Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 19, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
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 | (917) | |
Local Phone Number | 765-5977 | |
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 | 48,151,164 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash | $ 22,036 | $ 250,854 |
Accounts receivable, net of allowance for doubtful accounts | 157,120 | 75,737 |
Inventories | 393,683 | 468,913 |
Prepaid expenses and other current assets | 142,795 | 53,085 |
Total Current Assets | 715,634 | 848,589 |
Fixed Assets, net of accumulated depreciation | 208,807 | 257,219 |
Intangible Asset, net of accumulated amortization | 703,083 | 0 |
Total Assets | 1,627,524 | 1,105,808 |
Current Liabilities | ||
Accounts payable and accrued expenses | 3,258,354 | 3,097,807 |
Accrued Interest | 339,437 | 212,108 |
Current portion of notes payable-third party, net of debt discount | 841,908 | 463,221 |
Notes payable-related party | 741,641 | 641,641 |
Government loans payable | 160,000 | 160,000 |
Derivative liabilities | 801,449 | 793,997 |
Warrant liability, net of unamortized discount | 0 | 335,651 |
Total Current Liabilities | 6,142,789 | 5,704,425 |
Long-Term Liabilities | ||
Note payable - Third party | 0 | 0 |
Note payable - Related party | 0 | 0 |
Total Long-Term Liabilities | 0 | 0 |
Total Liabilities | 6,142,789 | 5,704,425 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Deficit | ||
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 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 | (704,327) | (2,873,543) |
Accumulated deficit | (3,861,407) | (1,774,108) |
Total Stockholders' Deficit | (4,515,265) | (4,598,617) |
Total Liabilities and Stockholders' Deficit | 1,627,524 | 1,105,808 |
Series C Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, value | 1,000 | 10,003 |
Series D Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, value | $ 3 | $ 3 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred Stock, Shares Authorized | 219,000,000 | 219,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 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 | 48,151,164 | 47,631,164 |
Common stock, shares outstanding | 48,151,164 | 47,631,164 |
Common Stock, Shares Subscribed but Unissued | 1,315,000 | 400,000 |
Series C Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Issued | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Outstanding | 1,000,000 | 1,000,000 |
Series D Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 18,000,000 | 18,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Issued | 3,354 | 3,054 |
Preferred Stock, Shares Outstanding | 3,354 | 3,054 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 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 | 0 | 124,406 | 7,452 | 124,406 |
Derivative (income) expense | 0 | (314,665) | 0 | (97,654) |
Interest expense | 66,830 | 50,851 | 157,472 | 57,411 |
Gain on forgiveness of debt | 0 | (113,799) | 0 | (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) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Earnings Per Share, Basic | $ (0.0130) | $ (0.0072) | $ (0.0434) | $ (0.0142) |
Earnings Per Share, Diluted | $ (0.0130) | $ (0.0072) | $ (0.0434) | $ (0.0142) |
Weighted Average Number of Shares Outstanding, Basic | 48,151,164 | 64,225,201 | 48,070,608 | 50,803,918 |
Weighted Average Number of Shares Outstanding, Diluted | 48,151,164 | 64,225,201 | 48,070,608 | 50,803,918 |
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, 2020 | $ 44,093 | $ (44,093) | $ (181,415) | $ (181,415) | |||
Beginning balance , shares at Dec. 31, 2020 | 44,093,276 | ||||||
Net loss | (9,234) | (9,234) | |||||
Ending balance, value at Mar. 31, 2021 | $ 44,093 | (44,093) | (190,649) | (190,649) | |||
Ending balance , shares at Mar. 31, 2021 | 44,093,276 | ||||||
Beginning balance, value at Dec. 31, 2020 | $ 44,093 | (44,093) | (181,415) | (181,415) | |||
Beginning balance , shares at Dec. 31, 2020 | 44,093,276 | ||||||
Net loss | (718,908) | ||||||
Ending balance, value at Sep. 30, 2021 | $ 44,093 | (44,093) | (900,323) | (900,323) | |||
Ending balance , shares at Sep. 30, 2021 | 44,093,276 | ||||||
Beginning balance, value at Mar. 31, 2021 | $ 44,093 | (44,093) | (190,649) | (190,649) | |||
Beginning balance , shares at Mar. 31, 2021 | 44,093,276 | ||||||
Net loss | (246,231) | (246,231) | |||||
Ending balance, value at Jun. 30, 2021 | $ 44,093 | (44,093) | (436,880) | (436,880) | |||
Ending balance , shares at Jun. 30, 2021 | 44,093,276 | ||||||
Net loss | (463,443) | (463,443) | |||||
Ending balance, value at Sep. 30, 2021 | $ 44,093 | (44,093) | (900,323) | (900,323) | |||
Ending balance , shares at Sep. 30, 2021 | 44,093,276 | ||||||
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 | $ 400 | $ (400) | |||||
Issuance of subscribed shares , shares | 400,000 | (400,000) | |||||
Cancellation of shares | $ (400) | 400 | |||||
Cancellation of shares , shares | (400,000) | ||||||
Cancellation of warrants in exchange for preferred stock | 335,651 | 335,651 | |||||
Cancellation of warrants in exchange for preferred stock , shares | 200 | ||||||
Net loss | (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 | (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 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 | $ 45 | $ (45) | |||||
Issuance of preferred and subscribed shares, shares | 100 | 45,000 | (45,000) | ||||
Cancellation of shares | |||||||
Net loss | (655,430) | (655,430) | |||||
Ending balance, value at Jun. 30, 2022 | $ 1,000 | $ 3 | $ 48,151 | (2,018,012) | (3,236,411) | (5,205,269) | |
Ending balance , shares at Jun. 30, 2022 | 1,000,000 | 3,354 | 48,151,164 | ||||
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 | (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 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 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 | 0 | (97,654) |
Gain on forgiveness of debt | 0 | (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 | 0 | 0 |
NET CASH PROVIDED BY (USED) IN INVESTING ACTIVITIES | 0 | 0 |
FINANCING ACTIVITIES: | ||
Sales of common stock | 1,120,000 | 0 |
Proceeds from convertible notes payable | 0 | 152,000 |
Proceeds from Loans Payable, related Party | 100,000 | 0 |
Loan receivable | 0 | (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 | 0 |
Cash and cash equivalents - Ending | 22,036 | 38,200 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | 30,143 | 0 |
Cash paid for income taxes | 0 | 0 |
NON-CASH TRANSACTIONS: | ||
Common stock and Preferred stock issued in merger in exchange for net assets of HyEdge, Inc. | 0 | 3,457,668 |
Preferred stock issued in exchange for cancellation of Warrant Liabilities, net of unamortized discount | 335,651 | 0 |
Common stock subscribed in exchange for assignment of Intellectual Property | $ 715,000 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021. On May 28, 2021, David Cicalese (“Cicalese”), an officer and Board member of Ficaar entered into an agreement with Gail Levy whereby Cicalese agreed to sell 29,900,000 shares, representing a majority interest in Ficaar, to Levy. Acting as the majority shareholder of the Company, Levy then caused Ficaar to enter into an Agreement and Plan of Merger (the “Merger Agreement”) between the Company, FCAA Merger Sub I, Inc. (“Merger Sub”), a Delaware corporation and wholly owned subsidiary of Ficaar, and HyEdge, Inc. (“Target” or “HyEdge”), a Delaware corporation, wherein Merger Sub and Target would merge, with Target surviving the transaction as a wholly owned subsidiary of Ficaar (the “Merger”). The Merger Agreement was executed on August 6, 2021 and the Merger closed on August 9, 2021. The Merger effected a change in control and was accounted for as a "reverse acquisition" whereby Target is the accounting acquiror for financial statement purposes. Accordingly, for all periods subsequent to the Closing Date, the financial statements of the Company reflect the historical financial statements of HyEdge and any operations of the Company subsequent to the Merger. Immediately following the Merger, the business of 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 through its wholly owned subsidiary, HyEdge, Inc., a Delaware Corporation, engages in the manufacturing, marketing, distribution and selling of HFactor ® |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
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, 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. 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, 2022, the Company had $ 22,036 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, 2022 and December 31, 2021, the Company held a cash balance of $ 22,036 250,854 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, 2022 and 2021, the Company recognized revenue at the time of delivery without providing any reserve. Accounts Receivable Accounts receivable represents amounts due from the 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, 2022 and December 31, 2021, the allowance for doubtful accounts were 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 ® 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. Intangible Assets 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 1.00 715,000 10 Advertising Costs Advertising costs are expensed as incurred. Advertising costs for the periods ended September 30, 2022 and 2021 were $ 107,342 0 Income Taxes The Company accounts for income taxes under ASC 740, Income Taxes 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, 2017 through 2021, 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 September 30, 2022 and December 31, 2021, 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. 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, 2022 and December 31, 2021. Factors that the Company considered when estimating the fair value of its debt included market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and term of debt. Recent Accounting Pronouncements We have considered all other 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. |
FIXED ASSETS, NET
FIXED ASSETS, NET | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS, NET | NOTE 3 – FIXED ASSETS, NET Fixed assets, net consist of the following: Schedule of fixed assets, net September 30, December 31, 2022 2021 Machinery and equipment $ 577,645 $ 577,645 Construction in progress 3,089 3,089 Less accumulated depreciation (371,927 ) (323,515 ) Fixed assets net $ 208,807 $ 257,219 Depreciation expense for the periods ended September 30, 2022 and 2021 was $ 48,648 35,705 |
NOTES PAYABLE-THIRD PARTIES
NOTES PAYABLE-THIRD PARTIES | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Convertible promissory note with interest at 8 0.01 June 30, 2022 0 $ 121,369 $ 80,394 $ 250,000 10 May 27, 2022 0 250,000 176,805 $ 152,000 10 July 22, 2022 0 152,000 71,875 $ 252,000 10 October 4, 2022 2,770 249,230 60,098 Unsecured promissory note for finder’s fee due with interest at 10 1,000 May 1, 2022 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 1 (B) Includes a warrant for the right to purchase an additional 300,000 0.55 (C) Includes a warrant for the right to purchase an additional 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” 0 654,000 383,426 387,996 |
NOTES PAYABLE - RELATED PARTY
NOTES PAYABLE - RELATED PARTY | 9 Months Ended |
Sep. 30, 2022 | |
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, 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 (A) Secured by all of Company’s accounts receivable and inventory. (B) Includes a five (5) year common stock warrant of common stock. Warrants equal to 1% of the principal loan divided by $0.414, exercisable at the fair market value on execution date. |
GOVERNMENT DEBT
GOVERNMENT DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Government Debt | |
GOVERNMENT DEBT | NOTE 6 – GOVERNMENT DEBT Economic Injury Disaster Loan 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 3.75 731.00 10,000 Future maturities of government debt are as follows: Schedule of future maturities of debt Period Ending September 30, 2022 $ – 2023 – 2024 – 2025 – Thereafter 150,000 Total Principal Payments $ 150,000 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 and December 31, 2021 amounted to $ 801,449 793,997 Schedule of asset measured at fair value Consolidated Quoted (Level 1) Quoted (Level 2) Significant (Level 3) Derivative Liabilities: September 30, 2022 $ 801,449 $ – $ – $ 801,449 December 31, 2021 $ 793,997 $ – $ – $ 793,997 The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis: Summary of changes in fair value of liability Period Ended 2022 Year Ended 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 |
MERGER AND RELATED TRANSACTIONS
MERGER AND RELATED TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
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 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 $ 120,000 999,999 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
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: 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 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 years ended December 31, 2021, and 2020. COVID-19 In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, and has since reached multiple other countries, including the United States, resulting in government-imposed quarantines, travel restrictions and other public health safety measures in affected countries. The various precautionary measures taken by many governmental authorities around the world in order to limit the spread of COVID-19has had, and could continue to have, an adverse effect on the global markets and its economy, including on the availability and pricing of employees and resources, and other aspects of the global economy. Although the Company cannot predict the impact that the COVID-19 pandemic will have on its business or results of operations in future periods, to date, the Company’s core water product applications have been able to support the increased demand the Company has experienced. On March 11, 2020, the World Health Organization declared the ongoing COVID-19 outbreak as a global health emergency. This resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including the closure of certain non-essential businesses During the years ended December 31, 2021, and 2020, respectively, the pandemic did not have a material impact on the Company’s operations. As of December 31, 2021, and 2020, and through September 30, 2022, the Company did not observe any material impairment of its assets or a significant change in the fair value of assets due to the COVID-19 pandemic. The Company has taken steps to minimize the potential impact of the pandemic including safety measures with respect to personal protective equipment, the reduction in travel and the implementation of a virtual office including regular video conference meetings and participation in virtual customer meetings and other virtual events. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
EQUITY | NOTE 10 – EQUITY Common stock The Company has authorized 200,000,000 .001 48,151,164 47,631,164 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 1.00 400,000 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 first quarter of 2022, the Company received total proceeds of $ 370,000 370,000 1.00 45,000 During the second quarter of 2022, the Company received total proceeds of $ 150,000 150,000 1.00 During the third quarter of 2022, the Company received total proceeds of $ 600,000 600,000 1.00 Preferred Stock The Company has authorized 30,000,000 shares of $ .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 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. On June 29,2022, 100 shares of Series D Preferred Stock were issued to an investor in connection with execution of a Leak-Out Agreement. On July 28,2022, 250 350 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
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 million 13 million 2036 The significant components of deferred income tax assets at September 30, 2022 and December 31, 2021 were as follows: 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
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 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 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 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. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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, 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. 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, 2022, the Company had $ 22,036 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, 2022 and December 31, 2021, the Company held a cash balance of $ 22,036 250,854 |
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, 2022 and 2021, 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, 2022 and December 31, 2021, the allowance for doubtful accounts were 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 ® 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. |
Intangible Assets | Intangible Assets 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 1.00 715,000 10 |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising costs for the periods ended September 30, 2022 and 2021 were $ 107,342 0 |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740, Income Taxes 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, 2017 through 2021, 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 September 30, 2022 and December 31, 2021, 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. |
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, 2022 and December 31, 2021. Factors that the Company considered when estimating the fair value of its debt included market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and term of debt. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements We have considered all other 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. |
FIXED ASSETS, NET (Tables)
FIXED ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets, net | 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 |
NOTES PAYABLE-THIRD PARTIES (Ta
NOTES PAYABLE-THIRD PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of third party convertible notes payable | Schedule of third party convertible notes payable September 30, 2022 December 31, 2021 Convertible promissory note with interest at 8 0.01 June 30, 2022 0 $ 121,369 $ 80,394 $ 250,000 10 May 27, 2022 0 250,000 176,805 $ 152,000 10 July 22, 2022 0 152,000 71,875 $ 252,000 10 October 4, 2022 2,770 249,230 60,098 Unsecured promissory note for finder’s fee due with interest at 10 1,000 May 1, 2022 69,309 74,049 Total Notes Payable-Third Parties $ 841,909 $ 463,221 |
NOTES PAYABLE - RELATED PARTY (
NOTES PAYABLE - RELATED PARTY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Notes Payable - Related Party | |
Schedule of notes payable related parties | Schedule of notes payable related parties September 30, December 31, 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 (A) Secured by all of Company’s accounts receivable and inventory. (B) Includes a five (5) year common stock warrant of common stock. Warrants equal to 1% of the principal loan divided by $0.414, exercisable at the fair market value on execution date. |
GOVERNMENT DEBT (Tables)
GOVERNMENT DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Government Debt | |
Schedule of future maturities of debt | Schedule of future maturities of debt Period Ending September 30, 2022 $ – 2023 – 2024 – 2025 – Thereafter 150,000 Total Principal Payments $ 150,000 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Liabilities | |
Schedule of asset measured at fair value | Schedule of asset measured at fair value Consolidated Quoted (Level 1) Quoted (Level 2) Significant (Level 3) Derivative Liabilities: September 30, 2022 $ 801,449 $ – $ – $ 801,449 December 31, 2021 $ 793,997 $ – $ – $ 793,997 |
Summary of changes in fair value of liability | Summary of changes in fair value of liability Period Ended 2022 Year Ended 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 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Income Tax Asset | 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 $ – $ – |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jul. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 15, 2021 | |
Accounting Policies [Abstract] | |||||||
Cash | $ 22,036 | $ 22,036 | $ 250,854 | ||||
Accounts Receivable, Allowance for Credit Loss, Current | 0 | 0 | 0 | ||||
Inventory Valuation Reserves | 0 | $ 0 | $ 0 | ||||
Property, Plant and Equipment, Estimated Useful Lives | three to five years | ||||||
Acquisition of intellectual property, shares | 715,000 | ||||||
Share price | $ 1 | $ 1 | $ 1 | ||||
Acquisition of intellectual property, value | $ 715,000 | $ 715,000 | |||||
Useful life of intangible assets | 10 years | ||||||
Advertising Expense | $ 107,342 | $ 0 | |||||
Research and Development Expense | $ 0 | $ 0 |
FIXED ASSETS NET (Details - Fix
FIXED ASSETS NET (Details - Fixed Assets, Net) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
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 |
FIXED ASSETS, NET (Details Narr
FIXED ASSETS, NET (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 48,648 | $ 35,705 |
NOTES PAYABLE-THIRD PARTIES (De
NOTES PAYABLE-THIRD PARTIES (Details - Convertible notes payable) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Total notes payable | $ 841,909 | $ 463,221 |
Convertible Promissory Note 1 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate During Period | 8% | |
Shares Issued, Price Per Share | $ 0.01 | |
Debt Instrument, Maturity Date | Jun. 30, 2022 | |
Debt Instrument, Unamortized Discount | $ 0 | |
Total notes payable | $ 121,369 | 80,394 |
Convertible Promissory Note 2 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate During Period | 10% | |
Debt Instrument, Maturity Date | May 27, 2022 | |
Debt Instrument, Unamortized Discount | $ 0 | |
Total notes payable | 250,000 | 176,805 |
Debt Instrument, Face Amount | $ 250,000 | |
Convertible Promissory Note 3 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate During Period | 10% | |
Debt Instrument, Maturity Date | Jul. 22, 2022 | |
Debt Instrument, Unamortized Discount | $ 0 | |
Total notes payable | 152,000 | 71,875 |
Debt Instrument, Face Amount | $ 152,000 | |
Convertible Promissory Note 4 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate During Period | 10% | |
Debt Instrument, Maturity Date | Oct. 04, 2022 | |
Debt Instrument, Unamortized Discount | $ 2,770 | |
Total notes payable | 249,230 | 60,098 |
Debt Instrument, Face Amount | $ 252,000 | |
Unsecured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate During Period | 10% | |
Debt Instrument, Maturity Date | May 01, 2022 | |
Total notes payable | $ 69,309 | $ 74,049 |
Debt Instrument, Periodic Payment | $ 1,000 |
NOTES PAYABLE-THIRD PARTIES (_2
NOTES PAYABLE-THIRD PARTIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | |||||
Warrant liability, net of unamortized discount | $ 0 | $ 0 | $ 335,651 | ||
Warrant Liability Discount | 0 | 0 | $ 654,000 | ||
Amortization of Debt Discount (Premium) | $ 72,420 | $ 346,478 | $ 383,426 | $ 387,996 | |
Convertible Notes Payable [Member] | |||||
Short-Term Debt [Line Items] | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 250,000 | 250,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1 | $ 1 | |||
Convertible Notes Payable One [Member] | |||||
Short-Term Debt [Line Items] | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 300,000 | 300,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.55 | $ 0.55 | |||
Convertible Notes Payable Two [Member] | |||||
Short-Term Debt [Line Items] | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 300,000 | 300,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.55 | $ 0.55 | |||
Convertible Notes [Member] | |||||
Short-Term Debt [Line Items] | |||||
Amortization of Debt Discount (Premium) | $ 383,426 | $ 387,996 |
NOTES PAYABLE - RELATED PARTY_2
NOTES PAYABLE - RELATED PARTY (Details - Notes Payable Related Party) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Total Notes Payable-Related Party | $ 741,641 | $ 641,641 | |
Secured Promissory Note [Member] | |||
Debt Instrument [Line Items] | |||
Total Notes Payable-Related Party | [1] | 445,116 | 445,116 |
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],[2] | 90,000 | 90,000 |
Unsecured Promissory Note [Member] | |||
Debt Instrument [Line Items] | |||
Total Notes Payable-Related Party | 100,000 | 0 | |
Unsecured Promissory Note One [Member] | |||
Debt Instrument [Line Items] | |||
Total Notes Payable-Related Party | $ 6,525 | $ 6,525 | |
[1]Secured by all of Company’s accounts receivable and inventory.[2]Includes a five (5) year common stock warrant of common stock. Warrants equal to 1% of the principal loan divided by $0.414, exercisable at the fair market value on execution date. |
GOVERNMENT DEBT (Details - Gove
GOVERNMENT DEBT (Details - Government debt) | Sep. 30, 2022 USD ($) |
Government Debt | |
2022 | $ 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 150,000 |
Total Principal Payments | $ 150,000 |
GOVERNMENT DEBT (Details Narrat
GOVERNMENT DEBT (Details Narrative) - Economic Injury Disaster Loan [Member] | Jun. 02, 2020 USD ($) |
Short-Term Debt [Line Items] | |
Debt Instrument, Face Amount | $ 150,000 |
Debt Instrument, Interest Rate During Period | 3.75% |
Debt Instrument, Periodic Payment | $ 731 |
Customer Advances, Current | $ 10,000 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details - Asset measured at fair value) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative Liabilities | $ 801,449 | $ 793,997 |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Derivative Liabilities | $ 801,449 | $ 793,997 |
DERIVATIVE LIABILITIES (Detai_2
DERIVATIVE LIABILITIES (Details - Changes in fair value of liability) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Derivative Liabilities | ||
Derivative Liability, Noncurrent | $ 793,997 | $ 0 |
Aggregate fair value of conversion features upon issuance | 0 | 918,403 |
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 | 7,452 | (124,406) |
Change in fair value of warrant and stock option derivative liabilities | 0 | 0 |
Derivative Liability, Noncurrent | $ 801,449 | $ 793,997 |
DERIVATIVE LIABILITIES (Detai_3
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative Liabilities | ||
Derivative Liability, Current | $ 801,449 | $ 793,997 |
MERGER AND RELATED TRANSACTIO_2
MERGER AND RELATED TRANSACTIONS (Details Narrative) | 1 Months Ended | 9 Months Ended | ||
Aug. 06, 2021 | Jul. 22, 2022 USD ($) shares | Sep. 30, 2022 USD ($) | Dec. 31, 2021 shares | |
Business Combination and Asset Acquisition [Abstract] | ||||
Debt Conversion, Converted Instrument, Rate | 0.7 | |||
Shares, Issued | 30,197,888 | |||
Annual salary | $ | $ 120,000 | $ 120,000 | ||
Shares returned | 999,999 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended |
Jul. 22, 2022 | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Annual salary | $ 120,000 | $ 120,000 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Dec. 15, 2021 | Oct. 27, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jul. 28, 2022 | Jul. 22, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Common stock, shares issued | 48,151,164 | 48,151,164 | 47,631,164 | |||||||
Common stock, shares outstanding | 48,151,164 | 48,151,164 | 47,631,164 | |||||||
Proceeds from Issuance or Sale of Equity | $ 650,000 | $ 370,000 | $ 1,120,000 | $ 0 | ||||||
Stock Issued During Period, Shares, Issued for Services | 650,000 | 370,000 | ||||||||
Share Price | $ 1 | $ 1 | $ 1 | |||||||
Common Stock Subscribed Shares | 400,000 | 45,000 | ||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Preferred Stock, Shares Authorized | 219,000,000 | 219,000,000 | 219,000,000 | |||||||
Series C Preferred Stock [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 | 1,000,000 | |||||||
Preferred Stock, Shares Issued | 1,000,000 | 1,000,000 | 1,000,000 | |||||||
Series D Preferred Stock [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Preferred Stock, Shares Authorized | 18,000,000 | 18,000,000 | 18,000,000 | |||||||
Preferred Stock, Shares Issued | 3,354 | 3,354 | 3,054 | |||||||
Series D Preferred Stock [Member] | Investor One [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Preferred Stock, Shares Issued | 250 | |||||||||
Series D Preferred Stock [Member] | Investor Two [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Preferred Stock, Shares Issued | 350 | |||||||||
Common Stock [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Proceeds from Issuance or Sale of Equity | $ 600,000 | $ 150,000 | ||||||||
Stock Issued During Period, Shares, Issued for Services | 600,000 | 150,000 | ||||||||
Share Price | $ 1 | $ 1 | $ 1 | |||||||
Chief Executive Officer [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Shares Issued, Shares, Share-based Payment Arrangement, Forfeited | 26,910,000 |
INCOME TAXES (Details - Deferre
INCOME TAXES (Details - Deferred Income Tax Asset) - USD ($) | Sep. 30, 2022 | Dec. 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 | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Operating Loss Carryforwards | $ 16,000,000 | $ 13,000,000 |
Operating Loss Carryforwards Expiration Dates | 2036 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 1 Months Ended |
Jul. 22, 2022 shares | |
Related Party Transactions [Abstract] | |
Acquisition of intellectual property, shares | 715,000 |