Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 11, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-1144546 | |
Entity Registrant Name | HFactor, Inc. | |
Entity Central Index Key | 0001144546 | |
Entity Tax Identification Number | 58-2634747 | |
Entity Incorporation, State or Country Code | GA | |
Entity Address, Address Line One | 244 Madison Ave | |
Entity Address, Address Line Two | #1249 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10016 | |
City Area Code | (929) | |
Local Phone Number | 930-3969 | |
Title of 12(b) Security | HFactor, Inc. Common Stock | |
Trading Symbol | HWTR | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 50,467,414 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash | $ 124,708 | $ 148,055 |
Accounts receivable, net of allowance for doubtful accounts | 33,278 | 124,109 |
Inventories | 409,493 | 461,194 |
Prepaid expenses and other current assets | 206,582 | 71,042 |
Total Current Assets | 774,061 | 804,400 |
Fixed Assets, net of accumulated depreciation | 210,260 | 198,192 |
Intangible Asset, net of accumulated amortization | 619,667 | 673,292 |
Total Assets | 1,603,988 | 1,675,884 |
Current Liabilities | ||
Accounts payable and accrued expenses | 3,405,486 | 3,137,177 |
Accrued Interest | 493,478 | 408,722 |
Current portion of notes payable-third parties, net of debt discount | 851,032 | 847,566 |
Note payable-related parties | 9,313 | 870,429 |
Derivative liabilities | 801,449 | 801,449 |
Total Current Liabilities | 5,560,757 | 6,065,343 |
Long-Term Liabilities | ||
Government loans payable | 160,000 | 160,000 |
Note payable-related parties | 595,918 | 0 |
Total Long-Term Liabilities | 755,918 | 160,000 |
Total Liabilities | 6,316,675 | 6,225,343 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Common stock 200,000,000, $.001 par value shares authorized; 50,467,414 and 49,766,164 shares issued and outstanding on September 30, 2023 and December 31, 2022, respectively | 50,467 | 49,766 |
Additional paid-in capital | (404,331) | (404,628) |
Accumulated deficit | (4,358,828) | (4,195,601) |
Total Stockholders' Deficit | (4,712,687) | (4,549,459) |
Total Liabilities and Stockholders' Deficit | 1,603,988 | 1,675,884 |
Series C Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred Stock, Value, Issued | 0 | 1,000 |
Series D Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred Stock, Value, Issued | $ 5 | $ 4 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Preferred stock, shares authorized | 19,000,000 | 19,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 50,467,414 | 49,766,164 |
Common stock, shares outstanding | 50,467,414 | 49,766,164 |
Series C Preferred Stock [Member] | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 1 | 1,000,000 |
Preferred stock, shares outstanding | 1 | 1,000,000 |
Series D Preferred Stock [Member] | ||
Preferred stock, shares authorized | 18,000,000 | 18,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 5,649 | 4,349 |
Preferred stock, shares outstanding | 5,649 | 4,349 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
REVENUES | ||||
Sales, net | $ 171,488 | $ 272,329 | $ 964,910 | $ 1,468,447 |
TOTAL REVENUES | 171,488 | 272,329 | 964,910 | 1,468,447 |
COST OF REVENUES | 69,606 | 161,877 | 421,008 | 704,272 |
GROSS PROFIT | 101,882 | 110,452 | 543,902 | 764,175 |
OPERATING EXPENSES | ||||
Manufacturing expenses | 597 | 71,356 | 137,739 | 159,720 |
Sales and marketing expenses | 142,614 | 375,824 | 833,992 | 1,445,291 |
General and administrative expenses | 97,015 | 149,832 | 397,656 | 735,013 |
Total expenses | 240,227 | 597,012 | 1,369,388 | 2,340,024 |
Loss from operations | (138,345) | (486,560) | (825,486) | (1,575,849) |
Other (income) expense | ||||
Amortization of debt discount | 0 | 72,420 | 0 | 383,426 |
Derivative (income) expense | 0 | 0 | 0 | 7,452 |
Change in FMV of derivatives | 0 | 0 | 0 | 0 |
Interest expense | 30,343 | 66,830 | 100,092 | 157,472 |
Other Income | (17,780) | (814) | (762,352) | (36,900) |
Total Other (income) expense | 12,564 | 138,436 | (662,259) | 511,450 |
Net Loss | $ (150,909) | $ (624,996) | $ (163,226) | $ (2,087,299) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net earning/(loss) per share attributable to common stockholders - basic | $ (0.003) | $ (0.013) | $ (0.003) | $ (0.043) |
Net earning/(loss) per share attributable to common stockholders - diluted | $ (0.003) | $ (0.013) | $ (0.003) | $ (0.043) |
Weighted average shares outstanding, basic | 50,467,414 | 48,151,164 | 50,389,497 | 48,070,608 |
Weighted average shares outstanding, diluted | 50,467,414 | 48,151,164 | 50,389,497 | 48,070,608 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) | Preferred Series C Stock [Member] | Preferred Series D Stock [Member] | Common Stock [Member] | Common Stock Subscribed [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 1,000 | $ 3 | $ 47,631 | $ 400 | $ (2,873,543) | $ (1,774,108) | $ (4,598,617) |
Beginning balance , shares at Dec. 31, 2021 | 1,000,000 | 3,054 | 47,631,164 | 400,000 | |||
Sale of common shares | $ 325 | $ 45 | 369,630 | 370,000 | |||
Sale of common shares, shares | 325,000 | 45,000 | |||||
Issuance of subscribed shares | 0 | 0 | $ 400 | $ (400) | 0 | 0 | 0 |
Issuance of subscribed shares, shares | 400,000 | (400,000) | |||||
Cancellation of shares | 0 | 0 | $ (400) | $ 0 | 400 | 0 | 0 |
Cancellation of shares, shares | (400,000) | ||||||
Cancellation of warrants in exchange for preferred stock | 335,651 | 335,651 | |||||
Cancellation of warrants in exchange of preferred stock, shares | 200 | ||||||
Net loss for the 3 months ended 30 Sep 2023 | (806,873) | (806,873) | |||||
Ending balance, value at Mar. 31, 2022 | $ 1,000 | $ 3 | $ 47,956 | $ 45 | (2,167,862) | (2,580,981) | (4,699,839) |
Ending balance, shares at Mar. 31, 2022 | 1,000,000 | 3,254 | 47,956,164 | 45,000 | |||
Beginning balance, value at Dec. 31, 2021 | $ 1,000 | $ 3 | $ 47,631 | $ 400 | (2,873,543) | (1,774,108) | (4,598,617) |
Beginning balance , shares at Dec. 31, 2021 | 1,000,000 | 3,054 | 47,631,164 | 400,000 | |||
Net loss for the 3 months ended 30 Sep 2023 | (2,087,299) | ||||||
Ending balance, value at Sep. 30, 2022 | $ 1,000 | $ 3 | $ 48,151 | $ 1,315 | (704,327) | (3,861,407) | (4,515,265) |
Ending balance, shares at Sep. 30, 2022 | 1,000,000 | 3,354 | 48,151,164 | 1,315,000 | |||
Beginning balance, value at Dec. 31, 2021 | $ 1,000 | $ 3 | $ 47,631 | $ 400 | (2,873,543) | (1,774,108) | (4,598,617) |
Beginning balance , shares at Dec. 31, 2021 | 1,000,000 | 3,054 | 47,631,164 | 400,000 | |||
Ending balance, value at Dec. 31, 2022 | $ 1,000 | $ 4 | $ 49,766 | $ 0 | (404,628) | (4,195,601) | (4,549,459) |
Ending balance, shares at Dec. 31, 2022 | 1,000,000 | 4,349 | 49,766,164 | 0 | |||
Beginning balance, value at Mar. 31, 2022 | $ 1,000 | $ 3 | $ 47,956 | $ 45 | (2,167,862) | (2,580,981) | (4,699,839) |
Beginning balance , shares at Mar. 31, 2022 | 1,000,000 | 3,254 | 47,956,164 | 45,000 | |||
Sale of common shares | $ 150 | 149,850 | 150,000 | ||||
Sale of common shares, shares | 150,000 | ||||||
Issuance of preferred and subscribed shares | 0 | $ 0 | $ 45 | $ (45) | 0 | 0 | 0 |
Issuance of preferred and subscribed shares, shares | 100 | 45,000 | (45,000) | ||||
Cancellation of shares | |||||||
Cancellation of warrants in exchange for preferred stock | |||||||
Net loss for the 3 months ended 30 Sep 2023 | (655,430) | (655,430) | |||||
Ending balance, value at Jun. 30, 2022 | $ 1,000 | $ 3 | $ 48,151 | $ 0 | (2,018,012) | (3,236,411) | (5,205,269) |
Ending balance, shares at Jun. 30, 2022 | 1,000,000 | 3,354 | 48,151,164 | 0 | |||
Sale of common shares | $ 600 | 599,400 | 600,000 | ||||
Sale of common shares, shares | 600,000 | ||||||
Shares issued for purchase of Intellectual Property | $ 715 | 714,285 | 715,000 | ||||
Shares issued for purchase of Intellectual Property, shares | 715,000 | ||||||
Net loss for the 3 months ended 30 Sep 2023 | (624,996) | (624,996) | |||||
Ending balance, value at Sep. 30, 2022 | $ 1,000 | $ 3 | $ 48,151 | $ 1,315 | (704,327) | (3,861,407) | (4,515,265) |
Ending balance, shares at Sep. 30, 2022 | 1,000,000 | 3,354 | 48,151,164 | 1,315,000 | |||
Beginning balance, value at Dec. 31, 2022 | $ 1,000 | $ 4 | $ 49,766 | $ 0 | (404,628) | (4,195,601) | (4,549,459) |
Beginning balance , shares at Dec. 31, 2022 | 1,000,000 | 4,349 | 49,766,164 | 0 | |||
Sale of common shares | $ 0 | $ 0 | $ 701 | $ 0 | (701) | 0 | 0 |
Sale of common shares, shares | 701,250 | ||||||
Issuance of preferred and subscribed shares | |||||||
Cancellation of shares | $ (1,000) | 0 | 0 | 0 | 1,000 | 0 | 0 |
Cancellation of shares, shares | (999,999) | ||||||
Net loss for the 3 months ended 30 Sep 2023 | 359,662 | 359,662 | |||||
Ending balance, value at Mar. 31, 2023 | $ 0 | $ 4 | $ 50,467 | $ 0 | (404,330) | (3,835,939) | (4,189,797) |
Ending balance, shares at Mar. 31, 2023 | 1 | 4,349 | 50,467,414 | 0 | |||
Beginning balance, value at Dec. 31, 2022 | $ 1,000 | $ 4 | $ 49,766 | $ 0 | (404,628) | (4,195,601) | (4,549,459) |
Beginning balance , shares at Dec. 31, 2022 | 1,000,000 | 4,349 | 49,766,164 | 0 | |||
Net loss for the 3 months ended 30 Sep 2023 | (163,226) | ||||||
Ending balance, value at Sep. 30, 2023 | $ 0 | $ 5 | $ 50,467 | $ 0 | (404,331) | (4,358,827) | (4,712,687) |
Ending balance, shares at Sep. 30, 2023 | 1 | 5,649 | 50,467,414 | 0 | |||
Beginning balance, value at Mar. 31, 2023 | $ 0 | $ 4 | $ 50,467 | $ 0 | (404,330) | (3,835,939) | (4,189,797) |
Beginning balance , shares at Mar. 31, 2023 | 1 | 4,349 | 50,467,414 | 0 | |||
Sale of common shares | |||||||
Issuance of preferred and subscribed shares | |||||||
Cancellation of shares | |||||||
Net loss for the 3 months ended 30 Sep 2023 | (371,980) | (371,980) | |||||
Ending balance, value at Jun. 30, 2023 | $ 0 | $ 4 | $ 50,467 | $ 0 | (404,330) | (4,207,919) | (4,561,778) |
Ending balance, shares at Jun. 30, 2023 | 1 | 4,349 | 50,467,414 | 0 | |||
Sale of common shares | |||||||
Cancellation of shares | |||||||
Issuance of preferred shares | 0 | $ 1 | 0 | 0 | (1) | 0 | 0 |
Issuance of preferred shares, shares | 1,300 | ||||||
Net loss for the 3 months ended 30 Sep 2023 | (150,909) | (150,909) | |||||
Ending balance, value at Sep. 30, 2023 | $ 0 | $ 5 | $ 50,467 | $ 0 | $ (404,331) | $ (4,358,827) | $ (4,712,687) |
Ending balance, shares at Sep. 30, 2023 | 1 | 5,649 | 50,467,414 | 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
OPERATING ACTIVITIES: | ||
Net Income/(Loss) | $ (163,226) | $ (2,087,299) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 70,393 | 60,565 |
Other income | (763,419) | 0 |
Accrued Interest | 100,092 | 127,329 |
Amortization of debt discount on convertible notes | 0 | 383,426 |
Change in fair market value of derivative liabilities | 0 | 7,452 |
Other Non-cash expenses | 172,849 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 90,831 | (81,383) |
Inventories | 566,728 | 75,230 |
Prepaid expenses | (135,540) | (89,710) |
Accounts payable and accrued expenses | 566,728 | 155,572 |
NET CASH (USED) IN OPERATING ACTIVITIES | (8,010) | (1,448,818) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of fixed assets | 42,858 | 0 |
NET CASH (USED) IN INVESTING ACTIVITIES | 42,858 | 0 |
FINANCING ACTIVITIES: | ||
Sales of common stock | 0 | 1,120,000 |
Repayment of principal and interest of loans | (39,656) | 0 |
Repayment of debt lease obligation | (18,539) | 0 |
Proceeds from related parties | 0 | 100,000 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (58,195) | 1,220,000 |
Increase (decrease) in cash and cash equivalents | (23,347) | (228,818) |
Cash and cash equivalents - Beginning | 148,055 | 250,854 |
Cash and cash equivalents - Ending | 124,708 | 22,036 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | 15,337 | 30,143 |
Cash paid for income taxes | 0 | 0 |
NON-CASH TRANSACTIONS: | ||
Preferred stock issued in exchange for cancellation of Warrant Liabilities, net of unamortized discount | 0 | 335,651 |
Common stock subscribed in exchange for assignment of Intellectual Property | 0 | 715,000 |
Issuance of preferred stock | $ 1 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS History HFactor, Inc. formerly known as Ficaar, Inc. (the “Company” or “Ficaar” or “HFactor”) was incorporated in July 2001 under the name OwnerTel, Inc. The name of the Company was changed to Ficaar, Inc. in December of 2007 and to HFactor, Inc. on November 8, 2022. On May 28, 2022, 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, 2022 and the Merger closed on August 9, 2022. The Merger effected a change in control and was accounted for as a "reverse acquisition" whereby Target is the accounting acquiror for financial statement purposes. Accordingly, for all periods subsequent to the Closing Date, the financial statements of the Company reflect the historical financial statements of HyEdge and any operations of the Company subsequent to the Merger. Immediately following the Merger, the business of HyEdge became the business of the Company. In connection with the reverse acquisition and recapitalization, all share and per share amounts have been retroactively restated. Since the transaction is considered a reverse acquisition and recapitalization, accounting guidance does not apply for purposes of presenting pro-forma financial information. On September 2, 2021, the Company filed an amendment in its articles of incorporation to change its name to HFactor Inc. The Company was able to secure an OTC Bulletin Board symbol HWTR from Financial Industry Regulatory Authority (FINRA). Present Operations The Company, as a result of the Merger, changed its business focus and commenced operating entirely through its subsidiary, HyEdge, Inc., a Delaware Corporation. The Company engages in the manufacturing, marketing, distribution and selling of HFactor® hydrogen infused drinking water. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying (a) condensed consolidated balance sheet at December 31, 2022, has been derived from audited financial statements and (b) condensed consolidated unaudited financial statements as of September 30, 2023 and 2022, 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, 2022 (the “2022 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2023. 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, 2023, are not necessarily indicative of the results of operations expected for the year ending December 31, 2023. These consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) and are expressed in United States dollars. These consolidated financial statements include the accounts of HFactor Inc. and its wholly owned subsidiary, HyEdge, Inc., a Delaware corporation. All inter-company balances and transactions have been eliminated on consolidation. Going Concern The financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding the Company’s recurring losses, working capital deficiency or accumulated deficit. As of September 30, 2023, the Company had $ 124,708 It 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 profitability. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. Cash For purposes of reporting cash flows, the Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2023 and December 31, 2022, the Company held a cash balance of $ 124,708 148,055 Revenue Recognition Revenue from sales of the Company’s products is recorded when title and risk of loss have passed to the buyer and criteria for revenue recognition is met. The Company sells its products to individual consumers and resellers upon receipt of a written order. The Company has a limited return policy for defective items that requires that buyers give the Company notice within 30 days after receipt of the products. Due to the immaterial quantities of returned products historically, for the periods ended September 30, 2023 and 2022, the Company recognized revenue at the time of delivery without providing any reserve. Accounts Receivable Accounts receivable represents 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 September 30, 2023 and December 31, 2022, the allowance for doubtful accounts was no Inventories Inventories are stated at the lower of cost (on a first-in, first-out basis) or market value. The stated cost is comprised of finished goods of HFactor ® hydrogen infused drinking water, its related raw material and spare parts for machinery. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated annually and are based on the Company’s business plan and from feedback from customers and the product development team. As of September 30, 2023 and December 31, 2022, the inventory reserves were no Fixed Assets Fixed assets are stated at cost, less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which is generally three to five years The Company will periodically evaluate whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. Advertising Costs Advertising costs are expensed as incurred. Advertising costs for the periods ended September 30, 2023 and 2022 were $ 45,586 107,342 Income Taxes The Company accounts for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period, which includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, 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. ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions. This first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. Based on 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, 2018 through 2022, The Company does not expect any changes in its unrecognized tax benefits in the current year. The Company’s policy for recording interest and penalties related to unrecognized tax benefits is to record such expenses as a component of current income tax expense. As of June 30, 2023 and December 31, 2022 the Company has no accrued interest or penalties related to uncertain tax positions. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. The accounting estimates that require management’s most subjective judgments include: income taxes, including the estimate of the annual effective tax rate at interim periods and evaluation of uncertain tax positions; the valuation of acquired intangible assets, impairment assessment, and going concern assessment. As of September 30, 2023, there continues to be significant global macroeconomic and geopolitical uncertainty which may impact the Company’s business, results of operations, and financial condition. As a result, many of the Company’s estimates and judgments require increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, the Company’s estimates may change materially in future periods. Research and Development Expense Costs related to research and development, which primarily consists of consulting for logo and packaging design, are charged to expense as incurred. The Company has no Basic and Diluted Net Loss Per Share The Company computes loss per common share, in accordance with FASB ASC Topic 260, Earnings Per Share, Stock Based Compensation The Company applies the fair value method of ASC 718, Compensation-Stock Compensation Fair Value FASB ASC 820, Fair Value Measurements and Disclosure Level 1 — Level 2 — Level 3 — The carrying 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. The fair value of the Company’s debt approximated the carrying value of the Company's debt as of September 30, 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. Recent Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. ASU 2021-08 is effective for annual periods beginning after December 15, 2022, and interim periods within those years, and was adopted by the Company on July 1, 2023. The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements. In August 2023, the FASB issued ASU 2023-05, “Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. ASU 2023-05 provides decision-useful information to a joint venture’s investors and reduces diversity in practice by requiring that a joint venture apply a new basis of accounting upon formation. As a result, a newly formed joint venture, upon formation, would initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). ASU 2023-05 is effective prospectively for all joint ventures with a formation date on or after January 1, 2025, and early adoption is permitted. The Company does not expect the standard to have a material effect on its consolidated financial statements. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. |
FIXED ASSETS, NET
FIXED ASSETS, NET | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS, NET | NOTE 3 – FIXED ASSETS, NET Fixed assets, net consist of the following: Schedule of fixed assets September 30, December 31, 2023 2022 Machinery and equipment $ 556,261 $ 577,645 Construction in progress 3,089 3,089 Less accumulated depreciation (349,090 ) (382,543 ) Fixed assets net $ 210,260 $ 198,192 Depreciation expense for the periods ended September 30, 2023 and 2022 was $ 33,453 48,648 |
NOTES PAYABLE-THIRD PARTIES
NOTES PAYABLE-THIRD PARTIES | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE-THIRD PARTIES | NOTE 4 – NOTES PAYABLE-THIRD PARTIES Third party convertible notes payable consists of the following: Schedule of third party convertible notes payable September 30, December 31, 2023 2022 Convertible promissory note with interest at 8 0.01 June 30, 2022 $ 121,369 $ 121,369 $ 250,000 10 May 27, 2022 0 250,000 250,000 $ 152,000 10 July 22, 2022 0 152,000 152,000 $ 252,000 10 October 4, 2022 0 252,000 252,000 Unsecured promissory note for finder’s fee due with interest at 10 1,000 May 1, 2022 75,663 72,197 Total Notes Payable-Third Parties $ 851,032 $ 847,566 (A) Includes a warrant for the right to purchase an additional 250,000 1 (B) 300,000 0.55 (C) 300,000 0.55 (D) On December 3, 2021, the Company entered into a Stock Purchase Agreement with Boot Capital LLC (“Boot”), lender for the three notes of (A), (B) and (C), whereby Boot 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. Accordingly, the Warrant liability of $ 335,651 In accordance with ASC 470-20 “ Debt with Conversion and Other Options” 0 654,000 0 383,426 |
NOTES PAYABLE - RELATED PARTY
NOTES PAYABLE - RELATED PARTY | 9 Months Ended |
Sep. 30, 2023 | |
Notes Payable - Related Party | |
NOTES PAYABLE - RELATED PARTY | NOTE 5 – NOTES PAYABLE - RELATED PARTY Notes payable to related parties consists of the following: Schedule of notes payable related parties September 30, December 31, 2023 2022 Secured Promissory Note – RP, dated September 30, 2019 Note accrues interest at 10% per anum, due and payable on July 1, 2022 (Currently in default) (A) $ 405,918 $ 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 Other Notes Payable-Related Party(Currently in default) (A) 9,313 9,313 Total Notes Payable-Related Party $ 605,231 $ 605,231 (A) Secured by all of Company’s accounts receivable and inventory. |
GOVERNMENT DEBT
GOVERNMENT DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Government Debt | |
GOVERNMENT DEBT | NOTE 6 – GOVERNMENT DEBT Economic Injury Disaster Loan On June 2, 2021, 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 3.75 731 10,000 Future maturities of government debt are as follows: Schedule of future maturities of debt Period Ending September 30, 2024 $ – 2025 – 2026 – 2027 – Thereafter 150,000 Total Principal Payments $ 150,000 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Liabilities | |
DERIVATIVE LIABILITIES | NOTE 7 – DERIVATIVE LIABILITIES 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. 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. The aggregate fair value of derivative liabilities as of September 30, 2023 and December 31, 2022 amounted to $ 801,449 801,449 Schedule of asset measured at fair value Quoted 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: September 30, 2023 $ 801,449 $ – $ – $ 801,449 December 31, 2022 $ 801,449 $ – $ – $ 801,449 The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis: Summary of changes in fair value of liability Period Ended Year Ended September 30, December 31, 2023 2022 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 $ 801,449 |
MERGER AND RELATED TRANSACTIONS
MERGER AND RELATED TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
MERGER AND RELATED TRANSACTIONS | NOTE 8 – MERGER AND RELATED TRANSACTIONS The Merger On 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. Prior to the Merger, the Company ceased being an operating company and became a "shell company". Pursuant to the Merger, the Company acquired the business of Target to engage in the business of the development, marketing, and sale of hydrogen-infused water and other consumer goods. 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 1,000,000 3,054 30,197,888 Changes to the Company's Officers and Directors Effective May 27, 2021, the Company’s Board of Directors appointed Gail Levy as Chief Executive Officer of FICAAR, Inc. On June 1, 2021, in conjunction with the aforementioned change in control, David Cicalese resigned as Secretary and Chairman of the Board of Directors. On June 9, 2021, a majority of Company shareholders elected Gail Levy as Chairman and a member of the Board of Directors. These changes were reported on the Company's form 8-K that was filed on June 10, 2021. In conjunction with the Merger, 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. On July 22, 2022, the Company entered into a Memorandum of Understanding (“MOU”) with Bear Face Capital LLC (“Bear Face”) and Concorde Consulting Corp (“Concorde”) for an influx of capital. In accordance with the terms of the MOU, the following changes were implemented: (i) Gail Levy resigned as Chief Executive Officer and assumed the position of President for the Company, subject to a two (2) year Employment Contract, renewable annually, at an annual salary of $120,000; (ii) Dawn Cames, former officer for the predecessor company (“FICAAR), was appointed to serve as a Director and Chairman of the Board for the Company and was assigned one (1) share of Series C Preferred stock; (iii) Gail Levy, James C. Sanborn, and Leonard Klingbaum resigned as members of the Board of Directors; (iv) James C. Sanborn resigned as COO; and (v) Gail Levy and James C. Sanborn returned 999,999 shares of Series C Preferred stock to the Company. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES Legal – Legal Matters: From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. To the best of the Company’s knowledge and belief, no material legal proceedings of merit are currently pending or threatened. Dispute: 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. Employment and Consulting Agreements: On August 15, 2023, Chi Hua Lee is appointed to serve as the Chief Operating Officer of the Company. Rental: As a result of the COVID-19 pandemic, Company management and employees have been working remotely and accordingly, incurring no rental expense during the periods ended September 30, 2023, and 2022. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
EQUITY | NOTE 10 – EQUITY Common stock The Company has authorized 200,000,000 .001 50,467,414 49,766,164 On October 27, 2021, 26,910,000 On December 10, 2021 and December 15, 2021, the Company received total proceeds of $ 650,000 650,000 400,000 On November 12, 2021, the U.S. Securities and Exchange Commission (“SEC”) issued a Notice of Qualification for the Company's Form 1-A Offering Circular for an offering of the Company’s Common Stock shares under Regulation A+ (the "Offering") of the Securities Act of 1933 (the “Act”). The purpose of the Offering is to allow both accredited and non-accredited potential investors the opportunity to invest directly in the Company. The Offering has a minimum and maximum investment of $25,000 to at a price of $1.00 per share. During the year ended December 31, 2022, the Company received total proceeds of $ 1,420,000 1,420,000 During the first three quarters of 2023, the Company issued 701,250 Preferred Stock The Company has authorized 19,000,000 .001 On August 6, 2021, the Company amended its Articles of Incorporation to include Certificates of Designation for two new classes of Preferred Stock – Series C Preferred, authorized 1,000,000 18,000,000 In connection with the Merger with HyEdge, on September 15, 2021, the Company issued 1,000,000 Additionally, the Company issued 3,054 During the year ended December 31, 2022, 1,295 On July 22, 2022, the Company entered a Memorandum of Understanding (“MOU”) with Bear Face Capital LLC (“Bear Face”) and Concorde Consulting Corp (“Concorde”) for an influx of capital. In accordance with the terms of the MOU, Gail Levy and James C. Sanborn returned 999,999 shares of Series C Preferred stock to the Company. 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. Impact of above arrangement was recognized in the three months ended March 31, 2023. During the nine months period ended September 30, 2023, 1,300 As of September 30, 2023, 999,999 17,994,351 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 – INCOME TAXES The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During the current period, the Company incurred a net loss and therefore has no tax liability. The Company has U.S. federal and state net operating loss carryovers (“NOL’s”) of approximately $ 16 13 The significant components of deferred income tax assets at September 30, 2023 and December 31, 2022 were as follows: Schedule of components of deferred income tax asset September 30, 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 $ – $ – 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 no current income. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 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 (other than those disclosed in Note 5 and Note 8) are disclosed below: During the period ended September 30, 2023, the Company received funds, totaling $ 465,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through November 14, 2023, 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. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying (a) condensed consolidated balance sheet at December 31, 2022, has been derived from audited financial statements and (b) condensed consolidated unaudited financial statements as of September 30, 2023 and 2022, 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, 2022 (the “2022 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2023. 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, 2023, are not necessarily indicative of the results of operations expected for the year ending December 31, 2023. These consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) and are expressed in United States dollars. These consolidated financial statements include the accounts of HFactor Inc. and its wholly owned subsidiary, HyEdge, Inc., a Delaware corporation. All inter-company balances and transactions have been eliminated on consolidation. |
Going Concern | Going Concern The financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding the Company’s recurring losses, working capital deficiency or accumulated deficit. As of September 30, 2023, the Company had $ 124,708 It 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 profitability. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. |
Cash | Cash For purposes of reporting cash flows, the Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2023 and December 31, 2022, the Company held a cash balance of $ 124,708 148,055 |
Revenue Recognition | Revenue Recognition Revenue from sales of the Company’s products is recorded when title and risk of loss have passed to the buyer and criteria for revenue recognition is met. The Company sells its products to individual consumers and resellers upon receipt of a written order. The Company has a limited return policy for defective items that requires that buyers give the Company notice within 30 days after receipt of the products. Due to the immaterial quantities of returned products historically, for the periods ended September 30, 2023 and 2022, the Company recognized revenue at the time of delivery without providing any reserve. |
Accounts Receivable | Accounts Receivable Accounts receivable represents 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 September 30, 2023 and December 31, 2022, the allowance for doubtful accounts was no |
Inventories | Inventories Inventories are stated at the lower of cost (on a first-in, first-out basis) or market value. The stated cost is comprised of finished goods of HFactor ® hydrogen infused drinking water, its related raw material and spare parts for machinery. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated annually and are based on the Company’s business plan and from feedback from customers and the product development team. As of September 30, 2023 and December 31, 2022, the inventory reserves were no |
Fixed Assets | Fixed Assets Fixed assets are stated at cost, less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which is generally three to five years The Company will periodically evaluate whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising costs for the periods ended September 30, 2023 and 2022 were $ 45,586 107,342 |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period, which includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, 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. ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions. This first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. Based on 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, 2018 through 2022, The Company does not expect any changes in its unrecognized tax benefits in the current year. The Company’s policy for recording interest and penalties related to unrecognized tax benefits is to record such expenses as a component of current income tax expense. As of June 30, 2023 and December 31, 2022 the Company has no accrued interest or penalties related to uncertain tax positions. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. The accounting estimates that require management’s most subjective judgments include: income taxes, including the estimate of the annual effective tax rate at interim periods and evaluation of uncertain tax positions; the valuation of acquired intangible assets, impairment assessment, and going concern assessment. As of September 30, 2023, there continues to be significant global macroeconomic and geopolitical uncertainty which may impact the Company’s business, results of operations, and financial condition. As a result, many of the Company’s estimates and judgments require increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, the Company’s estimates may change materially in future periods. |
Research and Development Expense | Research and Development Expense Costs related to research and development, which primarily consists of consulting for logo and packaging design, are charged to expense as incurred. The Company has no |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share The Company computes loss per common share, in accordance with FASB ASC Topic 260, Earnings Per Share, |
Stock Based Compensation | Stock Based Compensation The Company applies the fair value method of ASC 718, Compensation-Stock Compensation |
Fair Value | Fair Value FASB ASC 820, Fair Value Measurements and Disclosure Level 1 — Level 2 — Level 3 — The carrying 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. The fair value of the Company’s debt approximated the carrying value of the Company's debt as of September 30, 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. ASU 2021-08 is effective for annual periods beginning after December 15, 2022, and interim periods within those years, and was adopted by the Company on July 1, 2023. The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements. In August 2023, the FASB issued ASU 2023-05, “Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. ASU 2023-05 provides decision-useful information to a joint venture’s investors and reduces diversity in practice by requiring that a joint venture apply a new basis of accounting upon formation. As a result, a newly formed joint venture, upon formation, would initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). ASU 2023-05 is effective prospectively for all joint ventures with a formation date on or after January 1, 2025, and early adoption is permitted. The Company does not expect the standard to have a material effect on its consolidated financial statements. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. |
FIXED ASSETS, NET (Tables)
FIXED ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Schedule of fixed assets September 30, December 31, 2023 2022 Machinery and equipment $ 556,261 $ 577,645 Construction in progress 3,089 3,089 Less accumulated depreciation (349,090 ) (382,543 ) Fixed assets net $ 210,260 $ 198,192 |
NOTES PAYABLE-THIRD PARTIES (Ta
NOTES PAYABLE-THIRD PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of third party convertible notes payable | Schedule of third party convertible notes payable September 30, December 31, 2023 2022 Convertible promissory note with interest at 8 0.01 June 30, 2022 $ 121,369 $ 121,369 $ 250,000 10 May 27, 2022 0 250,000 250,000 $ 152,000 10 July 22, 2022 0 152,000 152,000 $ 252,000 10 October 4, 2022 0 252,000 252,000 Unsecured promissory note for finder’s fee due with interest at 10 1,000 May 1, 2022 75,663 72,197 Total Notes Payable-Third Parties $ 851,032 $ 847,566 |
NOTES PAYABLE - RELATED PARTY (
NOTES PAYABLE - RELATED PARTY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Payable - Related Party | |
Schedule of notes payable related parties | Schedule of notes payable related parties September 30, December 31, 2023 2022 Secured Promissory Note – RP, dated September 30, 2019 Note accrues interest at 10% per anum, due and payable on July 1, 2022 (Currently in default) (A) $ 405,918 $ 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 Other Notes Payable-Related Party(Currently in default) (A) 9,313 9,313 Total Notes Payable-Related Party $ 605,231 $ 605,231 |
GOVERNMENT DEBT (Tables)
GOVERNMENT DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Government Debt | |
Schedule of future maturities of debt | Schedule of future maturities of debt Period Ending September 30, 2024 $ – 2025 – 2026 – 2027 – Thereafter 150,000 Total Principal Payments $ 150,000 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Liabilities | |
Schedule of asset measured at fair value | Schedule of asset measured at fair value Quoted 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: September 30, 2023 $ 801,449 $ – $ – $ 801,449 December 31, 2022 $ 801,449 $ – $ – $ 801,449 |
Summary of changes in fair value of liability | Summary of changes in fair value of liability Period Ended Year Ended September 30, December 31, 2023 2022 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 $ 801,449 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of deferred income tax asset | Schedule of components of deferred income tax asset September 30, 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 $ – $ – |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||
Cash | $ 124,708 | $ 148,055 | |
Allowance for doubtful accounts | 0 | 0 | |
Inventory reserves | $ 0 | $ 0 | |
Estimated useful lives of the assets | three to five years | ||
Advertising costs | $ 45,586 | $ 107,342 | |
Research and development | $ 0 | $ 0 |
FIXED ASSETS, NET (Details - Fi
FIXED ASSETS, NET (Details - Fixed Assets, Net) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
Machinery and equipment | $ 556,261 | $ 577,645 |
Construction in progress | 3,089 | 3,089 |
Less accumulated depreciation | (349,090) | (382,543) |
Fixed assets net | $ 210,260 | $ 198,192 |
FIXED ASSETS, NET (Details Narr
FIXED ASSETS, NET (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 33,453 | $ 48,648 |
NOTES PAYABLE-THIRD PARTIES (De
NOTES PAYABLE-THIRD PARTIES (Details - Convertible notes payable) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Total notes payable | $ 851,032 | $ 847,566 |
Convertible Promissory Note 1 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 8% | |
Share price | $ 0.01 | |
Maturity date | Jun. 30, 2022 | |
Total notes payable | $ 121,369 | 121,369 |
Convertible Promissory Note 2 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Maturity date | May 27, 2022 | |
Total notes payable | $ 250,000 | 250,000 |
Face amount | 250,000 | |
Unamortized discount | $ 0 | |
Convertible Promissory Note 3 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Maturity date | Jul. 22, 2022 | |
Total notes payable | $ 152,000 | 152,000 |
Face amount | 152,000 | |
Unamortized discount | $ 0 | |
Convertible Promissory Note 4 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Maturity date | Oct. 04, 2022 | |
Total notes payable | $ 252,000 | 252,000 |
Face amount | 252,000 | |
Unamortized discount | $ 0 | |
Unsecured Promissory Note 5 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Maturity date | May 01, 2022 | |
Total notes payable | $ 75,663 | $ 72,197 |
Monthly payments | $ 1,000 |
NOTES PAYABLE-THIRD PARTIES (_2
NOTES PAYABLE-THIRD PARTIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | ||||||
Warrant liability | $ 335,651 | |||||
Derivative liability | $ 0 | $ 0 | $ 654,000 | |||
Amortization of debt discount | $ 0 | $ 72,420 | $ 0 | $ 383,426 | ||
Convertible Notes Payable [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Number of warrant issued for the right to purchase | 250,000 | 250,000 | ||||
Exercise price | $ 1 | $ 1 | ||||
Convertible Notes Payable One [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Number of warrant issued for the right to purchase | 300,000 | 300,000 | ||||
Exercise price | $ 0.55 | $ 0.55 | ||||
Convertible Notes Payable Two [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Number of warrant issued for the right to purchase | 300,000 | 300,000 | ||||
Exercise price | $ 0.55 | $ 0.55 | ||||
Convertible Notes [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Amortization of debt discount | $ 0 | $ 383,426 |
NOTES PAYABLE - RELATED PARTY_2
NOTES PAYABLE - RELATED PARTY (Details - Notes Payable Related Party) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Total Notes Payable-Related Party | $ 605,231 | $ 605,231 | |
Secured Promissory Note [Member] | |||
Debt Instrument [Line Items] | |||
Total Notes Payable-Related Party | [1] | 405,918 | 430,116 |
Secured Promissory Note One [Member] | |||
Debt Instrument [Line Items] | |||
Total Notes Payable-Related Party | [1] | 100,000 | 100,000 |
Secured Promissory Note Two [Member] | |||
Debt Instrument [Line Items] | |||
Total Notes Payable-Related Party | [1] | 90,000 | 90,000 |
Other Notes Payable Related Party [Member] | |||
Debt Instrument [Line Items] | |||
Total Notes Payable-Related Party | [1] | $ 9,313 | $ 9,313 |
[1]Secured by all of Company’s accounts receivable and inventory. |
GOVERNMENT DEBT (Details - Gove
GOVERNMENT DEBT (Details - Government debt) | Sep. 30, 2023 USD ($) |
Government Debt | |
2024 | $ 0 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
Thereafter | 150,000 |
Total Principal Payments | $ 150,000 |
GOVERNMENT DEBT (Details Narrat
GOVERNMENT DEBT (Details Narrative) - Economic Injury Disaster Loan [Member] | Jun. 02, 2021 USD ($) |
Short-Term Debt [Line Items] | |
Face amount | $ 150,000 |
Interest rate | 3.75% |
Periodic payment | $ 731 |
Received an advance from customer | $ 10,000 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details - Asset measured at fair value) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative Liabilities | $ 801,449 | $ 801,449 |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative Liabilities | $ 801,449 | $ 801,449 |
DERIVATIVE LIABILITIES (Detai_2
DERIVATIVE LIABILITIES (Details - Changes in fair value of liability) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative Liabilities | ||
Derivative liability, beginning balance | $ 801,449 | $ 793,997 |
Aggregate fair value of conversion features upon issuance | 0 | 0 |
Fair value of derivatives reclassified to equity | 0 | 0 |
Net transfer into level 3 | 0 | 0 |
Fair value of warrants netted against common stock issued for stock | 0 | 0 |
Change in fair value of conversion features | 0 | 7,452 |
Change in fair value of warrant and stock option derivative liabilities | 0 | 0 |
Derivative liability, ending balance | $ 801,449 | $ 801,449 |
DERIVATIVE LIABILITIES (Detai_3
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Derivative Liabilities | |||
Derivative Liability, Current | $ 801,449 | $ 801,449 | $ 793,997 |
MERGER AND RELATED TRANSACTIO_2
MERGER AND RELATED TRANSACTIONS (Details Narrative) - Target Companies [Member] - shares | 12 Months Ended | |
Aug. 06, 2021 | Dec. 31, 2021 | |
Common Stock [Member] | ||
Business Acquisition [Line Items] | ||
Number of shares issued on acquision | 30,895,530 | 30,197,888 |
Series C Preferred Stock [Member] | ||
Business Acquisition [Line Items] | ||
Number of shares issued on acquision | 1,000,000 | 30,197,888 |
Series D Preferred Stock [Member] | ||
Business Acquisition [Line Items] | ||
Number of shares issued on acquision | 3,054 | 30,197,888 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |||||||
Jan. 03, 2022 | Dec. 15, 2021 | Dec. 10, 2021 | Oct. 27, 2021 | Sep. 15, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Aug. 06, 2021 | |
Class of Stock [Line Items] | |||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||
Common stock, shares issued | 50,467,414 | 49,766,164 | |||||||
Common stock, shares outstanding | 50,467,414 | 49,766,164 | |||||||
Proceeds from sale equity | $ 650,000 | $ 650,000 | $ 0 | $ 1,120,000 | |||||
Number of shares issued on sale | 400,000 | 650,000 | 650,000 | ||||||
Preferred stock, shares authorized | 19,000,000 | 19,000,000 | |||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Common Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Proceeds from sale equity | $ 1,420,000 | ||||||||
Number of shares issued on sale | 1,420,000 | ||||||||
Number of shares issued | 701,250 | ||||||||
Series C Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | ||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Preferred stock unissued | 999,999 | ||||||||
Series C Preferred Stock [Member] | Hy Edge [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares acquired | 1,000,000 | ||||||||
Series D Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares issued | 1,300 | ||||||||
Preferred stock, shares authorized | 18,000,000 | 18,000,000 | 18,000,000 | ||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Preferred stock unissued | 17,994,351 | ||||||||
Series D Preferred Stock [Member] | Leak Out Agreement [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares issued | 1,295 | ||||||||
Series D Preferred Stock [Member] | Hy Edge [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares acquired | 3,054 | ||||||||
Chief Executive Officer [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares retired | 26,910,000 |
INCOME TAXES (Details - Deferre
INCOME TAXES (Details - Deferred Income Tax Asset) - USD ($) | Sep. 30, 2023 | Dec. 31, 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 | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 16,000,000 | $ 13,000,000 |
Uncertain tax positions | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Related Party Transactions [Abstract] | |
Proceeds from Other Payables Related Party | $ 465,000 |