,000 (1), and the principal and interest on the existing note issued August 4, 2020, in the amount of $150,000 (2). Each of the existing notes, (1) and (2), are deemed to be cancelled and are replaced by the note in the amount of $3,105,896.72 described above. The company evaluated the note for a beneficial conversion feature at the date of issuance noting that there was no BCF related. The security interest of this loan is junior and subordinate to all existing security. On September 14, 2023, an amendment to this loan was signed agreeing to roll the accrued interest to date of $918,154.10 into the principal amount resulting in total principal of $4,024,050.82 (the “New Principal Amount”). The maturity date has been extended to March 14, 2024. On July 26, 2022, this note required derivative treatment. On September 30, 2023, the derivative value of this note was $276,509.

On February 7, 2022, the Company issued a convertible promissory note in the amount of $55,000 bearing interest of 10% per annum with a maturity date of one year (February 7, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before maturity. During Q3, 2022, the investor fully converted this note including accrued interest of $2750 into 6,109,361 common shares. The conversions were within the terms of the agreement and no gain or loss was recognized on the conversions.

On March 11, 2022, the Company issued a convertible promissory note in the amount of $53,750 bearing interest of 10% per annum with a maturity date of one year (March 11, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before maturity. During Q3, 2022, the investor partially converted this note ($15,000) into 2,542,373 common shares leaving the balance of the note available for conversion of $38,750. During Q4, 2022 the lender converted the balance of the note ($38,750) and accrued interest ($2687.50) into 7,988,208 common shares and is now fully converted. The conversions were within the terms of the agreement and no gain or loss was recognized on the conversions.

On June 28, 2022, the Company issued a convertible promissory note in the amount of $64,250 bearing interest of 10% per annum with a maturity date of one year (June 28, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before maturity. The Agreement was signed on June 28^th and ultimately funded on July 6, 2022. During Q1, 2023, the principal amount of this note ($64,250) plus all accrued interest ($3212.50) was fully converted into 35,554,822 common shares. This note had an Original Issue Discount of $4,250 and as of February 21, 2023, it was fully amortized. The conversions were within the terms of the agreement and no gain or loss was recognized on the conversions.

On July 26, 2022, the Company issued a convertible promissory note in the amount of $35,000 bearing interest of 10% per annum with a maturity date of one year (July 26, 2023) and has the option to convert into shares of Common Stock any time following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before the 180^th day. During Q1, 2023, the principal amount of this note ($35,000) plus all accrued interest ($1,822.47) was fully converted into 17,916,870 common shares. This note had an Original Issue Discount of $2,500 and as of February 13, 2023, it was fully amortized. The conversions were within the terms of the agreement and no gain or loss was recognized on the conversions.

On September 12, 2022, the Company issued a convertible promissory note in the amount of $49,250 bearing interest of 10% per annum with a maturity date of one year (September 12, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before the 180^th day. During Q1, 2023, there were conversions totaling $37,800 leaving a principal balance of $11,450. These conversions converted into 32,114,261 common shares. During Q2, 2023, the remaining principal balance and accrued interest were converted into 17,639,140 shares. This note had an Original Issue Discount of $4,250 and as of May 22, 2023, it was fully amortized. The conversions were within the terms of the agreement and no gain or loss wase recognized on the conversions.

On October 25, 2022, the Company issued a convertible promissory note in the amount of $44,250 bearing interest of 10% per annum with a maturity date of one year (October 25, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before the 180^th day. During Q2, 2023, this note including accrued interest was fully converted into 82,282,838 shares. This note had an Original Issue Discount of $4,250 and as of June 20, 2023, was fully amortized. The conversions were within the terms of the agreement and no gain or loss was recognized on the conversions.

On February 21, 2023, the Company issued a convertible promissory note in the amount of $44,250 bearing interest of 10% per annum with a maturity date of one year (February 21, 2024) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before the 180^th day. During Q3, 2023, this note went through conversions reducing the principal amount by $44,230, converting into 95,152,107 common shares. Remaining for this note is $20 principal and accrued interest of $2526.59 at September 30, 2023. This note had an Original Issue Discount of $4,250 and as of September 30, 2023, it is fully amortized. The conversions were within the terms of the agreement and no gain or loss was recognized on the conversions.

On May 8, 2023, the Company issued a convertible promissory note in the amount of $21,000 bearing interest of 12% per annum with a maturity date of one year (May 8, 2024) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 61% of the Market Price (lowest trading price during the 20-trading day period). The Company has the right to prepay any time before maturity. This note had an Original Issue Discount of $5,000 and as of September 30, 2023, $1,986.30 has been amortized. There were no conversions as of September 30, 2023.

Note 4: Derivative Liabilities

Derivative liabilities – Convertible Notes

In Q3, 2022, the convertible debt issued February 7, 2022, March 11, 2022, June 28, 2022 and July 26, 2022 became eligible for conversion on August 6, 2022, September 7, 2022, December 25, 2022 and January 22, 2023 respectively. The Company engaged a third-party consultant to determine the fair value of the convertible notes at the end of each quarter. The subsequent evaluation determined that the notes should be accounted for as derivative liabilities upon the date they became convertible due to the variable conversion price included in each note based on Financial Accounting Standards Board (“FASB”) guidance. The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to discounts on convertible debt. Discounts have been amortized to interest expense over the respective terms of the related notes. Since the issuance of the convertible notes mentioned above, three more convertible notes were issued (as discussed in Note 3) for a total of seven of which six are fully converted and debt discount fully amortized. The total derivative liabilities associated with these notes eligible for conversion at September 30, 2023 was $277 and $57,344 at September 30, 2022. The Company’s debt discount relating to these convertible notes amounted to $77,362 at September 30, 2023 and the Company recorded interest expense for the amortization of the discount in the amount of $365,815 at September 30, 2023. The Company recorded a change in the value of embedded derivative liabilities expense of $44 for the three months ended September 30, 2023 ($9,367 year to date).

On July 26, 2022, due to the tainted equity environment, existing convertible notes required derivative treatment. The convertible note in the amount of $8,200 and the convertible note in the amount of $3,105,896.72 (discussed in Note 3) had an initial debt discount of $397,542, loss on initial derivative of $126,888 and a derivative liability of $524,330. At September 30, 2023, the derivative liability value of these notes was $279,494 and represents a decrease in fair value of $102,170 since December 31, 2022. On September 30, 2022, this situation did not exist.

Derivative liabilities – Warrants

Due to the tainted equity environment at July 26, 2022, the Company recognized derivative liability for existing warrants in the amount of $273,679. On December 31, 2022, a gain on derivative liabilities was recognized in the amount of $229,355 leaving a fair value at December 31, 2022 of $44,324 for warrants. On September 30, 2023, a loss on derivative liabilities was recognized in the amount of $3,794 leaving a fair value of $2,552 for warrants at September 30, 2023.

 Schedule of Derivative Liabilities and Fair Value

Derivative liabilities (fair value)

Note 5: Notes Payable, Related Parties

Promissory notes dated November 6, 2016 with a principal amount of $13,516 are due and bear interest of 5% and are payable on demand. Accrued interest to September 30, 2023 on these notes is $5,298.

In 2017 compensation was due to members of the executive management team in the amount of $312,000. In support of the growth of the Company, those executive team members agreed to defer receipt of payment by converting into loans that bear interest of 4%. $60,000 principal and accrued interest of $14,466 remains.

During 2021, a related party loaned the Company, on a short-term basis, $21,903. This amount was fully repaid in Q1, 2022. This related party will, from time to time, as necessary, lend the Company money on a short-term basis without charging interest. At December 31, 2022, the Company owed this party $10,081. This amount has been repaid during Q2 and the balance owing as of September 30, 2023 is nil.

Note 6: Other Loans Payable

On February 2, 2021, the company entered into a short-term loan agreement in the amount of $50,000 at an annual interest rate of 5% and due February 1, 2022. It was agreed to extend the due date to February 2, 2023. By mutual agreement, the note was extended for an additional term of six months and therefore would expire August 2, 2023. The terms and conditions remained the same with the exception of a change in the interest rate from 5% to 12%. During Q2, 2023, the principal portion of this loan was repaid leaving only accrued interest owing in the amount of $6,694. As of September 30, 2023, this accrued interest remains outstanding.

Note 7: Intellectual Property

As of the filing, the Company holds no intellectual property.

Note 8: Property and Equipment

Demonstration Equipment

The Company may have demonstration equipment to allow it to show a working version of its technology and equipment to customers and organizations in the future. Demonstration equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost would include the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended useful life. Depreciation for the demonstration equipment would be at a rate estimated to write off the cost of the equipment less its estimated residual value by an equal annual amount over its expected useful life. The residual value and expected useful life of the demonstration equipment is reviewed and adjusted, if appropriate, at the end of each reporting period. The Company does not currently have any demonstration equipment but could in the future.

Note 9: Common Stock

Common Stock

As at December 31, 2021, the Company had authorized 200,000,000 common stock with $0.001 par value with 144,354,957 shares issued and outstanding. Effective June 29, 2022, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada to increase the aggregate number of authorized shares to 501,000,000, of which 500,000,000 shares are common stock with a par value of $0.001 per share and 1,000,000 shares are preferred stock (see Note 17) with a par value of $0.001 per share.

At September 30, 2023, 441,457,754 common stock was issued and outstanding. The following table details the number of common stock issued:

 Schedule of Common Stock

On August 9, 2022, the Company issued 1,376,147 shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).

On August 16, 2022, the Company issued 1,834,862 shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).

On September 1, 2022 (effective June 13, 2022), 197,183 shares were rescinded by a shareholder.

On September 6, 2022, the Company issued 1,648,352 shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).

On September 12, 2022, the Company issued 1,250,000 shares completing the full conversion of a convertible promissory note including accrued interest of $2750. (See Note 3 for details).

On September 20, 2022, the Company issued 2,542,373 shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).

On October 6, 2022, the Company issued 3,000,000 shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).

On October 24, 2022, the Company issued 4,988,208 shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).

On January 9, 2023, the Company issued 5,769,231 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On January 26, 2023, the Company issued 3,229,505 shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).

On February 2, 2023, the Company issued 7,500,000 shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).

On February 3, 2023, the Company issued 4,316,123 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On February 7, 2023, the Company issued 9,027,778 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On February 8, 2023, the Company issued 4,986,627 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On February 13, 2023, the Company issued 9,750,000 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On February 14, 2023, the Company issued 5,384,615 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On February 21, 2023, the Company issued 3,507,813 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On March 15, 2023, the Company issued 9,375,000 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On March 20, 2023, the Company issued 11,090,909 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On March 27, 2023, the Company issued 11,648,352 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On April 24, 2023, the Company issued 12,235,294 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On May 22, 2023, the Company issued 5,403,846 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On May 25, 2023, the Company issued 13,076,923 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On June 5, 2023, the Company issued 13,728,814 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On June 9, 2023, the Company issued 14,491,525 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On June 14, 2023, the Company issued 15,192,307 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On June 16, 2023, the Company issued 15,192,307 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On June 20, 2023, the Company issued 10,600,962 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On September 5, 2023, the Company issued 17,203,389 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On September 12, 2023, the Company issued 18,076,923 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On September 21, 2023, the Company issued 19,000,000 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On September 26, 2023, the Company issued 19,897,436 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

On September 27, 2023, the Company issued 20,974,359 shares upon partial conversion of a convertible promissory note (see Note 3 for details).

Note 10: Related Party Transactions

Outstanding compensation and expense reimbursements due to consultants engaged by the Company $1,502,421 (2022: $1,143,145).

Refer to other related party payables in Notes 5 and 6.

The Company (the lender) signed a loan agreement with RHBV (the borrower) on June 21, 2022. RAKR agreed to a two-year loan facility with an interest rate of 8% with interest only payments until a bullet payment is made for the principal on the due date. Provisions in the agreement allow for prepayment. First tranche of the loan to RHBV in the amount of $5,000 was issued to RHBV on July 7, 2022. No changes to September 30, 2023.

Effective April 1, 2023 Rainmaker (RAKR) divested 60% interest in Rainmaker Worldwide Inc. (Ontario) (RWI) and continues to hold a 40% interest. RAKR will retain management participation and will retain one out of three board seats.

Note 11: Commitments and Contingencies

In the ordinary course of operating the Company’s business, it may, from time to time, be subject to various claims or possible claims. Management’s view that there are no claims or possible claims that if resolved would either individually or collectively result in a material adverse impact on the Company’s financial position, results of operations, or cash flows. These matters are inherently uncertain, and management’s view of these matters may change in the future.

On April 27, 2018, the Company identified a judgement dated August 8, 2016 against six Defendants including a former subsidiary of the Company as well as a predecessor of the Company as currently named and constituted. The amount of the judgement including costs is $4,423,910. An appeal was filed on November 9, 2016 by the previous management. A decision on the appeal was rendered on June 22, 2018 and the original judgement was upheld. As a result, the Company has recorded a contingent liability of $4,423,910 as of September 30, 2023 (2022: $4,423,910). The Company, since its last report, has not been contacted by the Plaintiff.

Note 12: Inventory

Inventory is stated at the lower of cost or market. Cost is recorded at standard cost, which approximates actual cost, on the first-in first-out basis. The Company, at this time, holds no inventory but may in the future.

Note 13: Leases

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.

There are no lease-related assets and liabilities recorded on the Company’s consolidated balance sheet and the Company has no lease expenses.

Note 14: Stock Options

In order to compensate members of the board and executives, the following stock options have been granted, vesting as described.

 Schedule of Warrants and Options

 Schedule of Share-based Payment Award Stock Options Valuation Assumptions

Note 15: Income Taxes

The Company recognizes deferred tax assets and liabilities using the asset and liability method. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. This method requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2022, the Company’s deferred tax assets relate to net operating loss (“NOL”) carry-forwards that were derived from operating losses and stock-based compensation from prior years. A full valuation allowance has been applied to the Company’s deferred tax assets. The valuation allowance will be reduced when and if the Company determines it is more likely than not that the related deferred income tax assets will be realized. At September 30, 2023, the Company had federal net operating loss carry-forwards, which are available to offset future taxable income, of $5,734,058. The Company’s NOL carry-forwards can be carried forward to offset future taxable income for a period of 20 years for each tax year’s loss. These NOL carry-forwards begin to expire in 2037. No provision was made for federal income taxes as the Company has significant NOLs in the United States and Canada. All of the Company’s income tax years remained open for examination by taxing authorities.

 Schedule of Effective Income Tax Rate Reconciliation

Note 16: Investments

None.

Note 17: Discontinued Operations

Effective April 1, 2023, the Company came to an agreement to divest 60% of Rainmaker Worldwide Inc., the private Ontario based company (a shell with no significant assets or liabilities), leaving RAKR with a 40% ownership in this company. The resultant Financial Statements, in accordance with ASC 205-20-45-1E, reflect the impact of this restructuring of the Company. The restructuring was executed to facilitate the fully funded development of the North American market. This includes Rainmaker and Miranda products as per the Joint Development Agreement described herein (see Note 1 Nature of Operations under Ongoing Partnerships). The current value of the Company’s 40% interest in Rainmaker Worldwide Inc. (Ontario) is nil.

Note 18: Mezzanine Equity

Effective June 29, 2022, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada to increase the aggregate number of authorized shares to 501,000,000, of which 500,000,000 shares are common stock (see Note 9) with a par value of $0.001 per share and 1,000,000 shares are preferred stock with a par value of $0.001 per share.

On May 23, 2023, a Certificate of Designation was executed designating 150,000 Preferred Stock as a new class of Preferred Stock designated Series A Preferred Stock. The total face value of this entire series is one hundred and fifty thousand dollars ($150,000). Each share of Series A Preferred Stock has a stated face value of $1.00 and is convertible into shares of fully paid and non-assessable shares of common stock of the Company at $0.0006 per share when common stock becomes available for issuance.

The holder of Series A Preferred Stock have the following rights:

(a) 1.5% MONTHLY FIXED DIVIDEND ON RESTRICTED COMMON STOCK:

Each share of Preferred Stock shall be entitled to a monthly fixed dividend of 1.5% of the original purchase price of such share (the “Monthly Dividend”), payable in cash or, at the option of the Company, in shares of Restricted Common Stock, as determined by the Board of Directors. The Monthly Dividend shall be calculated based on the original purchase price of the Preferred Stock and shall be paid on a monthly basis, with the first payment due one month following the Closing Date and continuing until the earlier of the redemption of the Preferred Stock or the conversion of such shares into shares of Common Stock;

The amount of the Monthly Dividend payable in shares of Restricted Common Stock shall be based on the volume-weighted average price (“VWAP”) of the Common Stock over the 30-day period ending on the last trading day of the month preceding the payment date. The number of shares of Restricted Common Stock to be issued in payment of the Monthly Dividend shall be determined by dividing the amount of the Monthly Dividend payable in shares of Restricted Common Stock by the VWAP; and

The Company may, in its sole discretion, elect to pay the Monthly Dividend in cash or in shares of Restricted Common Stock, subject to the provisions of this Agreement. If the Company elects to pay the Monthly Dividend in cash, it shall be paid on or before the fifteenth day of each calendar month, beginning with the month following the Closing Date. If the Company elects to pay the Monthly Dividend in shares of Restricted Common Stock, such shares shall be issued on or before the fifteenth day of each calendar month, beginning with the month following the Closing Date, subject to the limitations set forth herein.

(b) APPROVAL ON COMMON AND PREFERRED SHARE DILUTION:

Each share of Preferred Stock shall be entitled to approval rights on any future dilution of the Common Stock or Preferred Stock of the Company, subject to the terms and conditions set forth herein. In connection with any proposed issuance of Common Stock or Preferred Stock that would result in a dilution of the existing Common Stock or Preferred Stock of the Company, the Company shall provide written notice to the holders of Preferred Stock (the “Holders”) no less than ten (10) days prior to the proposed issuance, including the proposed terms of such issuance;

The Holders shall have the right to approve or reject the proposed issuance, such approval not to be unreasonably withheld and taking into consideration the financial situation of the Company at the time of the requested dilution. The Company shall not issue any Common Stock or Preferred Stock that would result in a dilution of the existing Common Stock or Preferred Stock of the Company without the approval of the Holders, except as provided herein. Nothing in this Section shall prohibit the Company from issuing any shares of common stock upon the exercise or conversion of currently outstanding securities;

If the Holders approve the proposed issuance, the Company shall use its best efforts to issue and deliver the Common Stock or Preferred Stock within ten (10) business days of such approval. If the Holders reject the proposed issuance, the Company may not issue any Common Stock or Preferred Stock on the proposed terms, unless and until the proposed terms are revised to the satisfaction of the Holders. Any proposed issuance that is not approved by the Holders shall be deemed a breach of this Agreement; and

The approval rights set forth herein shall terminate upon the earliest of (i) the conversion or redemption of all outstanding Preferred Stock, (ii) the occurrence of a Change of Control, or (iii) the written agreement of the Company and the Holders.

(c) OPTION TO APPOINT DIRECTORS:

Each holder of Preferred Stock shall be entitled to the right to appoint up to three (3) directors to the Board of Directors of the Company. The right to appoint directors shall be subject to the terms and conditions set forth herein;

If a holder of Preferred Stock wishes to exercise their right to appoint directors, they shall provide written notice to the Company no less than thirty (30) days prior to the date of the Company’s annual meeting of stockholders. The notice shall identify the individuals proposed to be appointed as directors and shall include all information required to be disclosed under applicable law;

The Company shall use its best efforts to ensure that the individuals proposed to be appointed as directors are duly elected to the Board of Directors at the annual meeting of stockholders. If the Company fails to cause the individuals proposed to be appointed as directors to be duly elected, then the Company shall take such actions as may be necessary or appropriate to ensure that such individuals are appointed as directors; and

The right to appoint directors set forth herein shall terminate upon the earliest of (i) the conversion or redemption of all outstanding Preferred Stock, (ii) the occurrence of a Change of Control, or (iii) the written agreement of the Company and the holders of a majority of the outstanding shares of Preferred Stock.

(d) RIGHT TO AUTHORIZE A ROLLBACK OF COMMON SHARES

The holder(s) Preferred Stock shall have the right to authorize a rollback of common shares of the Company in accordance with the terms and conditions set forth herein. For the purposes of this section, a “rollback of common shares” shall mean a reverse stock split or any other transaction or series of transactions that reduces the number of outstanding common shares of the Company;

In the event that the holder(s) of Preferred Stock wish to authorize a rollback of common shares, they shall provide written notice to the Company of their intention to do so. Such notice shall identify the proposed terms of the rollback, including the ratio of common shares to be exchanged for each new share;

The Company shall use its best efforts to carry out the rollback in accordance with the terms set forth in the notice. If the Company is unable to carry out the rollback as proposed, it shall promptly notify the holder(s) of Preferred Stock and negotiate with them in good faith to reach an agreement on the terms of the rollback; and

The right to authorize a rollback of common shares set forth herein shall terminate upon the earliest of (i) the conversion or redemption of all outstanding Preferred Stock, (ii) the occurrence of a Change of Control, or (iii) the written agreement of the Company and the holders of a majority of the outstanding shares of Preferred Stock.

In the event that the Company puts forth a proposal to effect a reverse stock split of the Company’s Common Stock, the holders of the Preferred Stock shall have the right to vote 50.1% of the amount of shares on such proposal.

(e) BUYBACK TRIGGER AND INVESTOR’S OPTION TO TAKE OWNERSHIP OF EQUITY

The Preferred Stock shall have a Buyback trigger based on the following conditions. The Preferred Stockholders have the right to do demand/receive cash if any of the following happen. To date, no such demands have been made:

1) RAKR is no longer SEC compliant;

2) RAKR is no longer publicly traded on an OTC exchange;

3) Any breach of the conditions (a-g);

4) On the 24-month anniversary of the subscription, or with an extension mutually agreed by RAKR and the holder(s) of Preferred Stock.

If any of the above triggers occur and RAKR fails to repurchase the Preferred Stock within 60 days of the occurrence of such trigger, the holder(s) of the Preferred Stock shall have the right to exercise an option to take ownership of the Ontario Rainmaker Worldwide Common Share equity owned by RAKR, subject to the following conditions:

i. The option to take ownership of the equity must be exercised within 60 days of the expiration of the repurchase period described above;

ii. The value of the equity to be transferred to the holder(s) of Preferred Stock shall be equal to the aggregate principal amount of the Preferred Stock outstanding at the time of exercise of the option; and

iii. The transfer of the equity shall be subject to any applicable laws and regulations, including without limitation any securities laws and regulations.

(f) RIGHT TO PURCHASE AND CONVERT TO COMMON STOCK

The holder of the Preferred Stock shall have the right to purchase, when common stock becomes available for issuance, up to US$600,000 worth of common stock of the Company at a price of US$0.0006 per share, reflecting a discount to market price at the time of signing this agreement of 50% and/or convert the Preferred Stock with the same conversion terms as above.

The exercise of these rights are subject to the following terms and conditions:

i. Availability of Shares: The purchase of common stock by the holder of the Preferred Stock shall be contingent upon the Company making such shares available for issuance.

ii. Purchase Notice: When common stock becomes available for issuance, the holder of the Preferred Stock shall provide a written notice to the Company indicating their intent to exercise their right to purchase the common stock. The notice shall specify the desired number of shares to be purchased, not exceeding the US$600,000 limit.

iii. Purchase Price: The purchase price per share shall be US$0.0006, reflecting a discount to market price of 50% at the time of signing this agreement.

iv. Payment Terms: The holder of the Preferred Stock shall remit the full payment for the purchased common stock within a specified timeframe determined by the Company.

v. Transfer of Shares: Upon receipt of the full payment, the Company shall transfer the purchased common stock to the holder of the Preferred Stock, and the stock certificates or electronic equivalents shall be issued accordingly.

vi. Limitations: The right to purchase common stock is subject to applicable laws, regulations, and the Company’s Articles of Incorporation and Bylaws.

(g) Voting Rights.

The Series A Holder shall be entitled to notice of any stockholders’ meeting and to vote as a single class upon any matter submitted to the stockholders and their approval shall be required to effect such action. In the event that the Company determines to put forth a proposal to its stockholders to effect a reverse split of its outstanding Common Stock, the Series A holder shall have the right to such number of votes as shall equal 50.1% of the voting stock of the Company.

As of May 26, 2023 the Company received $150,000 for 150,000 shares of Series A Preferred Stock. These shares were issued July 20, 2023.

As of September 30, 2023 and December 31, 2022, the Company had 150,000 shares of Series A Preferred Stock outstanding and none, respectively, and recorded as mezzanine at face value of $150,000 due to certain default provisions requiring mandatory cash redemption that are outside the control of the Company.

Note 19: Subsequent Events

On October 3, 2023, the Company issued 5,724,359 Common Shares for the convertible promissory note dated February 21, 2023, originally in the amount of $44,250. This was the final conversion for this note in the amount of $20 principal and $2,212.50 interest.

On November 6, 2023, the Company issued 40,000,000 Common Shares to Rainmaker Worldwide Inc. (Ontario) (RWI) as part of the Share Purchase agreement for RWI to acquire 100% of the common shares of Miranda. This satisfies the full requirement of the Company to retain a 40% interest in Miranda.

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

The following discussion and analysis contain forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our results could differ materially from the results indicated by our forward-looking statements as a result of many known or unknown factors, including, but not limited to, those factors discussed in Item 1A. “Risk Factors” in our on Form 10-12GA below in Part II Item 1A. “Risk Factors” of this Form 10-Q and in the “Cautionary Note Regarding Forward-Looking Statements” set forth at the beginning of this report.

You should read the following discussion and analysis in conjunction with the audited financial statements, and the related footnotes thereto, appearing elsewhere in this Form 10-Q. In addition, we intend to use our media and investor section on our website (www.rainmakerww.com/category/investor-updates/), SEC filings and press releases to communicate with the public about Rainmaker, its services and other issues.

Overview

Rainmaker Worldwide Inc. (“RAKR”, the “Company”, “we”, “us” or “our”) is a Nevada corporation originally formed on February 27, 1998. The corporation became RAKR on July 3, 2017 in a reverse merger. We are currently developing projects in various locations around the globe. We are implementing these projects using proprietary technology of our former subsidiary based in the Netherlands, Rainmaker Holland B.V. (“RHBV”). The Company retains a 12% ownership stake in RHBV. RAKR retains access to the technology based on a cost-plus formula.

Effective April 1, 2023, Rainmaker (RAKR) divested 60% interest in Rainmaker Worldwide Inc. (Ontario) (RWI) and continues to hold a 40% interest. RWI will be the driver of operations in Canada, the Caribbean, Central America and South America. RAKR will retain a management participation and will retain one out of three board seats. The rationale for the divestiture and restructuring was to have RWI serve as a vehicle to acquire complementary technology and companies. As a private company, acquisitions, including the purchase of 100% of the common stock of Miranda, become easier to finance and operate. The new majority owners have agreed to provide the necessary working capital to affect this and future transactions. In addition, with majority Canadian owners and a technology history, RWI is now eligible for a large range of grants and preferable financing options that were not previously accessible with a Canadian company that was wholly owned by a US based public company.

The Company has its head office based in Peterborough, Ontario, Canada. The Company utilizes two main types of products that it produces: energy-efficient, fresh water-producing/purification technologies: (1) Air-to-Water (“AW”), which harvests fresh water from humidity and heat in the atmosphere, and (2) Water-to-Water (“WW”), which transforms seawater or polluted water into drinking water. The technologies can be wind driven, solar based, or can use conventional power sources, such as grid or generator. It is deployable anywhere and leaves no carbon trace if renewable resources are deployed. The Company also distributes complementary technology through Joint Development Agreements.

The Company is pursuing projects in Turks and Caicos and other Caribbean countries. The Company has completed the sale of a water purification system in the Turks and Caicos using a combination of Miranda and Rainmaker technologies. In the Caribbean and Central America, locations have been identified and operating plans defined.

The Company has generated limited revenue up until the present time, and its operations for the past four years have been typically focused on business development, market research, technology research and development activities. The Company, on a consolidated basis, had total assets of $43,038, as of December 31, 2022. As of September 30^th, 2023, net assets were $30,863.

At present, the Company executes consulting agreements with experienced executive personnel and senior advisors. Sales are heavily driven by independent distributors and project developers. The Company had $78,912 in revenue for the quarter ended September 30, 2023 as the result of the delivery of a water treatment system to Turks and Caicos and no revenue for the quarter September 30, 2022 and had net losses of $961,110 and $939,581 for the quarters ended September 30, 2023 and 2022, respectively. The losses incurred to September 30, 2023, consist of general and administrative expenses (64%) and interest expense, amortization of debt discount, change in derivative liabilities and gain from operations of discontinued operations net of other income (36%). The Company has suffered recurring losses from operations, negative cash flows from operating activities and has limited resources or revenues to cover its operating costs. The Company’s auditor’s report for 2022 stated that there was substantial doubt about the Company’s ability to continue as a going concern.

Products and Services

Overview

Across the world, fresh water is unevenly distributed. Many regions are desperately under-served, including North Africa, the Middle East, India, Mexico, large portions of South America, and various island geographies.

Fundamentally, the solutions are based on deploying technology with the following attributes to ensure low-cost delivery and Company profitability:

Air-to-Water (AW) – Harvests fresh water from airborne humidity by using advanced heating and cooling technologies.

The acquisition of Miranda provides the Company with a full suite of water production and purifications systems that are distributed and available to communities who need them the most.

Cost Information

The relevant Cost Information is the cost per liter of alternative suppliers. Currently in remote locations, the principal source of supply is bottled water. Accordingly, our solutions are optimally profitable when we compete head-to-head with bottled water that is transported or bulk water that is transported by truck to local communities. In most remote communities where this water is imported, the minimum cost per liter is US$0.30 reaching as high as US$2.00, according to our market research. The Company’s fully amortized cost of water per liter allows us to compete profitably to generate corporate value beneficial to our shareholders.

Market Opportunity

In the past ten years, there has been a growing awareness of the shortage of fresh water—and the associated economic and social effects the problem magnifies in impoverished and underdeveloped communities. Entities ranging from Water.Org to the United Nations (access to safe drinking water represents #6 of the 17 Sustainable Development Goals articulated by the United Nations) are at the forefront of driving international policy momentum and prospects for multilateral cooperation in the realms of global governance and public-private co-regulation. Common to these efforts is the search for scalable and practical solutions that possess applications uniquely suited to the problem of shortage.

The metrics that underpin the international need for ingenuity and action are the same as those that animate and sustain the market opportunity for our Company:

Moreover, at any moment, the atmosphere contains approximately 37.5 million billion gallons of water. This potential is not currently harvested by the means of private organizations or government institutions and thus presents a significant opportunity for AW technology to satisfy worldwide demand for water.

The World Health Organization estimates that 50 liters of water per day is required per individual to meet basic needs. It is estimated by the OECD that by 2030 nearly half of humanity will be living in a condition of severe water stress. Currently, according to UNICEF, 2.2 billion people around the globe lack safe drinking water. While high-income countries only treat 70% of wastewater, low-income countries treat 8%. With the world’s population expected to reach 9 billion by 2038, the global need is indisputably high. Much of the population expansion is or will be in the very areas that are already suffering from the problem of water scarcity.

The above analysis points to a global market for water that is extraordinarily immense. Today, the annual global water market for all purposes and uses is $650 billion and is expected to expand to $1 trillion by 2025. (Source: RobecoSAM Study (2015, June). Water: the market of the future). Applying RAKR’s approach against the purposes and uses defined above, our solutions are tailored to meet roughly 70% of that global level of demand.

Suppliers

As stated previously, our principal supplier for the core technologies to be deployed is RHBV. RHBV in turn has built a global supply chain for its components. Should RHBV not supply the appropriate scale of technology required by a project, RAKR has identified multiple technologies of different sizes and types.

As a result of the pending acquisition of Miranda, RAKR has access to a much expanded and complimentary product line. Miranda and its partners have been providing products and services globally for over ten years to over thirty countries.

Supplemental technology (i.e., bottling, pre-post wastewater treatment, mineralization solutions, and renewable energy) – suppliers are global, abundant, and highly competitive so as to ensure the lowest cost per liter for any given project planned implemented by the Company. The Company is pursuing projects as a distributor of supplementary products based on Joint Development Agreements.

Competition

The Rainmaker business model that will deliver potable water at the source of demand is uniquely positioned to address alternative competitive models. We believe that competitive models, while relevant and plausible alternatives, will not ultimately fully support the global level of demand for water at a reasonable price per liter. By virtue of our current affiliations, we believe we have a cost per liter competitive advantage. Accordingly, on a global basis, we do not believe competitive conditions will thwart our ability to produce long-term, corporate value or significantly diminish our financial results in the near term. However, other companies with sufficiently greater resources may develop competing products and have an advantage over us based on the relative size.

Results of Operations for the Nine Months ended September 30^th, 2023 and 2022

Revenue

Revenue was $78,912 as a result of the delivery of the water treatment system to Turks and Caicos and $0 for the nine months ended September 30^th, 2023, and September 30^th, 2022 respectively.

General and Administrative Expenses

General and administrative expenses primarily include consultant expenses and benefit costs and stock-based compensation expense for executive consultants, outside legal and professional services, marketing and advertising, and facilities costs. General and administrative expenses for the nine months ended September 30, 2023 and September 30, 2022 were as follows:

General and administrative expenses, including stock-based compensation, for the nine months ended September 30, 2023, decreased $179,616, or 27.8%, compared to the same period in 2022. This decrease primarily relates to (1) a decrease of $144,227 in general and administrative expenses, (2) consulting expense decrease of $19,052, (3) stock option expense decreased of $11,983, (4) travel expense decreased by approximately $2,830, and (5) marketing, advertising and promotion expense decreased by approximately $1,524. Excluding stock-based compensation, general and administrative expenses decreased $167,633.

Liquidity and Capital Resources

Management’s Plans

While we are similar to other development stage companies, we have now pursued and executed a strategy whereby we have a full suite of products that can deliver distributed water solutions globally. To date, our products have yet to generate significant revenue. As a result, we have historically suffered recurring losses and we do not have the required cash resources to fully execute our business plans.

Historically, the Company’s major sources of cash have been comprised of proceeds from various private offerings of its securities (including common stock) and debt financing. From 2015 through to the date of this filing, the Company raised approximately $8.22 million in gross proceeds from various private offerings of our common stock, preferred stock and convertible debt. These funds were raised during various stages of the company and allowed us first to develop a commercially ready product and as soon as logistics and supply chains allow, deliver these products into identified projects and begin to generate revenue. The Company has sustained losses from operations in each fiscal year since our inception, and we expect losses to continue for the indefinite future. As of September 30, 2023 and September 30, 2022, the Company had an accumulated deficit of approximately $73.8 million and $71.9 million, respectively, and stockholders’ equity of approximately $(10.7) million and $(9.5) million, respectively. As of September 30, 2023, the Company had approximately $370 in cash.

The Company recognizes and is addressing the need to raise additional capital in order to continue to execute its business plan in the future. There is no assurance that additional financing will be available when needed or that the Company will be able to obtain financing on terms acceptable to it or whether the Company will become profitable and generate positive operating cash flow.

Off-Balance Sheet Arrangements

As of September 30, 2023, the Company had no off-balance sheet arrangements.

Critical Accounting Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:

While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those estimates and the differences could be material. The most significant estimates impact the following transactions or account balances: stock compensation.

See Note 2 in our consolidated financial statements for a discussion of our significant accounting policies.

Recently Issued Accounting Standards Not Yet Effective or Adopted

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, as of December 31, 2022, our Chief Executive Officer and Acting Chief Financial Officer has concluded that our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Our Chief Executive Officer and Acting Chief Financial Officer also concluded that, as of September 30, 2023, our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Acting Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting in accordance with Exchange Act Rule 13a-15. With the participation of our Chief Executive Officer and Acting Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2023 based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of September 30, 2023, based on those criteria. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:

Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of September 30, 2023, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.

Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2023, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls

Our management, including our CEO and EVP Finance, do not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not currently in any legal proceedings.

Item 1A. Risk Factors

Investing in our common stock involves risks. Each of these risks as well as other risks and uncertainties not presently known to us or that we currently deem immaterial could adversely affect our business, results of operations, cash flows and financial condition and cause the value of our common shares to decline, which may result in the loss of part or all of your investment.

There has been no change since filing the 2023 second quarter 10-Q.

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

On January 9, 2023, a convertible promissory note dated June 28, 2022 in the amount of $64,250 was partially converted. $15,000 principal was converted into 5,769,231 shares leaving a principal balance owing of $49,250.

On January 26, 2023, a convertible promissory note dated July 26, 2022 in the amount of $35,00 was partially converted. $12,000 principal and $595.07 accrued interest was converted into 3,229,505 shares leaving a principal balance owing of $23,000.

On February 2, 2023, the Company issued shares upon a partial conversion of the June 28, 2023 convertible promissory note. $15,000 principal was converted into 7,500,000 shares leaving a principal balance owing of $34,250.

On February 3, 2023, the Company issued shares upon partial conversion of the July 26, 2022 convertible promissory note. $8,000 principal plus accrued interest of $416.44 was converted into 4,316,123 shares leaving a principal balance of $15,000.

On February 7, 2023, the Company issued shares upon partial conversion of the June 28, 2022 convertible promissory note. $16,250 principal was converted into 9,027,778 shares leaving a principal balance of $18,000.

On February 8, 2023, the Company issued shares upon a partial conversion of the July 26, 2023 convertible promissory note. $8,000 principal and $427.40 accrued interest was converted into 4,986,627 shares leaving a principal balance of $7,000.

On February 13, 2023, the Company issued shares upon partial conversion of the June 28, 2022 convertible promissory note. $15,600 principal was converted into 9,750,000 shares leaving a principal balance of $2,400.

On February 14, 2023, the Company issued shares upon a partial conversion of the July 26, 2022 convertible promissory note. This final partial conversion was in the amount of $7,000 principal plus $383.56 accrued interest and was converted into 5,384,615 shares. This note is now fully converted.

On February 21, 2023, the Company issued shares upon a partial conversion of the June 28, 2022 convertible promissory note. This final partial conversion was in the amount of $2,400 principal plus $3212.50 accrued interest and was converted into 3,507,813 shares. This note is now fully converted.

On March 15, 2023, the Company issued shares upon partial conversion of a convertible promissory note dated September 12, 2022 in the amount of $49,250. $15,000 principal was converted into 9,375,000 shares leaving a principal balance of $34,250.

On March 20, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $12,200 principal was converted into 11,090,909 shares leaving a principal balance of $22,050.

On March 27, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $10,600 principal was converted into 11,648,352 shares leaving a principal balance of $11,450.

On April 24, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $10,400 principal was converted into 12,235,294 shares leaving a principal balance of $1,050.

On May 22, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $1,050 and accrued interest of $3,512.50 principal was converted into 5,403,846 shares. This note is now fully converted.

On May 25, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $8,500 principal was converted into 13,076,923 shares leaving a principal balance of $35,750.

On June 5, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $8,100 principal was converted into 13,728,814 shares leaving a principal balance of $27,650.

On June 9, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $8,550 principal was converted into 14,491,525 shares leaving a principal balance of $19,100.

On June 14, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $7,900 principal was converted into 15,192,307 shares leaving a principal balance of $11,200.

On June 16, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $7,900 principal was converted into 15,192,307 shares leaving a principal balance of $3,300.

On June 20, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $3,300 principal and accrued interest of $2212.50 was converted into 10,600,962. This note is now fully converted.

On September 5, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $10,150 principal was converted into 17,203,389 shares leaving a principal balance of $34,100.

On September 12, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $9,400 principal was converted into 18,076,923 shares leaving a principal balance of $24,700.

On September 21, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $8,740 principal was converted into 19,000,000 shares leaving a principal balance of $15,960.

On September 26, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $7,760 principal was converted into 19,897,436 shares leaving a principal balance of $8,200.

On September 27, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $8,180 principal was converted into 20,974,359 shares leaving a principal balance of $20.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable to smaller companies.

Item 5. Other Information

None

Item 6. Exhibits