UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: March 31, 2015

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

Commission File Number: 333-138927

HYDROGEN FUTURE CORP.

(Exact Name of registrant as specified in its charter)

Nevada	20-5277531
(State or other Jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

2525 Robinhood Street, Suite 1100

Houston, TX 77005

(Address of principal executive offices)

(713) 465-1001

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer	o		Accelerated Filer	o
Non-Accelerated Filer	o		Smaller Reporting Company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of May 13, 2015, there were 674,553,006 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.		3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		30

Item 3. Quantitative and Qualitative disclosures about Market Risk.		36

Item 4. Controls and Procedures.		36

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.		37

Item 1A. Risk Factors.		37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		37

Item 3. Defaults Upon Senior Securities.		37

Item 4. Mine Safety Disclosures.		37

Item 5. Other Information.		37

Item 6. Exhibits.		37

Signatures		38

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Hydrogen Future Corp.

(A Development Stage Company)

Balance Sheets

	March 31,			September 30,
	2015			2014
	(unaudited)
Assets

Current assets
Cash	$	9,810		$	31,033
Inventory		2,031			712
Total current assets		11,841			31,745

Non-current assets
Property and equipment - net		164,173			181,259
Note Receivable		47,005			47,005
Debt issue costs - net		1,020			20,288
Goodwill		3,353,156			3,353,156
Total Non-Current Assets		3,565,354			3,601,708

Total assets	$	3,577,195		$	3,633,453

Liabilities and Stockholders' (Deficit)

Current Liabilities
Accounts payable and accrued liabilities	$	156,985		$	165,991
Accounts payable - former Officer		415,719			415,719
Accrued interest payable		410,133			379,092
Notes/Advances payable - related party		27,173			27,173
Derivative liability		1,989,528			243,809
Convertible debt - net		733,793			442,609
Non-convertible debt from Hydra Acquistion		981,508			981,508
Total current liabilities		4,714,840			2,655,901

Stockholders' Equity
Preferred stock, Series A, $0.001 par value, 200,000,000 shares authorized; 100,000,000 issued and outstanding at March 31, 2015 and September 30, 2014		100,000			100,000
Preferred stock,Series B, $0.001 par value, 1 share authorized; 1 share and 0 shares issued and outstanding at March 31, 2015 and September 30, 2014, respectively		-			-
Common stock, $0.001 par value, 10,000,000,000 shares authorized; 234,657,616 and 8,911,263 issued and outstanding at March 31, 2015 and September 30, 2014, respectively		234,658			8,912
Additional paid-in capital		13,834,427			13,832,548
Deficit accumulated during the development stage		(15,307,235	)		(12,964,414	)
Accumulated other comprehensive income		505			505
Total Stockholders' Equity		(1,137,645	)		977,552

Total liabilities and stockholders' (deficit)	$	3,577,195		$	3,633,453

Hydrogen Future Corp.

(A Development Stage Company)

Statements of Operations

(Unaudited)

	Three Months Ended March 31						June 21, 2006 (inception) through
	2015			2014			March 31, 2015

Expenses
General and Administrative Expenses	$	134,175		$	5,349,454		$	8,903,232
Issuance of Common Stock to settle a prior liability		-			-			117,000
Impairment of software		-			-			1,035,027
Total		134,175			5,349,454			10,055,256

Other Income/(Expense)
Interest expense		(156,055	)		(176,507	)		(1,185,936	)
Derivative expense		(159,390	)		(1,067,424	)		(4,494,367	)
Change in fair value of derivative liability		(1,127,383	)		917,897			2,829,486
Loss on Retirement of Debt		(68,560	)		(1,825,104	)		(2,437,230	)
Tax refunds		-			-			36,071
Total Other (Expense) - net		(1,511,388	)		(2,151,139	)		(5,251,976	)

Net Income (Loss)	$	(1,645,563	)	$	(7,500,593	)	$	(15,307,235	)

Net loss per common share - basic	$	(0.03	)	$	(18.31	)

Net loss per common share - diluted	$	(0.03	)	$	(9.26	)

Weighted average number of common shares outstanding
during the period/year - basic		55,656,550			409,578

Weighted average number of common shares outstanding
during the period/year - diluted		56,056,550			809,578

Hydrogen Future Corp.

(A Development Stage Company)

Statements of Operations

(Unaudited)



	Six Months Ended March 31						June 21, 2006 (inception)
	2015			2014			through December 30, 2014

Expenses
General and Administrative Expenses	$	251,406		$	5,579,440		$	8,903,232
Issuance of Common Stock to settle a prior liability		-			-			117,000
Impairment of software		-			-			1,035,027
Total		251,406			5,579,440			10,055,259

Other Income/(Expense)
Interest expense		(341,899	)		(280,017	)		(1,185,936	)
Derivative expense		(241,041	)		(2,119,601	)		(4,494,367	)
Change in fair value of derivative liability		(1,423,351	)		3,258,449			2,829,486
Loss on Retirement of Debt		(85,124	)		(1,999,367	)		(2,437,230	)
Tax refunds		-			-			36,071
Total Other (Expense) - net		(2,091,415	)		(1,140,537	)		(5,251,976	)

Net Income (Loss)	$	(2,342,821	)	$	(6,719,977	)	$	(15,307,235	)

Net loss per common share - basic	$	(0.07	)	$	(19.24	)

Net loss per common share - diluted	$	(0.07	)	$	(8.97	)

Weighted average number of common shares outstanding
during the period/year - basic		32,043,335			349,183

Weighted average number of common shares outstanding
during the period/year - diluted		32,443,335			749,183

Hydrogen Future Corp.

Statement of Stockholder's Equity

From the Period of Inception to March 31, 2015

(Unaudited)


	Common Stock, $0.001 Par Value				Series A Preferred Stock, $0.001 Par Value				Series B Preferred Stock, $0.001 Par Value
	Shares		Amount		Shares		Amount		Shares		Amount		Additional Paid-In Capital		Deficit Acquired During Development Stage			Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity (Deficit)


Proceeds from the Issuance of founders stock- ($62.50/share)		80	$	0		-	$	-		-	$	-		5,000	$	-		$	-	$	5,000


Proceeds from the Issuance of founders stock- ($62.50/share)		120		0		-		-		-		-		15,000		-					15,000


Net loss- Inception (June 21, 2006) to September 30, 2006		-		-		-		-		-		-		-		(2,631	)		-		(2,631	)

Balance- September 30, 2006		200		0		-		-		-		-		20,000		(2,631	)		-		17,369


Proceeds from the Issuance of common stock- ($500/share)		164		0		-		-		-		-		82,000		-			-		82,000


Net loss for the year ended September 30, 2007		-		-		-		-		-		-		-		(16,960	)		-		(16,960	)

Balance- September 30, 2007		364		0		-		-		-		-		102,000		(19,591	)		-		82,409


Net loss for the year ended September 30, 2008		-		-		-		-		-		-		-		(18,199	)		-		(18,199	)

Balance- September 30, 2008		364		0		-		-		-		-		102,000		(37,790	)		-		64,210


Net loss for the year ended September 30, 2009		-		-		-		-		-		-		-		(19,076	)		-		(19,076	)

Balance- September 30, 2009		364		0		-		-		-		-		102,000		(56,866	)		-		45,134



Proceeds from the Issuance of common stock- ($81,250/share)	2	0	-	-	-	-	162,500	-		-		162,500


Common stock issued to acquire software ($110,000/share)	13	0	-	-	-	-	1,380,876	-		-		1,380,876


Proceeds from the Issuance of common stock- ($100,000/share)	2	0	-	-	-	-	200,000	-		-		200,000


Common stock issued for consulting services ($100,000/share)	0	0	-	-	-	-	16,000	-		-		16,000


Common stock issued for consulting services ($112,500/share)	1	0	-	-	-	-	135,000	-		-		135,000


Net loss for the year ended September 30, 2010	-	-	-	-	-	-	-	(351,790	)	-		(351,790	)

Foreign Currency translation adjustment	-	-	-	-	-	-	-	-		(3,079	)	(3,079	)

Balance- September 30, 2010	382	0	-	-	-	-	1,996,376	(408,656	)	(3,079	)	1,584,641


Proceeds from the Issuance of common stock- ($40,000/share)	3	0	-	-	-	-	99,999	-		-		100,000


Proceeds from the Issuance of common stock- ($25,000/share)	1	0	-	-	-	-	15,000	-		-		15,000

Debt discount on convertible notes- Original Issue Discount	-	-	-	-	-	-	27,122	-		-		27,122

Debt issue costs- warrants	-	-	-	-	-	-	26,901	-		-		26,901



Common stock issued for conversion of Note ($2,789/share)	9		0		-	-	-	-	24,990		-		-		24,990


Net loss for the year ended September 30, 2011	-		-		-	-	-	-	-		(3,024,617	)	-		(3,024,617	)

Foreign Currency translation adjustment	-		-		-	-	-	-	-		-		9,234		9,234

Balance- September 30, 2011	394		0		-	-	-	-	2,190,388		(3,433,273	)	6,155		(1,236,729	)

Share Rescission	(22	)	(0	)					(89,936	)					(89,936	)


Net income for the year ended September 30, 2012	-		-		-	-	-	-	-		694,279		-		694,279

Foreign Currency translation adjustment	-		-		-	-	-	-	-		-		(5,650	)	(5,650	)

Balance- September 30, 2012	372		0		-	-	-	-	2,100,452		(2,738,994	)	505		(638,037	)

Share Issuance upon default of
debt- ($488/share)	120		0		-	-	-	-	58,500		-		-		58,500

Issuance of Shares to Officers for
Compensation- ($400/share)	256		0		-	-	-	-	102,596		-				102,596

Shares issuance upon conversion
of debt- ($4,988/share)	48		0		-	-	-	-	237,575		-		-		237,575

Common stock issued upon
conversion of insider debt	3		0		-	-	-	-	(0	)	-		-		0

Shares issued for consulting
services- ($388/share)	1		0		-	-	-	-	452		-		-		452



Issuance of 100,000,000 shares of Preferred Stock to Officers- ($.0031/share)	-	-	100,000,000	100,000	-	-	210,000	-		-	310,000


Net loss for the year ended September 30, 2013	-	-	-	-	-	-	-	(2,421,145	)	-	(2,421,145	)

Balance- September 30, 2013	800	1	100,000,000	100,000	-	0	2,709,575	(5,160,139	)	505	(2,350,058	)


Shares issuance upon conversion of debt, accrued interest and related share issuance expenses	7,867,943	7,868	-	-	-	-	3,616,231	-		-	3,624,098


Shares issued to Management for Compensation on December 26, 2013 at $.065	2,880	3	-	-	-	-	44,997	-		-	45,000


Shares issued to Management for Compensation on January 27, 2014 at $.0521	400,000	400	-	-	-	-	5,209,600	-		-	5,210,000


Shares issued in settlement for prior unrecorded obligation for equipment purchase	120,000	120	-	-	-	-	116,880				117,000

Shares issued for consulting services	200,000	200					39,800				40,000


Debt Issue Costs											37,875							37,875

Sale of common shares	320,000		320								7,670							7,990

Issuance of 1 shares of Preferred Stock, Series B to American Security Research Company				-		-	1		-		2,049,920							2,049,920


Net loss for the year ended September 30, 2014
	-		-	-		-	-		-		-		(7,804,274	)		-		(7,804,274	)

Balance- September 30, 2014	8,911,623		8,912	100,000,000	$	100,000	1		-		13,832,548		(12,964,414	)		505		977,551

Shares issuance upon conversion of debt, accrued interest and related share issuance expenses
	225,745,933		225,746	-		-	-		-		1,879							227,625

Issuance of fractional shares associated with the reverse split	60		0	-		-	-		-		-		-					0

Net loss for the six months ended March 31, 2015				-		-	-		-				(2,342,821	)				(2,342,821	)

	234,657,616	$	234,658	100,000,000	$	100,000	1	$	-	$	13,834,427	$	(15,307,235	)	$	505	$	(1,137,646	)

Hydrogen Future Corp.

(A Development Stage Company)

Statements of Cash Flows

(Unaudited)

							June 21, 2006
	Six Months Ended March 31,						(Inception) to
	2015			2014			March 31, 2015

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,342,821	)	$	(6,719,976	)	$	(15,307,235	)
Adjustments to reconcile net loss
to net cash provided by (used in) operating activities:
Share based payments		-			5,255,000			5,907,549
Impairment of Software					-			1,035,027
Derivative expense		241,041			2,119,601			4,494,367
Depreciation		19,890			17,066			489,104
Amortization of debt issue cost		19,768			7,156			88,256
Amortization of debt discount		279,356			225,023			862,261
Amortization of Original Issue Discount		(85	)		17,250			36,058
Change in fair value of derivative liabilities		1,423,351			(3,258,449	)		(2,829,486	)
Accrued interest on Retired debt		31,587			-			67,661
Fees on debt conversions		10,154			9,375			30,299
Loss on Retirement of Debt		85,124			1,999,367			2,437,230
Loss on Issuance of Common Stock to settle a prior liability		-			-			117,000
Issuance of Common stock for consulting agreements		-			-			48,000
Changes in operating assets and liabilities:					-
(Increase) decrease in other receivables		-			-			-
(Increase) decrease in Inventory		(1,319	)		-			(2,031	)
Increase (decrease) in accounts payable and accrued expense		(9,006	)		-			156,985
Increase in accounts payable - related party		-			-			415,719
Increase in working capital from acquisition		-			-			(319,630	)
Increase in accrued interest		31,041			30,218			410,133
Net cash provided by (used in) operating activities		(211,918	)		(290,843	)		(1,862,731	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Note receivable Acquired in Acquistion		-			-			(47,005	)
Cash acquired in Acquisition		-			-			402
Purchase of property and equipment		(2,805	)		-			(307,428	)
Net cash used in investing activities		(2,805	)		-			(354,031	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party notes/advances		-			-			31,586
Proceeds from convertible notes payable		44,000			170,000			917,178
Notes Issued for Professional services		150,000			150,000			718,727
Repayment of related party notes/advances		-			-			(968	)
Cash paid as debt offering costs		(500	)		-			(24,500	)
Proceeds from issuance of common stock					-			587,490
Net cash provided by financing activities		193,500			320,000			2,229,513


Net (Decrease) in Cash		(21,223	)		29,157			12,751
Effect of Exchange Rates on Cash								(2,941	)

Cash - Beginning of Period/Year		31,033			(0	)		-

Cash - End of Period/Year	$	9,810		$	29,157		$	9,810

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash paid during the period/year for:
Interest	$	-		$	-		$	-
Income Taxes	$	-		$	-		$	-


SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Debt converted to common shares	$	63,087		$	-			913,644
Common stock issued to acquire software	$	-		$	-			1,380,876
Notes payable acquired in acquisition								984,008
Preferred stock issued to officers								310,000
Debt discount recorded on convertible debt accounted for as a derivative liability	$	193,500		$	320,000			1,241,375
Debt discount recorded on convertible debt accounted for as a derivative liability - original issue discount	$	500		$	27,122			38,375
Debt issue costs - warrants	$	0		$	0			26,901

Hydrogen Future Corp.

(A Development Stage Company)

Notes to Financial Statements

March 31, 2015

(Unaudited)

Note 1 Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information.

The financial information as of September 30, 2014 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the years ended September 30, 2014 and 2013. The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the years ended September 30, 2014 and 2013.

Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. 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 interim results for the three months ended March 31, 2015 are not necessarily indicative of results for the full fiscal year.

Note 2 Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Company History

We were incorporated in the State of Nevada on June 21, 2006, as El Palenque Nercery, Inc. On June 30, 2006, we changed our name to El Palenque Vivero, Inc., and on March 23, 2010, we changed our name to A5 Laboratories Inc. On April 8, 2010, we effectuated a forward split of our issued shares of common stock on the basis of 10-for-1. On October 10, 2013, we changed our name to Hydrogen Future Corporation. On December 27, 2013, our stock trading symbol was changed from AFLB.OB to HFCO.OB, and on January 27, 2015, we effectuated a reverse split of our common stock on a 1:500 basis . On April 21, 2014, the Company completed the acquisition of Hydra Fuel Cell Corporation (“Hydra”) from American Security Resources Corporation (Pink Sheets: ARSC). On January 12. 2015, we effectuated a reverse split of our common stock on a 1:250 basis. Hydra has developed advanced hydrogen fuel cell technology which it initially intends to deploy as residential and small commercial grid replacement for electric generation. Our business offices are located at 2525 Robinhood Street, Suite 1100, Houston TX and our telephone number is (713) 465-1001.

The Company intended to provide contract research and laboratory services to the pharmaceutical industry. This part of the Company is currently inactive, and we are concentrating on our fuel cell operation. We strongly suggest you read our 8-K filed April 28, 2014 about the Hydra acquisition and our form 10-K for the year ended September 30, 2013 filed on January 21, 2015 in addition to this filing to better understand the Company’s new direction. Both filings were with the Securities and Exchange Commission and can be found at www.SEC.gov .

Hydrogen Future Corp.

(A Development Stage Company)

Notes to Financial Statements

December 31, 2014

(Unaudited)

At the end of this quarter, the company therefore had two segments, 1) Fuel cell technology and 2) Contract research and laboratory services. See Note 13 for Segment reporting. See Note 7 for the accounting for Goodwill.

The Company’s fiscal year end is September 30.

Development Stage

The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan.

Risks and Uncertainties

The Company intends to operate in an industry that is subject to rapid change. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks, including the potential risk of business failure.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Such estimates for the periods ended March 31, 2015 and 2014, and assumptions affect, among others, the following:

●	estimated carrying value, useful lives and impairment of property and equipment;

●	estimated fair value of derivative liabilities;

●	estimated valuation allowance for deferred tax assets; and

●	estimated fair value of share based payments

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

Cash and Cash Equivalents

The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. At March 31, 2015 and September 30, 2014, the Company had no cash equivalents.

At March 31, 2015, the Company had $9,810 in cash.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At March 31, 2015 and September 30, 2014, there were no balances that exceeded the federally insured limit.

Property and Equipment

Property and equipment (including related party purchases) is stated at cost, less accumulated depreciation computed on a straight-line basis over the estimated useful lives. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized when deemed material. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

Hydrogen Future Corp.

(A Development Stage Company)

Notes to Financial Statements

December 31, 2014

(Unaudited)

Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company recognized an impairment of $1,035,027 during the year ended September 30, 2011. See Note 6.

Beneficial Conversion Feature

For conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”) and related debt discount.

When the Company records a BCF, the relative fair value of the BCF would be recorded as a debt discount against the face amount of the respective debt instrument. The discount would be amortized to interest expense over the life of the debt.

Derivative Liabilities

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as a Change in fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.

Debt Issue Costs and Debt Discount

The Company paid debt issue costs, and recorded debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized over the life of the debt. Debt issue costs are included in general and administrative expense and debt discount amortization is included in interest expense.

Original Issue Discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount (“OID”). An OID is the difference between the original cash proceeds and the amount of the note upon maturity. The Note is originally recorded for the proceeds received. The OID is expensed into interest expense pro-rata over the term of the Note, and upon maturity, the back value of the Note shall equal the proceeds due.

Share-Based Payments

Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded as a component of general and administrative expense. During the six months ended March 31, 2015, there were no payments of this kind.

Hydrogen Future Corp.

(A Development Stage Company)

Notes to Financial Statements

December 31, 2014

(Unaudited)

Earnings per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

Prior to the issuance of the Company’s Preferred Stock during the calendar year ending September 30, 2013, the Company did not have any dilutive securities. As such, a separate computation of diluted earnings (loss) per share was not presented. Commencing with the issuance of the Preferred Stock, the Company now has dilutive securities, and a separate computation of diluted earnings (loss) per share is now presented.

The Company had the following potential common stock equivalents at March 31, 2015 and September 30, 2014:

	December 31, 2014		September 30, 2014

Warrants		63		63
Convertible debt (1)		87,538,367		9,931,803
Total common stock equivalents		187,538,430		9,931,864

(1)	The Company has identified eight and ten debt holders as of March 31, 2015 and September 30, 2014, respectively, who cannot exceed ownership in the Company of 9.99%. Each investor is limited to 23,465,762 and 993,180 shares at March 31, 2015 and September 30, 2014 respectively.

Fair Value of Financial Instruments

The carrying amounts of the Company’s short-term financial instruments, other receivables, accounts payable and accrued liabilities, approximate fair value due to the relatively short period to maturity for these instruments.

Foreign Currency Transactions

The Company’s functional currency had been the Canadian dollar and its reporting currency was the U.S. Dollar. All transactions which had been initiated in Canadian Dollars were translated to U.S. Dollars in accordance with ASC 830-10-20 “Foreign Currency Translation” as follows:

(i)	Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date;

(ii)	Equity at historical rates; and

(iii)

Revenue and expense items at the average exchange rate prevailing during the period.

Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income (loss). Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income (loss).

Currently, the Company’s functional and reporting currency is the U.S. dollar, and there are no more financial currency transactions, which require separate accounting.

Hydrogen Future Corp.

(A Development Stage Company)

Notes to Financial Statements

December 31, 2014

(Unaudited)

Comprehensive Income (Loss)

Comprehensive income or loss is comprised of net earnings or loss and other comprehensive income or loss, which includes certain changes in equity, excluded from net earnings, primarily foreign currency translation adjustments.

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The guidance in ASU 2011-04 changes the wording used to describe the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements, including clarification of the FASB's intent about the application of existing fair value and disclosure requirements and changing a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this ASU should be applied prospectively and are effective for interim and annual periods beginning after December 15, 2011. Early adoption by public entities is not permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial position or results of operations.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The guidance in ASU 2011-05 applies to both annual and interim financial statements and eliminates the option for reporting entities to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. This ASU also requires consecutive presentation of the statement of net income and other comprehensive income. Finally, this ASU requires an entity to present reclassification adjustments on the face of the financial statements from other comprehensive income to net income. The amendments in this ASU should be applied retrospectively and are effective for fiscal year, and interim periods within those years, beginning after December 15, 2011. The Company has adopted this guidance in these financial statements.

Note 3 Going Concern

As reflected in the accompanying financial statements, the Company had a net loss of $2,342,821 for the six months ended December 31, 2014, and utilized $211,918 in cash for operations. The Company also has a working capital deficit of $4,702,999 and a deficit accumulated during the development stage of $13,661,672 at March 31, 2015. In addition, the Company is in the development stage and has not yet generated any revenues. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue its operations is dependent on Management's plans, which include potential asset acquisitions, mergers or business combinations with other entities, further implementation of its business plan and continuing to raise funds through debt or equity raises. The Company will likely rely upon equity financing in order to ensure the continuing existence of the business.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Hydrogen Future Corp.

(A Development Stage Company)

Notes to Financial Statements

March 31, 2015

(Unaudited)

Note 4 Fair Value of Financial Assets and Liabilities

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

●	Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

●	Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

●	Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

At March 31, 2015, the fair value of financial instruments measured on a recurring basis includes derivative liabilities, determined based on level two inputs consisting of quoted prices in active markets for identical assets. The carrying amount reported for accounts payable, accrued liabilities, and notes payable approximates fair value because of the short-term maturity of these financial instruments.

The Company has a derivative liability measured at fair market value on a recurring basis. Consequently, the Company had changes in fair value reported in the statements of operations, which were attributable to the change in market value relating to the liability for the six months ended March 31, 2015.

The following is the Company’s derivative liability measured at fair value on a recurring basis at:

	December 31, 2014		September 30, 2014
Level 1	$	-	$	-
Level 2 – Derivative Liability		1,989,528		243,809
Level 3		-		-
Total	$	1,989,528	$	243,809

Note 5 Receivables

(A) Note Receivables- Non-current

On the closing of the purchase of Hydra, the Company paid on behalf of the seller ,American Security Research Company, to the State of Nevada $47,005 to execute the transfer. This expense will ultimate be borne by the seller and the Company has recorded a receivable to reflect this.

Hydrogen Future Corp.

(A Development Stage Company)

Notes to Financial Statements

March 31, 2015

(Unaudited)

Note 6 Property and Equipment

Property and equipment consists of the following:

	March 2015			September 2014			Estimated Useful Lives

Software	$	1,380,876			1,380,876			3
Leasehold improvements (1)		144,802			144,802			10
Lab equipment (2)		106,705			106,705			10
Technical equipment (3)		15,824			15,824			5
Office equipment		40,141			37,336			5
		1,688,348			1,685,543

Less: Accumulated depreciation		(489,148	)		(469,257	)
Less: Impairment		(1,035,027	)		(1,035,027	)
Property and equipment – net	$	164,173			181,259

(1) See Note 8(B) – related party

(2) See below related to related party purchases

(3) Technical equipment- This represents equipment used to test fuel cell viability

Note 7 Goodwill

The Company recorded goodwill as a result of its business acquisition of Hydra(“Hydra Acquisition”) . Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible assets acquired. In the Hydra Acquisition , the objective was to expand the Company’s product offerings and customer base by entering into a new line of business. The Company determined the value of the goodwill by analyzing comparable companies with similar product lines. Based upon that analysis, the Company determined that the value of the Goodwill was $3,353,156 as follows:

Hydrogen Future Corp.

(A Development Stage Company)

Notes to Financial Statements

March 31, 2015

(Unaudited)

Assets acquired:
Cash	$	402
Other receivables		3,529
Total	$	3,931
Liabilities acquired:
Promissory note payable	$	984,008
Accrued interest payable		235,972
Other current liabilities		87,187
Additional paid-in capital		2,049,920
Total	$	3,357,087
Goodwill	$	3,353,156

The Company tests goodwill for impairment on a quarterly basis. At March 31, 2015, the company determined that there was no impairment.

Note 8 Notes Payable

(A) Related Party

The following is a summary of the Company’s related party liabilities:

	March 31, 2015			September 30, 2013
Notes payable (1)	$	20,915		$	20,915
Advances (2)		7,226			7,226
Less: payments		(968	)		(968	)
Total related party liabilities	$	27,173		$	27,173

(1) The note is non-interest bearing, unsecured, and due on demand.

(2) The advances are non-interest bearing, unsecured, and due on demand.

(B) Convertible debt-net

The following is a summary of the Company's outstanding convertible debt as of March 31, 2015:

Hydrogen Future Corp.

(A Development Stage Company)

Notes to Financial Statements

March 31, 2015

(Unaudited)

Summary of Notes Issued

(as of March 31, 2015)





Date of Issuance	Original Amount		Conversions through March 31, 2015		Accrued Original Issue Discount, if any	Gross Amount outstanding at March 31, 2015		Remaining Discount		Net Amount		Type of Note

2-Apr-13		5,000		0			5,000		0		5,000		a
31-May-13		5,500		0			5,500		460		5,040		a
31-May-13		5,500		0			5,500		0		5,500		a
23-Feb-11		300,000		300,000			0		0		0		a
1-Oct-12		165,000		165,000			0		0		0		b
1-Aug-13		25,000		14,400			10,600		0		10,600		b
1-Sep-13		25,000		25,000			0		0		0		b
1-Oct-13		25,000		25,000			0		0		0		b
1-Nov-13		25,000		0			25,000		0		25,000		b
1-Dec-13		25,000		0			25,000		0		25,000		b
1-Jan-14		25,000		0			25,000		0		25,000		b
1-Feb-14		25,000		25,000			0		0

Hydrogen Future Corp 10-Q