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 ~~September~~March 3031, ~~2022~~2023

☐

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

244 Madison Ave, #1249

New York, NY 10016

(Address of principal executive offices)

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

(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 ~~November~~May 1911, ~~2022~~ 2023, the Registrant had 4850,~~151~~467,~~164~~414 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	2019
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2422
Item 4.	Controls and Procedures	2422
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	2524
Item1A.	Risk Factors	2524
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2524
Item 3.	Defaults Upon Senior Securities	2524
Item 4.	Mine Safety Disclosures	2524
Item 5.	Other Information	2524
Item 6.	Exhibits	2625
	Signatures	2726

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL ~~STATEMENTS~~INFORMATION

HFACTOR, INC.

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	March 31,			December 31,
	2022			2021
	2023			2022
	-Unaudited-			~~-Audited-~~
ASSETS
Current Assets
Cash	$	2236,~~036~~206		$	~~250~~148,~~854~~055
Accounts receivable, net of allowance for doubtful accounts		~~157~~276,~~120~~376			75124,~~737~~109
Inventories		~~393~~517,~~683~~728			~~468~~461,~~913~~194
Prepaid expenses and other current assets		~~142~~37,~~795~~159			5371,~~085~~042
Total Current Assets		~~715~~867,~~634~~470			~~848~~804,~~589~~400
Fixed Assets, net of accumulated depreciation		~~208~~187,~~807~~577			~~257~~198,~~219~~192
Intangible Asset, net of accumulated amortization		~~703~~655,~~083~~417			–673,292
Total Assets	$	1,~~627~~710,~~524~~464		$	1,~~105~~675,~~808~~884
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses	$	3,258,354		$	3,097,807
Accounts and Other payables	$	3,039,773		$	3,378,177
Accrued Interest		~~339~~420,~~437~~311			~~212~~408,~~108~~722
Current portion of notes payable-third party, net of debt discount		~~841~~849,~~908~~299			~~463~~847,~~221~~566
Notes payable-related party		741,641			641,641
Note payable-related party		629,429			629,429
Government loans payable		160,000			160,000
Derivative liabilities		801,449			801,449
Derivative liabilities		801,449			793,997
Total Current Liabilities		5,740,262			6,065,343
Warrant liability, net of unamortized discount		–			335,651
Total Current Liabilities		6,142,789			5,704,425
Long-Term Liabilities
Note payable - Third party		–			–
Government loans payable		160,000			160,000
Note payable - Related party		–			–
Total Long-Term Liabilities		160,000			160,000
Total Long-Term Liabilities		–			–
Total Liabilities		5,900,262			6,225,343
Total Liabilities		6,142,789			5,704,425
Commitments and Contingencies		–			–
Stockholders' Deficit
Preferred stock 219,000,000, $.001 par value shares authorized, shares issued and outstanding as follows:
Preferred stock 19,000,000, $.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 September 30, 2022 and December 31, 2021, respectively		1,000			10,003
Series C voting, convertible Preferred stock, $.001 par value 1,000,000 shares authorized; 1 and 1,000,000 shares issued and outstanding on March 31, 2023 and December 31, 2022, respectively		–			1,000
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
Series D non-voting, convertible Preferred stock, $.001 par value 18,000,000 shares authorized; 4,349 and 4,349 shares issued and outstanding on March 31, 2023 and December 31, 2022, respectively		4			4
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
Common stock 200,000,000, $.001 par value shares authorized; 50,467,414 and 49,766,164 shares issued and outstanding on March 31, 2023 and December 31, 2022, respectively		50,467			49,766
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
Additional paid-in capital		(404,329	)		(404,628	)
Additional paid-in capital		(704,327	)		(2,873,543	)
Accumulated deficit		(3,835,939	)		(4,195,601	)
Accumulated deficit		(3,861,407	)		(1,774,108	)
Total Stockholders' Deficit		(4,189,797	)		(4,549,459	)
Total Stockholders' Deficit		(4,515,265	)		(4,598,617	)
Total Liabilities and Stockholders' Deficit	$	1,710,464		$	1,675,884
Total Liabilities and Stockholders' Deficit	$	1,627,524		$	1,105,808

~~Going~~The ~~Concern~~accompanying ~~(Note~~notes 2)are an integral part of these condensed consolidated financial statements.

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~3

3HFACTOR, INC.

~~HFACTOR,~~Condensed ~~INC.~~Consolidated Statements of Operations

Condensed Consolidated Statements of Operations


	Three Months Ended March 31,			Three Months Ended March 31,
	2023			2022
	-Unaudited-			-Unaudited-
REVENUES

Sales, net	$	418,765		$	595,623

TOTAL REVENUES		418,765			595,623

COST OF REVENUES		187,809			275,716

GROSS PROFIT		230,956			319,907

OPERATING EXPENSES
Manufacturing expenses		84,475			55,067
Sales and marketing		323,694			581,042
General and administrative		159,610			295,105
Total expenses		567,778			931,214

Loss from operations		(336,823	)		(611,307	)

Other (income) expense
Amortization of debt discount		–			142,687
Change in FMV of derivatives		–			7,452
Interest expense		15,832			45,427
(other income)		(712,316	)		–

Total Other (income) expense		(696,484	)		195,566

Net Income/(Loss)	$	359,662		$	(806,873	)

Net earnings/(loss) per share attributable to common stockholders - basic & diluted	$	0.0072		$	(0.0168	)

Weighted average shares outstanding		50,233,664			48,006,164

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

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
REVENUES
Sales, net	$	272,329		$	513,174		$	1,468,447		$	513,174
TOTAL REVENUES		272,329			513,174			1,468,447			513,174
COST OF REVENUES		161,877			246,307			704,272			246,307
GROSS PROFIT		110,452			266,867			764,175			266,867
OPERATING EXPENSES
Manufacturing expenses		71,356			41,726			159,720			41,226
Sales and marketing		375,824			358,270			1,445,291			358,270
General and administrative		149,832			233,810			735,013			247,168
Total Expenses		597,012			633,806			2,340,024			646,664
Loss from Operations		(486,560	)		(366,939	)		(1,575,849	)		(379,797	)
Other (income) expense
Amortization of debt discount		72,420			346,478			383,426			387,996
Change in Fair Market Value of derivatives		–			124,406			7,452			124,406
Derivative (income) expense		–			(314,665	)		–			(97,654	)
Interest expense		66,830			50,851			157,472			57,411
Gain on forgiveness of debt		–			(113,799	)		–			(113,799	)
Other (income ) expense		(814	)		3,233			(36,900	)		(19,249	)
Total Other (income) expense		138,436			96,504			511,450			339,111
Net Loss	$	(624,996	)	$	(463,443	)	$	(2,087,299	)	$	(718,908	)
Net Loss per common shares outstanding - Basic and diluted:
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~~HFACTOR, ~~accompanying notes are an integral part of these condensed consolidated financial statements~~Inc.

4Consolidated Statements of Stockholders' Deficit

~~HFACTOR, Inc.~~-Unaudited-

Consolidated Statements of Stockholders' Deficit


	Series C						Series D
	Preferred Stock						Preferred Stock				Common stock
	Shares			Amount			Shares		Amount		Shares			Amount

Balance as of December 31, 2021		1,000,000		$	1,000			3,054	$	3		47,631,164		$	47,631

Sale of common shares		–			–			–		–		325,000			325
Issuance of subscribed shares		–			–			–		–		400,000			400
Cancellation of shares		–			–			–		–		(400,000	)		(400	)
Cancellation of warrants in exchange of preferred stock		–			–			200		–		–			–
Net loss for the 3 months ended 31 March 2022		–			–			–		–		–			–

Balance as of March 31, 2022		1,000,000		$	1,000			3,254	$	3		47,956,164		$	47,956


Balance as of December 31, 2021		1,000,000		$	1,000			3,054	$	3		47,631,164		$	47,631

Sale of common shares		–			–			–		–		775,000			775
Issuance of preferred and subscribed shares		–			–			1,095		1		1,760,000			1,760
Cancellation of shares		–			–			–		–		(400,000	)		(400	)
Cancellation of warrants in exchange for preferred stock		–			–			200		–		–			–
Shares issued for purchase of Intellectual Property		–			–			–		–		–			–
Net loss for the year ended December 31, 2022		–			–			–		–		–			–

Balance as of December 31, 2022		1,000,000		$	1,000			4,349	$	4		49,766,164		$	49,766

Sale of common shares		–			–			–		–		701,250			701
Cancellation of shares		(999,999	)		(1,000	)
Issuance of preferred and subscribed shares		–			–			–		–		–			–
Net profit for the 3 months ended 31 March 2023		–			–			–		–		–			–

Balance as of March 31, 2023		1		$	–			4,349	$	4		50,467,414		$	50,467

-Unaudited-


	Common Stock						Additional
	Subscribed						Paid-In			Accumulated
	Shares			Amount			Capital			Deficit			Total

Balance as of December 31, 2021		400,000		$	400			(2,873,543	)	$	(1,774,108	)	$	(4,598,617	)

Sale of common shares		45,000			45			369,630			–			370,000
Issuance of subscribed shares		(400,000	)		(400	)		–			–			–
Cancellation of shares		–			–			400			–			–
Cancellation of warrants in exchange of preferred stock		–			–			335,651			–			335,651
Net loss for the 3 months ended 31 March 2022		–			–			–			(806,873	)		(806,873	)

Balance as of March 31, 2022		45,000		$	45		$	(2,167,862	)	$	(2,580,981	)	$	(4,699,839	)


Balance as of December 31, 2021		400,000		$	400		$	(2,873,543	)	$	(1,774,108	)	$	(4,598,617	)

Sale of common shares		645,000			645			1,418,580			–			1,420,000
Issuance of preferred and subscribed shares		(1,760,000	)		(1,760	)		(1	)		–			–
Cancellation of shares		–			–			400			–			–
Cancellation of warrants in exchange for preferred stock		–			–			335,651			–			335,651
Shares issued for purchase of Intellectual Property		715,000			715			714,285			–			715,000
Net loss for the year ended December 31, 2022		–			–			–			(2,421,493	)		(2,421,493	)

Balance as of December 31, 2022		–		$	–		$	(404,628	)	$	(4,195,601	)		(4,549,459	)

Sale of common shares		–			–			(701	)		–			–
Cancellation of shares		–			–			1,000			–			–
Issuance of preferred and subscribed shares		–			–			–			–			–
Net profit for the 3 months ended 31 March 2023		–			–			–			359,662			359,662

Balance as of March 31, 2023		–		$	–		$	(404,329	)	$	(3,835,939	)	$	(4,189,797	)

	Series C			Series D								Common Stock					Additional
	Preferred Stock			Preferred Stock			Common Stock					Subscribed					Paid-In			Accumulated
	Shares	Amount		Shares	Amount		Shares		Amount			Shares		Amount			Capital			Deficit			Total
Balance as of December 31, 2020	–	$	–	–	$	–	44,093,276		$	44,093		–		$	–		$	(44,093	)	$	(181,415	)	$	(181,415	)
Net loss for the 3 months ended March 31, 2021	–		–	–		–	–			–		–			–			–			(9,234	)		(9,234	)
Balance as of March 31, 2021	–		–	–		–	44,093,276			44,093		–			–			(44,093	)		(190,649	)		(190,649	)
Net loss for the 3 months ended June 30, 2021	–		–	–		–	–			–		–			–			–			(246,231	)		(246,231	)
Balance as of June 30, 2021	–		–	–		–	44,093,276			44,093		–			–			(44,093	)		(436,880	)		(436,880	)
Net loss for the 3 months ended September 30, 2021	–		–	–		–	–			–		–			–			–			(463,443	)		(463,443	)
Balance as of September 30, 2021	–	$	–	–	$	–	44,093,276		$	44,093		–		$	–		$	(44,093	)	$	(900,323	)	$	(900,323	)
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	)
Sale of common shares	–		–	–		–	325,000			325		45,000			45			369,630			–			370,000
Issuance of subscribed shares	–		–	–		–	400,000			400		(400,000	)		(400	)		–			–			–
Cancellation of shares	–		–	–		–	(400,000	)		(400	)	–			–			400			–			–
Cancellation of warrants in exchange for preferred stock	–		–	200		–	–			–		–			–			335,651			–			335,651
Net loss for the 3 months ended March 31, 2022	–		–	–		–	–			–		–			–			–			(806,873	)		(806,873	)
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	)
Sale of common shares	–		–	–		–	150,000			150		–			–			149,850			–			150,000
Issuance of preferred and subscribed shares	–		–	100		–	45,000			45		(45,000	)		(45	)		–			–			–
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 condensed consolidated financial statements.

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~5

5HFACTOR, INC.

~~HFACTOR,~~Condensed ~~INC.~~Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Cash Flows


	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
	-Unaudited-			-Unaudited-
OPERATING ACTIVITIES:
Net Income/(Loss)	$	359,662		$	(806,873	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		28,490			18,899
Amortization of debt discount on convertible notes		–			142,687
Change in fair market value of derivative liabilities		–			7,452
Changes in operating assets and liabilities:
Accounts receivable		(152,267	)		(52,938	)
Inventory		(56,534	)		(64,787	)
Prepaid expenses		33,883			16,326
Accounts payable and accrued expenses		(338,404	)		128,486
Accrued interest		13,322			36,627
NET CASH (USED) IN OPERATING ACTIVITIES		(111,848	)		(574,121	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Equipment purchase		–			–
NET CASH (USED) IN INVESTING ACTIVITIES		–			–

FINANCING ACTIVITIES:
Sales of common stock		–			370,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		–			370,000

Increase (decrease) in cash and cash equivalents		(111,849	)		(204,121	)

Cash and cash equivalents - Beginning		148,055			250,854

Cash and cash equivalents - Ending	$	36,206		$	46,733

Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	4,243		$	8,798
Cash paid for income taxes	$	–		$	–

NON-CASH TRANSACTIONS:
Preferred stock issued in exchange for cancellation of Warrant Liabilities, net of unamortized discount	$	–		$	335,651
Issuance of common stock		701			–
Cancellation of preferred stock		(1,000	)		–
NON CASH TRANSACTIONS	$	(299	)	$	335,651

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

	Nine Months			Nine Months
	Ended			Ended
	September 30, 2022			September 30, 2021
OPERATING ACTIVITIES:
Net loss	$	(2,087,299	)	$	(718,908	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and Depreciation		60,565			21,332
Amortization of debt discount on convertible notes		383,426			387,996
Change in fair market value of derivative liabilities		7,452			124,406
Derivative expense		–			(97,654	)
Gain on forgiveness of debt		–			(113,799	)
Changes in operating assets and liabilities:
Accounts receivable		(81,383	)		69,096
Inventory		75,230			(825	)
Prepaid expenses		(89,710	)		(8,301	)
Accounts payable and accrued expenses		155,572			176,624
Accrued interest		127,329			49,233
NET CASH PROVIDED BY (USED) IN OPERATING ACTIVITIES		(1,448,818	)		(110,800	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Equipment purchase		–			–
NET CASH PROVIDED BY (USED) IN INVESTING ACTIVITIES		–			–
FINANCING ACTIVITIES:
Sales of common stock		1,120,000			–
Proceeds from convertible notes payable		–			152,000
Proceeds from Loans Payable, related Party		100,000			–
Loan receivable		–			(3,000	)
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	$	22,036		$	38,200
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	30,143		$	–
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~~HFACTOR, ~~accompanying notes are an integral part of these condensed consolidated financial statements~~INC.

6NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~HFACTOR, INC.~~(Unaudited)

~~NOTES~~NOTE TO1 ~~CONDENSED~~- ~~CONSOLIDATED~~DESCRIPTION ~~FINANCIAL~~OF ~~STATEMENTS~~BUSINESS

~~(Unaudited)~~History

~~NOTE~~HFactor, 1Inc. -formerly ~~DESCRIPTION~~known OFas ~~BUSINESS~~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 2007 and to HFactor, Inc. on November 8, 2021.

~~History~~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 acquirer for financial statement purposes. Accordingly, for all periods subsequent to the Closing Date, the Company’s financial statements reflect the historical financial statements of HyEdge and any operations of the Company subsequent to the Merger.

~~HFactor,~~Immediately ~~Inc.~~following ~~formerly~~the ~~known as Ficaar~~Merger, ~~Inc. (~~the ~~“Company”~~ orbusiness ~~“Ficaar”~~of orHyEdge ~~“HFactor”)~~became ~~was incorporated in July 2001 under~~ the ~~name OwnerTel, Inc. The~~ ~~name~~business of the Company ~~was changed to Ficaar, Inc~~. ~~in December of 2007 and to HFactor, Inc. on November 8, 2021.~~

On ~~May~~September 282, 2021, ~~David~~the ~~Cicalese~~Company ~~(“Cicalese”), an~~filed ~~officer and Board member of Ficaar entered into~~ an ~~agreement with Gail Levy whereby Cicalese agreed to sell 29,900,000 shares, representing~~amendment ~~a majority interest~~ in ~~Ficaar,~~its toarticles ~~Levy. Acting as the majority shareholder~~ of ~~the~~incorporation ~~Company,~~to ~~Levy~~change ~~then~~its ~~caused~~name ~~Ficaar~~ to ~~enter~~HFactor ~~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~~Company ~~Agreement~~ was ~~executed~~able 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~~secure ~~Closing~~an ~~Date,~~OTC ~~the~~Bulletin ~~financial~~Board ~~statements~~symbol ofHWTR ~~the Company reflect the historical financial statements of~~from ~~HyEdge~~Financial ~~and~~Industry ~~any~~Regulatory ~~operations~~Authority ~~of the Company subsequent to the Merger~~(FINRA).

~~Immediately~~Present ~~following the Merger, the business of HyEdge became the business of the Company.~~Operations

InThe ~~connection~~Company ~~with~~as a result of the ~~reverse~~Merger, ~~acquisition~~changed ~~and~~its ~~recapitalization, all~~business ~~share~~focus ~~and~~from ~~per~~engaging ~~share~~in ~~amounts~~the ~~have~~cannabis ~~been~~industry ~~retroactively~~to ~~restated.~~presently ~~Since~~being ~~the~~a ~~transaction~~holding iscompany ~~considered~~that aoperates entirely ~~reverse~~through ~~acquisition~~its ~~and~~subsidiary, ~~recapitalization~~HyEdge, ~~accounting~~ ~~guidance~~Inc, ~~does~~a ~~not~~Delaware ~~apply~~Corporation. ~~for~~The ~~purposes~~Company engages in the manufacturing, marketing, distribution and selling of ~~presenting~~HFactor® ~~pro-forma~~hydrogen ~~financial~~infused ~~information~~drinking water.

OnNOTE ~~September~~ 2, ~~2021~~- ~~the~~SIGNIFICANT ~~Company~~ACCOUNTING 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).POLICIES

~~Present~~Principles ~~Operations~~of Consolidation and Basis of Presentation

The ~~Company~~accompanying ~~through~~(a) ~~its~~condensed ~~wholly~~consolidated ~~owned~~balance sheet ~~subsidiary~~at December 31, 2022, has been derived from audited financial statements and (b) condensed consolidated unaudited financial statements ~~HyEdge~~as of March 31, ~~Inc.~~2023 and 2022, ahave ~~Delaware~~been ~~Corporation~~prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, ~~engages~~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 ~~manufacturing~~audited consolidated financial statements and related footnotes included in our Annual Report on Form 10K for the year ended December 31, ~~marketing~~2022 (the “2022 Annual Report”), ~~distribution~~filed with the Securities and ~~selling~~Exchange Commission (the “SEC”) on April 17, 2023. It is management’s opinion, however, that all material adjustments (consisting of ~~HFactor®~~normal ~~hydrogen~~recurring adjustments) have been made which ~~infused~~are ~~drinking~~necessary ~~water~~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 months ended March 31, 2023, are not necessarily indicative of the results of operations expected for the year ending December 31, 2023.

~~NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES~~7

~~Principles~~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 ~~Consolidation~~HFactor Inc. and ~~Basis~~its wholly owned subsidiaries, HyEdge, Inc., a Delaware corporation, and, the following all of ~~Presentation~~which are inactive, Standard Canna, Inc., a Florida corporation, and its wholly owned subsidiaries, Standard Cultivation Systems Inc., a Colorado corporation; and Standard Property Group Inc., a California corporation; and as well as Precious Holdings, Inc., a Delaware corporation. All inter-company balances and transactions have been eliminated on consolidation.

~~The~~Going 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 September 30, 2022 and 2021, have been prepared in accordance with generally accepted accounting principles for interim financial 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 September 30, 2022, are not necessarily indicative of the results of operations expected for the year ending December 31, 2022.Concern

7The financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding the Company’s working capital deficiency, or accumulated deficit.

~~These~~As ~~consolidated~~of ~~financial~~March ~~statements~~31, ~~are~~2023, ~~presented~~the Company had $36,206 in ~~accordance~~cash ~~with~~to ~~accounting~~fund ~~principles~~its ~~generally~~operations. ~~accepted~~The inCompany ~~the~~does ~~United~~not ~~States~~believe ~~(“GAAP”)~~its ~~and~~current ~~are~~cash ~~expressed~~balance inwill ~~United~~be ~~States~~sufficient to allow the Company to fund ~~dollars~~its planned operating activities for the next twelve months. ~~These~~The ~~consolidated~~ability ~~financial~~of ~~statements~~the ~~include~~Company to continue as a going concern is dependent on the ~~accounts~~Company ofobtaining ~~HFactor~~adequate ~~Inc~~capital to maintain profitable operations. ~~and~~These ~~its~~principal ~~wholly~~factors ~~owned~~raise ~~subsidiary,~~substantial ~~HyEdge,~~doubt ~~Inc.,~~concerning athe ~~Delaware~~Company’s ~~corporation~~ability to continue as a going concern. ~~All~~Management ~~inter~~has financed the Company’s operations principally through government loans, third-~~company~~party ~~balances~~and related parties’ loans, and ~~transactions~~also ~~have~~through ~~been~~equity ~~eliminated~~investments oninto ~~consolidation~~the Company.

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

The ~~financial~~ability ~~statements~~of ~~have~~the ~~been~~Company ~~prepared~~to oncontinue as a going concern ~~basis,~~is ~~and~~dependent doupon ~~not~~its ~~reflect~~ability ~~any~~to ~~adjustments~~successfully ~~related~~accomplish to the ~~uncertainty~~plan ~~surrounding~~described in the ~~Company’s~~preceding ~~recurring~~paragraph ~~losses,~~and ~~working~~eventually secure other ~~capital~~sources ~~deficiency~~of orfinancing ~~accumulated~~and ~~deficit~~maintain profitable operations.

As of September 30, 2022, the Company had $22,036 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 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. These principal factors raise substantial 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.Cash

ItFor ispurposes ~~the~~of ~~Company’s~~reporting ~~intent~~cash toflows, ~~continue~~the ~~to attempt~~Company toconsiders ~~raise~~all ~~funds~~short-term ininvestments ~~this~~with ~~manner~~an ~~and~~original tomaturity ~~raise~~of ~~funds~~three ~~through~~months ~~the~~or ~~sale~~less ofwhen ~~equity~~purchased ~~securities~~to ~~until~~be ~~the~~cash ~~Company~~equivalents. ~~attains~~As ~~profitability.~~of ~~However,~~March ~~management~~31, ~~cannot~~2023 ~~provide~~and ~~any~~December ~~assurance~~31, ~~that~~2022, the Company ~~will~~held bea ~~successful~~cash inbalance ~~accomplishing~~of ~~any~~$36,206 ofand ~~its~~$148,055, ~~plans~~respectively.

~~The~~Revenue 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.Recognition

~~Cash~~The Company recognizes revenue from product sales when control of the promised goods is transferred to the company’s customers in an amount that reflects the consideration to which management expects to be entitled in exchange for those goods. To achieve this core principle, management applies the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. 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 March 31, 2023 and 2022, the Company recognized revenue at the time of delivery without providing any reserve.

~~For~~Accounts 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 September 30, 2022 and December 31, 2021, the Company held a cash balance of $22,036 and $250,854, respectively.Receivable

~~Revenue~~Accounts ~~Recognition~~receivable represent amounts due from the Company’s customers. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management utilizes a specific customer identification methodology. Management 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 March 31, 2023 and December 31, 2022, the allowance for doubtful accounts were not material.

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 September 30, 2022 and 2021, the Company recognized revenue at the time of delivery without providing any reserve.8

~~Accounts Receivable~~Inventories

~~Accounts~~Inventories ~~receivable~~are ~~represents~~stated ~~amounts~~at ~~due~~the ~~from~~lower ~~the~~of cost (on ~~Company’s~~a ~~customers~~first-in, first-out basis) or market value. The ~~Company~~stated ~~maintains~~cost anis ~~allowance~~comprised ~~for~~of ~~doubtful~~finished ~~accounts~~goods ~~for~~of ~~estimated~~HFactor® ~~losses~~hydrogen ~~inherent~~infused indrinking water, its ~~accounts~~related ~~receivable portfolio.~~raw Inmaterial ~~establishing~~and ~~the~~spare ~~required~~parts ~~allowance~~for machinery. Reserves, ~~management~~if ~~utilizes~~necessary, aare ~~specific~~recorded ~~customer~~to ~~identification~~reduce ~~methodology.~~inventory ~~Management~~to ~~also~~market value ~~considers~~based ~~historical~~on ~~losses~~assumptions ~~adjusted~~about ~~for~~consumer demand, current ~~market~~inventory ~~conditions~~levels and ~~the~~product ~~customers’~~life ~~financial~~cycles ~~condition~~for ~~and~~ the ~~current~~various ~~receivables aging~~inventory ~~and~~items. ~~current~~These ~~payment~~assumptions are ~~patterns.~~evaluated ~~Account~~annually ~~balances~~and are ~~charged~~based ~~off~~on ~~against~~ the ~~allowance~~Company’s ~~after~~business ~~all~~plan, ~~means~~feedback offrom ~~collection~~customers ~~have been exhausted~~ and the ~~potential~~product ~~for~~development team. ~~recovery~~A isreserve ~~considered~~will ~~remote.~~be ~~The~~established ~~Company~~if ~~does~~necessary ~~not~~to ~~have~~reduce ~~any~~excess ~~off-balance~~or ~~sheet~~obsolete ~~credit~~inventories ~~exposure related~~ to ~~its~~their ~~customers~~realizable value. As of ~~September~~March 3031, ~~2022~~ 2023 and December 31, ~~2021~~2022, the ~~allowance~~inventory ~~for~~reserves ~~doubtful accounts~~ were not material.

8Fixed Assets

~~Inventories~~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.

~~Inventories~~The ~~are~~Company ~~stated~~will atperiodically ~~the~~evaluate ~~lower of cost (on a~~whether ~~first-in,~~events ~~first-out~~and ~~basis)~~circumstances orhave ~~market~~occurred ~~value.~~that ~~The~~may ~~stated~~warrant ~~cost~~revision isof ~~comprised~~the ofestimated ~~finished~~useful ~~goods~~lives of ~~HFactor®~~fixed ~~hydrogen~~assets ~~infused drinking~~or ~~water,~~whether ~~its~~the ~~related raw material and spare parts for machinery. Reserves, if necessary, are recorded to reduce inventory to market~~remaining ~~value~~balance ~~based~~of onfixed ~~assumptions~~assets ~~about~~should ~~consumer~~be ~~demand,~~evaluated ~~current inventory levels and product life cycles~~ for ~~the~~possible ~~various inventory items~~impairment. ~~These assumptions~~The ~~are~~Company ~~evaluated~~uses ~~annually~~an ~~and~~estimate ~~are~~of ~~based on~~ the ~~Company’s~~related ~~business~~undiscounted ~~plan~~cash ~~and~~flows over ~~from feedback from customers and~~ the ~~product development~~remaining ~~team.~~life As of ~~September 30, 2022 and December 31, 2021,~~ the ~~inventory~~fixed ~~reserves~~assets ~~were~~in ~~not~~measuring ~~material~~their recoverability.

~~Fixed~~Intangible Assets

~~Fixed~~Intangible ~~assets~~asset ~~are~~amounts ~~stated~~were atdetermined ~~cost,~~based on ~~less~~the ~~accumulated depreciation.~~estimated ~~Depreciation~~economics isof ~~provided~~the ~~principally~~asset onand are amortized over the estimated useful life on a straight-line ~~method~~basis over ~~the~~10 ~~estimated~~years ~~useful~~for ~~lives~~intellectual licensing ofarrangement ~~the~~(HyEdge ~~assets~~IP), which ~~is generally~~approximates ~~three~~the pattern in which the economic benefits are expected to ~~five~~be ~~years~~received. ~~The~~On ~~cost~~July 22, of2022, ~~repairs~~the ~~and~~Company ~~maintenance~~entered isinto ~~charged~~an Intellectual Property Assignment Agreement with Gail Levy, whereby the Company acquired the intellectual property related to ~~expense~~its asbeverage ~~incurred.~~production ~~Expenditures~~operations from HyEdge IP in exchange for ~~property~~715,000 ~~betterments~~shares of Company Common stock. The acquired ~~and~~intellectual ~~renewals~~property ~~are~~was ~~capitalized~~valued at $1.00 ~~Upon~~per ~~sale~~share orfor ~~other~~total ~~disposition~~valuation of a$715,000 ~~depreciable~~and ~~asset,~~is ~~cost~~being ~~and~~amortized ~~accumulated~~over ~~depreciation~~10 ~~are~~years ~~removed~~on ~~from~~a straight-line basis. We evaluate the ~~accounts~~recoverability of intangible assets periodically and ~~any~~consider ~~gain~~events or ~~loss~~circumstances isthat ~~reflected~~may inwarrant ~~other~~revised estimates ~~income~~of useful lives or ~~expense~~that may indicate an impairment.

~~The~~Intangible ~~Company~~asset ~~will~~amortization ~~periodically~~expense ~~evaluate whether events~~for ~~and circumstances have occurred that may warrant revision of~~ the ~~estimated~~three ~~useful~~months ~~lives~~ended ofMarch ~~fixed~~31, ~~assets~~2023 orwas ~~whether the remaining balance~~$17,875 of(March ~~fixed~~2022: ~~assets~~0 ~~should be evaluated for possible impairment~~Nil). The Company ~~uses~~’s anintangible ~~estimate~~assets ofwere ~~the~~$655,417 and ~~related~~$673,292 as ~~undiscounted~~of ~~cash~~March ~~flows over~~31, ~~the~~2023 ~~remaining~~and ~~life~~December of31, ~~the~~2022, ~~fixed~~from ~~assets~~its inintellectual ~~measuring~~property ~~their~~licensing ~~recoverability~~arrangement (HyEdge IP).

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

OnAdvertising ~~July~~costs ~~22,~~are ~~2022,~~expensed ~~the~~as ~~Company~~incurred. ~~entered~~Advertising ~~into~~costs anfor ~~Intellectual Property Assignment Agreement, with Gail Levy whereby~~ the ~~Company acquired the intellectual property related to its beverage production~~ ~~operations~~periods ~~from~~ended ~~HyEdge~~March ~~IP in exchange for 715~~31,~~000~~ ~~shares~~2023 ofand ~~Company~~2022 ~~Common~~were ~~stock. The acquired intellectual property was valued at~~ $~~1.00 per~~24,541 ~~share~~and ~~for total valuation of~~ $~~715~~27,~~000~~565, ~~and is being amortized over 10 years on a straight-line basis~~respectively.

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

~~Advertising~~The ~~costs~~Company accounts for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are ~~expensed~~recognized asfor ~~incurred~~the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. ~~Advertising~~Deferred ~~costs~~tax ~~for~~assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the ~~periods~~years ~~ended~~in ~~September~~which ~~30,~~those ~~2022~~temporary differences are expected to be recovered or settled. The effect on deferred tax assets and ~~2021~~liabilities ~~were~~of ~~$107~~a change in tax rates is recognized in income in the period,~~342~~ ~~and~~which $includes ~~-0-~~the enactment date. Deferred tax assets are reduced by a valuation allowance when, ~~respectively~~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. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

~~Income Taxes~~9

~~The Company accounts for income taxes under~~ ASC 740~~, Income~~ ~~Taxes.~~contains ~~Under~~a ~~ASC~~two-step ~~740,~~approach ~~deferred~~to ~~tax assets~~ recognizing and ~~liabilities~~measuring ~~are~~uncertain ~~recognized~~tax ~~for~~positions. ~~the~~This ~~future~~first ~~tax~~step ~~consequences~~is ~~attributable~~ to ~~differences~~ ~~between~~evaluate the ~~financial~~tax ~~statement~~position ~~carrying~~for ~~amounts~~recognition ofby ~~existing~~determining ~~assets~~if ~~and~~the ~~liabilities~~weight ~~and their respective tax bases. Deferred~~of ~~tax~~available ~~assets~~evidence ~~and~~indicates ~~liabilities~~it ~~are~~is ~~measured~~more ~~using~~likely ~~enacted~~than ~~tax~~not ~~rates~~that ~~expected to apply to taxable income in~~ the ~~years~~position inwill ~~which those temporary differences are expected to~~ be ~~recovered~~sustained ~~or settled. The effect~~ on ~~deferred~~audit, ~~tax~~including ~~assets~~resolution ~~and liabilities~~ of ~~a change in tax rates is recognized~~related inappeals ~~income~~or inlitigation ~~the period~~processes, ~~which~~if ~~includes the enactment date~~any. ~~Deferred~~The ~~tax~~second ~~assets~~step ~~are~~is ~~reduced~~to bymeasure athe ~~valuation~~tax ~~allowance~~benefit ~~when,~~as in the ~~opinion of~~largest ~~management,~~amount itwhich is more ~~likely~~ than ~~not~~50% ~~that~~likely of ~~some~~being ~~portion~~realized orupon ~~all~~ultimate ofsettlement. ~~the~~The ~~deferred~~Company ~~tax~~considers ~~assets~~many ~~will~~factors ~~not~~when beevaluating ~~realized. Deferred tax assets~~ and ~~liabilities~~estimating ~~are~~its ~~adjusted~~tax ~~for~~positions ~~the~~and ~~effects~~tax benefits, ofwhich ~~changes~~may inrequire ~~tax~~periodic ~~laws~~adjustments and ~~rates~~which onmay ~~the~~not ~~date~~accurately ofanticipate ~~enactment~~actual outcomes.

~~ASC~~Based ~~740~~on ~~contains~~its aevaluation, ~~two-step~~the ~~approach~~Company tohas ~~recognizing~~concluded ~~and~~that ~~measuring~~there ~~uncertain~~are ~~tax~~no ~~positions.~~significant ~~This~~uncertain ~~first step is to evaluate the~~ tax ~~position~~positions ~~for~~requiring recognition byin ~~determining~~its iffinancial ~~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~~statements. The ~~second~~Company's ~~step~~evaluation iswas performed tofor ~~measure~~ the tax ~~benefit~~years asended ~~the~~December ~~largest~~31, ~~amount~~2017 ~~which~~through is2022, ~~more than 50% likely of being realized upon ultimate settlement.~~ The Company ~~considers~~does ~~many~~not ~~factors~~expect ~~when~~any ~~evaluating~~changes ~~and~~in ~~estimating~~ its ~~tax~~unrecognized ~~positions and~~ tax benefits, in ~~which~~the ~~may~~current ~~require periodic adjustments and which may not accurately anticipate actual outcomes~~period.

9The 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 March 31, 2023 and December 31, 2022, the Company has no accrued interest or penalties related to uncertain tax positions.

~~Based~~Use onof 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.Estimates

The ~~Company’s~~preparation ~~policy~~of ~~for~~consolidated ~~recording~~financial ~~interest~~statements ~~and~~in ~~penalties~~conformity ~~related~~with toaccounting ~~unrecognized~~principles ~~tax~~generally ~~benefits~~accepted isin the United States of America requires management to ~~record~~make ~~such~~estimates ~~expenses~~and assumptions asthat aaffect ~~component~~the reported amounts of ~~current~~assets ~~income~~and ~~tax~~liabilities ~~expense.~~and Asdisclosures of ~~September~~contingent assets and liabilities at the date ~~30,~~of ~~2022~~the financial statements and ~~December~~the ~~31,~~reported ~~2021,~~amounts of revenues and expenses during the ~~Company~~reporting ~~has~~period. noManagement ~~accrued~~evaluates ~~interest~~these estimates orand ~~penalties~~assumptions ~~related~~on toa ~~uncertain~~regular ~~tax~~basis. ~~positions~~Actual results could differ from those estimates.

~~Use~~Research ofand ~~Estimates~~Development Expenses

~~The~~Costs ~~preparation~~related ~~of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management~~ to ~~make~~research ~~estimates~~ and ~~assumptions~~ ~~that~~development, ~~affect~~which primarily ~~the~~consists ~~reported amounts~~ of ~~assets~~consulting ~~and~~for ~~liabilities~~logo and ~~disclosures~~packaging ofdesign, ~~contingent~~are ~~assets~~charged ~~and~~to ~~liabilities~~expense atas ~~the~~incurred. ~~date of~~The ~~the~~Company ~~financial~~has ~~statements~~not ~~and~~incurred ~~the~~any ~~reported amounts of revenues~~ research and ~~expenses~~development ~~during~~for the ~~reporting~~periods ~~period.~~ended ~~Management~~March ~~evaluates~~31, ~~these estimates~~2023, and ~~assumptions on a regular basis~~2022. ~~Actual results could differ from those estimates.~~

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

~~Costs~~The ~~related~~Company tocomputes ~~research~~gain/ ~~and~~loss ~~development~~per common share, in accordance with FASB ASC Topic 260, Earnings Per Share, which ~~primarily consists~~requires ofdual ~~consulting~~presentation ~~for~~of ~~logo~~basic and ~~packaging~~diluted ~~design,~~earnings/loss per ~~are~~share. ~~charged~~Basic toincome ~~expense~~or asloss ~~incurred~~per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. ~~The~~Diluted ~~Company~~income ~~has~~or ~~not~~loss ~~incurred~~per ~~any~~common ~~research~~share ~~and~~is computed by dividing net income or loss by the weighted average ~~development~~number ~~for~~of common shares outstanding, plus the ~~periods~~issuance ~~ended~~of ~~September~~common 30shares, ~~2022~~if dilutive, that could result from the exercise of outstanding stock options and ~~2021~~warrants. No potential dilutive common shares are included in the computation of any diluted per share amount when a loss is reported. No convertible securities were outstanding as of 31 March 2023.

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

The Company ~~computes~~applies ~~loss~~the ~~per~~fair ~~common~~value ~~share,~~method ~~in accordance~~of ~~with FASB~~ ASC 718, ~~Topic~~Compensation-Stock ~~260~~Compensation, ~~Earnings~~in ~~Per~~accounting ~~Share,~~for ~~which~~its ~~requires~~stock-based ~~dual~~compensation. ~~presentation~~These ofstandards ~~basic~~state ~~and~~that ~~diluted~~compensation ~~earnings per~~cost ~~share.~~is ~~Basic~~measured ~~income~~at orthe ~~loss~~grant ~~per~~date ~~common~~based ~~share~~on isthe ~~computed~~value byof ~~dividing~~the ~~net~~award ~~income~~and oris ~~loss~~recognized byover the ~~weighted~~service ~~average~~period, ~~number~~which ofis ~~common~~usually the vesting ~~shares~~period, ~~outstanding~~if ~~during~~any. The Company uses the ~~period.~~Black-Scholes ~~Diluted~~option ~~income~~pricing ormodel ~~loss~~to ~~per~~determine ~~common~~the ~~share~~fair isvalue ~~computed~~of byits ~~dividing~~stock, ~~net~~stock ~~income~~option, orand ~~loss~~warrant issuance. byThe determination of the ~~weighted~~ ~~average~~fair ~~number~~value of ~~common~~stock-based ~~shares~~payment ~~outstanding,~~awards ~~plus~~on the ~~issuance~~date of ~~common~~grant ~~shares,~~using ifan ~~dilutive~~option-pricing model is affected by the Company’s stock price, ~~that~~as ~~could~~well ~~result~~as ~~from~~assumptions ~~the exercise~~regarding ofa ~~outstanding~~number ~~stock~~of ~~options~~complex and ~~warrants~~subjective variables. NoThese ~~potential~~variables ~~dilutive~~include the ~~common~~Company’s ~~shares~~expected ~~are~~stock ~~included~~price, involatility over the ~~computation~~term of ~~any~~the awards, actual employee exercise behaviors, risk-free interest ~~diluted~~rate ~~per~~and ~~share~~expected ~~amount~~dividends. ~~when~~No astock-based ~~loss~~compensation isplan ~~reported~~was active as at 31 March, 2023.

~~Stock Based Compensation~~ 10

~~The~~Fair 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.Value

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:

~~FASB~~Level ~~ASC~~1 ~~820,~~— ~~Fair~~Quoted ~~Value~~market ~~Measurements~~prices ~~and Disclosures (“ASC 820”) establishes a framework~~ for ~~all~~identical ~~fair~~assets ~~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~~active ofmarkets ~~the~~or ~~following~~observable ~~three categories:~~inputs;

Level 12 — ~~Quoted~~Significant ~~market~~other ~~prices~~observable ~~for~~inputs ~~identical~~that can ~~assets~~be orcorroborated ~~liabilities~~by ~~in active markets or~~ observable ~~inputs~~market data; and

Level 23 — Significant ~~other~~unobservable ~~observable~~ inputs that ~~can~~ cannot be corroborated by observable market data~~; and~~.

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

10The fair value of the Company’s debt approximated the carrying value of the Company's debt as of March 31, 2023, and December 31, 2022. 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.

~~The~~Recent ~~carrying~~Accounting ~~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.~~Pronouncements

~~The~~We ~~fair~~have ~~value~~considered ofall ~~the~~other ~~Company’s~~recently ~~debt~~issued ~~approximated~~accounting pronouncements ~~the~~during ~~carrying~~2023 ~~value~~and ~~of the Company's debt as of September 30,~~ 2022 and ~~December~~do ~~31,~~not ~~2021.~~believe ~~Factors that~~ the ~~Company~~adoption ~~considered when estimating the fair value~~ of ~~its~~such ~~debt~~pronouncements ~~included~~will ~~market~~have ~~conditions,~~a ~~liquidity~~material ~~levels~~impact inon ~~the~~our ~~private~~consolidated ~~placement market, variability in pricing from multiple~~financial ~~lenders and term of debt~~statements.

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

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

NOTE 3 – FIXED ASSETS, NET

Schedule of fixed assets, net
	March 31,			December 31,
	2023			2022
Machinery and equipment	$	577,645		$	577,645
Construction in progress		3,089			3,089
Less accumulated depreciation		(393,157	)		(382,542	)
Fixed assets net	$	187,577		$	198,192

~~Fixed~~Depreciation ~~assets~~expenses for the periods ended March 31, ~~net~~2023 ~~consist~~and of2022 were ~~the~~$10,615 ~~following:~~and $18,899, respectively.

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

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

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

Third party convertible notes payable consists of the following:


	March 31, 2023		December 31, 2022

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. (Currently in default)	$	121,369	$	121,369

$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, net of unamortized discount of $ -0- at December 31, 2022. (A) (D) (Currently in default)		250,000		250,000

$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, 2022.2, net of unamortized discount of $ -0- at December 31, 2022. (B) (D) (Currently in default)		152,000		152,000

$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 $ -0- at December 31, 2022. (C) (D) (Currently in default)		252,000		252,000

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. (Currently in default)		73,930		72,197

Total Notes Payable-Third Parties	$	849,299	$	847,566

Schedule of third party convertible notes payable
	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

(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.

11(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.

(BC) 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) ~~July~~October 224, 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.~~

(CD) ~~Includes~~On aDecember ~~warrant~~3, ~~for~~2021, the ~~right~~Company toentered ~~purchase an~~into ~~additional~~a ~~300,000~~Stock ~~shares~~Purchase ofAgreement ~~Company~~with ~~Common~~Boot ~~Stock,~~Capital ~~subject~~LLC to(“Boot”), ~~adjustments~~lender for ~~anti-dilution.~~the ~~Each~~three ~~Warrant~~notes ~~is exercisable for a period~~ of ~~five~~(A), ~~years~~(B) ~~from~~and ~~the~~(C), ~~date~~whereby ofBoot ~~issuance~~agreed to atretire anall ~~initial exercise price~~ of ~~$0.55~~its ~~per~~outstanding ~~share.~~warrants ~~The~~(850,000 ~~exercise~~in ~~price~~total) isin ~~also~~exchange ~~subject~~for to200 ~~adjustment due~~shares toof ~~certain~~Series ~~events,~~D ~~including~~Preferred stock ~~dividends, stock splits and recapitalizations~~. InThe ~~the~~Preferred ~~event~~stock shares ~~the~~were ~~Company~~issued ~~files~~on aMarch ~~registration~~29, ~~statement with~~2022. ~~the Securities and Exchange Commission~~Accordingly, the ~~Maturity~~Warrant ~~Date~~liability ~~shall~~of be$335,651 ~~the~~as ~~earlier~~ of ~~(i)~~December ~~October 4~~31, ~~2022;~~2021 orwas ~~(ii)~~written-off ~~the~~during ~~date on which~~ the period ~~Company~~ended ~~has~~June ~~raised at least $1~~30,~~500,000~~ ~~under a registration statement~~2022. ~~Interest is payable at the Maturity Date~~

~~(D)~~In Onaccordance ~~December~~with 3,ASC ~~2021~~470-20 “Debt with Conversion and Other Options”, the Company ~~entered~~allocated ~~into a~~$0 ~~Stock~~of ~~Purchase~~the ~~Agreement~~derivative ~~with~~liability ~~Boot~~as ~~Capital~~discounts ~~LLC~~against ~~(“Boot”),~~the ~~lender~~convertible notes for the ~~three~~period ~~notes~~ended ofMarch ~~(A)~~31, ~~(B)~~2023 and ~~(C),~~year ~~whereby~~ended ~~Boot~~December ~~agreed to~~31, ~~retire~~2022, ~~all~~respectively. ofThe ~~its~~discounts ~~outstanding~~are ~~warrants~~being ~~(850,000~~amortized into ~~total)~~interest inexpense over ~~exchange~~the ~~for~~term ~~200 shares~~ of ~~Series~~the Dnotes ~~Preferred~~using ~~stock.~~the ~~The~~straight-line ~~Preferred~~method ~~stock shares~~which ~~were~~approximates ~~issued~~the oneffective ~~March~~interest ~~29, 2022~~method. ~~Accordingly,~~The ~~the~~Company ~~Warrant~~recorded ~~liability~~$0 of and $~~335~~142,~~651~~687 as of ~~December~~interest ~~31,~~expense ~~2021~~pursuant ~~was~~to ~~written-off~~the amortization of the note discounts during the ~~period~~ periods ended ~~June~~March 3031, 2023 and 2022, respectively.

InNOTE ~~accordance~~5 ~~with~~– ~~ASC~~NOTES ~~470-20~~PAYABLE ~~“Debt with Conversion and Other Options”, the Company allocated $~~-0- ~~and~~RELATED $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.PARTY

12Notes payable to related parties consists of the following:

NOTE 5 – NOTES PAYABLE - RELATED PARTY


	March 31,		December 31,
	2023		2022
Secured Promissory Note – RP, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on July 1, 2022 (Currently in default) (A)	$	430,116	$	430,116

Secured Promissory Note – LK, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on July 1, 2022 (Currently in default) (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 (Currently in default) (A)		90,000		90,000

Unsecured Promissory Note – Others (Currently in default)		9,313		9,313

Total Notes Payable-Related Party	$	629,429	$	629,429

~~Notes~~(A) ~~payable~~Secured toby ~~related~~all ~~parties~~of ~~consists~~Company's ofaccounts ~~the~~receivable ~~following:~~and inventory.

Schedule of notes payable related parties
	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

NOTE 6 – GOVERNMENT DEBT

~~(A)~~Economic ~~Secured~~Injury byDisaster ~~all of Company’s accounts receivable and inventory.~~Loan

~~(B)~~On ~~Includes~~June 2, 2020, the Company executed a ~~five~~secured loan with the U.S. Small Business Administration (5SBA) ~~year~~under ~~common~~the ~~stock~~Economic ~~warrant~~Injury ofDisaster ~~common~~Loan ~~stock~~program in the amount of $150,000. ~~Warrants~~The loan ~~equal~~is tosecured 1%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, ~~divided~~the byCompany also received an advance of $010,000 from the SBA.~~414~~ While the SBA refers to this program as an advance, ~~exercisable~~it atwas written into law as a grant. This means that the ~~fair~~amount ~~market~~given ~~value~~through this onprogram ~~execution~~does ~~date~~not need to be repaid.

~~NOTE 6 – GOVERNMENT DEBT~~13

~~Economic~~Future ~~Injury~~maturities ~~Disaster~~of ~~Loan~~government debt are as follows:

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.

Schedule of future maturities of debt
Period Ending March 31,
2024	$	–
2025		–
2026		–
2027		–
Thereafter		150,000
Total Principal Payments	$	150,000

~~Future~~NOTE ~~maturities~~7 of– ~~government~~DERIVATIVE ~~debt are as follows:~~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.

13For 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.

~~NOTE~~The 7aggregate –fair ~~DERIVATIVE~~value ~~LIABILITIES~~of derivative liabilities as of March 31, 2023 and December 31, 2022 amounted to $801,449. 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.

Quoted

Prices in

Prices for

Active

Similar

Markets for

Assets or

Identical

Liabilities in

Significant

Consolidated

Assets or

Active

Unobservable

Balance

Liabilities

Markets

Inputs

Sheet

(Level 1)

(Level 2)

(Level 3)

Derivative Liabilities:

March 31, 2023

801,449

–

801,449

December 31, 2022

801,449

–

801,449

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 815-15.14

The ~~aggregate~~following ~~fair~~table ~~value~~sets offorth ~~derivative~~a ~~liabilities~~summary as of ~~September~~the ~~30,~~changes ~~2022~~in ~~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~~Company’s ~~value~~Level ~~measurement. The~~3 ~~following table~~financial ~~provides~~liabilities ~~a summary of the assets~~ that are measured at fair value on a recurring basis.:

Schedule of asset measured at fair value

Summary of changes in fair value of liability

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)

Period Ended

Year Ended

Derivative Liabilities:

March 31,

December 31,

September 30, 2022

801,449

–

801,449

2023

2022

December 31, 2021

793,997

–

793,997

Beginning balance

801,449

793,997

Aggregate fair value of conversion features upon issuance

–

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

Change in fair value of warrant and stock option derivative liabilities

–

Ending balance

801,449

~~The~~NOTE ~~following~~8 ~~table~~– ~~sets~~MERGER ~~forth~~AND aRELATED ~~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:~~TRANSACTIONS

Summary of changes in fair value of liability
	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

14On August 6, 2021, 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, 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.

~~NOTE~~Prior 8to –the ~~MERGER~~Merger, ~~AND~~the ~~RELATED~~Company ~~TRANSACTIONS~~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.

~~The~~As consideration for the merger, Target shareholders exchanged 100% of Target Stock (as defined in the Merger Agreement) totaling 44,136,473 fully diluted shares into shares of Company Common Stock at a conversion rate of 0.7 As a result, an aggregate of 30,895,530 shares of the company’s Common Stock, 1,000,000 shares of Series C Preferred Stock and 3,054 shares of Series D Preferred Stock were to be issued to the shareholders of Target. As of December 31, 2021, there were 30,197,888 of the planned Merger shares of common stock issued and the Series C and D Preferred shares issued.

OnChanges August 6, 2021, 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, 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.'s ~~The~~Officers ~~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.Directors

~~Prior~~Effective toMay ~~the~~27, ~~Merger~~2021, the Company’s ~~ceased~~Board of ~~being~~Directors anappointed ~~operating company~~Gail ~~and~~Levy ~~became~~as aChief ~~"shell~~Executive ~~company"~~Officer of FICAAR, Inc. ~~Pursuant~~On toJune ~~the~~1, ~~Merger~~2021, ~~the~~in ~~Company~~conjunction ~~acquired~~with the ~~business~~aforementioned ofchange in ~~Target~~control, toDavid ~~engage~~Cicalese inresigned ~~the~~as ~~business~~ Secretary and Chairman of the ~~development~~Board of Directors. On June 9, ~~marketing~~2021, a majority of Company shareholders elected Gail Levy as Chairman and ~~sale~~a member of ~~hydrogen~~the Board of Directors. These changes were reported on the Company's form 8-~~infused~~K ~~water~~that ~~and~~was ~~other~~filed on ~~consumer~~June ~~goods~~10, 2021.

As consideration for the merger, Target shareholders exchanged 100% of Target Stock (as defined in the Merger Agreement) totaling 44,136,473 fully diluted shares into shares of Company Common Stock at a conversion rate of 0.7 As a result, an aggregate of 30,895,530 shares of the company’s Common Stock, 1,000,000 shares of Series C Preferred Stock and 3,054 shares of Series D Preferred Stock were to be issued to the shareholders of Target. As of December 31, 2021, there were 30,197,888 of the planned Merger shares of common stock issued and the Series C and D Preferred shares issued.15

~~Changes~~In toconjunction with the ~~Company's~~Merger, ~~Officers~~Dawn Cames resigned as 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.

~~Effective~~On ~~May~~July 2722, ~~2021~~2022, the Company’s ~~Board~~entered into a Memorandum of ~~Directors~~Understanding ~~appointed~~(“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 ~~FICAAR~~President for the Company, ~~Inc.~~subject Onto ~~June~~a 1two (2) year Employment Contract, ~~2021~~renewable annually, at inan ~~conjunction~~annual ~~with~~salary of $120,000; (ii) Dawn Cames, former officer for the ~~aforementioned~~predecessor ~~change in~~company ~~control~~(“FICAAR”), ~~David~~was ~~Cicalese~~appointed ~~resigned~~to serve as ~~Secretary~~a Director and Chairman of the Board offor ~~Directors.~~the OnCompany ~~June~~and 9,was ~~2021,~~assigned aone ~~majority~~(1) share of ~~Company~~Series ~~shareholders elected~~C Preferred stock; (iii) Gail Levy, James asC. ~~Chairman~~Sanborn, and aLeonard ~~member~~Klingbaum resigned as members of the Board of Directors.; ~~These~~(iv) ~~changes~~James ~~were~~C. ~~reported~~Sanborn onresigned ~~the~~as ~~Company's~~COO; ~~form~~and ~~8-K~~(v) Gail ~~that~~Levy ~~was~~and ~~filed on~~James ~~June~~C. 10Sanborn returned 999,999 shares ~~2021~~of Series C Preferred stock to the Company.

InNOTE ~~conjunction~~9 ~~with~~– ~~the~~COMMITMENTS ~~Merger,~~AND ~~Dawn Cames resigned as 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.~~CONTINGENCIES

OnLegal ~~July~~– ~~22,~~To ~~2022,~~ the ~~Company~~best ~~entered into a Memorandum~~ of ~~Understanding~~our ~~(“MOU”)~~knowledge ~~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~~belief, ~~the~~no ~~following changes were implemented: (i) Gail Levy resigned as Chief~~material ~~Executive~~legal ~~Officer~~proceedings ~~and assumed the position~~ of ~~President~~merit ~~for~~are ~~the~~currently ~~Company,~~pending ~~subject~~or 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 Cthreatened. 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.

15Legal Matters:

~~NOTE~~From 9time –to ~~COMMITMENTS~~time, ~~AND~~the ~~CONTINGENCIES~~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.

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

~~Legal Matters~~Dispute:

~~From~~The ~~time~~Company tois ~~time,~~disputing the ~~Company~~validity ~~may~~of ~~become~~a ~~involved~~convertible inpromissory ~~various~~note ~~lawsuits~~carried ~~and~~over ~~legal~~from ~~proceedings,~~its ~~which~~merger ~~arise~~ in ~~the~~August ~~ordinary course of business~~2021. ~~However,~~Since ~~litigation~~it presently is ~~subject~~not possible to ~~inherent uncertainties,~~determine ~~and~~the anoutcome ~~adverse~~of ~~result~~this matter, the note is disclosed in ~~these~~Note or4 ~~other~~to ~~matters~~the ~~may~~financial ~~arise~~statements ~~from~~with ~~time~~a tonet ~~time~~balance ~~that~~of ~~may~~$121,369 ~~harm~~until its ~~business~~ultimate resolution.

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

~~Dispute:~~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.

The Company is disputing the validity of a convertible promissory note carried over from its merger in August 2021. Since it presently is not possible to determine the outcome of this matter, the note is disclosed in Note 4 to the financial statements with a net balance of $121,369 until its ultimate resolution.Rental:

~~Employment~~Company management and ~~Consulting~~employees ~~Agreements:~~have been working remotely and accordingly, incurring no material rental expense during the period ended 31 March 2023 and 31 March 2022. However, minimal rental expense, for storage of office supplies, was charged in the period ended 31 March, 2023.

~~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~~16

~~Rental:~~NOTE 10 – EQUITY

AsCommon ~~a result of the COVID-19 pandemic, Company management and employees have been working remotely and accordingly, incurring no rental expense during the years ended December 31, 2021, and 2020.~~stock:

~~COVID-19~~The Company has authorized 200,000,000 shares of $.001 par value common stock. As of March 31, 2023 and December 31, 2022, the Company had 50,467,414 and 49,766,164 shares, respectively, of common stock issued and outstanding.

InOn ~~December~~October ~~2019~~27, ~~a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan~~2021, ~~China~~26, ~~and has since reached multiple other countries~~910,000 ~~including~~shares 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~~Common ~~have,~~Stock ~~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~~held ~~predict~~by 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~~Chief ~~water~~Executive ~~product~~Officer ~~applications~~were ~~have~~returned ~~been able~~ to ~~support~~treasury ~~the increased~~and ~~demand the Company has experienced~~retired.

On ~~March~~December 1110, ~~2020~~2021 and December 15, 2021, the Company ~~World~~received ~~Health~~total ~~Organization~~proceeds ~~declared~~ of $650,000 for the ~~ongoing~~sale ~~COVID-19~~of ~~outbreak~~650,000 ascommon astock ~~global~~shares ~~health~~at ~~emergency~~$1.00 ~~This~~per ~~resulted~~share. inThe ~~governments~~December ~~worldwide~~15, ~~enacting~~2021 ~~emergency~~sale of ~~measures~~400,000 toshares ~~combat the~~were ~~spread~~issued ofon ~~the~~January ~~virus~~3, ~~including~~2022 ~~the~~and ~~closure~~accordingly, ofrecorded ~~certain~~as ~~non-essential~~common ~~businesses~~stock subscribed in the accompanying financial statements.

~~During~~On ~~the~~November ~~years ended December 31~~12, 2021, ~~and~~the ~~2020, respectively,~~U.S. ~~the~~Securities ~~pandemic~~and Exchange ~~did~~Commission ~~not~~(“SEC”) ~~have~~issued a ~~material~~Notice ~~impact~~of onQualification for the Company’'s ~~operations.~~Form As1-A ofOffering ~~December~~Circular ~~31,~~for ~~2021,~~an ~~and 2020, and through~~offering ~~September~~of ~~30, 2022,~~ the Company’s ~~did~~Common ~~not~~Stock ~~observe~~shares ~~any~~under ~~material~~Regulation ~~impairment~~A+ of(the ~~its~~"Offering") ~~assets~~of orthe aSecurities ~~significant~~Act ~~change~~of in1933 (the ~~fair~~“Act”). The ~~value~~purpose of ~~assets due to~~ the ~~COVID-19~~Offering ~~pandemic.~~is ~~The~~to ~~Company~~allow ~~has~~both ~~taken~~accredited ~~steps~~and tonon-accredited ~~minimize the~~ potential ~~impact~~investors of the ~~pandemic~~opportunity ~~including safety measures with respect~~ to ~~personal~~invest ~~protective~~directly ~~equipment, the reduction~~ in ~~travel and~~ the Company. ~~implementation~~The ofOffering has a ~~virtual~~minimum ~~office~~and ~~including~~maximum ~~regular~~investment ~~video~~of ~~conference meetings~~$25,000 ~~and~~to ~~participation~~at ina ~~virtual~~price ~~customer~~of ~~meetings~~$1.00 ~~and~~per ~~other virtual events~~share.

16During the year ended December 31, 2022, the Company received total proceeds of $1,420,000 for the sale of 142,000 common stock shares at $1.00 per share.

~~NOTE~~During 10the –first ~~EQUITY~~quarter of 2023, the Company issued 701,250 shares of common stock shares. No cash proceeds from aforementioned issue.

~~Common~~Preferred ~~stock~~Stock:

The Company has authorized ~~200~~19,000,000 shares of $.001 par value ~~common stock. As of September 30, 2022, and December 31, 2021, the Company had 48,151,164 and 47,631,164 shares, respectively,~~preferred ~~of common~~ stock ~~issued and outstanding~~.

On ~~October~~August 276, 2021 26,~~910,000~~ ~~shares~~the Company amended its Articles of ~~Common~~Incorporation ~~Stock~~ to include Certificates of ~~the~~Designation ~~Company~~for ~~held~~two bynew ~~the~~classes ~~Company’s~~of ~~Chief~~Preferred ~~Executive~~Stock ~~Officer~~– ~~were~~Series ~~returned~~C toPreferred, authorized ~~treasury~~1,000,000 shares and, ~~retired~~Series D Preferred, authorized 18,000,000 shares.

OnIn ~~December~~connection ~~10,~~with ~~2021~~the ~~and~~Merger ~~December~~with HyEdge, on September 15, 2021, the Company ~~received~~ ~~total~~issued ~~proceeds~~1,000,000 shares of ~~$650~~Series C Convertible Preferred stock,~~000~~ ~~for~~non-dividend, with voting rights. Each share of Series C Preferred stock is convertible into the ~~sale~~number of ~~650,000~~shares of the Company’s common stock ~~shares~~equal atto $the result of (i) 1.005 ~~per~~times ~~share.~~the ~~The~~number ~~December~~of ~~15,~~Common ~~2021~~shares ~~sale~~issued and outstanding calculated on a fully diluted basis at the time of ~~400~~conversion,~~000~~ (ii) ~~shares~~divided ~~were~~by ~~issued~~the ontotal ~~January~~number 3,of ~~2022~~Series ~~and~~C ~~accordingly,~~Preferred ~~recorded~~shares asissued ~~common~~and ~~stock~~outstanding ~~subscribed~~at in the ~~accompanying~~time ~~financial~~of ~~statements~~conversion.

~~On November 12~~Additionally, ~~2021,~~ the ~~U.S.~~Company ~~Securities and Exchange Commission (“SEC”)~~ issued a3,054 ~~Notice~~ shares of ~~Qualification~~Series ~~for~~D ~~the~~Convertible ~~Company's~~Preferred ~~Form~~stock, 1non-Adividend, ~~Offering~~with ~~Circular~~no ~~for~~voting anrights. ~~offering~~Each share of ~~the~~Series ~~Company’s Common~~D ~~Stock~~Preferred ~~shares~~stock ~~under~~is ~~Regulation~~convertible ~~A+ (~~into the ~~"Offering")~~number of ~~the~~shares ~~Securities Act~~ of ~~1933 (~~the ~~“Act”).~~Company’s ~~The~~common ~~purpose of~~stock ~~the~~equal ~~Offering is~~ to ~~allow~~0.01% ~~both~~of ~~accredited and non-accredited potential investors~~ the ~~opportunity~~number toof ~~invest~~Common ~~directly~~shares inissued ~~the Company. The Offering has a minimum~~ and ~~maximum~~outstanding ~~investment of $25,000 to~~ at athe ~~price~~ time of $1conversion.~~00 per share.~~

During the ~~first~~year ~~quarter~~ended ofDecember 31, 2022, ~~the~~1,295 ~~Company~~shares ~~received total proceeds~~ of ~~$370,000~~Series ~~for~~D ~~the~~Preferred Stock ~~sale~~were ofissued ~~370,000~~to ~~common~~an ~~stock~~investor ~~shares~~in atconnection ~~$1.00~~with ~~per~~the ~~share,~~execution of ~~which~~a ~~45,000~~Leak-Out ~~shares~~Agreement. ~~were~~No ~~issued~~shares inof ~~the~~Series ~~second quarter~~C ~~ending June 30, 2022~~ and ~~accordingly,~~Series ~~recorded~~D asPreferred Stock ~~common~~were ~~stock~~issued ~~subscribed~~during in the ~~accompanying~~period ~~financial~~ended ~~statements~~31 March, 2023.

~~During the second quarter of 2022, the Company received total proceeds of $150,000 for the sale of 150,000 common stock shares at $1.00 per share.~~17

~~During~~On ~~the~~July ~~third~~22, ~~quarter of~~ 2022, the Company ~~received total~~entered ~~proceeds~~into a Memorandum of ~~$600,000~~Understanding (“MOU”) with Bear Face Capital LLC (“Bear Face”) and Concorde Consulting Corp (“Concorde”) for an influx of capital. In accordance with the ~~sale~~terms of ~~600~~the MOU,~~000~~ ~~common~~Gail ~~stock~~Levy and James C. Sanborn returned 999,999 shares atof $1Series C Preferred stock to the Company.00 ~~per~~Dawn ~~share~~Cames, ~~which~~former officer for the predecessor company (“FICAAR”), was appointed to serve as ofa ~~date~~Director and Chairman of the ~~accompanying~~Board ~~financial statements~~for ~~have~~the ~~not~~Company ~~been~~and ~~issued~~was ~~and,~~assigned ~~accordingly~~one ~~recorded~~(1) asshare ~~common~~of Series C Preferred stock. ~~subscribed~~Impact of above arrangement was recognised in the period ended March 31, 2023.

As of March 31, 2023, 999,999 shares of Series C Preferred ~~Stock:~~stock and 17,995,651 shares of Series D Preferred, respectively, stock remain unissued.

~~The~~NOTE ~~Company~~11 ~~has~~– ~~authorized~~INCOME ~~30,000,000 shares of $.001 par value preferred stock.~~TAXES

OnThe ~~August~~Company 6,uses ~~2021~~the liability method, where deferred tax assets and liabilities are determined based on the ~~Company~~expected ~~amended~~future ~~its~~tax ~~Articles~~ consequences of ~~Incorporation~~temporary todifferences ~~include~~between ~~Certificates~~the carrying amounts of ~~Designation~~assets and liabilities for ~~two~~financial ~~new~~and ~~classes~~income oftax ~~Preferred~~reporting ~~Stock~~purposes. –During ~~Series~~the Ccurrent ~~Preferred~~period, ~~authorized~~though the Company incurred ~~1,000,000~~a ~~shares~~net ~~and,~~profit ~~Series~~but Dno ~~Preferred,~~tax ~~authorized~~liability ~~18,000,000~~will ~~shares~~be charged on account of the accumulated deficit.

InThe ~~connection~~Company ~~with~~has ~~the~~U.S. ~~Merger~~federal ~~with~~and ~~HyEdge,~~state onnet ~~September~~operating ~~15,~~loss ~~2021,~~carryovers ~~the~~(“NOL’s”) ~~Company~~of ~~issued~~approximately ~~1,000,000~~$17 ~~shares~~million ofat ~~Series~~March C31, ~~Convertible~~2023 ~~Preferred~~and ~~stock~~December 31, ~~non-dividend~~2022, ~~with~~which ~~voting~~begin ~~rights~~to expire in 2036. ~~Each~~Section ~~share~~382 of ~~Series~~ Cthe ~~Preferred~~Internal ~~stock~~Revenue isCode ~~convertible~~limits ~~into~~ the ~~number~~amount of ~~shares of the Company~~NOL’s ~~common~~available ~~stock equal~~ to ~~the~~offset ~~result~~future oftaxable ~~(i) 1.5 times~~income ~~the~~when ~~number of Common shares issued and outstanding calculated on~~ a ~~fully~~substantial ~~diluted~~change ~~basis~~in atownership ~~the time of conversion, (ii) divided by the total number of Series C Preferred shares issued and outstanding at the time of conversion~~occurs.

~~Additionally,~~The ~~the~~significant ~~Company~~components ~~issued 3,054 shares~~ of ~~Series D~~deferred ~~Convertible~~income ~~Preferred~~tax ~~stock,~~assets ~~non-dividend,~~at ~~with no voting rights. Each share of Series D Preferred stock is convertible into the number~~March of31, ~~shares~~2023 ~~of the Company’s common stock equal to 0.01% of the number of Common shares issued~~ and ~~outstanding~~December at31, ~~the~~2022 ~~time~~were ofas ~~conversion.~~follows:

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


	March 31,			December 31,
	2023			2022
Deferred tax asset:
Net operating loss carry-forward	$	3,612,000		$	3,612,000
Less: valuation allowance		(3,612,000	)		(3,612,000	)

Net deferred income tax asset	$	–		$	–

OnThe ~~June~~amount ~~29,2022,~~taken ~~100~~into ~~shares~~income as deferred income tax assets must reflect that portion of ~~Series~~the Dincome ~~Preferred~~tax loss carry forwards that is more-likely-than-not to be realized from future operations. ~~Stock~~The ~~were~~Company ~~issued~~has chosen to anprovide ~~investor~~a full valuation allowance against all available income tax loss carry forwards. The Company has recognized a valuation allowance for the deferred income tax asset since the Company cannot be assured that it is more likely than not that such benefit will be utilized in ~~connection~~future ~~with~~years. ~~execution~~The ofvaluation allowance is reviewed annually. When circumstances change and which cause a ~~Leak-Out~~change in ~~Agreement~~management’s judgment about the realizability of deferred income tax assets, the impact of the change on the valuation allowance is generally reflected in current income.

17NOTE 12 – RELATED PARTY TRANSACTIONS

OnParties ~~July~~are ~~28,2022,~~considered ~~250 and~~to ~~350~~be related if one party ~~shares~~has ofthe ~~Series~~ability Dto ~~Preferred~~control ~~Stock~~or ~~were~~exercise ~~issued~~significant toinfluence anover ~~two~~the ~~investors~~other party in ~~connection~~making ~~with~~financial ~~execution~~and operating decisions. Details of atransactions ~~Leak-Out~~between ~~Agreements.~~the Company and related parties, are disclosed below:

~~NOTE~~During 11period –ended ~~INCOME~~31 ~~TAXES~~March 2023, the Company received funds, totalling $165,000 (2022: 0 Nil) from Bear Face Capital LLC, one of the Company’s shareholders, to facilitate particular operating activities. These funds were classified as Other Payables as of March 31, 2023 due to their operational nature.

~~The~~NOTE ~~Company~~13 ~~uses~~– ~~the~~SUBSEQUENT 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.EVENTS

The Company has ~~U.S.~~evaluated ~~federal~~subsequent ~~and~~events ~~state~~through ~~net~~May ~~operating~~22, ~~loss~~2023, ~~carryovers~~which ~~(“NOL’s”)~~is ofthe ~~approximately~~date ~~$16~~the ~~million~~financial ~~and~~statements ~~$13~~were ~~million at September 30~~issued, ~~2022~~ and ~~December~~has ~~31,~~concluded ~~2021,~~that ~~respectively, which~~no ~~begin~~such toevents ~~expire~~or intransactions ~~2036.~~took ~~Section~~place ~~382~~which ofwould require ~~the~~adjustment ~~Internal Revenue Code limits the amount of NOL’s available~~ to ~~offset~~or ~~future~~disclosure ~~taxable income when a substantial change~~ in ~~ownership~~the ~~occurs.~~financial statements

~~The significant components of deferred income tax assets at September 30, 2022 and December 31, 2021 were as follows:~~ 18

Schedule of Components of Deferred Income Tax Asset
	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	$	–		$	–

The amount taken into income as deferred income tax assets must reflect that portion of the income tax loss carry forwards that is more-likely-than-not to be realized from future operations. The Company has chosen to provide a full valuation allowance against all available income tax loss carry forwards. The Company has recognized a valuation allowance for the deferred income tax asset since the Company cannot 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 management’s judgment about the realizability of deferred income tax assets, the impact of the change on the valuation allowance is generally reflected in current income.

NOTE 12 – RELATED PARTY TRANSACTIONS

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:

On April 15, 2019, the Company entered into an intellectual property licensing agreement (the “Agreement”) with HyEdge IP Co. (“HyEdge IP”), an entity 100% owned by the founder and CEO of the Company. Pursuant to the 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 owned by HyEdge IP (the “Intellectual Properties”), solely within North America. In addition, the Company agrees to irrevocably assign and transfer to HyEdge IP, all of its right, title and interest in and to any improvements, acquired through use, modification or improvement, on the Intellectual Properties (the “Improvements”). On July 22, 2022, the Company entered into an Intellectual Property Assignment Agreement, with Gail Levy 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

On December 20, 2019, the Company and HyEdge IP entered into an amendment to the Agreement (the "Amendment"), expanding the territory in the Agreement from North America to worldwide, including the World Wide Web. In addition, the Amendment clarified the scope of the license and rights in question, which includes the Intellectual Properties and the Improvements. The Amendment also stipulated that the Company and HyEdge IP shall agree upon a royalty for the Company's use of the Intellectual Properties, including the Improvements, outside of North America.

NOTE 13 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through November 19, 2022, which is the date the financial statements were issued, and has concluded that no such events or transactions took place which would require adjustment to or disclosure in the financial statements.

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, 2022 ~~2021~~ and ~~2020~~2021. 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.

2019

~~HFactor's~~BUSINESS ~~anti-inflammatory~~DESCRIPTION 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.(CONTINUED)

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.

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 ~~September~~March 3031, ~~2022~~ 2023 to Three Months Ended ~~September~~March 3031, ~~2021~~ 2022

Results of Operations

	Three Months ended September 30,									Percent
	Three Months ended March 31,									Percent
	2022			2021			Change			Change
	2023			2022			Change			Change
Revenues	$	~~272~~418,~~329~~765		$	~~513~~595,~~174~~623		$	(~~240~~176,~~845~~858	)		~~(47)~~-30%
Gross profit		~~110~~230,~~452~~956			~~266~~319,~~867~~907			(~~156~~88,~~415~~951	)		~~(59)~~-28%
Operating expenses		(~~597~~567,~~012~~778	)		(~~633~~931,~~806~~214	)		~~(36~~363,~~794~~436	)		~~(6)~~39%
Other income (expense)		~~(138~~696,~~436~~484	)		(96195,~~504~~566	)		41892,~~932~~051			43456%
Net loss	$	~~(624~~359,~~996~~662	)	$	(~~463~~806,~~443~~873	)	$	~~(161~~1,~~553~~166,535	)		35145%

Net revenues for the three months ended ~~September~~March 3031, ~~2022~~2023 were $~~272~~418,~~329~~765 as compared to $~~513~~595,~~174~~623 for the three months ended ~~September~~March 3031, ~~2021~~2022. ~~which~~Company ~~resulted~~has ~~primarily~~been striving ~~from~~to ~~higher~~boost ~~distributor~~sales ~~dictated~~and ~~trade~~operating ~~spending~~results ~~during~~since ~~the summer high peak season~~merger.

Gross profit for the three months ended ~~September~~March 3031, ~~2022~~2023 was also deteriorated by $~~110~~88,~~452~~951, asin ~~compared~~line with decline in revenues. However, company managed to ~~$266~~control of goods sold. Hence,~~867~~ ~~for~~noticed ~~the~~slight ~~three~~improvement ~~months~~in GP Margin, from 54% in quarter ended ~~September~~March 3031, ~~2021~~2022, to 55% in current reporting period.

Total operating expenses ~~were~~ were $~~597~~567,~~012~~778 for the three months ended ~~September~~March 3031, ~~2022~~2023 as compared to $~~633~~931,~~806~~214 for the three months ended ~~September~~March 3031, ~~2021~~2022. ~~The~~Reduction 6in expenses by 39% ~~decrease~~ was primarily attributable to athe ~~reduction~~decline in ~~payroll~~sales and ~~compensation~~marketing expense by $257,348.

~~Other~~Significant ~~income~~improvement ~~(expense) was~~in ~~$(138~~other income,~~436)~~ ~~for~~in ~~the~~current ~~three~~period, ~~months~~was ~~ended~~attributable ~~September~~to ~~30,~~the ~~2022~~write-off ~~compared~~of tothe ~~$(96,504)~~salary ~~for~~payable ~~the~~balance ~~three~~of ~~months~~Gail ~~ended~~Levy ~~September~~of 30$720,~~2021~~000. ~~The $41~~Consequently,~~932~~ ~~increase~~other ~~was~~expenses ~~primarily~~of ~~additional~~$ ~~interest~~195,566 ~~accrued~~in ~~associated~~2022 ~~with~~were ~~convertible~~turned ~~debt~~into ~~borrowings~~net ~~that~~income ~~are~~of ~~in default status~~$696,484.

For the three months ended September 30, 2022, the Company reported a net loss of $624,996 as compared to a net loss of $463,443 for the three months ended September 30, 2021. The $161,553 increase in net loss for the three months ended September 30, 2022 mainly arose from decreased sales, net of higher than usual trade spending .20

21For the three months ended March 31, 2023, the Company reported a net profit of $359,662 as compared to a net loss of $806,873 for the three months ended March 31, 2022. The net gain for the three months ended March 31, 2023 mainly arose from the write-off of the accumulated salary payable of Gail Levy. Though sales dropped off in current period by 30% on account of reduction in sales and marketing activities, the gross profit margin was still positive. Effective cost control and restructuring of marketing activities can maintain profitable operations.

Comparison of Nine Months Ended September 30, 2022 to Nine Months Ended September 30, 2021

Results of Operations

	Nine Months ended September 30,									Percent
	2022			2021			Change			Change
Revenues	$	1,468,447		$	513,174		$	955,273			186%
Gross profit		764,175			266,867			497,308			186%
Operating expenses		(2,340,024	)		(646,667	)		(1,693,360	)		315%
Other income (expense)		(511,450	)		(339,111	)		(172,339	)		51%
Net loss	$	(2,087,299	)	$	(718,908	)	$	(1,368,391	)		190%

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

Gross profit for the nine months ended September 30, 2022 was $764,175 as compared to $266,867 for the nine months ended September 30, 2021.

Total operating expenses were $2,340,024 for the nine months ended September 30, 2022 compared to $646,667 for the nine months ended September 30, 2021. The 315% increase was primarily attributable to the additional operating expenses resulting from the merger of HyEdge, specifically $1,087,021 in additional sales and marketing expenses..

Other income (expense) was $(511,450) for the nine months ended September 30, 2022 compared to $(339,111) for the nine months ended September 30,2021. The $172,339 increase was primarily $116,954 decrease in derivative expenses associated with embedded liabilities in convertible debt and $100,061 increase in interest expenses associated with borrowings.

For the nine months ended September 30, 2022, the Company reported a net loss of $2,087,299 as compared to a net loss of $718,908 for the nine months ended September 30, 2021. The $1,368,391 increase in net loss for the nine months ended September 30, 2022 mainly arose from higher sales and marketing expenses.

Liquidity and Capital Resources

As of ~~September~~March 3031, ~~2022~~2023, the Company had $2236,~~036~~206 in cash to fund its operations. The Company reported working capital deficit of $54,~~427~~872,~~155~~792 at ~~September~~March 3031, ~~2022~~2023 as ~~compared~~ compared to a working capital deficit of $45,~~855~~260,~~836~~943 at December 31, ~~2021~~2022, representing andecrease ~~increase~~ in working capital deficit by $~~571~~388,~~320~~151.

~~The~~Liquidity 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~~Capital ~~of recorded assets and classification of liabilities should the Company be unable to continue as a going concern.~~Resources

AsThe ~~the~~ Company ~~continues~~does tonot ~~incur~~believe ~~losses,~~its ~~achieving~~current ~~profitability~~cash isbalance ~~dependent~~will onbe ~~achieving~~sufficient ato ~~level~~allow ofthe ~~revenues~~Company ~~adequate~~ to ~~support~~fund its planned operating activities for the ~~Company's~~next ~~cost~~twelve ~~structure~~months. The ability of the Company ~~may~~ ~~never~~to ~~achieve~~continue ~~profitability,~~as ~~and~~a ~~unless~~going ~~and~~concern ~~until~~is itdependent ~~does,~~on the Company ~~will~~obtaining ~~continue~~adequate capital to ~~need~~fund toaccumulated ~~raise~~operating losses ~~additional~~until ~~capital.~~it ~~Management intends~~becomes toprofitable. ~~fund~~If ~~future~~the ~~operations~~Company ~~through~~is ~~additional~~unable ~~private~~to orobtain ~~public~~adequate ~~equity~~capital, ~~offering~~it ~~and~~could ~~may~~be ~~seek~~forced ~~additional~~to ~~capital~~cease ~~through~~operations ~~arrangements~~or substantially ~~with~~curtail ~~strategic~~some ~~partners~~or all of ~~from~~its ~~other~~planned ~~sources~~activities. ~~There~~These ~~can~~conditions beraise nosubstantial ~~assurances,~~doubt ~~however,~~as ~~that~~to ~~additional~~the ~~funding~~Company's ~~will~~ability beto ~~available~~continue onas ~~terms~~a going ~~acceptable~~concern. toThe ~~the~~accompanying ~~Company,~~financial orstatements atdo ~~all.~~not ~~Any~~include ~~equity~~any ~~financing~~adjustments ~~may~~relating beto ~~dilutive~~the torecoverability ~~existing~~and ~~shareholders,~~classification ~~which~~of ~~dilution~~recorded assets ~~may~~and beclassification ~~significant depending~~of onliabilities should the ~~terms~~Company ofbe ~~the~~unable ~~transactions~~to continue as a going concern.

22As the Company started to report profitable results, maintaining profitability is dependent on achieving a level of revenues adequate to support the Company's cost structure. Management intends to fund future operations through additional private or public equity offering and may seek additional capital through arrangements with strategic partners. 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 ~~nine~~three months ended ~~September~~March 3031, ~~2022,~~2023 net cash flow used by operating activities was $(1111,~~448,818~~848) as compared to $(~~110~~574,~~800~~121) for the ~~nine~~three months ended ~~September 30,~~March ~~2021~~31, 2022. ~~The~~Comparatively, ~~increases~~less in cash ~~flow~~resources ~~used~~were ~~for~~tied up in operating activities ~~for~~on ~~2022~~account ~~period~~of ~~were~~net ~~primarily~~income ~~due~~of to$359,662, ~~increases~~ in ~~operating~~current ~~expenditures~~reporting ~~resulting from the HyEdge merger~~period.

Investing and Financing Activities:

Net cash flows provided by ~~(used)~~ ~~in investing and~~ financing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 were $10 as compared to $370,~~220,~~000 ~~from~~for ~~sales~~the ofthree ~~common~~months ~~stock~~period ~~shares compared~~ended toMarch ~~$149~~31,~~000~~ in2022. No ~~proceeds~~investments ~~from~~were ~~convertible~~made ~~loans~~ in ~~September~~the ~~30,~~current ~~2021~~and comparative reporting period.

Liquidity and Capital Resource Measures:

The Company’s primary source of liquidity ~~has~~in ~~been~~the ~~from~~period ended ~~sales~~March of31, ~~its~~2023 ~~common~~was ~~stock~~shareholder’s ~~and convertible loans~~loan.

Going Concern

The Company ~~has~~generated ~~experienced~~ a net profit ~~loss~~of ~~and~~$359,662 in the period ended March 31, 2023 but had an accumulated deficit of $3,~~861~~835,~~407~~939 as of ~~September~~March 3031, ~~2022~~2023. These conditions raise substantial doubt about the Company’s ability to continue ~~absent~~ raising sufficient capital to fund continued operations. Management expects to ~~incur~~maintain ~~additional~~profitable ~~losses~~results in the foreseeable future ~~and~~with ~~recognizes~~support ~~the~~of ~~need~~additional tofinancing ~~raise~~and ~~capital~~cost ~~to remain viable~~control. ~~The~~However, ~~accompanying~~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~~During the first quarter of 2023, the Company received funds, totaling $165,000, from Bear Face Capital LLC, one of the Company’s shareholders, to facilitate particular operating activities. These funds were classified as Other Payables as of March 31 2023 due to their operational nature.

Critical Accounting Policies

Refer to Note 2 in the Consolidated Financial Statements for a summary of ~~recently~~implemented ~~adopted and recently issued~~ accounting ~~standards~~policies 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 for the three months ~~September~~ended 30March 31, ~~2022~~2023 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~~Financial 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~~Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of ~~September~~March 3031, ~~2022~~2023, the end of the period ~~covered~~ covered by this report. Based on that evaluation, our Chief Executive Officer and Chief ~~Accounting~~Financial 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~~ 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~~composition 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.

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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~~proceedings.

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~~2022.

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

OnWe ordid ~~about~~not ~~August~~have 8,any ~~2021~~sales ~~the Company issued 30,197,888 shares~~ of ~~Company~~unregistered ~~common~~equity ~~stock~~securities ~~and~~for ~~1,003,054 Preferred stock upon~~ the three ~~closing~~months ofended ~~the~~March ~~HyEdge~~31, ~~Inc.~~2023 ~~acquisition. The~~other ~~shares~~than ~~were~~those ~~the~~that ~~component~~have ofbeen ~~the~~previously ~~consideration paid by the Company to acquire HyEdge~~reported. ~~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 September 30, 2022:~~None.

Lender	Principal		Maturity Dates
(a) Boot Capital LLC	$	250,000	May 27, 2022
(b) Boot Capital LLC	$	152,000	July 22, 2022
(b) Saliam Inc.	$	69,309	May 01, 2022
(c) R. Propper	$	445,116	July 01,2022
(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.

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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 Agreement dated July 22, 2022	*
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).	*

2625

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)
November 21, 2022	By:	/s/ Dawn Cames
May 22, 2023	By:	/s/ Dawn Cames
		Dawn Cames
		Principal Executive Officer & Acting Principal Financial Officer

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Filing Compare · HFactor, Inc.