UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~June~~September 30, 2022

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

For the transition period from _______________ to __________

Commission file number: 000-1144546

HFactor, Inc.

(Exact name of registrant as specified in its charter)

Georgia		58-2634747
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

244 Madison Ave, #1249

New York, NY 10016

(Address of principal executive offices)

(~~516~~917) ~~647~~ 765-~~5171~~5977

(Registrant’s telephone number, including area code)

_______________________________________

(Former name or former address, if changed since ~~last~~ last report).

Securities registered pursuant to Section 12(b) of the Act:

Title of Class		Trading Symbol(s)		Name of each exchange on which registered/
HFactor, Inc. Common Stock		HWTR		OTC Markets: PINK

Securities registered pursuant to Section 12(g) of the Act:

Common Stock

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

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

Large accelerated filer ☐	Accelerated filer	☐
Non-accelerated filer ☒	Smaller reporting company	☒
	Emerging Growth Company	☒

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No ☒

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

As of ~~August~~November 1119, 2022 the Registrant had 48,151,164 issued and outstanding shares of common stock.

HFactor, Inc.

FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4.	Controls and Procedures	24


PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	25
Item1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

	Signatures	27

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL ~~INFORMATION~~STATEMENTS

HFACTOR, INC.

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	September 30,			December 31,
	2022			2021
	-Unaudited-	~~-Unaudited-~~		-Audited-	~~-Audited-~~
ASSETS
Current Assets
Cash	$	7322,~~275~~036		$	250,854
Accounts receivable, net of allowance for doubtful accounts		~~268~~157,~~942~~120			75,737
Inventories		~~465~~393,~~128~~683			468,913
Prepaid expenses and other current assets		32142,~~600~~795			53,085
Total Current Assets		~~839~~715,~~945~~634			848,589
Fixed Assets, net of accumulated depreciation		~~219~~208,~~422~~807			257,219
Total Assets	$	1,059,367		$	1,105,808
Intangible Asset, net of accumulated amortization		703,083			–
Total Assets	$	1,627,524		$	1,105,808
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses	$	3,~~602~~258,~~415~~354		$	3,097,807
Accrued Interest		~~285~~339,~~247~~437			212,108
Current portion of notes payable-third party, net of debt discount		~~773~~841,~~884~~908			463,221
Note payable-related party		641,641			641,641
Notes payable-related party		741,641			641,641
Government loans payable		160,000			160,000
Derivative liabilities		801,449			793,997
Warrant liability, net of unamortized discount		–			335,651
Total Current Liabilities		6,~~264~~142,~~636~~789			5,704,425
Long-Term Liabilities
Note payable - Third party		–			–
Note payable - Related party		–			–
Total Long-Term Liabilities		–			–
Total Liabilities		6,~~264~~142,~~636~~789			5,704,425
Commitments and Contingencies		–			–
Stockholders' Deficit
Preferred stock 219,000,000, $.001 par value shares authorized, shares issued and outstanding as follows: Series C voting, convertible Preferred stock, $.001 par value 1,000,000 shares authorized; 1,000,000 shares issued and outstanding June 30, 2022 and December 31, 2021; respectively		1,000			1,000
Preferred stock 219,000,000, $.001 par value shares authorized, shares issued and outstanding as follows:
Series D non-voting, convertible Preferred stock, $.001 par value 18,000,000 shares authorized; 3,354 and 3,054 shares issued and outstanding June 30, 2022 and December 31, 2021; respectively		3			3
Series C voting, convertible Preferred stock, $.001 par value 1,000,000 shares authorized; 1,000,000 shares issued and outstanding September 30, 2022 and December 31, 2021, respectively		1,000			10,003
Common stock 200,000,000, $.001 par value shares authorized; 48,151,164 and 47,631,164 shares issued and outstanding at June 30, 2022 and December 31,2021; respectively		48,151			47,631
Series D non-voting, convertible Preferred stock, $.001 par value 18,000,000 shares authorized; 3,354 and 3,054 shares issued and outstanding September 30, 2022 and December 31, 2021, respectively		3			3
Common stock subscribed, -0- and 400,000 shares issued and outstanding at June 30, 2022 and December 31,2021; respectively		–			400
Common stock 200,000,000, $.001 par value shares authorized; 48,151,164 and 47,631,164 shares issued and outstanding at September 30, 2022 and December 31,2021, respectively		48,151			47,631
Additional paid-in capital		(2,018,012	)		(2,873,543	)
Common stock subscribed, 1,315,000 and 400,000 shares issued and outstanding at September 30, 2022 and December 31,2021, respectively		1,315			400
Accumulated deficit		(3,236,411	)		(1,774,108	)
Additional paid-in capital		(704,327	)		(2,873,543	)
Total Stockholders' Deficit		(5,205,269	)		(4,598,617	)
Accumulated deficit		(3,861,407	)		(1,774,108	)
Total Liabilities and Stockholders' Deficit	$	1,059,367		$	1,105,808
Total Stockholders' Deficit		(4,515,265	)		(4,598,617	)
Total Liabilities and Stockholders' Deficit	$	1,627,524		$	1,105,808

Going Concern (Note 2)

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

HFACTOR, INC.

Condensed Consolidated Statements of Operations

-Unaudited-

	Three Months			Three Months			~~Six~~Nine Months			~~Six~~Nine Months
	Ended			Ended			Ended			Ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
REVENUES
Sales, net	$	~~600~~272,~~495~~329		$	–513,174		$	1,~~196~~468,~~118~~447		$	–513,174
TOTAL REVENUES		~~600~~272,~~495~~329			–513,174			1,~~196~~468,~~118~~447			–513,174
COST OF REVENUES		~~266~~161,~~679~~877			246,307			~~542~~704,~~395~~272			–246,307
GROSS PROFIT		~~333~~110,~~816~~452			–266,867			~~653~~764,~~723~~175			–266,867
OPERATING EXPENSES
Manufacturing expenses		3371,~~297~~356			–41,726			88159,~~364~~720			–41,226
Sales and marketing		~~488~~375,~~425~~824			–358,270			1,~~069~~445,~~467~~291			–358,270
General and administrative		~~290~~149,~~076~~832			5233,~~825~~810			~~585~~735,~~181~~013			12247,~~858~~168
Total Expenses		~~811~~597,~~798~~012			5633,~~825~~806			12,~~743~~340,~~012~~024			12646,~~858~~664
Loss from Operations		(~~477~~486,~~982~~560	)		(5366,~~825~~939	)		(1,~~089~~575,~~289~~849	)		(12379,~~858~~797	)
Other (income) expense
Amortization of debt discount		~~168~~72,~~319~~420			41346,~~518~~478			~~311~~383,~~006~~426			41387,~~518~~996
Change in Fair Market Value of derivatives		–			–124,406			7,452			–124,406
Derivative expense		–			217,011			–			217,011
Derivative (income) expense		–			(314,665	)		–			(97,654	)
Interest expense		4566,~~215~~830			450,~~359~~851			90157,~~642~~472			657,~~560~~411
Other (income ) expense		(36,086	)		(22,482	)		(36,086	)		(22,482	)
Gain on forgiveness of debt		–			(113,799	)		–			(113,799	)
Total Other (income) expense		177,448			240,406			373,014			242,607
Other (income ) expense		(814	)		3,233			(36,900	)		(19,249	)
Net Loss	$	(655,430	)	$	(246,231	)	$	(1,462,303	)	$	(255,465	)
Total Other (income) expense		138,436			96,504			511,450			339,111
Net Loss per common shares outstanding-Basic and diluted:
Net Loss	$	(624,996	)	$	(463,443	)	$	(2,087,299	)	$	(718,908	)
Net Loss per share attributable to common stockholders	$	(0.0136	)	$	(0.0056	)	$	(0.0304	)	$	(0.0058	)
Net Loss per common shares outstanding - Basic and diluted:
Weighted Average Shares Outstanding		48,054,497			44,093,276			48,030,331			44,093,276
Net Loss per share attributable to common stockholders	$	(0.0130	)	$	(0.0072	)	$	(0.0434	)	$	(0.0142	)
Weighted Average Shares Outstanding		48,151,164			64,225,201			48,070,608			50,803,918

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

HFACTOR, Inc.

Consolidated Statements of Stockholders' Deficit

-Unaudited-

	~~Series C~~	Series C				~~Series D~~		Series D						~~Common Stock~~					~~Additional~~		Common Stock							Additional
	~~Preferred Stock~~	Preferred Stock				~~Preferred Stock~~		Preferred Stock	~~Common Stock~~					~~Subscribed~~Common Stock					~~Paid-In~~		Subscribed	~~Accumulated~~						Paid-In			Accumulated
	~~Shares~~	Shares	~~Amount~~		Amount	~~Shares~~	~~Amount~~	Shares	~~Shares~~	Amount	~~Amount~~			Shares		~~Amount~~	Amount		~~Capital~~		Shares	~~Deficit~~		Amount	~~Total~~			Capital			Deficit			Total
Balance as of December 31, 2020	–	–	$	–	$	–	$	–	~~44,093,276~~	$	$–	~~44,093~~		–44,093,276		$	–$	44,093	$	~~(44,093~~	)–	$	~~(181,415~~	)$	$–	~~(181,415~~	)	$	(44,093	)	$	(181,415	)	$	(181,415	)
Net loss for the 3 months ended March 31, 2021	–	–		–		–		–	–		–	–		–			–	–		–	–		~~(9,234~~	)	–	~~(9,234~~	)		–			(9,234	)		(9,234	)
Balance as of March 31, 2021	–	–		–		–		–	~~44,093,276~~		–	~~44,093~~		–44,093,276			–	44,093		~~(44,093~~	)–		~~(190,649~~	)	–	~~(190,649~~	)		(44,093	)		(190,649	)		(190,649	)
Net loss for the 3 months ended June 30, 2021	–	–		–		–		–	–		–	–		–			–	–		–	–		~~(246,231~~	)	–	~~(246,231~~	)		–			(246,231	)		(246,231	)
Balance as of June 30, 2021	–	–	$	–		–	$	–	~~44,093,276~~		$–	~~44,093~~		–44,093,276		$	–	44,093	$	~~(44,093~~	)–	$	~~(436,880~~	)	$–	~~(436,880~~	)		(44,093	)		(436,880	)		(436,880	)
Balance as of December 31, 2021	1,000,000		$	1,000		3,054	$	3	47,631,164		$	47,631		400,000		$	400		$	(2,873,543	)	$	(1,774,108	)	$	(4,598,617	)
Net loss for the 3 months ended September 30, 2021		–				–		–			–			–				–			–				–				–			(463,443	)		(463,443	)
Sale of common shares	–			–		–		–	325,000			325		45,000			45			369,630			–			370,000
Balance as of September 30, 2021		–			$	–		–		$	–			44,093,276			$	44,093			–			$	–			$	(44,093	)	$	(900,323	)	$	(900,323	)
Issuance of subscribed shares	–			–		–		–	400,000			400		(400,000	)		(400	)		–			–			–
Balance as of December 31, 2021		1,000,000			$	1,000		3,054		$	3			47,631,164			$	47,631			400,000			$	400			$	(2,873,543	)	$	(1,774,108	)	$	(4,598,617	)
Cancellation of shares	–			–		–		–	(400,000	)		(400	)	–			–			400			–			–
Sale of common shares		–				–		–			–			325,000				325			45,000				45				369,630			–			370,000
Cancellation of warrants in exchange for preferred stock	–			–		200		–	–			–		–			–			335,651			–			335,651
Issuance of subscribed shares		–				–		–			–			400,000				400			(400,000	)			(400	)			–			–			–
Net loss for the 3 months ended March 31, 2022	–			–		–		–	–			–		–			–			–			(806,873	)		(806,873	)
Cancellation of shares		–				–		–			–			(400,000	)			(400	)		–				–				400			–			–
Balance as of March 3, 2022	1,000,000			1,000		3,254		3	47,956,164			47,956		45,000			45			(2,167,862	)		(2,580,981	)		(4,699,839	)
Cancellation of warrants in exchange for preferred stock		–				–		200			–			–				–			–				–				335,651			–			335,651
Sale of common shares	–			–		–		–	150,000			150		–			–			149,850			–			150,000
Net loss for the 3 months ended March 31, 2022		–				–		–			–			–				–			–				–				–			(806,873	)		(806,873	)
Issuance of preferred and subscribed shares	–			–		100		–	–			45		(45,000	)		(45	)		–			–			–
Balance as of March 3, 2022		1,000,000				1,000		3,254			3			47,956,164				47,956			45,000				45				(2,167,862	)		(2,580,981	)		(4,699,839	)
Cancellation of shares	–			–		–		–	–			–		–			–			–			–			–
Sale of common shares		–				–		–			–			150,000				150			–				–				149,850			–			150,000
Net loss for the 3 months ended June 30, 2022	–			–		–		–	–			–		–			–			–			(655,430	)		(655,430	)
Issuance of preferred and subscribed shares		–				–		100			–			45,000				45			(45,000	)			(45	)			–			–			–
Balance as of June 30, 2022	1,000,000		$	1,000		3,354	$	3	48,106,164		$	48,151		–		$	–		$	(2,018,012	)	$	(3,236,411	)	$	(5,205,269	)
Cancellation of shares		–				–		–			–			–				–			–				–				–			–			–
Net loss for the 3 months ended June 30, 2022		–				–		–			–			–				–			–				–				–			(655,430	)		(655,430	)
Balance as of June 30, 2022		1,000,000				1,000		3,354			3			48,151,164				48,151			–				–				(2,018,012	)		(3,236,411	)		(5,205,269	)
Sale of common shares		–				–		–			–			–				–			600,000				600				599,400			–			600,000
Shares issued for purchase of Intellectual Property		–				–		–			–			–				–			715,000				715				714,285			–			715,000
Net loss for the 3 months ended September 30, 2021		–				–		–			–			–				–			–				–				–			(624,996	)		(624,996	)
Balance as of September 30, 2021		1,000,000			$	1,000		3,354		$	3			48,151,164			$	48,151			1,315,000			$	1,315			$	(704,327	)	$	(3,861,407	)	$	(4,515,265	)

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

HFACTOR, INC.

Condensed Consolidated Statements of Cash Flows

-Unaudited-

	Six Months			Six Months
	Nine Months			Nine Months
	Ended			Ended
	June 30, 2022			June 30, 2021
	September 30, 2022			September 30, 2021
OPERATING ACTIVITIES:
Net loss	$	(12,~~462~~087,~~303~~299	)	$	(~~255~~718,~~465~~908	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		37,798			–
Amortization and Depreciation		60,565			21,332
Amortization of debt discount on convertible notes		~~311~~383,~~006~~426			41387,~~518~~996
Change in fair market value of derivative liabilities		7,452			–124,406
Derivative expense		–			~~217~~(97,~~011~~654	)
Gain on forgiveness of debt		–			(113,799	)
Changes in operating assets and liabilities:
Accounts receivable		(~~177~~81,~~579~~383	)		–69,096
Inventory		375,~~785~~230			–(825	)
Prepaid expenses		20(89,~~485~~710	)		–(8,301	)
Accounts payable and accrued expenses		~~488~~155,~~638~~572			~~(18~~176,~~525~~624	)
Accrued interest		73127,~~139~~329			449,~~263~~233
NET CASH PROVIDED BY (USED) IN OPERATING ACTIVITIES		(~~697~~1,~~579~~448,818	)		(11110,~~198~~800	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Equipment purchase		–			–
NET CASH PROVIDED BY (USED) IN INVESTING ACTIVITIES		–			–
FINANCING ACTIVITIES:
Sales of common stock		~~520~~1,120,000			–
Proceeds from convertible notes payable		–			~~259~~152,~~173~~000
Loan receivable		–			(247,975	)
Proceeds from Loans Payable, related Party		100,000			–
NET CASH PROVIDED BY (USED) IN FINANCING ACTIVITIES		520,000			11,198
Loan receivable		–			(3,000	)
Increase (decrease) in cash and cash equivalents		(177,579	)		–
NET CASH PROVIDED BY (USED) IN FINANCING ACTIVITIES		1,220,000			149,000
Increase (decrease) in cash and cash equivalents		(228,818	)		38,200
Cash and cash equivalents - Beginning		250,854			–
Cash and cash equivalents - Ending	$	7322,~~275~~036		$	–38,200
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	1730,~~503~~143		$	–
Cash paid for income taxes	$	–		$	–
NON-CASH TRANSACTIONS:
Common stock and Preferred stock issued in merger in exchange for net assets of HyEdge, Inc.	$	–		$	3,457,668
Preferred stock issued in exchange for cancellation of Warrant Liabilities, net of unamortized discount	$	335,651		$	–
Common stock subscribed in exchange for assignment of Intellectual Property	$	715,000		$	–

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

HFACTOR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - DESCRIPTION OF BUSINESS

History

HFactor, Inc. formerly known as Ficaar, Inc. (the “Company” or “Ficaar” or “HFactor”) was incorporated in July 2001 under the name OwnerTel, Inc. The name of the Company was changed to Ficaar, Inc. in December of 2007 and to HFactor, Inc. on November 8, 2021.

On May 28, 2021, David Cicalese (“Cicalese”), an officer and Board member of Ficaar entered into an agreement with Gail Levy whereby Cicalese agreed to sell 29,900,000 shares, representing a majority interest in Ficaar, to Levy. Acting as the majority shareholder of the Company, Levy then caused Ficaar to enter into an Agreement and Plan of Merger (the “Merger Agreement”) between the Company, FCAA Merger Sub I, Inc. (“Merger Sub”), a Delaware corporation and wholly owned subsidiary of Ficaar, and HyEdge, Inc. (“Target” or “HyEdge”), a Delaware corporation, wherein Merger Sub and Target would merge, with Target surviving the transaction as a wholly owned subsidiary of Ficaar (the “Merger”). The Merger Agreement was executed on August 6, 2021 and the Merger closed on August 9, 2021. The Merger effected a change in control and was accounted for as a "reverse acquisition" whereby Target is the accounting acquiror for financial statement purposes. Accordingly, for all periods subsequent to the Closing Date, the financial statements of the Company reflect the historical financial statements of HyEdge and any operations of the Company subsequent to the Merger.

Immediately following the Merger, the business of of HyEdge became the business of the Company.

In connection with the reverse acquisition and recapitalization, all share and per share amounts have been retroactively restated. Since the transaction is considered a reverse acquisition and recapitalization, accounting guidance does not apply for purposes of presenting pro-forma financial information.

On September 2, 2021 the Company filed an amendment in its articles of incorporation to change its name to HFactor Inc. The Company was able to secure an OTC Bulletin Board symbol HWTR from Financial Industry Regulatory Authority (FINRA).

Present Operations

The Company asthrough ~~a result of the Merger, changed~~ its ~~business~~wholly ~~focus~~owned ~~from engaging in the cannabis industry to presently being a holding company that operates entirely through its~~ subsidiary, HyEdge, Inc., a Delaware Corporation., ~~The Company~~ engages in the manufacturing, marketing, distribution and selling of HFactor® ~~hydrogen~~ hydrogen infused drinking water.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The accompanying (a) condensed consolidated balance sheet at December 31, 2021, has been derived from audited financial statements and (b) condensed consolidated unaudited financial statements as of ~~June~~September 30, 2022 and 2021, have been prepared in accordance with generally accepted accounting principles for interim financial ~~information~~ information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and related footnotes included in our Annual Report on Form 10K for the year ended December 31, 2021 (the “2021 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2022. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments), have been made which are necessary for a fair financial statement presentation. The condensed consolidated financial statements include all material adjustments (consisting of normal recurring accruals) necessary to make the condensed consolidated financial statements not misleading as required by Regulation S-X, Rule 10-01. Operating results for the three and six months ended ~~June~~September 30, 2022, are not necessarily indicative of the results of operations expected for the year ending December 31, 2022.

These consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) and are expressed in United States dollars. These consolidated financial statements include the accounts of HFactor Inc. and its wholly owned subsidiary, HyEdge, Inc., a Delaware corporation. All inter-company balances and transactions have been eliminated on consolidation.

Going Concern

The financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding the Company’s recurring losses, ~~working~~ working capital deficiency or accumulated deficit.

As of ~~June~~September 30, 2022, the Company had $7322,~~275 in~~036 in cash to fund its operations. The Company does not believe its current cash balance will be sufficient to allow the Company to fund ~~its~~ its planned operating activities for the next twelve months. The ability of the Company to continue as a going concern is dependent on ~~the~~ the Company obtaining adequate capital to fund operating losses until it becomes profitable. These principal factors raise substantial ~~doubt~~ doubt concerning the Company’s ability to continue as a going concern. Management has financed the Company’s operations principally through government loans, third party loans and from related parties, and through equity investments into the Company.

It is the Company’s intent to continue to ~~attempt~~ attempt to raise funds in this manner and to raise funds through the sale of equity securities until the Company attains profitability. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.

Cash

For purposes of reporting cash flows, the Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of ~~June~~September 30, 2022 and December 31, 2021, the Company held a cash balance of $7322,~~275~~036 and $250,854, respectively.

Revenue Recognition

Revenue from sales of the Company’s products is recorded when title and risk of loss have passed to the buyer and criteria for revenue recognition is met. The Company sells its products to individual consumers and resellers upon receipt of a written order. The Company has a limited return policy for defective items that requires that buyers give the Company notice within 30 days after receipt of the products. Due to the immaterial quantities of returned products historically, for the periods ended ~~June~~September 30, 2022 and 2021, the Company recognized revenue at the time of delivery without providing any reserve.

Accounts Receivable

Accounts receivable represents amounts due from ~~the~~ the Company’s customers. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts ~~receivable~~ receivable portfolio. In establishing the required allowance, management utilizes a specific customer identification methodology. Management ~~also~~ also considers historical losses adjusted for current market conditions and the customers’ financial condition and the current receivables aging and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. As of ~~June~~September 30, 2022 and December 31, 2021, the allowance for doubtful accounts were not material.

Inventories

Inventories are stated at the lower of cost (on a a first-in, first-out basis) or market value. The stated cost is comprised of finished goods of HFactor® hydrogen infused drinking water, its related raw material and spare parts for machinery. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated annually and are based on the Company’s business plan and from feedback from customers and the product development team. As of ~~June~~September 30, 2022 and December 31, 2021, the inventory reserves were not material.

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which is generally three to five years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income or expense.

The Company will periodically evaluate whether ~~events~~ events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining ~~balance~~ balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash ~~flows~~ flows over the remaining life of the fixed assets in measuring their recoverability.

~~Advertising~~Intangible ~~Costs~~Assets

~~Advertising~~On ~~costs~~July ~~are~~22, ~~expensed~~2022, asthe ~~incurred.~~Company ~~Advertising~~entered into an Intellectual ~~costs~~Property ~~for~~Assignment Agreement, with Gail Levy whereby the ~~periods~~Company ~~ended~~acquired ~~June~~the 30intellectual property related to its beverage production operations from HyEdge IP in exchange for 715,000 ~~2022~~shares ~~and~~of ~~2021~~Company ~~were~~Common stock. The acquired intellectual property was valued at $321.00 per share for total valuation of $715,~~928~~000 and $is being amortized over 10 years on a straight-~~0-,~~line ~~respectively~~basis.

~~Income~~Advertising ~~Taxes~~Costs

~~The~~Advertising ~~Company~~costs ~~accounts for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities~~ are ~~recognized~~expensed ~~for~~as ~~the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases~~incurred. ~~Deferred~~Advertising ~~tax~~costs ~~assets~~for ~~and liabilities are measured using enacted tax rates expected to apply to taxable income in~~ the ~~years~~periods inended ~~which~~September ~~those~~30, ~~temporary differences~~2022 ~~are expected to be recovered or settled. The effect on deferred tax assets~~ and ~~liabilities~~2021 ofwere ~~a change in tax rates is recognized in income in the period~~$107,342 ~~which~~and ~~includes~~$ ~~the enactment date. Deferred tax assets are reduced by a valuation allowance when~~-0-, ~~in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized~~respectively. ~~Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.~~

~~ASC~~Income 740 contains a two-step approach to recognizing and measuring uncertain tax positions. This first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.Taxes

~~Based~~The onCompany ~~its~~accounts ~~evaluation~~for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the ~~Company~~future ~~has~~tax ~~concluded~~consequences attributable to ~~that~~differences ~~there~~between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are nomeasured ~~significant~~using ~~uncertain~~enacted tax ~~positions~~rates ~~requiring~~expected ~~recognition~~to apply to taxable income in ~~its~~the ~~financial~~years ~~statements~~in which those temporary differences are expected to be recovered or settled. The ~~Company's~~effect ~~evaluation~~on ~~was~~deferred tax assets and liabilities of a change in tax rates is recognized ~~performed~~in ~~for~~income in the period, which includes the enactment date. Deferred tax ~~years~~assets ~~ended~~are ~~December~~reduced 31by a valuation allowance when, ~~2017~~in ~~through~~the ~~2021~~opinion of management, ~~The~~it ~~Company~~is ~~does~~more likely than not ~~expect~~that ~~any~~some ~~changes~~portion inor ~~its~~all ~~unrecognized~~of the deferred tax ~~benefits~~assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the ~~current~~date ~~year~~of enactment.

9ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions. This first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.

The Company’s policy for recording interest and penalties related to unrecognized tax benefits is to record such expenses as a component of current income tax expense. As of June 30, 2022 and December 31, 2021, the Company has no accrued interest or penalties related to uncertain tax positions.9

~~Use~~Based ofon ~~Estimates~~its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The Company's evaluation was performed for the tax years ended December 31, 2017 through 2021, The Company does not expect any changes in its unrecognized tax benefits in the current year.

The ~~preparation~~Company’s ofpolicy ~~consolidated~~for ~~financial~~recording ~~statements~~interest inand ~~conformity~~penalties ~~with~~related ~~accounting~~to ~~principles~~unrecognized ~~generally~~tax ~~accepted~~benefits inis ~~the United States of America requires management~~ to ~~make~~record ~~estimates~~such ~~and assumptions~~expenses ~~that~~as ~~affect~~a ~~the~~component ~~reported amounts~~ of ~~assets~~current ~~and~~income ~~liabilities~~tax ~~and~~expense. ~~disclosures~~As of ~~contingent assets and liabilities at the date~~September of30, ~~the~~2022 ~~financial statements~~ and ~~the~~December ~~reported~~31, ~~amounts~~2021, ~~of revenues and expenses during~~ the ~~reporting~~Company ~~period.~~has ~~Management~~no ~~evaluates~~accrued ~~these estimates~~interest ~~and~~or ~~assumptions~~penalties onrelated ato ~~regular~~uncertain ~~basis.~~tax ~~Actual results could differ from those estimates~~positions.

~~Research~~Use ~~and~~of ~~Development Expense~~Estimates

~~Costs~~The ~~related~~preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to ~~research~~make estimates and assumptions ~~development,~~that ~~which primarily~~affect ~~consists~~the reported amounts of ~~consulting~~assets ~~for~~and ~~logo~~liabilities and ~~packaging~~disclosures ~~design,~~of ~~are~~contingent ~~charged~~assets toand ~~expense~~liabilities asat ~~incurred.~~the ~~The~~date of ~~Company~~the ~~has~~financial ~~not~~statements ~~incurred~~and ~~any~~the ~~research~~ reported amounts of revenues and ~~development~~expenses ~~for~~during the ~~periods~~reporting ~~ended~~period. ~~June~~Management ~~30,~~evaluates ~~2022~~these estimates and ~~2021~~assumptions on a regular basis. Actual results could differ from those estimates.

~~Basic~~Research and ~~Diluted~~Development ~~Net Loss Per Share~~Expense

~~The~~Costs ~~Company~~related ~~computes~~to ~~loss~~research ~~per~~and ~~common share~~development, ~~in accordance with FASB ASC Topic 260, Earnings Per Share,~~ which ~~requires~~primarily consists ~~dual~~of ~~presentation~~consulting offor ~~basic~~logo and ~~diluted~~packaging ~~earnings~~design, ~~per share.~~are ~~Basic~~charged ~~income~~to orexpense ~~loss~~as ~~per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period~~incurred. ~~Diluted~~The ~~income~~Company orhas ~~loss~~not ~~per~~incurred ~~common~~any ~~share~~research ~~is computed by dividing net income or loss by the weighted average~~and ~~number~~development offor ~~common shares outstanding, plus~~ the ~~issuance~~periods ofended ~~common~~September ~~shares~~30, if2022 ~~dilutive, that could result from the exercise of outstanding stock options~~ and ~~warrants~~2021. ~~No potential dilutive common shares are included in the computation of any diluted per share amount when a loss is reported.~~

~~Stock~~Basic ~~Based~~and ~~Compensation~~Diluted Net Loss Per Share

The Company ~~applies~~computes ~~the~~loss ~~fair~~per ~~value~~common ~~method of ASC 718~~share, ~~Compensation-Stock Compensation,~~ in accordance ~~accounting~~with ~~for~~FASB ~~its~~ASC ~~stock-based~~Topic ~~compensation.~~260, ~~These~~Earnings ~~standards~~Per ~~state~~Share, ~~that~~which ~~compensation~~requires ~~cost is~~dual ~~measured~~presentation atof ~~the~~basic ~~grant~~and ~~date~~diluted ~~based~~earnings onper share. ~~the~~Basic ~~value~~income ofor ~~the~~loss ~~award~~per ~~and~~common share is ~~recognized~~computed ~~over~~by ~~the~~dividing ~~service~~net ~~period,~~income ~~which~~or isloss ~~usually~~by the ~~vesting period,~~weighted ifaverage ~~any.~~number ~~The~~of ~~Company~~common shares ~~uses~~outstanding during the ~~Black-Scholes~~period. ~~option~~Diluted ~~pricing~~income ~~model~~or toloss ~~determine~~per ~~the~~common ~~fair~~share ~~value~~is ofcomputed ~~its~~by ~~stock,~~dividing ~~stock~~net ~~option~~income ~~and~~or ~~warrant issuance.~~loss ~~The~~by ~~determination of~~ the weighted ~~fair~~average ~~value~~number of ~~stock-based~~common ~~payment~~shares ~~awards~~outstanding, onplus the ~~date~~issuance of ~~grant~~common ~~using~~shares, anif ~~option-pricing model is affected by the Company’s stock price~~dilutive, asthat ~~well~~could asresult ~~assumptions~~from ~~regarding~~the exercise aof ~~number~~outstanding ofstock ~~complex~~options and ~~subjective variables~~warrants. ~~These~~No ~~variables~~potential ~~include the~~dilutive ~~Company’s~~common ~~expected~~shares ~~stock~~are ~~price,~~included ~~volatility~~in ~~over~~ the ~~term~~computation of ~~the~~any diluted ~~awards,~~per ~~actual~~share ~~employee~~amount ~~exercise~~when ~~behaviors,~~a ~~risk-free~~loss ~~interest rate~~is ~~and expected dividends~~reported.

10Stock Based Compensation

~~Fair~~The ~~Value~~Company applies the fair value method of ASC 718, Compensation-Stock Compensation, in accounting for its stock-based compensation. These standards state that compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period, if any. The Company uses the Black-Scholes option pricing model to determine the fair value of its stock, stock option and warrant issuance. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price, volatility over the term of the awards, actual employee exercise behaviors, risk-free interest rate and expected dividends.

~~FASB ASC 820,~~ Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

~~Level~~FASB 1ASC —820, ~~Quoted~~Fair ~~market~~Value ~~prices~~Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement ~~identical~~and ~~assets~~developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in ~~active~~one ~~markets~~of orthe ~~observable~~following ~~inputs;~~three categories:

Level 21 — ~~Significant~~Quoted ~~other~~market ~~observable~~prices for identical ~~inputs~~assets ~~that~~or ~~can~~liabilities bein ~~corroborated~~active bymarkets or observable ~~market data~~inputs; ~~and~~

Level 32 — Significant ~~unobservable~~other observable inputs that ~~cannot~~can be corroborated by observable market data.; and

~~The~~Level ~~carrying~~3 ~~amounts~~— ofSignificant ~~cash,~~unobservable ~~loan receivable,~~inputs ~~accounts~~that ~~payable~~cannot ~~and~~be ~~other~~corroborated ~~liabilities,~~by ~~and~~observable ~~accrued~~market ~~interest payable approximate fair value because of the short-term nature of these items~~data.

The fair value of the Company’s debt approximated the carrying value of the Company's debt as of June 30, 2022 and December 31, 2021. Factors that the Company considered when estimating the fair value of its debt included market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and term of debt.10

~~Recent~~The ~~Accounting~~carrying ~~Pronouncements~~amounts of cash, loan receivable, accounts payable and other liabilities, and accrued interest payable approximate fair value because of the short-term nature of these items.

WeThe ~~have~~fair ~~considered~~value ~~all~~of ~~other~~the ~~recently~~Company’s ~~issued~~debt ~~accounting~~approximated ~~pronouncements~~the ~~during~~carrying value of the Company's debt as of September 30, 2022 and December 31, 2021. ~~and~~Factors dothat ~~not~~the ~~believe~~Company considered when estimating the ~~adoption~~fair value of ~~such~~its ~~pronouncements~~debt ~~will~~included ~~have~~market aconditions, ~~material~~liquidity ~~impact~~levels onin ~~our~~the ~~consolidated~~private placement market, variability in pricing from multiple ~~financial~~lenders ~~statements~~and term of debt.

~~NOTE~~Recent ~~3 – FIXED~~Accounting ~~ASSETS, NET~~Pronouncements

~~Fixed~~We ~~assets,~~have ~~net~~considered ~~consist~~all ofother recently issued accounting pronouncements during 2022 and 2021 and do not believe the ~~following:~~adoption of such pronouncements will have a material impact on our consolidated financial statements.

Schedule of fixed assets, net
	June 30,			December 31,
	2022			2021
Machinery and equipment	$	577,645		$	577,645
Construction in progress		3,089			3,089
Less accumulated depreciation		(361,313	)		(323,515	)
Fixed assets net	$	219,421		$	257,219

NOTE 3 – FIXED ASSETS, NET

~~Depreciation~~Fixed ~~expense for the periods ended June 30~~assets, ~~2022~~net ~~and~~consist ~~2021~~of ~~was~~the ~~$37,798 and $35,705, respectively.~~following:

Schedule of fixed assets, net
	September 30,			December 31,
	2022			2021
Machinery and equipment	$	577,645		$	577,645
Construction in progress		3,089			3,089
Less accumulated depreciation		(371,927	)		(323,515	)
Fixed assets net	$	208,807		$	257,219

~~NOTE~~Depreciation 4expense –for ~~NOTES~~the ~~PAYABLE-THIRD~~periods ~~PARTIES~~ended September 30, 2022 and 2021 was $48,648 and $35,705, respectively.

~~Third~~NOTE ~~party~~4 ~~convertible~~– ~~notes~~NOTES ~~payable~~PAYABLE-THIRD ~~consists of the following:~~ PARTIES

Schedule of third party convertible notes payable
	June 30, 2022		December 31, 2021
Convertible promissory note with interest at 8% per annum, convertible into common shares at the lesser of: (i) a 50% discount to market price for the Company’s stock or (ii) $0.01 per share. Matures on June 30, 2022, net of unamortized discount of $ at June 30, 2022.	$	121,369	$	80,394
$250,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days at 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on May 27, 2022, unless earlier converted, net of unamortized discount of $-0- at June 30, 2022. (A) (D)		250,000		176,805
$152,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days at 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on July 22, 2022, net of unamortized discount of $8,683 at June 30, 2022. (B) (D)		143,317		71,875
$252,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days at 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on October 4, 2022, net of unamortized discount of $66,507 at June 30, 2022. (C) (D)		185,492		60,098
Unsecured promissory note for finder’s fee due with interest at 10% per annum, with monthly payments of $1,000. Matures May 1, 2022, or the earlier of the Company aggregate proceeds exceeding $1,000,000 from the sale of equity securities. This note is in default and the Company is pursuing discussions with the lender for its extension.		73,706		74,049
Total Notes Payable-Third Parties	$	773,884	$	463,221

Third party convertible notes payable consists of the following:

(A) Includes a warrant for the right to purchase an additional 250,000 shares of Company Common Stock, subject to adjustments for anti-dilution. Each Warrant is exercisable for a period of five years from the date of issuance at an initial exercise price of $1 per share. The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. In the event the Company files a registration statement with the Securities and Exchange Commission, the Maturity Date shall be the earlier of (i) May 27, 2022; or (ii) the date on which the Company has raised at least $1,250,000 under a registration statement. Interest is payable at the Maturity Date. This note is in default and the Company is pursuing discussions with the lender for its extension.


	September 30, 2022		December 31, 2021
Convertible promissory note with interest at 8% per annum, convertible into common shares at the lesser of: (i) a 50% discount to market price for the Company’s stock or (ii) $0.01 per share. Matures on June 30, 2022, net of unamortized discount of $-0- at September 30, 2022. (Note 9)	$	121,369	$	80,394

$250,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days at 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on May 27, 2022, unless earlier converted, net of unamortized discount of $-0- at September 30, 2022. (A) (D)		250,000		176,805

$152,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days at 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on July 22, 2022, net of unamortized discount of $-0- at September 30, 2022. (B) (D)		152,000		71,875

$252,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days at 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on October 4, 2022, net of unamortized discount of $2,770 at June 30, 2022. (C) (D)		249,230		60,098

Unsecured promissory note for finder’s fee due with interest at 10% per annum, with monthly payments of $1,000. Matures May 1, 2022, or the earlier of the Company aggregate proceeds exceeding $1,000,000 from the sale of equity securities. This note is in default and the Company is pursuing discussions with the lender for its extension.		69,309		74,049

Total Notes Payable-Third Parties	$	841,909	$	463,221

(B) Includes a warrant for the right to purchase an additional 300,000 shares of Company Common Stock, subject to adjustments for anti-dilution. Each Warrant is exercisable for a period of five years from the date of issuance at an initial exercise price of $0.55 per share. The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. In the event the Company files a registration statement with the Securities and Exchange Commission, the Maturity Date shall be the earlier of (i) July 22, 2022; or (ii) the date on which the Company has raised at least $1,500,000 under a registration statement. Interest is payable at the Maturity Date.11

12(A) Includes a warrant for the right to purchase an additional 250,000 shares of Company Common Stock, subject to adjustments for anti-dilution. Each Warrant is exercisable for a period of five years from the date of issuance at an initial exercise price of $1 per share. The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. In the event the Company files a registration statement with the Securities and Exchange Commission, the Maturity Date shall be the earlier of (i) May 27, 2022; or (ii) the date on which the Company has raised at least $1,250,000 under a registration statement. Interest is payable at the Maturity Date. This note is in default and the Company is pursuing discussions with the lender for its extension.

(CB) Includes a warrant for the right to purchase an an additional 300,000 shares of Company Common Stock, subject to adjustments for anti-dilution. Each Warrant is exercisable for a period of five years from the date of issuance at an initial exercise price of $0.55 per share. The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. In the event the Company files a registration statement with the Securities and Exchange Commission, the Maturity Date shall be the earlier of (i) ~~October~~July 422, 2022; or (ii) the date on which ~~the~~ the Company has raised at least $1,500,000 under a registration statement. Interest is payable at the Maturity Date. This note is in default and the Company is pursuing discussions with the lender for its extension.

(DC) OnIncludes ~~December~~a 3,warrant ~~2021,~~for the ~~Company~~right ~~entered~~to ~~into~~purchase an aadditional ~~Stock~~300,000 ~~Purchase~~shares ~~Agreement~~of ~~with~~Company ~~Boot~~Common ~~Capital~~Stock, ~~LLC~~subject ~~(“Boot”),~~to ~~lender~~adjustments for ~~the~~anti-dilution. ~~three~~Each ~~notes~~Warrant is exercisable for a period of ~~(A),~~five ~~(B)~~years ~~and~~from ~~(C),~~the ~~whereby~~date ~~Boot~~of ~~agreed to~~issuance ~~retire~~at ~~all~~an initial exercise price of ~~its~~$0.55 ~~outstanding~~per ~~warrants~~share. ~~(850,000~~The inexercise ~~total)~~price inis ~~exchange~~also ~~for~~subject ~~200~~to ~~shares~~adjustment due ofto ~~Series~~certain Devents, ~~Preferred~~including stock dividends, stock splits and recapitalizations. ~~The~~In ~~Preferred~~the ~~stock shares~~event ~~were~~the ~~issued~~Company onfiles ~~March~~a ~~29,~~registration ~~2022.~~statement with ~~Accordingly~~the Securities and Exchange Commission, the ~~Warrant~~Maturity ~~liability~~Date ofshall ~~$335,651~~be asthe earlier of ~~December~~(i) 31October 4, ~~2021~~2022; ~~was~~or ~~written-off~~(ii) ~~during~~ the date on which ~~period~~the ~~ended~~Company ~~June~~has 30raised at least $1,500,000 ~~2022~~under a registration statement. Interest is payable at the Maturity Date

In(D) ~~accordance~~On ~~with~~December ~~ASC~~3, ~~470-20 “Debt with Conversion and Other Options”~~2021, the Company ~~allocated~~entered ~~$-0-~~into a ~~and~~Stock ~~$654,000~~Purchase ofAgreement ~~the~~with ~~derivative~~Boot ~~liability~~Capital asLLC ~~discounts~~(“Boot”), ~~against~~lender ~~the convertible notes~~ for the ~~period~~three ~~ended~~notes ~~June~~of 30(A), ~~2022~~(B) and ~~year ended December 31~~(C), ~~2021,~~whereby ~~respectively.~~Boot ~~The discounts are being amortized~~agreed to ~~interest~~retire ~~expense~~all ~~over~~of ~~the~~its ~~term~~outstanding ofwarrants ~~the~~(850,000 ~~notes~~in ~~using~~total) ~~the~~in ~~straight-line~~exchange ~~method~~for ~~which~~200 ~~approximates~~shares ~~the~~of ~~effective~~Series ~~interest~~D ~~method~~Preferred stock. The ~~Company~~Preferred stock ~~recorded~~shares ~~$311,006~~were ~~and~~issued ~~$41~~on March 29,~~518~~ of2022. ~~interest~~Accordingly, ~~expense~~the ~~pursuant~~Warrant toliability ~~the~~of ~~amortization~~$335,651 as of ~~the~~December ~~note~~31, ~~discounts~~2021 was written-off during the period ~~periods~~ ended June 30, ~~2022~~ ~~and 2021, respectively~~2022.

~~NOTE~~In 5accordance –with ~~NOTES~~ASC ~~PAYABLE~~470-20 “Debt with Conversion and Other Options”, the Company allocated $-0- ~~RELATED~~and ~~PARTY~~$654,000 of the derivative liability as discounts against the convertible notes for the period ended September 30, 2022 and year ended December 31, 2021, respectively. The discounts are being amortized to interest expense over the term of the notes using the straight-line method which approximates the effective interest method. The Company recorded $383,426 and $387,996 of interest expense pursuant to the amortization of the note discounts during the periods ended September 30, 2022 and 2021, respectively.

~~Notes payable to related parties consists of the following:~~12

Schedule of notes payable related parties
	June 30, 2022		December 31, 2021
Secured Promissory Note – RP, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on July 1, 2022 (A)	$	445,116	$	445,116
Secured Promissory Note – LK, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on July 1, 2022 (A)		100,000		100,000
Secured Promissory Note – C Lemen, dated July 23, 2020. Note accrues interest at 10% per annum, due and payable on July 1, 2022 (A)(B)		90,000		90,000
Unsecured Promissory Note – DC, dated September 30, 2012. Note accrues interest at 7% per annum, due and payable on June 30, 2022		6,525		6,525
Total Notes Payable-Related Party	$	641,641	$	641,641

NOTE 5 – NOTES PAYABLE - RELATED PARTY

~~(A)~~Notes ~~Secured~~payable byto ~~all~~related ofparties ~~Company’s~~consists ~~accounts~~of ~~receivable~~the ~~and inventory.~~following:

(B) Includes a five (5) year common stock warrant of common stock. Warrants equal to 1% of the principal loan divided by $0.414, exercisable at the fair market value on execution date.


	September 30, 2022		December 31, 2021
Secured Promissory Note – RP, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on July 1, 2023 (A)	$	445,116	$	445,116

Secured Promissory Note – LK, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on July 1, 2023 (A)		100,000		100,000

Secured Promissory Note – C Lemen, dated July 23, 2020. Note accrues interest at 10% per annum, due and payable on July 1, 2023 (A)(B)		90,000		90,000

Unsecured Loan – Shareholder, dated September 23, 2022, terms to be formalized		100,000		–

Unsecured Promissory Note – DC, dated September 30, 2012. Note accrues interest at 7% per annum, due and payable on June 30, 2022		6,525		6,525

Total Notes Payable-Related Party	$	741,641	$	641,641

13(A) Secured by all of Company’s accounts receivable and inventory.

~~NOTE~~(B) 6Includes –a ~~GOVERNMENT~~five ~~DEBT~~(5) year common stock warrant of common stock. Warrants equal to 1% of the principal loan divided by $0.414, exercisable at the fair market value on execution date.

~~Economic~~NOTE ~~Injury~~6 ~~Disaster~~– ~~Loan~~GOVERNMENT DEBT

~~On June 2, 2020, the Company executed a secured loan with the U.S. Small Business Administration (SBA) under the~~ Economic Injury Disaster Loan program in the amount of $150,000. The loan is secured by all tangible and intangible assets of the Company and payable over 30 years at an interest rate of 3.75 % per annum. Installment payments, including principal and interest, totaling $731.00 monthly, will begin thirty (30) months from the date of the Note, with first payments applied to accumulated accrued interest. As part of the loan, the Company also received an advance of $10,000 from the SBA. While the SBA refers to this program as an advance, it was written into law as a grant. This means that the amount given through this program does not need to be repaid.

~~Future~~On ~~maturities~~June 2, 2020, the Company executed a secured loan with the U.S. Small Business Administration (SBA) under the Economic Injury Disaster Loan program in the amount of ~~government~~$150,000. ~~debt~~The ~~are~~loan is secured by all tangible and intangible assets of the Company and payable over 30 years at an interest rate of 3.75 % per annum. Installment payments, including principal and interest, totaling $731.00 monthly, will begin thirty (30) months from the date of the Note, with first payments applied to accumulated accrued interest. As part of the loan, the Company also received an advance of $10,000 from the SBA. While the SBA refers to this program as ~~follows:~~an advance, it was written into law as a grant. This means that the amount given through this program does not need to be repaid.

Schedule of future maturities of debt
Period Ending June 30,
2022	$	–
2023		–
2024		–
2025		–
Thereafter		150,000
Total Principal Payments	$	150,000

Future maturities of government debt are as follows:

NOTE 7 – DERIVATIVE LIABILITIES

Schedule of future maturities of debt
Period Ending September 30,
2022	$	–
2023		–
2024		–
2025		–
Thereafter		150,000
Total Principal Payments	$	150,000

The Company analyzed the notes payable – related parties and convertible notes payable referred to in Notes 4 and 5 based on the provisions of ASC 815-15 and determined that the conversion options of the convertible notes qualify as embedded derivatives and required the recognition of derivative liabilities.13

~~For~~NOTE ~~the~~7 ~~derivative~~– ~~instruments~~DERIVATIVE that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date and any resulting gain or loss is recognized as a current period charge to the consolidated statements of operations. The Company estimates the fair value of the embedded derivatives using a Monte Carlo simulation valuation model that combines expected cash outflows with market-based assumptions regarding risk-adjusted yields, stock price volatility, probability of a change of control and the trading information of our common stock into which the notes are convertible, as appropriate to value the derivative instruments at inception and subsequent valuation dates and the value is reassessed at the end of each reporting period, in accordance with FASB ASC Topic 815-15.LIABILITIES

The ~~aggregate~~Company ~~fair~~analyzed ~~value~~the ofnotes ~~derivative~~payable ~~liabilities~~– related asparties ~~of June 30, 2022~~ and ~~December~~convertible ~~31,~~notes ~~2021~~payable ~~amounted~~referred to ~~$801,449~~in ~~and~~Notes ~~$793,997,~~4 ~~respectively.~~and ~~The~~5 ~~assets or liability’s fair value measurement within the fair value hierarchy is~~ based ~~upon~~on the ~~lowest~~provisions ~~level~~ of ~~any~~ASC ~~input~~815-15 ~~that~~and isdetermined ~~significant~~that to the ~~fair value measurement.~~conversion ~~The~~options ~~following table provides a summary~~ of the ~~assets~~convertible ~~that~~notes ~~are~~qualify ~~measured~~as atembedded ~~fair~~derivatives ~~value~~and onrequired athe ~~recurring~~recognition ~~basis~~of derivative liabilities.

Schedule of asset measured at fair value
	Consolidated Balance Sheet		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative Liabilities:
June 30, 2022	$	801,449	$	–	$	–	$	801,449
December 31, 2021	$	793,997	$	–	$	–	$	793,997

For the derivative instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date and any resulting gain or loss is recognized as a current period charge to the consolidated statements of operations. The Company estimates the fair value of the embedded derivatives using a Monte Carlo simulation valuation model that combines expected cash outflows with market-based assumptions regarding risk-adjusted yields, stock price volatility, probability of a change of control and the trading information of our common stock into which the notes are convertible, as appropriate to value the derivative instruments at inception and subsequent valuation dates and the value is reassessed at the end of each reporting period, in accordance with FASB ASC Topic 815-15.

14The aggregate fair value of derivative liabilities as of September 30, 2022 and December 31, 2021 amounted to $801,449 and $793,997, respectively. The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of the assets that are measured at fair value on a recurring basis.

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis:


	Consolidated Balance Sheet		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative Liabilities:
September 30, 2022	$	801,449	$	–	$	–	$	801,449
December 31, 2021	$	793,997	$	–	$	–	$	793,997

Summary of changes in fair value of liability
	Period Ended June 30, 2022		Year Ended December 31, 2021
Beginning balance	$	793,997	$	–
Aggregate fair value of conversion features upon issuance		–		918,403
Fair value of derivatives reclassified to equity		–		–
Net transfer into level 3		–		–
Fair value of warrants netted against common stock issued for stock		–		–
Change in fair value of conversion features		7,452		(124,406	)
Change in fair value of warrant and stock option derivative liabilities		–		–
Ending balance	$	801,449	$	793,997

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis:

NOTE 8 – MERGER AND RELATED TRANSACTIONS


	Period Ended September 30, 2022		Year Ended December 31, 2021
Beginning balance	$	793,997	$	–
Aggregate fair value of conversion features upon issuance		–		918,403
Fair value of derivatives reclassified to equity		–		–
Net transfer into level 3		–		–
Fair value of warrants netted against common stock issued for stock		–		–
Change in fair value of conversion features		7,452		(124,406	)
Change in fair value of warrant and stock option derivative liabilities		–		–
Ending balance	$	801,449	$	793,997

~~The Merger~~14

OnNOTE ~~August~~8 6,– ~~2021,~~MERGER ~~the~~AND ~~Company,~~RELATED FCAA Merger Sub I, Inc, (‘Merger Sub”), a Delaware corporation and wholly owned subsidiary of Ficaar, and HyEdge, Inc. ("Target" or "HyEdge"), a Delaware corporation, entered into an Agreement and Plan of Merger (the "Merger Agreement") which closed on August 9, 2021 (the "Closing Date"). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into the Target and the separate corporate existence of Merger Sub ceased, with Target continuing its corporate existence as a wholly owned subsidiary of the Company. The Merger effected a change in control and was accounted for as a "reverse acquisition" whereby Target is the accounting acquiror for financial statement purposes. Accordingly, for all periods subsequent to the Closing Date, the financial statements of the Company reflect the historical financial statements of HyEdge and any operations of the Company subsequent to the Merger.TRANSACTIONS

~~Prior~~The ~~to the~~ Merger, the Company ceased being an operating company and became a "shell company". Pursuant to the Merger, the Company acquired the business of Target to engage in the business of the development, marketing, and sale of hydrogen-infused water and other consumer goods.

AsOn ~~consideration~~August ~~for~~6, 2021, the ~~merger~~Company, ~~Target~~FCAA ~~shareholders~~Merger Sub I, ~~exchanged~~Inc, ~~100%~~(‘Merger Sub”), a Delaware corporation and wholly owned subsidiary of ~~Target~~Ficaar, ~~Stock~~and HyEdge, Inc. (as"Target" ~~defined~~or "HyEdge"), ina Delaware corporation, entered into an Agreement and Plan of Merger (the "Merger Agreement") ~~totaling~~which 44closed on August 9,~~136,473~~ ~~fully~~2021 ~~diluted~~(the ~~shares~~"Closing ~~into~~Date"). ~~shares~~Pursuant to the terms of ~~Company~~the ~~Common Stock~~Merger atAgreement, aMerger ~~conversion~~Sub ~~rate~~merged ofwith ~~0.7~~and Asinto athe ~~result,~~Target and anthe ~~aggregate~~separate corporate existence of 30Merger Sub ceased,~~895,530~~ ~~shares~~with ofTarget ~~the~~continuing ~~company’s~~its ~~Common~~corporate ~~Stock,~~existence ~~1,000,000~~as ~~shares~~a wholly owned subsidiary of ~~Series~~the CCompany. ~~Preferred~~The ~~Stock~~Merger ~~and~~effected ~~3,054~~a ~~shares~~change ofin ~~Series~~control Dand ~~Preferred~~was ~~Stock~~accounted ~~were~~for toas bea ~~issued~~"reverse toacquisition" whereby Target is the accounting ~~shareholders~~acquiror offor ~~Target.~~financial Asstatement ofpurposes. ~~December 31~~Accordingly, ~~2021,~~for ~~there~~all ~~were~~periods 30subsequent to the Closing Date,~~197,888~~ the financial statements of the ~~planned~~Company ~~Merger~~reflect ~~shares~~the ofhistorical ~~common~~financial ~~stock~~statements ~~issued~~of HyEdge and ~~the~~any ~~Series~~operations Cof ~~and~~the DCompany ~~Preferred~~subsequent ~~shares~~to ~~issued~~the Merger.

~~Changes~~Prior to the Merger, the Company's ~~Officers~~ceased being an operating company and ~~Directors~~became a "shell company". Pursuant to the Merger, the Company acquired the business of Target to engage in the business of the development, marketing, and sale of hydrogen-infused water and other consumer goods.

~~Effective~~As ~~May~~consideration ~~27,~~for ~~2021,~~ the ~~Company’s~~merger, ~~Board~~Target shareholders ofexchanged ~~Directors~~100% ~~appointed~~of ~~Gail~~Target ~~Levy~~Stock (as ~~Chief~~defined ~~Executive~~in ~~Officer~~the ofMerger ~~FICAAR~~Agreement) totaling 44,136,473 ~~Inc.~~fully Ondiluted ~~June~~shares 1,into ~~2021,~~shares inof ~~conjunction~~Company ~~with~~Common Stock ~~the~~at ~~aforementioned~~a ~~change in~~conversion ~~control,~~rate ~~David~~of ~~Cicalese~~0.7 ~~resigned~~As asa ~~Secretary~~result, ~~and~~an ~~Chairman~~aggregate of ~~the~~30,895,530 ~~Board~~shares of ~~Directors.~~the Oncompany’s ~~June~~Common 9Stock, ~~2021~~1,000,000 ashares of ~~majority~~Series ofC ~~Company~~Preferred ~~shareholders elected~~Stock ~~Gail~~and ~~Levy~~3,054 asshares ~~Chairman~~of ~~and~~Series aD ~~member~~Preferred ofStock were to be issued to the ~~Board~~shareholders of ~~Directors~~Target. ~~These~~As ~~changes~~of December 31, 2021, there were ~~reported~~30,197,888 onof the ~~Company's~~planned ~~form~~Merger ~~8-K~~shares ~~that~~of ~~was~~common ~~filed on~~stock ~~June~~issued ~~10,~~and ~~2021~~the Series C and D Preferred shares issued.

15Changes to the Company's Officers and Directors

InEffective ~~conjunction~~May ~~with~~27, ~~the Merger~~2021, ~~Dawn~~the ~~Cames~~Company’s ~~resigned~~Board of Directors appointed Gail Levy as ~~President,~~Chief ~~James~~Executive COfficer of FICAAR, Inc. ~~Sanborn~~On ~~was~~June ~~appointed~~1, as2021, ~~COO~~in ~~and~~conjunction with the aforementioned change in control, David Cicalese resigned as aSecretary ~~member~~and Chairman of the Board of Directors. On June 9, ~~and~~2021, ~~Leonard~~a ~~Klingbaum~~majority ~~was~~of ~~appointed~~Company asshareholders elected Gail Levy as Chairman and a member of the Board of Directors. These changes were reported on the Company's form 8-K that was filed on June 10, 2021.

~~Refer~~In toconjunction ~~Note~~with 13the ~~for~~Merger, ~~subsequent~~Dawn ~~Changes~~Cames toresigned as ~~Management~~President, James C. Sanborn was appointed as COO and as a member of the Board of Directors, and Leonard Klingbaum was appointed as a member of the Board of Directors.

~~NOTE~~On 9July –22, ~~COMMITMENTS~~2022, ~~AND~~the ~~CONTINGENCIES~~Company entered into a Memorandum of Understanding (“MOU”) with Bear Face Capital LLC (“Bear Face”) and Concorde Consulting Corp (“Concorde”) for an influx of capital. In accordance with the terms of the MOU, the following changes were implemented: (i) Gail Levy resigned as Chief Executive Officer and assumed the position of President for the Company, subject to a two (2) year Employment Contract, renewable annually, at an annual salary of $120,000; (ii) Dawn Cames, former officer for the predecessor company (“FICAAR), was appointed to serve as a Director and Chairman of the Board for the Company and was assigned one (1) share of Series C Preferred stock; (iii) Gail Levy, James C. Sanborn, and Leonard Klingbaum resigned as members of the Board of Directors; (iv) James C. Sanborn resigned as COO; and (v) Gail Levy and James C. Sanborn returned 999,999 shares of Series C Preferred stock to the Company.

~~Legal – To the best of our knowledge and belief, no material legal proceedings of merit are currently pending or threatened.~~15

~~Legal~~NOTE ~~Matters:~~9 – COMMITMENTS AND CONTINGENCIES

~~From~~Legal ~~time~~– toTo ~~time,~~ the ~~Company~~best ~~may~~of ~~become~~our ~~involved~~knowledge inand ~~various~~belief, ~~lawsuits~~no ~~and~~material legal proceedings, ~~which arise in the ordinary course~~ of ~~business.~~merit ~~However,~~are ~~litigation~~currently ispending ~~subject to inherent uncertainties, and an adverse result in these~~ or ~~other matters may arise from time to time that may harm its business~~threatened.

ToLegal ~~the best of the Company’s knowledge and belief, no material legal proceedings of merit are currently pending or threatened.~~Matters:

~~Dispute:~~From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.

~~The~~To ~~Company is disputing~~ the ~~validity~~best of ~~a convertible promissory note carried over from its merger in August 2021. Since it presently is not possible to determine~~ the ~~outcome~~Company’s ofknowledge ~~this~~and ~~matter~~belief, ~~the~~no ~~note~~material islegal ~~disclosed~~proceedings ~~in Note 4 to the financial statements with a net balance~~ of ~~$121,369~~merit ~~until~~are ~~its~~currently ~~ultimate~~pending ~~resolution~~or threatened.

~~Employment and Consulting Agreements~~Dispute:

~~During~~The ~~years from 2017 to 2019, the~~ Company ~~signed employment~~is ~~agreements~~disputing ~~with five executive officers:~~ the ~~President,~~validity ~~Chief Operating Officer, Director~~ of ~~Marketing,~~a ~~President~~convertible promissory ~~and~~note ~~Chief Medical~~carried ~~Officer~~over ~~and~~from its ~~Vice~~merger ~~President~~in ofAugust ~~Sales~~2021. ~~With~~Since ~~the~~it ~~exception~~presently ofis ~~one~~not ~~contract,~~possible ~~each~~to ~~agreement~~determine isthe atoutcome ~~will~~of ~~with~~this ~~no set termination periods.~~matter, the ~~unless~~note ~~terminated~~is ~~earlier.~~disclosed ~~The~~in ~~contracts~~Note ~~provide~~4 ~~for an annual base salary ranging from $100,000~~ to ~~$200,00, participation in~~ the ~~Company’s~~financial ~~Bonus~~statements ~~Plan,~~with ~~Stock~~a ~~Option~~net ~~Plan,~~balance ~~Medical~~of ~~benefits~~$121,369 ~~severance~~until ~~pay~~its ~~and~~ultimate ~~two (2) year non-compete clauses~~resolution.

~~Rental~~Employment and Consulting Agreements:

AsGail aLevy ~~result~~resigned ofas ~~the~~Chief ~~COVID-19~~Executive ~~pandemic,~~Officer ~~Company~~and ~~management~~assumed ~~and~~the ~~employees~~position ~~have~~of ~~been~~President ~~working~~for ~~remotely~~the ~~and accordingly~~Company, ~~incurring~~subject noto ~~rental~~a ~~expense~~two ~~during~~(2) ~~the~~year ~~years~~Employment ~~ended~~Contract, ~~December~~renewable 31annually, ~~2021,~~at an annual salary ~~and~~of ~~2020.~~$120,000

~~COVID-19~~Rental:

InAs ~~December 2019,~~ a ~~novel~~result ~~strain~~ of ~~coronavirus (“~~the COVID-19”) ~~was reported to have surfaced in Wuhan~~pandemic, ~~China,~~Company ~~and has since reached multiple other countries, including the~~management ~~United States, resulting in government-imposed quarantines, travel restrictions~~ and ~~other~~employees public health safety measures in affected countries. The various precautionary measures taken by many governmental authorities around the world in order to limit the spread of COVID-19has had, and could continue to have, anbeen ~~adverse~~working ~~effect~~remotely ~~on the global markets~~ and ~~its economy~~accordingly, ~~including~~incurring onno ~~the~~rental ~~availability~~expense ~~and~~during ~~pricing of employees and resources, and other aspects of~~ the ~~global~~years ~~economy.~~ended ~~Although~~December ~~the Company cannot predict the impact that the COVID-19 pandemic will have on its business or results of operations in future periods~~31, ~~to date~~2021, ~~the~~and ~~Company’s core water product applications have been able to support the increased demand the Company has experienced~~2020.

~~On March 11, 2020, the World Health Organization declared the ongoing~~ COVID-19 ~~outbreak as a global health emergency. This resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including the closure of certain non-essential businesses~~

16In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, and has since reached multiple other countries, including the United States, resulting in government-imposed quarantines, travel restrictions and other public health safety measures in affected countries. The various precautionary measures taken by many governmental authorities around the world in order to limit the spread of COVID-19has had, and could continue to have, an adverse effect on the global markets and its economy, including on the availability and pricing of employees and resources, and other aspects of the global economy. Although the Company cannot predict the impact that the COVID-19 pandemic will have on its business or results of operations in future periods, to date, the Company’s core water product applications have been able to support the increased demand the Company has experienced.

~~During~~On ~~the~~March ~~years ended December 31~~11, ~~2021, and~~ 2020, ~~respectively,~~ the ~~pandemic~~World ~~did~~Health ~~not~~Organization ~~have a material impact on the Company’s operations. As of December 31, 2021, and 2020,~~declared ~~and through June 30, 2022,~~ the ~~Company~~ongoing ~~did~~COVID-19 ~~not~~outbreak ~~observe~~as ~~any~~a ~~material~~global ~~impairment~~health ofemergency. ~~its~~This ~~assets~~resulted ~~or a significant change~~ in ~~the~~governments ~~fair~~worldwide ~~value of~~enacting ~~assets~~emergency ~~due~~measures to combat the ~~COVID-19~~spread ~~pandemic. The Company has taken steps to minimize the potential impact~~ of the ~~pandemic~~virus, including ~~safety measures with respect to personal protective equipment,~~ the ~~reduction~~closure ~~in travel and the implementation~~ of acertain ~~virtual~~non-essential ~~office including regular video conference meetings and participation in virtual customer meetings and other virtual events.~~businesses

~~NOTE~~During 10the –years ~~EQUITY~~ended December 31, 2021, and 2020, respectively, the pandemic did not have a material impact on the Company’s operations. As of December 31, 2021, and 2020, and through September 30, 2022, the Company did not observe any material impairment of its assets or a significant change in the fair value of assets due to the COVID-19 pandemic. The Company has taken steps to minimize the potential impact of the pandemic including safety measures with respect to personal protective equipment, the reduction in travel and the implementation of a virtual office including regular video conference meetings and participation in virtual customer meetings and other virtual events.

~~Common stock:~~16

~~The~~NOTE ~~Company~~10 ~~has~~– authorized 200,000,000 shares of $.001 par value common stock. As of June 30, 2022, and December 31, 2021, the Company had 48,151,164 and 47,631,164 shares, respectively, of common stock issued and outstanding.EQUITY

~~On October 27, 2021 26,910,000 shares of~~ Common ~~Stock~~ ~~of the Company held by the Company’s Chief Executive Officer were returned to treasury and retired.~~stock:

OnThe ~~December~~Company ~~10,~~has ~~2021~~authorized ~~and December 15~~200, ~~2021~~000,000 ~~the Company~~shares ~~received total proceeds~~ of $~~650,000~~.001 par ~~for~~value ~~the sale of 650,000~~ common stock. ~~shares~~As atof ~~$1.00~~September ~~per~~30, ~~share.~~2022, ~~The~~and December 1531, 2021 ~~sale of 400~~,~~000~~ ~~shares~~the ~~were~~Company ~~issued~~had ~~on January 3~~48,151,164 ~~2022~~ and ~~accordingly~~47,631,164 ~~recorded~~shares, asrespectively, of common stock ~~subscribed~~issued inand ~~the accompanying financial statements~~outstanding.

On ~~November~~October 1227, 2021 26,910,000 ~~the~~shares ~~U.S.~~of ~~Securities~~Common ~~and~~Stock ~~Exchange Commission (“SEC”) issued a Notice~~ of ~~Qualification for~~ the Company's ~~Form~~held ~~1-A~~by ~~Offering Circular for an offering of~~ the Company’s ~~Common~~Chief ~~Stock~~Executive ~~shares~~Officer ~~under~~were ~~Regulation~~returned ~~A+ (the "Offering") of the Securities Act of 1933 (the “Act”). The purpose of the Offering is~~ to ~~allow~~treasury ~~both accredited~~ and ~~non-accredited potential investors the opportunity to invest directly in the Company~~retired. ~~The Offering has a minimum and maximum investment of $25,000 to at a price of $1.00 per share.~~

~~During~~On ~~the~~December ~~first~~10, ~~quarter~~2021 ofand ~~2022~~December 15, 2021, the Company received total proceeds of $~~370~~650,000 for the sale of ~~370~~650,000 common stock shares at $1.00 per share. The December 15, of2021 ~~which~~sale 45of 400,000 shares were issued in ~~the~~on ~~second~~January ~~quarter ending June 30~~3, 2022 and accordingly, recorded as common stock subscribed in the accompanying financial statements.

~~During~~On November 12, 2021, the ~~second~~U.S. ~~quarter~~Securities and Exchange Commission (“SEC”) issued a Notice of ~~2022,~~Qualification for the Company's Form 1-A Offering Circular for an offering of the Company’s ~~received~~Common ~~total~~Stock ~~proceeds~~shares under Regulation A+ (the "Offering") of ~~$150,000~~the ~~for~~Securities Act of 1933 (the ~~sale~~“Act”). The purpose of ~~150~~the Offering is to allow both accredited and non-accredited potential investors the opportunity to invest directly in the Company. The Offering has a minimum and maximum investment of $25,000 ~~common~~to ~~stock~~at ~~shares~~a atprice of $1.00 per share.

~~Preferred~~During ~~Stock:~~the first quarter of 2022, the Company received total proceeds of $370,000 for the sale of 370,000 common stock shares at $1.00 per share, of which 45,000 shares were issued in the second quarter ending June 30, 2022 and accordingly, recorded as common stock subscribed in the accompanying financial statements.

~~The~~During the second quarter of 2022, the Company ~~has~~received total ~~authorized~~proceeds 30of $150,000 for the sale of 150,000 common stock shares of at $1.~~001~~00 ~~par~~per ~~value preferred stock~~share.

OnDuring ~~August~~the 6,third ~~2021~~quarter of 2022, the Company ~~amended~~received total ~~its~~proceeds ~~Articles~~ of ~~Incorporation~~$600,000 tofor ~~include~~the ~~Certificates~~sale of ~~Designation~~600,000 ~~for~~common ~~two~~stock ~~new~~shares ~~classes~~at of$1.00 ~~Preferred~~per ~~Stock~~share, –which ~~Series~~as Cof ~~Preferred,~~date ~~authorized~~of the accompanying financial ~~1,000,000~~statements ~~shares~~have not been issued and, ~~Series~~accordingly Drecorded ~~Preferred,~~as ~~authorized~~common ~~18,000,000~~stock ~~shares~~subscribed.

~~In connection with the Merger with HyEdge, on September 15, 2021, the Company issued 1,000,000 shares of Series C Convertible~~ Preferred stock, non-dividend, with voting rights. Each share of Series C Preferred stock is convertible into the number of shares of the Company’s common stock equal to the result of (i) 1.5 times the number of Common shares issued and outstanding calculated on a fully diluted basis at the time of conversion, (ii) divided by the total number of Series C Preferred shares issued and outstanding at the time of conversion.Stock:

17The Company has authorized 30,000,000 shares of $.001 par value preferred stock.

~~Additionally~~On August 6, 2021, the Company ~~issued~~amended ~~3,054~~its ~~shares~~Articles of ~~Series~~Incorporation Dto ~~Convertible~~include ~~Preferred~~Certificates ~~stock,~~of ~~non-dividend,~~Designation ~~with~~for notwo ~~voting~~new ~~rights.~~classes ~~Each~~of ~~share~~Preferred ofStock – Series DC Preferred, ~~stock is convertible into~~authorized ~~the~~1,000,000 ~~number of~~ shares ofand, ~~the~~Series ~~Company’s~~D ~~common~~Preferred, ~~stock~~authorized ~~equal~~18,000,000 ~~to 0.01% of the number of Common~~ shares ~~issued and outstanding at the time of conversion~~.

OnIn ~~December~~connection 3with the Merger with HyEdge, on September 15, 2021, the Company ~~entered~~issued ~~into a~~1,000,000 ~~Stock~~shares ~~Purchase~~of ~~Agreement~~Series ~~with~~C ~~Boot~~Convertible ~~Capital~~Preferred ~~LLC~~stock, ~~(“Boot”)~~non-dividend, ~~whereby~~with ~~Boot~~voting ~~Capital~~rights. ~~agreed~~Each toshare ~~retire all~~ of Series ~~its~~C ~~outstanding~~Preferred ~~warrants (850,000~~stock inis ~~total)~~convertible ininto ~~exchange~~the ~~for~~number ~~200~~of shares of ~~Series~~the DCompany’s ~~Preferred~~common stock equal to the result of (i) 1.5 ~~The~~times the ~~Preferred~~number ~~stock~~of Common shares ~~were~~ issued and outstanding calculated on ~~March~~a 29fully diluted basis at the time of conversion, ~~2022~~(ii) divided by the total number of Series C Preferred shares issued and outstanding at the time of conversion.

OnAdditionally, ~~June~~the 29Company issued 3,~~2022~~054 shares of Series D Convertible Preferred stock, ~~100~~non-dividend, ~~shares~~with no voting rights. Each share of Series D Preferred stock is convertible into the number ~~Stock~~of ~~were~~shares ~~issued~~of tothe anCompany’s ~~investor~~common instock ~~connection~~equal ~~with~~to ~~execution~~0.01% of athe ~~Leak-Out~~number ~~Agreement~~of Common shares issued and outstanding at the time of conversion.

AsOn ofDecember ~~June 30~~3, ~~2022~~2021, 28the Company entered into a Stock Purchase Agreement with Boot Capital LLC (“Boot”) whereby Boot Capital agreed to retire all of its outstanding warrants (850,~~996,46~~000 in total) in exchange for 200 shares of Series D Preferred stock. ~~remain~~The ~~unissued~~Preferred stock shares were issued on March 29, 2022.

~~NOTE~~On 11June –29,2022, ~~INCOME~~100 ~~TAXES~~shares of Series D Preferred Stock were issued to an investor in connection with execution of a Leak-Out Agreement.

The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During the current period, the Company incurred a net loss and therefore has no tax liability.17

~~The~~On ~~Company~~July ~~has~~28,2022, ~~U.S. federal~~ 250 and ~~state net operating~~350 ~~loss~~shares ~~carryovers (“NOL’s”)~~ of ~~approximately~~Series ~~$16~~D ~~million~~Preferred ~~and~~Stock ~~$13~~were ~~million~~issued atto ~~June~~an ~~30,~~two ~~2021~~investors ~~and December 31, 2021, respectively, which begin to expire~~ in ~~2036.~~connection ~~Section~~with ~~382~~execution of ~~the Internal Revenue Code limits the amount of NOL’s available to offset future taxable income when~~ a ~~substantial~~Leak-Out ~~change in ownership occurs~~Agreements.

~~The~~NOTE ~~significant~~11 ~~components~~– ofINCOME ~~deferred income tax assets at June 30, 2022 and December 31, 2021 were as follows:~~ TAXES

Schedule of Components of Deferred Income Tax Asset
	June 30, 2022			December 31, 2021
Deferred tax asset:
Net operating loss carry-forward	$	3,400,000		$	3,150,000
Less: valuation allowance		(3,400,000	)		(3,150,000	)
Net deferred income tax asset	$	–		$	–

The ~~amount~~Company ~~taken~~has ~~into~~U.S. ~~income~~federal asand ~~deferred~~state ~~income~~net operating ~~tax~~loss ~~assets~~carryovers ~~must~~(“NOL’s”) ~~reflect that portion~~ of ~~the~~approximately ~~income~~$16 ~~tax~~million ~~loss~~and ~~carry~~$13 ~~forwards~~million ~~that~~at isSeptember ~~more-likely-than-not~~30, to2022 beand ~~realized~~December ~~from~~31, ~~future~~2021, ~~operations.~~respectively, ~~The~~which ~~Company~~begin ~~has chosen~~ to ~~provide~~expire ain ~~full valuation allowance against all available income tax loss carry forwards~~2036. ~~The~~Section ~~Company~~382 ~~has~~of ~~recognized a valuation allowance for~~ the ~~deferred~~Internal ~~income~~Revenue ~~tax~~Code ~~asset~~limits ~~since~~ the ~~Company~~amount ~~cannot~~of be assured that it is more likely than not that such benefit will be utilized in future years. The valuation allowance is reviewed annually. When circumstances change and which cause a change in managementNOL’s ~~judgment~~available ~~about~~to ~~the~~offset ~~realizability~~future ~~of deferred~~ taxable income ~~tax~~when ~~assets,~~a ~~the~~substantial ~~impact of the~~ change ~~on the valuation allowance is generally reflected~~ in ~~current~~ownership ~~income~~occurs.

~~NOTE~~The 12significant –components ~~RELATED~~of ~~PARTY~~deferred ~~TRANSACTIONS~~income tax assets at September 30, 2022 and December 31, 2021 were as follows:

Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial and operating decisions. Details of transactions between the Company and related parties are disclosed below:


	September 30, 2022			December 31, 2021
Deferred tax asset:
Net operating loss carry-forward	$	3,800,000		$	3,150,000
Less: valuation allowance		(3,800,000	)		(3,150,000	)

Net deferred income tax asset	$	–		$	–

OnThe ~~April~~amount ~~15,~~taken ~~2019,~~into ~~the~~income ~~Company~~as ~~entered~~deferred ~~into~~income antax ~~intellectual~~assets ~~property~~must ~~licensing~~reflect ~~agreement~~that (portion of the ~~“Agreement”)~~income ~~with~~tax ~~HyEdge~~loss IPcarry ~~Co.~~forwards ~~(“HyEdge~~that ~~IP”),~~is anmore-likely-than-not ~~entity~~to ~~100%~~be ~~owned~~realized from future operations. byThe ~~the~~Company ~~founder~~has ~~and~~chosen ~~CEO~~to ofprovide ~~the~~a ~~Company. Pursuant~~full tovaluation ~~the~~allowance ~~agreement,~~against ~~HyEdge~~all IPavailable ~~granted~~income ~~the~~tax ~~Company~~loss ancarry ~~exclusive,~~forwards. ~~non-assignable,~~The ~~non-sublicensable~~Company has recognized ~~and~~a ~~royalty-free~~valuation ~~right~~allowance ~~and~~for ~~license~~the todeferred ~~use~~income tax asset since the ~~intellectual properties~~Company ~~related~~cannot tobe ~~beverages infused~~assured ~~with~~that ~~hydrogen~~it ~~for~~is ~~human~~more ~~consumption owned~~likely bythan ~~HyEdge~~not IPthat ~~(the~~such benefit ~~“Intellectual~~will ~~Properties”),~~be ~~solely~~utilized ~~within~~in ~~North~~future ~~America~~years. InThe ~~addition,~~valuation ~~the~~allowance ~~Company~~is ~~agrees~~reviewed toannually. ~~irrevocably assign~~When ~~and~~circumstances ~~transfer~~change toand ~~HyEdge~~which ~~IP,~~cause ~~all~~a ofchange in ~~its~~management’s ~~right,~~judgment ~~title~~about ~~and~~the ~~interest~~realizability inof ~~and~~deferred toincome ~~any~~tax ~~improvements~~assets, ~~acquired~~the ~~through~~impact ~~use,~~of ~~modification or~~the ~~improvement,~~change on the ~~Intellectual~~valuation ~~Properties~~allowance is ~~(the~~generally ~~“Improvements”)~~reflected in current income.

18NOTE 12 – RELATED PARTY TRANSACTIONS

~~The~~Parties ~~license~~are ~~will~~considered to be ~~terminated~~related if 1)one ~~the Company~~party ~~fails~~has ~~to perform any term or condition of~~ the ~~Agreement~~ability ~~and fails~~ to ~~cure~~control ~~such failure within 30 days.~~ or 2)exercise ~~the~~significant ~~Company~~influence ~~undergoes~~over ~~any direct or indirect sale, merger, consolidation, or transfer of greater than 50% of~~ the ~~Licensee's~~other ~~ownership~~party ~~shares~~in ormaking ~~business~~financial ~~assets to~~and aoperating ~~person~~decisions. ~~or group~~ Details of ~~persons,~~transactions orbetween 3) the Company ~~substantially~~and ~~discontinues~~related ~~business~~parties ~~operations.~~are disclosed below:

On ~~December~~April 2015, 2019, the Company ~~and HyEdge IP~~ entered into an ~~amendment~~intellectual property tolicensing agreement (the “Agreement”) with HyEdge IP Co. (~~the~~“HyEdge ~~"Amendment"~~IP”), ~~expanding~~an entity 100% owned by the ~~territory~~founder and inCEO of the ~~Agreement~~Company. Pursuant ~~from~~to ~~North~~the ~~America~~agreement, HyEdge IP granted the Company an exclusive, non-assignable, non-sublicensable and royalty-free right and license to use the intellectual properties related to beverages infused with hydrogen for human consumption ~~worldwide,~~owned ~~including~~by HyEdge IP (the ~~World~~“Intellectual ~~Wide~~Properties”), ~~Web~~solely within North America. In addition, the ~~Amendment~~Company ~~clarified~~agrees ~~the~~to ~~scope~~irrevocably assign and transfer to HyEdge IP, all of ~~the~~its ~~license~~right, title and ~~rights~~interest in ~~question~~and to any improvements, ~~which~~acquired ~~includes~~through use, modification or improvement, on the Intellectual Properties ~~and~~ (the “Improvements”). On ~~The~~July ~~Amendment~~22, ~~also~~2022, ~~stipulated that~~ the Company ~~and~~entered ~~HyEdge~~into IPan ~~shall~~Intellectual Property ~~agree~~Assignment ~~upon~~Agreement, awith ~~royalty for~~Gail Levy whereby the Company's ~~use~~acquired of the ~~Intellectual~~intellectual ~~Properties,~~property ~~including~~related ~~the~~to ~~Improvements~~its beverage production operations from HyEdge IP in exchange for 715,000 ~~outside~~shares of ~~North~~Company ~~America.~~ Common stock

~~NOTE 13 – SUBSEQUENT EVENTS~~18

~~The~~On ~~Company~~December ~~has~~20, ~~evaluated~~2019, ~~subsequent~~the ~~events~~Company ~~through~~and HyEdge IP entered ~~August~~into 12an amendment to the Agreement (the "Amendment"), ~~2022~~expanding the territory in the Agreement from North America to worldwide, including ~~which~~the isWorld Wide Web. In addition, the ~~date~~Amendment clarified the ~~financial~~scope ~~statements~~of ~~were~~the ~~issued~~license and rights in question, which includes the Intellectual Properties and ~~has~~the ~~concluded~~Improvements. The Amendment also stipulated that nothe ~~such~~Company ~~events~~and orHyEdge ~~transactions~~IP ~~took~~shall ~~place which~~agree ~~would~~upon ~~require~~a ~~adjustment~~royalty for tothe orCompany's ~~disclosure~~use inof the ~~financial~~Intellectual ~~statements~~Properties, ~~except~~including ~~for~~ the ~~following:~~Improvements, outside of North America.

~~Equity~~NOTE 13 – SUBSEQUENT EVENTS

OnThe ~~July 22, 2022, the~~ Company ~~entered~~has ~~into~~evaluated asubsequent ~~Memorandum of~~events ~~Understanding~~through ~~(“MOU”)~~November ~~with Bear Face Capital LLC (“Bear Face”) and Concorde Consulting Corp (“Concorde”) (“jointly “Parties”) whereby Bear Face and Concorde agreed to the purchase of 250~~19,~~000~~ ~~and 350~~2022,~~00 common stock shares,~~ ~~respectively,~~which atis ~~$1.00~~the ~~per~~date ~~share.~~the ~~The~~financial ~~total~~statements ~~proceeds of $600,000~~ were ~~received on July 27~~issued, ~~2022~~and byhas ~~the~~concluded ~~Company.~~that ~~Simultaneously~~no ~~the~~such ~~Parties executed~~events ~~nine-month~~or ~~Leak-Out~~transactions ~~agreements~~took onplace ~~sales~~which ofwould ~~the~~require adjustment ~~shares~~to ~~purchased.~~or Asdisclosure ~~consideration~~in ~~for~~ the ~~Leak-Out~~financial ~~agreements the Parties were granted 250 and 350 Series D Preferred shares, respectively~~statements.

~~Change in Management and Board of Directors~~19

In accordance with the terms of the MOU, the following changes were implemented: (i) Gail Levy resigned as Chief Executive Officer and assumed the position of President for the Company, subject to a two (2) year Employment Contract, renewable annually, at an annual salary of $120,000; (ii) Dawn Cames, former officer for the predecessor company (“FICAAR), was appointed to serve as a Director and Chairman of the Board for the Company and was assigned one (1) share of Series C Preferred stock; (iii) Gail Levy, James C. Sanborn, and Leonard Klingbaum resigned as members of the Board of Directors; (iv) James C. Sanborn resigned as COO; and (v) Gail Levy and James C. Sanborn returned 999,999 shares of Series C Preferred stock to the Company.

Intellectual Property

On July 22, 2022, the Company entered into an Intellectual Property Assignment Agreement whereby the Company acquired the intellectual property related to its beverage production operations from HyEdge IP in exchange for 715,000 shares of Company Common stock.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis (“MD&A”) is intended to provide an understanding of our financial condition, results of operations and cash flows by focusing on changes in certain key measures from year to year. This discussion should be read in conjunction with the Condensed Consolidated Unaudited Financial Statements contained in this Quarterly Report on Form 10-Q and the Consolidated Financial Statements and related notes and MD&A of Financial Condition and Results of operations appearing in our Annual Report on Form 10-K as of and for the years ended December 31, 2021 and 2020. The results of operations for an interim period may not give a true indication of results for future interim periods or for the year.

Cautionary Statement Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q, Financial Statements and Notes to Financial Statements contain forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations and financial conditions. All forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or intended. We undertake no obligation to publicly update or revise any forward-looking statements to reflect actual results, changes in expectations or events or circumstances after the date this Quarterly Report on Form 10-Q is filed.

When this report uses the words “we,” “us,” “our,” or “FICAAR” and the “Company,” they refer to Ficaar, Inc.

Company History and Summary

HFactor, Inc., formerly known as Ficaar, Inc. (the “Company” or “HFactor” or “Ficaar”) was incorporated in July 2001 in the State of Georgia under the name OwnerTel, Inc. The name of the Company was changed to Ficaar, Inc. in December of 2007 and to HFactor, Inc. on September 2, 2021.

The Company’s fiscal year end is December 31.

On May 28, 2021, David Cicalese (“Cicalese”), an officer and Board member of Ficaar entered into an agreement with Gail Levy whereby Cicalese agreed to sell 29,900,000 shares, representing a majority interest in Ficaar, to Levy. Acting as the majority shareholder of the Company, Levy then caused Ficaar to enter into an Agreement and Plan of Merger (the "Merger Agreement") between the Company, FCAA Merger Sub I, Inc. ("Merger Sub"), a Delaware corporation and wholly owned subsidiary of Ficaar, and HyEdge, Inc. ("Target" or "HyEdge"), a Delaware corporation, wherein Merger Sub and Target would merge, with Target surviving the transaction as a wholly owned subsidiary of Ficaar (the "Merger"). The Merger Agreement was executed on August 6, 2021 and the Merger closed on August 9, 2021. The Merger effected a change in control and was accounted for as a "reverse acquisition" whereby Target is the accounting acquiror for financial statement purposes. Accordingly, for all periods subsequent to the Closing Date, the financial statements of the Company reflect the historical financial statements of HyEdge and any operations of the Company subsequent to the Merger.

Plan of Operations

BUSINESS DESCRIPTION

HFactor water was created by Gail Levy, HyEdge's founder and CEO. Gail is a successful serial entrepreneur who was looking for a new product that could alleviate the toxic side effects of the cancer chemotherapeutic drugs that had riddled a dear friend. As she researched the properties of hydrogen water, she became more and more enthralled by its potential. Ms. Levy felt she could honor her friend by making hydrogen water immaculate, effective, and accessible to everyone. Enlivened by this mission, she collected a team of experts to help her engineer a natural process to combine hydrogen with water with zero impurities and optimal impact. In 2017, she launched her flagship product through retail and ecommerce channels. HFactor was developed and is manufactured by a team of experts in the U.S. and utilizes a patented chemical-free and magnesium-free process to infuse free hydrogen into its water. Its award winning, environmentally friendly ergonomic pouch keeps the hydrogen potent and pure and makes it extremely portable.

HFactor's anti-inflammatory and antioxidant benefits appeal to a wide population across every age group, positioning HFactor to capture significant share in an expanding market. The global market for bottled water is projected to reach $215B by 2025. HFactor has demonstrated significant market traction, with $2.87M sales in 2020, 30M+ followers across Social Media channels.

The quality of our product is achieved through a proprietary manufacturing process. A reverse osmosis filtering system and patent-protected infusion process ensures efficacy, purity, and taste. The efficacy of hydrogen water is backed by over 1,000 published peer reviewed studies demonstrating that hydrogen positively impacts fitness, health, lifestyle, recovery, and wellness.

Our sales strategy involves a diversified, multi-channel approach. Our products are currently on shelves in approximately 5,000+ retail stores across 20 chains in addition to our growing ecommerce presence. Our company prides itself on having a low carbon footprint, primarily due to our eco-conscious packaging and free mail-in recycling program through our partnership with Teracycle.

Our mission statement is to build a brand and corporate culture that, at its essence, exhibits strength in oneself and in one's community. We promote a foundation of "doing well by doing good". This foundation enables HFactor to produce and distribute the highest quality "better for you" consumer products that are conscious to the community, mind, body, and the environment

Comparison of Three Months Ended ~~June~~September 30, ~~2022~~ 2022 to Three Months Ended ~~June~~September 30, 2021

Results of Operations

Three Months ended June 30,

Percent

Three Months ended September 30,

Percent

2022

2021

Change

Revenues

~~600~~272,~~495~~329

–513,174

~~600~~(240,~~495~~845

)

~~100~~(47)%

Gross profit

~~333~~110,~~816~~452

–266,867

~~333~~(156,~~816~~415

)

~~100~~(59)%

Operating expenses

(~~811~~597,~~798~~012

)

(5633,~~825~~806

)

(~~805~~36,~~973~~794

)

~~13,836~~(6)%

Other income (expense)

(~~177~~138,~~448~~436

)

(~~240~~96,~~406~~504

)

~~(62~~41,~~958~~932

)

~~-26~~43%

Net loss

(~~655~~624,~~430~~996

)

(~~246~~463,~~231~~443

)

(~~409~~161,~~199~~553

)

~~166~~35%

Net revenues for the three months ended ~~June~~September 30, 2022 were $~~600~~272,~~495~~329 as compared to $~~-0-~~513,174 for the three months ended ~~June~~September 30, 2021 which resulted primarily from higher distributor dictated trade spending during the ~~merger~~summer ~~of HyEdge~~high peak season.

Gross profit for the three months ended ~~June~~September 30, 2022 was $~~333~~110,~~816~~452 as compared to $~~-0-~~266,867 for the three months ended ~~June~~September 30, 2021.

Total operating expenses were $~~811~~597,~~798~~012 for the three months ended ~~June~~September 30, 2022 compared to $5633,~~825~~806 for the three months ended ~~June~~September 30, 2021. The ~~13,836~~6% ~~increase was~~decrease was primarily attributable to ~~the~~a ~~additional~~reduction ~~operating expenses resulting from the merger of HyEdge, specifically $488,425~~ in ~~sales and marketing expenses and $142,393 in~~ payroll and compensation.

Other income (expense) was $(~~177~~138,~~448~~436) for the three months ended ~~June~~September 30, 2022 compared to $(~~240~~96,~~406~~504) for the three months ended ~~June~~September 30,2021. The $6241,~~958 decrease~~932 increase was primarily ~~the~~additional ~~reduction~~interest inaccrued ~~derivative expenses~~ associated with ~~embedded liabilities in~~ convertible debt borrowings that are in default status.

For the three months ended ~~June~~ September 30, 2022, the Company reported a net loss of $~~655~~624,~~430~~996 as compared to a net loss of $~~246~~463,~~231~~443 for the three months ended ~~June~~September 30, 2021. The $~~409~~161,~~199~~553 increase in net loss for the three months ended ~~June~~September 30, 2022 mainly arose from ~~the~~decreased sales, ~~additional~~ net ~~loss~~of ~~resulting~~higher ~~from~~than ~~the merger~~usual oftrade ~~HyEdge~~spending .

Comparison of ~~Six~~Nine Months Ended ~~June~~September 30, 2022 to ~~Six~~Nine Months Ended ~~June~~September 30, 2021

Results of Operations

Six Months ended June 30,

Percent

Nine Months ended September 30,

Percent

2022

2021

Change

Revenues

1,~~196~~468,~~118~~447

–513,174

1955,~~196,118~~273

~~100~~186%

Gross profit

~~653~~764,~~723~~175

–266,867

~~653~~497,~~723~~308

~~100~~186%

Operating expenses

(12,~~743~~340,~~012~~024

)

(12646,~~858~~667

)

(1,~~730~~693,~~154~~360

)

~~13,456~~315%

Other income (expense)

(~~373~~511,~~014~~450

)

(~~242~~339,~~607~~111

)

(~~130~~172,~~407~~339

)

5451%

Net loss

(12,~~462~~087,~~303~~299

)

(~~255~~718,~~465~~908

)

(1,~~206~~368,~~838~~391

)

~~472~~190%

Net revenues for the ~~six months~~nine months ended ~~June~~September 30, 2022 were $1,~~196~~468,~~118~~447 as compared to $~~-0-~~513,174 for the ~~six~~nine months ended ~~June~~September 30, 2021 which resulted from the merger of HyEdge.

Gross profit for the ~~six months~~nine months ended ~~June~~September 30, 2022 was $~~653~~764,~~723~~175 as compared to $~~-0-~~266,867 for the ~~six~~nine months ended ~~June~~September 30, 2021.

Total operating expenses were $12,~~743~~340,~~012~~024 for the ~~six~~nine months ended ~~June~~September 30, 2022 compared to $12646,~~858~~667 for the ~~six~~nine months ended ~~June~~September 30, 2021. The ~~13,456~~315% increase ~~was~~ was primarily attributable to the additional operating expenses resulting from the merger of HyEdge, specifically $1,~~069~~087,~~467~~021 in additional sales and marketing expenses ~~and $281,019 in payroll and compensation~~..

Other income (expense) was $(~~373~~511,~~014~~450) for the ~~six~~nine months ended ~~June~~September 30, 2022 compared to $(~~242~~339,~~607~~111) for the ~~six~~nine months ended ~~June~~September 30,2021. The $~~130~~172,~~407 increase~~339 increase was primarily $~~269~~116,~~488~~954 ~~in amortization of debt discount offset by $217,011~~ decrease in derivative expenses associated with embedded liabilities in convertible debt and $84100,~~082~~ 061 increase in interest expenses associated with borrowings.

For the ~~six~~nine months ended ~~June~~ September 30, 2022, the Company reported a net loss of $12,~~462~~087,~~303~~299 as compared to a net loss of $~~255~~718,~~465~~908 for the ~~six~~nine months ended ~~June~~ September 30, 2021. The $1,~~206~~368,~~838~~391 increase in net loss for the ~~six~~nine months ended ~~June~~September 30, 2022 mainly arose from ~~the~~higher ~~additional~~sales ~~net~~and ~~loss resulting from the~~marketing ~~merger of HyEdge~~expenses.

Liquidity and Capital Resources

As of ~~June~~September 30, 2022, the ~~Company~~ Company had $7322,~~275~~036 in cash to fund its operations. The Company reported working capital deficit of $5,~~424~~427,~~691~~155 at ~~June~~September 30, 2022 as compared to a working capital deficit of $4,855,836 at December 31, 2021, representing an increase in working capital deficit by $~~568~~571,~~855~~320.

The Company does not believe its current cash balance will be sufficient to allow the Company to fund its planned operating activities for the next twelve months. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations or substantially curtail some or all of its planned activities. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities should the Company be unable to continue as a going concern.

As the Company continues to incur losses, achieving profitability is dependent on achieving a level of revenues adequate to support the Company's cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital. Management intends to fund future operations through additional private or public equity offering and may seek additional capital through arrangements with strategic partners of from other sources. There can be no assurances, however, that additional funding will be available on terms acceptable to the Company, or at all. Any equity financing may be dilutive to existing shareholders, which dilution may be significant depending on the terms of the transactions.

Operating Activities:

For the ~~six~~nine months ended ~~June~~ September 30, 2022, net cash flow used by operating activities was $(~~697~~1,~~579~~448,818) compared to $(11110,~~198~~800) for the ~~six~~nine months ended ~~June~~ September 30, 2021. The ~~decreases~~ increases in cash flow used for operating activities for 2022 period were primarily due to increases in operating expenditures ~~resulting~~ resulting from the HyEdge merger.

Investing and Financing Activities:

Net cash flows provided by (used) in investing and financing activities for the ~~six~~nine months ended ~~June~~September 30, 2022 were $~~520~~1,220,000 from sales of common stock shares compared to $11149,~~198~~000 in ~~net~~proceeds ~~payments~~ from ~~borrowings~~convertible ~~for~~loans ~~the~~in ~~six~~September ~~months ended June~~ 30, 2021.

Liquidity and Capital Resource Measures:

The Company’s primary ~~source~~ source of liquidity has been from ~~convertible~~sales ~~loans~~of ~~and~~its ~~third~~common ~~party~~stock and ~~related~~convertible ~~party~~ loans.

Going Concern

The Company has experienced a a net loss and had an accumulated deficit of $3,~~236~~861,~~411~~407 as of ~~June~~September 30, 2022. These conditions raise substantial doubt about the Company’s ability to continue absent raising sufficient capital to fund continued operations. Management expects to incur additional losses in the foreseeable future and recognizes the need to raise capital to remain viable. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Transaction with Related Parties:

None.

Critical Accounting Policies

Refer to Note 2 in the Consolidated Financial Statements for a summary of recently adopted and recently issued accounting standards and their related effects or anticipated effects on our consolidated results of operations and financial condition.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Inflation and Changing Prices

We do not believe that inflation nor changing ~~prices~~ prices for the three months ~~June~~September 30, 2022 had a material effect on our operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Accounting Officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of ~~June~~September 30, 2022, the end of the period ~~covered~~ covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Accounting Officer concluded that our disclosure ~~controls~~ controls and procedures were not effective at the reasonable assurance level due to the material weaknesses discussed below.

Internal Control Over Financial Reporting

Evaluation of Disclosure Controls and Procedures

Management of the Company has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of the Company had concluded that the Company's disclosure controls and procedures as of the period covered by this Quarterly Report on Form 10-Q were not effective for the following reasons:

a) The Company has limited segregation of duties amongst its employees with respect to the Company's control activities. This deficiency is the result of the Company's limited number of employees. This deficiency may affect management's ability to determine if errors or inappropriate actions have taken place. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible changes in our disclosure controls and procedures.

b) The Company's has a limited number of external board members. This deficiency may give the impression to the investors that the board is not independent from management. Management and the Board of Directors are required to apply their judgment in evaluating the cost-benefit relationship of possible changes in the organization of the Board of Directors.

Changes in internal control over financial reporting.

Management of the Company has also evaluated, with the participation of the Chief Executive Officer of the Company, any change in the Company’s internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q and determined that there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be involved in various claims and legal actions in the ordinary course of business. We are not currently involved in any material legal proceedings outside the ordinary course of our business.

ITEM 1A. RISK FACTORS

As of the date of this report, there have been no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On or about August 8, 2021 the Company issued 30,197,888 shares of Company common stock and 1,003,054 Preferred stock upon the closing of the HyEdge, Inc. acquisition. The shares were the component of the consideration paid by the Company to acquire HyEdge. These shares of Company common stock were offered and sold in a private transaction in accordance with Section 4(a)(2) of the Securities Act of 1933, as amended.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company is in fault on the following notes with due dates on principal and interest as of ~~June~~September 30, 2022:

Lender	~~Lender~~	Principal	~~Maturity Dates~~	Maturity Dates
(a) Boot Capital LLC	~~(a) Boot Capital LLC~~	$~~250,000~~	~~May 27~~250, ~~2022~~000	May 27, 2022
	(b) Saliam Inc.	$ 73,706	May 01, 2022
(b) Boot Capital LLC		$	152,000	July 22, 2022
	(c) R. Propper	$445,116	July 01,2022
(b) Saliam Inc.		$	69,309	May 01, 2022
	(d) L. Klingbaum	$100,000	July 01, 2022
(c) R. Propper		$	445,116	July 01,2022
	(e) C. Leman	$ 90,000	June 30, 2022
(d) L. Klingbaum		$	100,000	July 01, 2022
(e) C. Leman		$	90,000	June 30, 2022

The Company is currently pursuing discussions with the above note holders for their extension.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

		Filed Herewith (*)	Incorporated by Reference
Exhibit No.	Description		Filing Type	Date Filed
2.1	Merger Agreement		8-K	08/11/2021
3.1	Articles of Incorporation		10-12G	01/24/2018
3.2	Amendment to Articles of Incorporation		8-K	08/11/2021
3.3	Bylaws		10-12G	01/24/2018
3.4	Amendment to Articles of Incorporation		8-K	11/18/2021
4.1	Series C Preferred Stock Designation		8-K	08/11/2021
4.2	Series D Preferred Stock Designation		8-K	08/11/2021
10.01	Boot Capital Securities Purchase Agreement dated May 27, 2021		8-K	06/10/2021
10.02	Boot Capital Convertible Promissory Note dated May 27, 2021		8-K	06/10/2021
10.03	Boot Capital Warrant dated May 27, 2021		8-K	06/10/2021
10.04	Boot Capital Securities Purchase Agreement dated July 22, 2021		8-K	08/11/2021
10.05	Boot Capital Convertible Promissory Note dated July 22, 2021		8-K	08/11/2021
10.06	Boot Capital Warrant dated July 22, 2021		8-K	08/11/2021
10.07	Boot Capital Securities Purchase Agreement dated October 4, 2021		8-K	10/12/2021
10.08	Boot Capital Convertible Promissory Note dated October 4, 2021		8-K	10/12/2021
10.09	Boot Capital Warrant dated October 4, 2021		8-K	10/12/2021
10.10	IP Assignment ~~Agreememt~~Agreement dated July 22, 2022	*
23.1	Auditor's Consent	*
31.1	Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 of Principal Executive Officer	*
31.2	Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 of Principal Financial Officer	*
32.1	Certification pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 of the Principal Executive and Principal Financial Officer	*
101.INS	Inline XBRL Instances Document	*
101.SCH	Inline XBRL Taxonomy Extension Schema Document	*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	*
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).	*

SIGNATURES

Pursuant to the requirements of Section 13 or 15 of the Securities Exchange Act, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HFactor, Inc.
	(Registrant)
August 15, 2022	By:	/s/ Dawn Cames
November 21, 2022	By:	/s/ Dawn Cames
		Dawn Cames
		Principal Executive Officer & Acting Principal Financial Officer

Filing Compare · HFactor, Inc.