Rainmaker Worldwide Inc. 10-K

Item 9A. 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 December 31, 2022, 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. 19 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 December 31, 2022 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 December 31, 2022, 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: 1. As of December 31, 2022, due to the inherent issue of segregation of duties in a small company, we have relied heavily on entity or management review controls. Accordingly, management has determined that this control deficiency constitutes a material weakness. 2. As of December 31, 2022, we did not establish a formal written policy for the approval, identification, and authorization of related party transactions. 3. During the 2022 audit, it was necessary to record adjusting journal entries. Management has determined that the effects of the corrected misstatements are material, both individually and in the aggregate, to the financial statements as a whole. The corrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in the judgment of our auditor previously, such corrected misstatements are material to the financial statements under audit. Professional standards define an audit adjustment as a proposed correction of the financial statements that, in the judgment of our auditor previously, may not have been detected except through the auditing procedures. An audit adjustment may or may not indicate matters that could have a significant effect on the Company’s financial reporting process (that is, cause future financial statements to be materially misstated). In the judgment of our auditor previously, the adjustments proposed indicate matters that could have a significant effect on the Company’s financial reporting process. Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2022, 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 December 31, 2022, 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. 20 Item 9B. Other Information On December 21, 2021, the Board of Directors (the “Board”) of Rainmaker Worldwide Inc., a Nevada corporation (the “Company”), appointed James Ross and Dr. Mamdouh Shoukri to serve on the Company’s Board. This information is consistent with the 8-K filing from December 28, 2021. Mr. Ross has held senior management positions in Renewable and Technology companies. During this period, he has invested in, developed, financed, divested and acquired numerous energy projects in hydro, biomass, wind, co gen, fuel cell and gas firming. He has also been actively involved and invested in numerous technology companies, including Telecommunications, Renewable, Information Technology, Blockchain and GIS companies. He has been a Director and Financial Manager of both public and private companies. Mr. Ross has also served as the President of JSR Capital Inc., an investment fund and corporate finance firm focused on funding and consulting well-managed emerging renewable, independent power and technology companies since September 1991. Dr. Shoukri serves on the Board of Directors of Canada Foundation for Innovation, an independent not-for-profit organization that invests in research facilities and equipment in Canada’s universities, colleges, research hospitals, and non-profit research institutions. Dr. Shoukri was the seventh President and Vice-Chancellor of York University from July 1, 2007 to June 30, 2017. Dr. Shoukri began his career in academia at McMaster University in Hamilton, Ontario, leading major research programs in support of the power and process industries and serving in administrative leadership positions at all levels of the academy, including as department chair, dean and vice-president. There is no arrangement or understanding between Mr. Ross, Dr. Shoukri, and any other persons, pursuant to which they were selected to the Board. Mr. Ross and Dr. Shoukri have not engaged in any transaction, or any currently proposed transaction, in which the Company was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest. There are no family relationships between Mr. Ross, Dr. Shoukri and any Director or executive officer of the Company. July 1, 2022 Kelly White received a promotion to Executive Vice President of Finance. Ms. White holds a BSc. in Mathematics and Economics from Trent University. She has over 30 years of experience in finance, accounting, administration and general management. PART III Item 10. Directors, Executive Officers and Corporate Governance The following individuals serve as the directors and executive officers of our company as of the date of this annual report. All directors of our company hold office until they either resign or the term of their engagement expires whichever comes first. The executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Name Position Held with the Company Age Date First Elected or Appointed Michael O’Connor CEO* and Executive Chairman 56 July 21, 2014 James Ross Non-Executive Director 65 December 20, 2021 Dr. Mamdouh Shoukri Non-Executive Director 75 December 20, 2021 Kelly White Executive Vice President of Finance 55 July 1, 2022 *Mr. O’Connor maintained the Executive Chairman role since 2014 and for a short period of time he hired a CEO to assist him in negotiations for the Sphere 3D merger. When that merger agreement was terminated, Mr. O’Connor resumed his role as CEO. Business Experience The following is a brief account of the education and business experience of the executive officers and directors. 21 Michael O’Connor – CEO and Executive Chairman Michael O’Connor has more than 30 years of operational, corporate finance, business development and corporate governance experience. He began his career at the Economic Council of Canada before becoming a Director of the Centre for Economic and Financial Analysis at one of the largest international consulting companies in the U.S – Science Applications International Corporation. In 1998, Mr. O’Connor joined Orascom Telecom (“OT”) in Egypt as a founding executive, leading all business development and Mergers and Acquisitions activities throughout Africa, the Middle East, Europe and Asia. During his time with OT he led more than $35 billion in transactions. During his tenure, OT grew from 100,000 subscribers to more than 125 million across 10 countries and from 6 to 100,000 employees by 2008. Michael returned to Canada as one of the founders of Wind Mobile (now Freedom Mobile). Wind Mobile was acquired by Shaw Communications Inc. in March 2016 for $1.6 billion. Shaw Communications has since been acquired by Rogers Communications. Michael has extensive international corporate governance experience for both private and publicly traded companies as well as not-for-profit organizations including Hutchison Telecommunications in Hong Kong, nine Telecel subsidiaries, Wind Mobile, Ontario Shores and Trent University. Mr. O’Connor is currently the Executive Chairman of Rainmaker Worldwide Inc., Rainmaker’s purpose is to produce safe drinking water for communities in need. The revolutionary approach to building water infrastructure supports the development of sustainable communities around the world, creating a positive impact environmentally, socially and economically. James Ross – Non-Executive Director (Chair of Audit Committee) Mr. Ross has held senior executive management positions in Renewable and Technology companies. During this period, he has invested in, developed, financed, divested and acquired numerous energy projects in hydro, biomass, wind, co gen, fuel cell and gas firming. He has also been actively involved and invested in numerous technology companies, including Telecommunications, Renewable, Information Technology, Blockchain and GIS companies. He has been a Director and Financial Manager of both public and private companies. Mr. Ross has also served as the President of JSR Capital Inc., an investment fund and corporate finance firm focused on funding and consulting well-managed emerging renewable, independent power and technology companies since September 1991. Dr. Mamdouh Shoukri – Non-Executive Director (Chair of Compensation Committee) Dr. Shoukri serves on the Board of Directors of Canada Foundation for Innovation, an independent not-for-profit organization that invests in research facilities and equipment in Canada’s universities, colleges, research hospitals, and non-profit research institutions. Dr. Shoukri was the seventh President and Vice-Chancellor of York University, Ontario, Canada from July 1, 2007 to June 30, 2017. Dr. Shoukri began his career in academia at McMaster University in Hamilton, Ontario, Canada. McMaster’s leading research programs, in support of the power and process industries, were directed by Dr. Shoukri as he served in administration leadership positions including as Department Chair, Dean and Vice-President. As an academic leader, he guided York’s transformation into a comprehensive research-intensive university as well as spearheading hundreds of millions of dollars of capital development projects. In 2013, for his contributions to the flourishing of Ontario’s academic institutions as both an engineer and an administrator, Dr. Shoukri was named a Member of the Order of Canada, the Order of Ontario, and awarded the Queen Elizabeth II Diamond Jubilee medal. Kelly White – Executive Vice President of Finance Ms. White has been the VP of Operations & Finance at Rainmaker since 2015 and has more than 30 years of experience in finance and administration. On July 1, 2022 she assumed the role of Executive Vice President of Finance. Prior to joining Rainmaker, she was a partner in Larchwood Management Partners, a finance, business and strategic advisory consultancy in the telecommunications, utility and water sectors. Over her career she has performed core financial and corporate infrastructure functions and provided business planning and budgeting services for various companies in manufacturing, retail, financial services, telecommunications, media and consumer products. White has orchestrated many business start-ups across Canada and managed all of the financial and administration and functions of those businesses. She has been an active community volunteer supporting many local sports and community organizations. Family Relationships There are currently no family relationships among our Directors and Executive Officers. 22 Compliance with Section 16(a) of the Exchange Act Section 16(a) of the Exchange Act requires our officers and directors, and stockholders owning more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. The Company is not aware of any persons who failed to timely file reports under this section. Involvement in Legal Proceedings To the best of our knowledge, during the past five years, none of the following occurred with respect to our directors or executive officers: (1) any bankruptcy petition filed by or against any business of which one of them was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree of any court of competent jurisdiction, permanently or temporarily inquiring, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction, the SEC or the CFTC to have violated Federal or state securities or commodities laws. Audit Committee In December 2021, the Board created an Audit Committee, in conjunction with nominating two new independent directors to the Company’s Board. The group has convened informally on many occasions to discuss the contents of this document and the financial statements. The Committee will meet formally as part of this 10-K filing process. The meeting will set out the Committee’s charter and will provide the framework for additional governance and oversight of the internal control over finance reporting. It will work alongside the board of directors as a whole which participates in the review of financial statements and disclosure. The audit committee members are James Ross (chair), Dr. Mamdouh Shoukri and Michael O’Connor. James Ross qualifies as an audit committee financial expert and is independent under applicable SEC standards. Code of Ethics We are in the process of developing a Code of Business Conduct and Ethics that applies to, among other persons, members of our board of directors, our company’s officers including our chief executive officer and chief financial officer, employees, consultants and advisors. Once formulated, our Code of Business Conduct and Ethics will set follow the following guiding principles: 1. honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; 2. full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us; 3. compliance with applicable governmental laws, rules and regulations; 4. the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and 5. accountability for adherence to the Code of Business Conduct and Ethics. 23 Item 11. Executive Compensation The Company has a newly formed compensation committee with two independent board members. Any future changes to compensation will be reviewed and implemented by the committee. SUMMARY COMPENSATION TABLE The following table sets forth the compensation paid to, or accrued for, each of our current executive officers or officers who were in place over the last two fiscal years. Name and Principal Position Year Salary ($) Bonus ($) Stock Awards Option Awards (A) All Other Compensation Total Michael O’Connor (1) 2022 $ 210,000 - - - - $ 210,000 2021 $ 210,000 - - - - $ 210,000 Michael Skinner (2) 2022 N/A - - - - N/A Chief Executive Officer 2021 $ 275,000 - - - - $ 275,000 Kelly White (3) 2022 $ 93,000 - - $ 69,870 - $ 162,870 Executive VP Finance 2021 (4) N/A N/A (A) Reflects the dollar amount expensed by the Company during the applicable fiscal year for financial statement reporting purposes pursuant to ASC 718 1 Michael O’Connor was appointed as the Company’s Chief Executive Officer and Executive Chairman July 2017 for Rainmaker Worldwide Inc. post RTO. 2 Michael Skinner was appointed as the Company’s Chief Executive Officer January 21, 2020-January 20, 2021. The fair market value of the options awarded to Mr. Skinner was $779,771. 3 Kelly White was appointed Executive Vice President of Finance July 1, 2022. Salary reflects July 1 st start date and end date of December 31, 2022. Formerly VP Finance since 2015. Options Awards are calculated on the same basis, i.e., from the point where Ms. White was nominated to her current position. 4 Ms. White was not an executive officer in 2021 Other Agreements None. Outstanding Equity Awards at Fiscal Year End The following table sets forth the number of shares of common stock covered by outstanding stock option awards that are exercisable and unexercisable, and the number of shares of common stock covered by unvested restricted stock awards for each of our named executive officers as of December 31, 2022. Outstanding Equity Awards at Fiscal Year-End For Each Named Officer Option Awards Name Number of Securities Underlying Unexercised Options(#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options (#) Option Exercise Price ($) Option Expiration Date Michael O’Connor - - - - - Kelly White (exp.date’26) 2,625,000 1,475,000 - 0.10 2026 Kelly White (exp.date’27) 1,500,000 1,000,000 - 0.10 2027 Equity Awards None. 24 Director Compensation In 2021 each of the Company’s Directors were granted 500,000 options, 1,000,000 in total. At December 31, 2021, 283,334 of their options had vested. A further 533,333 for a total of 816,667 had vested at December 31, 2022 with a further 183,333 to vest in 2023. Mr. O’Connor did not receive any compensation for services as director for the year ended December 31, 2022 or December 31, 2021. The independent members of the Compensation Committee will determine his director’s compensation for 2023 and beyond. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of April 12, 2023, the Registrant had 246,383,669 shares of common stock issued. The following table sets forth certain information regarding the beneficial ownership of our common stock as of April 12, 2023: ● each person that is known by us to beneficially own more than 5% of our common stock; ● each of our directors; ● each of our executive officers and significant employees; and ● all our executive officers, directors and significant employees as a group. Under the rules of the Securities and Exchange Commission, beneficial ownership includes voting or investment power with respect to securities and includes the shares issuable under stock options, warrants and convertible securities that are exercisable/convertible within sixty (60) days of April 12, 2023. Those shares issuable under stock options, warrants and/or convertible securities are deemed outstanding for computing the percentage of each person holding options, warrants and/or convertible securities but are not deemed outstanding for computing the percentage of any other person. The percentage of beneficial ownership schedule is based upon 246,383,669 shares outstanding as of April 12, 2023. The address for those individuals for which an address is not otherwise provided is c/o Rainmaker Worldwide Inc., 271 Brock Street, Peterborough, ON K9H 2P8 Canada. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting power and investment power with respect to all shares of common stock listed as owned by them. Name and Address of Beneficial Owner Number Percent of Class Outstanding James Ross, Director 666,667 0.27 % Dr. Mamdouh Shoukri, Director 416,673 0.17 % Michael O’Connor, CEO and Executive Chairman (1) 7,132,139 2.89 % Kelly White, EVP Finance (2) 9,438,805 3.74 % Executive officers, directors and significant employees as a group (4 persons directly above) 17,654,284 6.97 % (1)(2) Shares and options held by individual and respective corporations in each case. Item 13. Certain Relationships and Related Transactions, and Director Independence Other than the compensation described above in Item 11 Executive Compensation, there are no related party transactions. Director Independence We currently act with three directors, Michael O’Connor, James Ross and Dr. Mamdouh Shoukri. Mr. Ross and Dr. Shoukri both qualify as an “independent director”. 25 Item 14. Principal Accounting Fees and Services The aggregate fees billed for the most recently completed fiscal year ended December 31, 2022 and for fiscal year ended December 31, 2021 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows: Year Ended December 31, 2022 2021 $ $ Audit Fees 20,000 16,000 Audit Related Fees - - Tax Fees - - All Other Fees 14,779 16,250 Total 34,779 32,250 Fees for the year ended December 31, 2021 relate to M&K CPAS, PLLC, the Company’s auditor. The portion of fees for the year ended December 31, 2022 relating to M&K CPAS, PLLC is $32,250 and the balance is for fees billed by Inclusive Accounting. Inclusive Accounting is a Canadian CPA firm that filed taxes for RWI in Ontario. Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered. Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence. PART IV Item 15. Exhibits, Financial Statement Schedules (a) Exhibits Exhibit Number Description (31) Rule 13a-14 (d)/15d-14d) Certifications 31.1 Section 302 Certification by the Principal Executive Officer 31.2 Section 302 Certification by the Principal Financial Officer and Principal Accounting Officer (32) Section 1350 Certifications 32.1 Section 906 Certification by the Principal Executive Officer 32.2 Section 906 Certification by the Principal Financial Officer and Principal Accounting Officer (b) Financial Statement Schedules Our consolidated financial statements being filed as part of this Form 10-K are filed in Item 8 of this Form 10-K. All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. 26 RAINMAKER WORLDWIDE INC. FINANCIAL STATEMENTS INDEX Page Report of Independent Registered Public Accounting Firm (Auditor Firm ID 2738 ) F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations and Comprehensive Loss F-4 Consolidated Statements of Stockholders’ Equity (Deficit) F-5 Consolidated Statement of Cash Flows F-6 Notes to the Financial Statements F-7 – F-25 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Rainmaker Worldwide, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Rainmaker Worldwide, Inc. (the Company) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred continuing net losses from operations and has a significant accumulated deficit which raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are discussed in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate. Derivative Liabilities As discussed in Note 4, the Company borrows funds through the use of convertible notes payable that contain a conversion price that may be fixed or fluctuates with the stock price. Auditing management’s estimates of the fair value of the derivative liability involves significant judgements and estimates given the embedded conversion features of the notes. To evaluate the appropriateness of the fluctuation of the conversion price, the embedded conversion feature requires bifurcation from the host contract and is recorded as a liability subject to market adjustments as of each reporting period. Significant judgment is exercised by the Company in determining derivative liability values for these convertible note agreements, including the use of a specialist engaged by management. We evaluated management’s conclusions regarding their derivative liability and reviewed support for the significant inputs used in the valuation model, as well as assessing the model for reasonableness. /s/ M&K CPAS, PLLC M&K CPAS, PLLC We have served as the Company’s auditor since 2020. Firm ID 2738 Houston, TX April 19, 2023 F- 2 RAINMAKER WORLDWIDE INC. (Formerly Gold and Silver Mining of Nevada Inc.) Consolidated Balance Sheets December 31 December 31 2022 2021 Assets Current Assets Cash $ 7,130 $ 4,337 Other receivables 5,527 4 Inventory - 175,000 Prepaid expenses 30,381 5,000 Prepaid expenses – related parties - 160,000 Total Current Assets 43,038 344,341 Total Assets $ 43,038 $ 344,341 Liabilities and Stockholders’ Equity (Deficit) Current Liabilities Accounts payable $ 147,345 $ 101,804 Related party payables 1,261,984 906,947 Accrued liabilities 783,118 410,505 Customer deposits 112,500 112,500 Contingent liability 4,423,910 4,423,910 Convertible notes payable, net of discount of $ 328,501 and $ 0 2,978,347 8,200 Notes payable - related parties 83,598 95,419 Other loans payable 50,000 50,000 Derivative liabilities 502,611 - Total Current Liabilities 10,343,413 6,109,285 Long Term Payables Convertible notes payable - 3,105,897 Total Long Term Payables - 3,105,897 Total Liabilities $ 10,343,413 $ 9,215,182 Stockholders’ Equity (Deficit) Common stock - $ 0.001 par value; 500,000,000 and 200,000,000 authorized at Dec 31, 2022 and 2021 respectively; 160,797,716 and 144,354,957 outstanding at December 31, 2022 and December 31, 2021, respectively $ 160,798 $ 144,355 Additional paid-in capital 62,000,842 61,686,839 Accumulated deficit ( 72,834,664 ) ( 70,997,053 ) Accumulated other comprehensive income 372,649 295,018 Total Stockholders’ Equity (Deficit) $ ( 10,300,375 ) $ ( 8,870,841 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 43,038 $ 344,341 The accompanying notes are an integral part of these consolidated financial statements. F- 3 RAINMAKER WORLDWIDE INC. (Formerly Gold and Silver Mining of Nevada Inc.) Consolidated Statements of Operations and Comprehensive Loss 2022 2021 Year Ended December 31, 2022 2021 Revenue $ - $ - Expenses General and administrative expense 1,513,896 1,515,725 Total Expenses 1,513,896 1,515,725 Loss from Operations ( 1,513,896 ) ( 1,515,725 ) Other income (expense) Other income 20,000 65,000 Interest expense ( 348,267 ) ( 829,006 ) Amortization of debt discount ( 252,373 ) - Change in derivative liabilities expense 256,925 - Total other income (expense) ( 323,715 ) ( 764,006 ) Loss from continuing operations ( 1,837,611 ) ( 2,279,731 ) Loss from equity investments - ( 112,000 ) Discontinued operations: Loss from operations of discontinued operations - ( 333,733 ) Total discontinued operations - ( 333,733 ) Net income (loss) $ ( 1,837,611 ) $ ( 2,725,464 ) Other comprehensive income (loss) Foreign exchange translation gain (loss) 77,631 285,865 Net income (loss) and comprehensive income (loss) $ ( 1,759,980 ) $ ( 2,439,599 ) Net loss per share: Basic and diluted $ ( 0.012 ) $ ( 0.02 ) Weighted average number of common shares outstanding: Basic and diluted 148,725,194 145,614,282 The accompanying notes are an integral part of these consolidated financial statements. F- 4 RAINMAKER WORLDWIDE INC. (Formerly Gold and Silver Mining of Nevada Inc.) Consolidated Statements of Stockholders’ Equity (deficit) Number of stock Amount ($) Additional paid-in capital ($) Stock Payable Deficit ($) Accumulated other comprehensive income ($) Total Balance, December 31, 2020 139,580,934 $ 139,581 $ 53,611,108 $ 75,000 $ ( 68,271,589 ) $ 9,153 $ ( 14,436,747 ) Private placements 2,128,385 2,128 76,723 ( 75,000 ) - - 3,851 Conversion of convertible promissory notes 22,884,244 22,885 1,679,775 - - - 1,702,660 Shares cancelled ( 20,238,606 ) ( 20,239 ) ( 1,457,179 ) - - - ( 1,477,418 ) Stock-based compensation 62,248 62,248 Disposition of discontinued operations - - 7,714,164 - - - 7,714,164 Foreign currency translation - - - - - 285,865 285,865 Net gain (loss) for the year - - - - ( 2,725,464 ) - ( 2,725,464 ) Balance, December 31, 2021 144,354,957 $ 144,355 $ 61,686,839 $ - $ ( 70,997,053 ) $ 295,018 $ ( 8,870,841 ) Balance 144,354,957 $ 144,355 $ 61,686,839 $ - $ ( 70,997,053 ) $ 295,018 $ ( 8,870,841 ) Conversion of convertible promissory notes 16,639,942 16,640 177,314 - - - 193,954 Shares cancelled ( 197,183 ) ( 197 ) 197 - - - - Stock-based compensation 136,492 136,492 Foreign currency translation - - - - - 77,631 77,631 Net gain (loss) for the year - - - - ( 1,837,611 ) - ( 1,837,611 ) Balance, December 31, 2022 160,797,716 $ 160,798 $ 62,000,842 $ - $ ( 72,834,664 ) $ 372,649 $ ( 10,300,375 ) Balance 160,797,716 $ 160,798 $ 62,000,842 $ - $ ( 72,834,664 ) $ 372,649 $ ( 10,300,375 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 RAINMAKER WORLDWIDE INC. (Formerly Gold and Silver Mining of Nevada Inc.) Consolidated Statements of Cash Flows 2022 2021 Year Ended December 31, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net gain (loss) $ ( 1,837,611 ) $ ( 2,725,464 ) Adjustments to reconcile net income to net cash used for operating activities: Stock-based compensation 136,492 62,248 Derivative expense – warrants 273,679 - Loss from equity investments - 112,000 Other income - 65,000 Impairment expense 335,000 - Discount amortization 252,373 - Change in fair value of derivative liabilities ( 256,925 ) - Change in operating assets and liabilities: Accounts receivable ( 5,523 ) 1,819 Inventory - 206,278 Prepaid expenses, prepaid expenses related parties ( 25,381 ) 57,000 Accounts payable, related party payables and accrued liabilities 778,629 1,592,258 Customer deposits - ( 36,447 ) Discontinued operations - 475,281 CASH USED FOR OPERATING ACTIVITIES ( 349,267 ) ( 190,027 ) CASH FLOWS FROM INVESTING ACTIVITIES Restructuring/discontinued operations - - CASH USED FOR INVESTING ACTIVITIES - - CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from sale of stock - 3,852 Borrowed on convertible debt 286,250 - Borrowed on debt - 50,000 Borrowed on debt related party 11,269 21,903 Repayments on other loans payable ( 23,090 ) ( 3,300 ) CASH PROVIDED BY FINANCING ACTIVITIES 274,429 72,455 Effect on Foreign Currency Exchange 77,631 ( 70,669 ) NET INCREASE (DECREASE) IN CASH 2,793 ( 188,241 ) CASH AT BEGINNING OF YEAR 4,337 192,578 CASH AT PERIOD END $ 7,130 $ 4,337 NON-CASH TRANSACTIONS Shares issued for conversion 193,954 1,702,659 Shares issued from stock payable - 75,000 Conversion of AP to convertible notes payable - 928,000 Receipts of prepaid inventory 160,000 - Share cancellation 197 - Initial derivative discount 565,623 - The accompanying notes are an integral part of these consolidated financial statements. F- 6 Note 1: Nature of Operations, Reverse Merger and Going Concern Nature of Operations Rainmaker Worldwide Inc. (“Rainmaker” or the “Company” or “RAKR”) is a Nevada company which operates Rainmaker Worldwide Inc. (Ontario) (“RWI”) 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 use wind, solar, or use conventional power sources (grid or generator), is deployable anywhere, and leaves no carbon trace if renewable resources are deployed. As part of the asset restructuring completed March 31, 2021, Rainmaker retained 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. Reverse Merger 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 traded on the OTC Pink, but, as of March 17, 2022, the Company now trades on the OTCQB continuing to trade under the symbol, RAKR. F- 7 Merger with Sphere 3D On July 15, 2020 Sphere 3D Corp. (NASDAQ: ANY) announced that it entered into a definitive merger agreement pursuant to which it would have acquired all the outstanding securities of Rainmaker Worldwide Inc. Upon closing, Sphere 3D’s name would have changed to Rainmaker Worldwide Inc., and its business model would have focused on “WaaS”. Rainmaker management would have assumed operational leadership of the combined entity. The agreement was ultimately terminated on February 12, 2021 and was subsequently announced publicly. As a result of the incomplete Sphere 3D transaction, on March 31, 2021, the Company, including RWI, entered into a business agreement with RHBV, DRM and Wind en Water Technologie Holding B.V. (“WWT”). These companies were considered related parties on that date by virtue of stock ownership exceeding 10 %. The parties agreed to an exchange of contractual obligations, debt owed, and shares of common stock in full settlement of all obligations among the parties. The resultant Financial Statements, in accordance with ASC 205-20-45-1E, reflect the impact of these exchanges to the Company. The Company and RHBV decided to restructure in order to optimize business operations and broaden access to the capital markets. The Company and RHBV, as mutual shareholders in each other’s company, continue to pursue the mission and objective of providing low-cost water to communities and commercial entities in need of water solutions. The Company retains a 12 % ownership stake in RHBV. RAKR retains access to the technology based on a cost-plus formula. Going Concern The Company has incurred continuing losses from its operations and has an accumulated deficit of $ 72,834,664 . 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 financings to enable it to meet its operating needs including current and future sales orders. F- 8 Note 2: Significant Accounting Policies Basis of Preparation The consolidated financial statements presented are for the entity Rainmaker and its wholly owned subsidiary, Rainmaker Worldwide Inc. (Ontario) and Rainmaker Holland B.V. (“RHBV” Discontinued Operations) as a consolidated entity. The consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles. The preparation of the consolidated financial statements in conformity with United States Generally Accepted Accounting Principles 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 discontinued operations and the subsidiary located outside of the United States are measured in their functional currency: Rainmaker Worldwide Inc. (Ontario) reports in Canadian dollars and Rainmaker Holland B.V. (as Discontinued Operations) reports in Euros. Monetary assets and liabilities of these subsidiaries are translated at the exchange rates 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 The Company acquired intellectual property including know-how and patents in the December 2015 Asset Purchase Agreement whereby Rainmaker Worldwide Inc. (Ontario) purchased the assets of Dutch Rainmaker B.V. (“DRM”) and Wind En Water Technologie Holding B.V. (“WWT”). Commencing January 2016, the Company has amortized the patents and know-how using the average life expectancy of the patents which is 14 years. As discussed in Note 18 (Discontinued Operations), these intangible assets were a part of the restructuring agreement and are no longer reflected on the RAKR balance sheet. 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 Leasehold Improvements – lesser of 10 years or lease duration Manufacturing Equipment – 5 years Office Furniture & Equipment – 5 years Demonstration Equipment – 10 years Intellectual Property – 14 years Computer Software – 5 years 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. F- 9 Embedded Conversion Features The Company evaluates 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 does not require derivative treatment under ASC 815, the instrument is 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. 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 will have two sources of revenue. The first is 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 product to the customer. Our contracts outline each party’s rights and obligations including the terms and timing of payments. The second source of revenue is in exchange for operating, maintenance and professional services associated with 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 its grant and contract 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. 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. F- 10 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. Asset Retirement Obligation As of the date of this filing, we hold no assets that are subject to ASC 410, Asset Retirement and Environmental Obligations. In the case that such requirements are needed, the Company will follow ACS 410. The liability is accreted each period over the maximum term of the contractual agreements. The Company records the offsetting asset to the initial obligation as an increase to the carrying amount of the related long-lived asset and depreciates that cost over the maximum term of the contractual agreements. 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. F- 11 Segment Reporting ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for the way that public business enterprises report information about operating segments in the Company’s consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and assess performance. The Company has reportable segments in the United States, Canada and The Netherlands (discontinued operations). Schedule of Segment Reporting December 31 December 31 2022 2021 Gross Profit United States - - Europe-discontinued operations - - Canada - - Gross Profit $ - $ - Net Loss United States 1,773,375 2,671,315 Europe-discontinued operations - - Canada 64,236 54,149 Net Loss $ 1,837,611 $ 2,725,464 Assets United States 42,627 344,263 Europe-discontinued operations - - Canada 411 78 $ 43,038 $ 344,341 Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles of the United States 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. All potentially dilutive shares are anti-dilutive due the Company’s net loss. 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. F- 12 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 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. F- 13 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 CAD$ 100,000 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 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 December 31, 2022, 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 On June 30, 2017, Gold and Silver Mining of Nevada, Inc. held unsecured, matured and past due convertible notes payable of $ 235,495 . On the date of the Merger, the above convertible notes payable amount was recognized on the Company’s balance sheet. On July 3, 2017, $ 180,500 of the convertible notes payable was forgiven and recorded as debt forgiveness in the statement of operations. The following summarizes the above notes including notes forgiven: ● Original note of $ 24,500 – the $ 24,500 was forgiven on July 3, 2017. ● Original note of $ 100,000 with interest at 15 % p.a. - $ 75,000 of these notes was forgiven on July 3, 2017. The remaining $ 25,000 was held by three different parties in the following amounts: $ 8,200 , $ 8,750 and $ 8,050 . ● Original note of $ 90,000 with interest at 15 % p.a. - $ 81,000 of these notes was forgiven on July 3, 2017. ● Original note of $ 20,995 with interest at 15 % p.a. – this note was settled on January 31, 2018 in exchange for 50,000 shares of stock at $ 0.42 per stock (See note 9). ● All of the above notes were convertible at $ 0.001 per stock. Following the Merger, $ 13,100 of the convertible notes payable was converted into stock at a conversion price of $ 0.001 per stock for a total of 13,100,000 shares of common stock as per the terms of the notes. On May 14, 2020, $ 100 of convertible notes payable was converted into stock at a conversion price of $ 0.001 per stock for a total of 100,000 shares of common stock as per the terms of the notes. On June 15, 2020, $ 2,783.53 of convertible notes payable was converted into stock at a conversion price of $ 0.001 per stock for a total of 2,783,530 shares of common stock as per the terms of the notes. F- 14 On June 29, 2020, $ 3,333.30 of convertible notes payable was converted into stock at a conversion price of $ 0.001 per stock for a total of 3,333,302 shares of common stock as per the terms of the notes. As a result of the above conversions, there are $ 8,200 in convertible notes remaining that came into the Company through the July 3, 2017 merger. On July 26, 2022, this note required derivative treatment which resulted in a debt discount of $ 8,200 which was subsequently fully amortized to interest expense on December 31, 2022. On May 10, 2018, the Company entered into a $ 200,000 unsecured, convertible promissory note maturing on July 10, 2018. The note was interest bearing at a rate of 12 % interest per annum with no interest payments due until maturity and convertible into shares of the Company’s Common Stock at a fixed price of $ 0.35 per share. The holder of the note was issued 100,000 shares of common stock in lieu of set-up fees and interest for the term of the loan which was discounted against note in the amount of $ 25,000 , the market value of the shares issued on the date of the note. The Company evaluated the note for a beneficial conversion feature at the date of issuance noting that there was no BCF related. The note was in default from July 10, 2018 through January 20, 2019 and thus in addition to the above 12%, the Company accrued penalty interest at the rate of 1.5% per month as per the terms of the note . In exchange for the above note dated May 10, 2018, the holder advanced the Company an additional $ 75,000 and the Company issued a new note on January 21, 2019 in the amount of $ 307,219 which included accrued interest in the amount of $ 32,219 and was due on April 20, 2019 . The new note is interest bearing at a rate of 15 % interest per annum with no interest payments due until maturity and convertible into shares of the Company’s Common Stock at a fixed price of $ 0.05 per share. The note also contained a bonus conversion feature which states that if the holder exercises their option to convert, then the holder will be able to convert 115% of the principal and accrued interest on the date of conversion . The conversion feature expired July 9, 2019 and was not exercised. The Company evaluated the note for a beneficial conversion feature at the date of issuance noting that there was no BCF related. The note is secured by a general pledge on assets. As part of the restructuring completed March 31, 2021, this loan and all accrued interest was transferred to Rainmaker Holland B.V. (see note on Discontinued Operations). As a result, the Company bears no responsibility for financial obligations under this loan. On April 2, 2020, the Company issued two convertible promissory notes of $ 550,000 for a total of $ 1,100,000 . The notes matured on November 24, 2020, having an interest rate of 3 % per annum and were convertible prior to maturity at $ 0.33 per share. These existing notes and accrued interest were rolled into a Senior Secured Convertible Promissory Note in an agreement signed September 14, 2020, and are now deemed to be cancelled. Prior to the notes being rolled into the Senior Secured Convertible Promissory Note, the Company had received $ 755,000 . As of December 31, 2021, the Company received a further $ 65,000 for a total of $ 820,000 of the original notes. The funds received during 2021 were recognized as Other Income. Subsequent to the 2021 fiscal year end, the Company received a further $ 20,000 which was recognized as Other Income in Q1, 2022. 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) described above, and the principal and interest on the existing note issued August 4, 2020, in the amount of $ 150,000 (2) (see Note 7). Each of these existing notes, (1) and (2), are deemed to be cancelled and are replaced by the remaining 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 July 26, 2022, this note required derivative treatment which resulted a debt discount of $ 389,342 and $ 134,447 was amortized to interest expense on December 31, 2022. F- 15 On February 22, 2021, to settle accounts payables due to various entities, the Company issued Convertible Promissory Notes totaling $ 928,000 bearing interest of 6 % per annum with a maturity date of February 22, 2022 , and convertible into shares of Common Stock equal to 70% of the 30-day VWAP preceding the conversion date with a floor price of $ 0.065 . On March 4, 2021, these notes were converted into 14,276,922 Common Shares at $ 0.065 which was within the terms of the note and therefore no gain or loss needed to be recognized . 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 the Q3, 2022 period, the lender fully converted this note including accrued interest of $ 2,750 into 6,109,361 common shares. The conversions were within the terms of the agreement and no gain or loss were recognized on the conversions. On March 11, 2022, the Company issued a second 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 the Q3, 2022 period, the lender 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 were 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. Agreement was signed on June 28 th and ultimately funded on July 6, 2022. This note had an Original Issue Discount of $ 4,250 and as of December 31, 2022, $ 2,073 amortized. 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. This note had an Original Issue Discount of $ 2,500 and as of December 31, 2022, $ 1,075 amortized. 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. This note had an Original Issue Discount of $ 4,250 and as of December 31, 2022, $ 1,281 amortized. 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. This note had an Original Issue Discount of $ 4,250 and as of December 31, 2022, $ 1,071 amortized. F- 16 Note 4: Derivative Liabilities Derivative liabilities – Convertible Notes In Q3, 2022, the convertible debt issued February 7, 2022, March 11, 2022 and July 26, 2022 became eligible for conversion on August 6, 2022, September 7, 2022 and July 26, 2022 respectively. During Q4, 2022, the convertible debt issued June 28, 2022 became eligible for conversion on December 25, 2022. The Company engaged a third-party consultant to determine the fair value of the convertible notes. 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 term of the related note. For Q3, 2022, the Monte Carlo simulation model used a risk-free interest rate of ranging from 2.77 % to 3.75 %, volatility ranging from 134.4 % to 179.5 %, trading prices ranging from $ 0.0090 per share to $ 0.0220 per share and a conversion price ranging from $ 0.0062 to $ 0.0109 per share. For Q4, 2022 the simulation model used a risk-free interest rate of ranging from 3.84 % to 4.38 %, volatility ranging from 181.8 % to 235.6 %, trading prices ranging from $ 0.005 per share to $ 0.012 per share and a conversion price ranging from $ 0.005 to $ 0.0053 per share. The total derivative liabilities associated with these notes were $ 76,622 at December 31, 2022 and $ 0 at December 31, 2021. The Company’s debt discount relating to these convertible notes amounted to $ 71,542 at December 31, 2022 and the Company recorded interest expense for the amortization of the discount in the amount of $ 102,039 at December 31, 2022. The Company recorded a change in the value of embedded derivative liabilities expense of $ 11,693 to December 31, 2022. 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 December 31, 2022, $ 142,667 of the debt discount was amortized. 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. Schedule of Derivative Liabilities and Fair Value Derivative liabilities (fair value) Beginning Balance $ - Change to notes requiring derivative treatment due to equity environment 915,706 Change due to Issuances 50,484 Change due to Conversions ( 79,767 ) Market-to-market ( 383,812 ) Ending Balance $ 502,611 Note 5: Convertible Notes Payable, Related Parties On April 18, 2019, the Company entered into a convertible loan agreement with an entity that is controlled by an officer of the Company. This loan agreement was for the aggregate amount of $ 351,865 . The loan was repayable on December 31, 2020 , had an interest of rate of 15 % per annum and was convertible into shares of common stock at $0.05 per share prior to or after maturity. The Company evaluated the note for a beneficial conversion feature at the date of issuance noting that there was no BCF related. This loan is secured by a general pledge on the assets of the Company. As part of the restructuring completed March 31, 2021, this loan and all accrued interest was transferred to Rainmaker Holland B.V. (see note on Discontinued Operations). As a result, the Company bears no responsibility for financial obligations under this loan. Compensation due to members of the executive management team in the amount of $ 1,261,596 was converted into convertible promissory notes on October 1, 2020, bearing interest of 6 % per annum and are due October 1, 2021. The conversion price to be calculated using the 5-day VWAP preceding the conversion date and not to drop below $ 0.09 . The company evaluated the notes for beneficial conversion feature at the date of issuance and found a BCF totaling $ 518,656 . During Q1 2021, $ 611,635 of these notes plus accrued interest were converted into 6,933,353 restricted stock as per the terms of the notes. As part of the restructuring completed March 31, 2021, a further $ 649,961 principal and accrued interest was transferred to Rainmaker Holland B.V. (see note on Discontinued Operations). The Company recorded interest expense for the amortization of the discount related party convertible notes in the amount of $467,118 during 2021 leaving a balance of zero at December 31, 2021. The principal balance of these convertible notes was zero at December 31, 2021. Note 6: Notes Payable, Related Parties Promissory notes amounting to $ 28,796.73 are due and bear interest of 5 % and are payable on demand. As part of the restructuring completed March 31, 2021, $ 11,980 of these notes and all corresponding accrued interest was transferred to Rainmaker Holland B.V. (see note on Discontinued Operations) and on May 13, 2021, $ 3,300 plus accrued interest was repaid leaving the principal balance of these promissory notes at $ 13,516 as of December 31, 2022. 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 to January 2019. The loans bear interest at 4 %. On October 1, 2020, some notes ($252,000) were amended to reflect a new maturity date of October 1, 2021 , a change in interest rate to 6% and added a conversion feature leaving $ 60,000 as a note payable under the original conditions. Conversion price to be calculated using the 5-day VWAP preceding the conversion date and not to drop below $ 0.09 . The company evaluated the notes for a beneficial conversion feature at the date of issuance and found a BCF totaling $ 103,600 . During Q1 2021, $ 132,000 of these notes plus accrued interest were converted into 1,673,969 restricted stock as per the terms of the notes. As part of the restructuring completed March 31, 2021, a further $ 120,000 of these notes and accrued interest was transferred to Rainmaker Holland B.V. (see note on Discontinued Operations). Of the original amount of $ 312,000 , $ 60,000 principal and accrued interest remains. As of December 31, 2022, the Company owes $ 60,000 principal and $ 12,670.68 in accrued interest. F- 17 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. As of December 31, 2022, the Company owes this party $ 10,081 . Note 7: Other Loans Payable On January 25, 2019, the Company entered into a loan agreement for $ 351,865 with an interest rate of 10 % per annum. This loan is secured by a general pledge on the assets of RHBV. On October 9, 2020, $ 175,933 principal was repaid. The remaining principal of $ 175,932 and accrued interest was due February 1, 2021 . It was agreed to extend this due date and, as part of the restructuring completed March 31, 2021, this loan and all accrued interest became the full responsibility of Rainmaker Holland B.V. (see note on Discontinued Operations). As a result, the Company bears no responsibility for financial obligations under this loan. On August 4, 2020, the Company entered into a loan agreement for $ 150,000 bearing an interest rate of 10 % per annum. Principal and interest were due and payable on the earlier of the closing of the merger agreement with Sphere 3D (see Note 1) or February 28, 2021. On October 1, 2020, this loan and accrued interest were rolled up into the Senior Secured Convertible Promissory Note described in Note 3 and is now deemed to be cancelled. The City Development Fund (“SOFIE”) in Rotterdam, The Netherlands, is an initiative of the municipality of Rotterdam and is made possible through funds from the European Regional Development Fund. The SOFIE fund was created in the summer of 2013 with the goal of making the Rotterdam City Ports more attractive to new entrepreneurship. The Company was approved on October 26, 2015, for a loan in the amount of $ 1,223,000 ( 1,000,000 (EUR) comprised of loans of EUR 300,000 and EUR 700,000 ) and bears interest at a rate of 6.5 % compounded annually . The EUR 700,000 was payable over 60 months and the EUR 300,000 payable over 18 months. The first drawdown of the note occurred on March 1, 2016, with the entire EUR 1,000,000 subsequently being drawn down. Due to Company cash flow deficiencies, the loan moved to an interest only payable status commencing July 1, 2018 to January 1, 2020. SOFIE has agreed to allow the Company to continue to make interest only payments until January 1, 2021. Both loans now mature January 1, 2025 and was recorded as long-term portion of $ 799,874 and the short-term portion of $ 233,877 , a total of $ 1,033,751 principal remaining. As part of the restructuring completed March 31, 2021, this loan and all accrued interest became the full responsibility of Rainmaker Holland B.V. (see note on Discontinued Operations). As a result, the Company bears no responsibility for financial obligations under this loan. 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 . On December 1, 2021, the parties agreed to add a conversion feature to this note with terms to be determined before February 2, 2022, however, it was subsequently agreed to remove this conversion feature and extend the due date to February 2, 2023. Note 8: Intellectual Property On December 21, 2015, the Company, through its subsidiary, RWI, agreed to purchase the intangible assets of WWT/DRM, companies incorporated in Netherlands. WWT/DRM developed and exclusively owned all necessary know-how, patents, patent applications and technology allowing for the manufacture and commercial sale of water treatment and processing systems using renewable energy. This know-how and technology, at the time, was collectively known as the Dutch Rainmaker system. The resultant products remain the basis for the Company to deliver WaaS to its customers. The original purchase price in 2015 included stock and future royalty obligations based on sales of equipment. The Company evaluated the Intellectual Property for impairment as of December 31, 2020, and determined a full impairment was necessary. As part of the restructuring completed March 31, 2021, any obligation under the original agreements became the full responsibility of RHBV who, in turn, issued shares in RHBV to satisfy these obligations (see Note 18 on Discontinued Operations). F- 18 Note 9: Property and Equipment 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 10-year useful life. The Company has created demonstration equipment to allow it to show a working version of its technology and equipment to customers and organizations. The demonstration equipment was completed in September 2017 therefore the Company commenced depreciation in the 4th quarter of 2017. 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. The depreciation period for the Company’s demonstration equipment is 10 years. As part of the restructuring, Demonstration Equipment remains with RHBV and is included in assets of discontinued operations. See Note 18 for full details. Note 10: 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 to be common stock with a par value of $ 0.001 per share and 1,000,000 shares are to be preferred stock with a par value of $ 0.001 per share. At December 31, 2022, 160,797,716 common stock is issued and outstanding. The following table details the number of common stock issued: Schedule of Common Stock Number of Stock Balance, December 31, 2020 139,580,934 Private placements 2,128,385 Conversion of convertible promissory notes 22,884,244 Shares cancelled ( 20,238,606 ) Balance, December 31, 2021 144,354,957 Conversion of convertible promissory notes 16,639,942 Shares cancelled ( 197,183 ) Balance, December 31, 2022 160,797,716 F- 19 On February 8 & 9, 2021, the Company issued a total of 8,607,322 restricted shares upon conversion of promissory notes. (See Note 4 for details). On March 4, 2021, the Company issued a total of 14,276,922 restricted shares as settlement of various debts. (See Note 3 for details). On March 31, 2021, as part of the restructuring agreement, 20,238,606 shares were returned to the Company and subsequently cancelled. On September 8, 2021, the Company sold 128,385 shares for total proceeds of $ 3,852 . 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). Note 11: Related Party Transactions Outstanding compensation and expense reimbursements due to consultants engaged by the Company $ 1,261,984 (2021: $ 906,947 ). Refer to other related party payables in Notes 5 and 6. The Company entered into an agreement regarding Royalties Payable in 2020, however, as part of the restructuring completed March 31, 2021 , the Company no longer bears any responsibility for financial obligations under this agreement. See further discussion in Note 18. 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. Note 12: 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 located 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 December 31, 2022 (2021: $ 4,423,910 ). The Company, since its last report, has not been contacted by the Plaintiff. F- 20 Note 13: 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. Due to a lack of sales, it was necessary to impair the inventory at December 31, 2022 bringing the value to zero. Schedule of Inventory Year ended December 31 Year ended December 31 2022 2021 Finished Goods $ 335,000 $ 175,000 Components - - Impairment ( 335,000 ) - Total Inventory $ - $ 175,000 Note 14: 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. The lease expense for the period ended December 31, 2022 is nil (2021: $ 12,364 ). Note 15: Stock Option Plan The Company’s 2017 Equity Incentive Plan (the “Option Plan”) was established to attract, retain, incentivize and motivate officers and employees of, consultants to, and non-employee directors providing services to the Company and its subsidiaries and affiliates and to promote the success of the Company by providing such participating individuals with a proprietary interest in the performance of the Company. Effective July 3, 2017, at the time of completion of the Merger, the Board adopted the Option Plan under which up to twenty percent of the outstanding shares of common stock of the Company (“Shares”) may be reserved for the issuance of options to purchase Shares (“Options”). The previous Option Plan was administered by the Board, which has all of the powers necessary to enable it to carry out its duties under any Option Plan, including the power and duty to construe and interpret any Option Plan and to determine all questions arising under it. Under the Option Plan, “Eligible Individuals” includes officers, employees, consultants, advisors and non-employee directors providing services to the Company and its subsidiaries and affiliates. In the future, the Board will determine which Eligible Individuals will receive grants of options. F- 21 Commencing July 3, 2017, in fulfillment of conditions contained in the share exchange agreement and other contracts, the Board authorized the grant of the following Options: ● 3,996,000 Options to four individuals who are officers and/or directors as compensation for the termination of certain RWI stock option rights; these options are fully vested, expire on July 2, 2022 and are exercisable at a price of $ 0.15 per Share; ● 8,625,000 Options to seven individuals who are officers and/or directors or contractual service providers; one third of these Options vested on July 3, 2017 while the balance vest monthly over a period of 24 months; they have a term of 5 years and are exercisable at a price of $ 0.15 per Share; ● 500,000 Options to a director; 100,000 of these Options vested on July 3, 2017 while the balance vest monthly over a period of 24 months; they have a term of 5 years and are exercisable at a price of $ 0.25 per Share; ● 1,300,000 Options to an officer; 150,000 of these options vested on October 10, 2017; 283,334 vested on January 13, 2018 and the balance vest monthly over a period of 24 months thereafter; they have a term of 5 years and are exercisable at a price of $ 0.25 per Share. ● 200,000 Options to a contractual service provider; one third of these options vested on July 4, 2017; the balance vest monthly over a period of 24 months thereafter; they have a term of 5 years and are exercisable at a price of $ 0.15 per Share. ● 100,000 Options to a contractual service provider; one third of these options vested on July 4, 2017; the balance vest monthly over a period of 24 months thereafter; they have a term of 5 years and are exercisable at a price of $ 0.15 per Share. ● 1,000,000 Options to a contractual service provider; one third of these options vested on July 4, 2017; the balance vest monthly over a period of 24 months thereafter; they have a term of 5 years and are exercisable at a price of $ 0.25 per Share. ● 1,250,000 Options to a contractual service provider; 250,000 exercisable at $ 0.15 per Share (the “Initial Grant”) and 1,000,000 exercisable at $ 0.25 per Share (the “Second Grant”) both have a term of 5 years. One half of the Initial Grant ( 125,000 ) vested on January 15, 2018; the remaining ( 125,000 ) of the Initial Grant vest and are exercisable monthly, pro-rata over the 18 month period ( 6,945 per month) commencing January 15, 2018. One third of the Second Grant ( 333,333 ) vested and are exercisable on January 15, 2018; the remaining 666,667 from the Second Grant vest and are exercisable monthly, pro-rata over the 24-month period commencing January 15, 2018. ● 625,000 Options to the five members of the Company’s Strategic Advisory Board; vesting monthly commencing July 3, 2017 over a period of 24 months, have a 5 -year term and are exercisable at a price of $ 0.40 per Share. ● 1,000,000 Options to a contractual service provider; 333,333 of these options vested on February 15, 2018; the balance vest monthly over a period of 24 months thereafter; they have a term of 5 years and are exercisable at a price of $ 0.25 per Share. ● On February 15, 2018, the Board authorized the grant of 500,000 options to a newly appointed Director of the Board; 100,000 vested on February 15, 2018 with the remainder vesting monthly over a period of 24 months with a term of 5 years and exercisable at a price of $ 0.25 per Share. ● On April 15, 2018, the Board authorized the grant of 500,000 options to a newly appointed Director of the Board; 100,000 vested on April 15, 2018 with the remainder vesting monthly over a period of 24 months with a term of 5 years and exercisable at a price of $ 0.25 per Share. F- 22 ● Effective September 30, 2019, the Board of Directors approved the immediate vesting of all remaining options resulting in the immediate recognition of the of the remaining option expense. ● In January 2020, all holders of options agreed to waive their right to exercise the above options. ● On January 22, 2020, the Company entered into a three -year consulting agreement with a third party for consulting and business development services. The contract includes 75,000,000 warrants as follows: ○ 25,000,000 exercisable at $ 0.20 per warrant, effective January 22, 2020 ○ 25,000,000 exercisable at $ 0.30 per warrant, effective January 22, 2021 ○ 25,000,000 exercisable at $ 0.40 per warrant, effective January 22, 2022 On December 22, 2020, the Company terminated this agreement thereby cancelling the 2 nd and 3 rd warrant blocks. The first tranche of 25,000,000 remain in effect under the same conditions and expiring January 21, 2023 . ● On January 21, 2020, the Company entered into a three-year consulting agreement with a company controlled by its new CEO. The contract included 3,600,000 warrants with an exercise price of $ 0.20 vesting in equal amounts commencing the effective date of the contract. On December 31, 2020, this contract was terminated. The warrants vested immediately, and the exercise price was amended to $ 0.10 . As well, the Company granted an additional 500,000 warrants which vested immediately at an exercise price is $ 0.10 . All expire December 31, 2025 . ● On October 1, 2020, the Company entered into a consulting agreement with an Advisor which granted warrants in full compensation for services. It included 13,500,000 warrants at an exercise price of $ 0.30 expiring October 1, 2023 and of 15,000,000 warrants at an exercise price of $ 0.15 expiring October 1, 2025 . ● On April 1, 2021, the Company granted 4,100,000 options as part of an amendment to an Executive Consultant’s contract; 125,000 options vest per month commencing April 1, 2021, with a term of 5 years and exercisable at a price of $ 0.10 per Share. ● On December 20, 2021, the Company granted 1,000,000 options as compensation for two new Board Members. 100,000 options vested immediately for each of the two board members and the remaining options vest over maximum of two years , with a term of 5 years and exercisable at $ 0.10 per Share or with a 20 % discount to market based on a 30-day VWAP if it falls below $ 0.10 , not to go below $ 0.07 per share. ● Effective July 1, 2022, the Company granted 1,500,000 options as compensation to the newly filled position, VP Sales and 2,500,000 to the newly filled position, Executive VP Finance. 640,000 and 500,000 options respectively vested immediately and the remaining options vest over one year, with a term of 5 years and exercisable at $ 0.10 per Share. ● For the period ended December 31, 2021, the Company recorded a stock option expense of $ 62,248 . The Company used the Black-Scholes option-pricing model to determine the grant date fair value of stock-based awards under ASC 718. For the year ended December 31, 2022, the Company recorded stock option expense of $ 136,492 . Schedule of Warrants and Options Warrants and Options Vested Granted Vested Non-Vested Dec 31, 2021 To Dec 31, 2022 To Dec 31, 2022 To Dec 31, 2022 59,008,334 66,700,000 63,611,667 3,088,333 ● The assumptions used in the Company’s Black Scholes option pricing is as follows: Schedule of Share-based Payment Award Stock Options Valuation Assumptions Stock Price $ 0.0172 -$ 0.0646 Exercise Price $ 0.10 Number of Options Granted 66,700,000 Dividend Yield 0 % Expected Volatility 116 - 156 % Weighted Average Risk-Free Interest Rate .06 - 2.88 % Term (in years) 5 F- 23 Note 16: 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”) carryforwards 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 December 31, 2022, the Company had federal net operating loss carryforwards, which are available to offset future taxable income, of $ 5,630,661 . The Company’s NOL carryforwards can be carried forward to offset future taxable income for a period of 20 years for each tax year’s loss. These NOL carryforwards 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 Year ended December 31 Year ended December 31 2022 2021 Net Loss ( 1,837,611 ) ( 2,725,464 ) Add back: Stock Compensation 410,171 62,249 Amortization of Debt Discount 252,373 467,118 Taxable Income ( 1,175,067 ) ( 2,196,097 ) Tax Rate 21 % 21 % Deferred Tax Asset: Net Operating (Gain) Loss 246,764 461,180 Valuation Allowance ( 246,764 ) ( 461,180 ) Net Deferred Asset - - Note 17: Investments None. F- 24 Note 18: Discontinued Operations On March 31, 2021, the Company, including Rainmaker-Ontario, came to an agreement with Rainmaker Holland B.V. (“RHBV”), Dutch Rainmaker B.V. and Wind en Water Technologie Holding B.V. These companies were considered related parties on that date due to stock ownership of more than 10 %. The parties agreed to an exchange of contractual obligations, debt owed, an exchange of shares in full settlement of all obligations among the parties. The resultant Financial Statements, in accordance with ASC 205-20-45-1E, reflect the impact of these exchanges to the Company. These initiatives were taken subsequent to the mutual decision among the parties to cancel the Sphere 3D Asset Purchase Agreement (see Note 1, “Merger with Sphere 3D”). After the termination of that agreement, the Company and RHBV decided to restructure to optimize and broaden access to capital markets. The Company and RHBV, as mutual shareholders in each other’s companies, continue to pursue the mission and objective of providing low-cost water to communities and commercial entities in need of water solutions. Schedule of Disposition of Discontinued Operations Change to APIC for Disposition of Discontinued Operations Notes Payable moved to RHBV $ 1,457,993 Accrued Interest on Notes Payable 242,094 Royalties Payable moved to RHBV 1,977,566 Elimination of Intercompany Loans ( 719,156 ) Return Common Shares for Cancellation ( 20,238,606 ) 1,477,418 Accumulated Losses of Discontinued Operations 3,278,249 Total change to APIC for Disposition of Discontinued Operations $ 7,714,164 Note 19: Subsequent Events On January 9, 2023, the convertible promissory note dated June 28, 2022 in the amount of $ 64,250 was partially converted. This was the first conversion and amounted to $ 15,000 principal and 5,769,231 shares leaving $ 49,250 principal remaining. On January 26, 2023, the convertible promissory note dated July 26, 2023 in the amount of $ 35,000 was partially converted. This was the first conversion for this note which amounted to $ 12,000 principal and $ 595.07 interest. The total conversion amounted to 3,229,505 shares and left $ 23,000 principal remaining. On February 2, 2023, the convertible promissory note dated June 28, 2022, originally in the amount of $ 64,250 went through a second conversion in the amount of $ 12,000 principal and 7,500,000 shares leaving $ 34,250 principal remaining. On February 3, 2023, the convertible promissory note dated July 26, 2022, originally in the amount of $ 35,000 went through a second conversion in the amount of $ 8,000 principal and $ 416.44 interest. The total conversion amounted to 4,316,123 shares and left $ 15,000 principal remaining. On February 7, 2023, the convertible promissory note dated June 28, 2022, originally in the amount of $ 64,250 went through a third conversion in the amount of $ 16,250 principal and 9,027,778 shares leaving $ 18,000 principal remaining. On February 8, 2023, the convertible promissory note dated July 26, 2022, originally in the amount of $ 35,000 went through a third conversion in the amount of $ 8,000 principal and $ 427.40 interest. The total conversion amounted to 4,986,627 shares and left $ 7,000 principal remaining. On February 13, 2023, the convertible promissory note dated June 28, 2022, originally in the amount of $ 64,250 went through a fourth conversion in the amount of $ 15,600 principal and 9,750,000 shares leaving $ 2,400 principal remaining. On February 14, 2023, the convertible promissory note dated July 26, 2022, originally in the amount of $ 35,000 went through a fourth and final conversion in the amount of $ 7,000 principal and $ 383.56 interest. The total conversion amounted to 5,384,615 . On February 21, 2023, the convertible promissory note dated June 28, 2022 originally in the amount of $ 64,250 went through a fifth and final conversion in the amount of $ 2,400 principal and $ 3,213 interest. The total shares converted amounted to 3,507,813 . 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 maturity. On March 15, 2023, the convertible promissory note dated September 12, 2022, originally in the amount of $ 49,250 , went through an initial conversion in the amount of $ 15,000 principal converting into 9,375,000 shares leaving $ 34,250 principal remaining. On March 20, 2023, the convertible promissory note dated September 12, 2022, originally in the amount of $ 49,250 , went through a second conversion in the amount of $ 12,200 principal converting into 11,090,909 shares leaving $ 22,050 principal remaining. On March 27, 2023, the convertible promissory note dated September 12, 2022, originally in the amount of $ 49,250 , went through a third conversion in the amount of $ 10,600 principal converting into 11,648,352 shares leaving $ 11,450 principal remaining. F- 25 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Rainmaker Worldwide Inc. Date: April 19, 2023 By: /s/ Michael O’Connor Michael O’Connor President, Chief Executive Officer and Interim Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Michael O’Connor Director April 19, 2023 Signature Title Date /s/ James Ross Director April 19, 2023 27