UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

~~☒ Quarterly~~For ~~report pursuant to Section 13 or 15(d) of~~ the ~~Securities~~quarterly ~~Exchange~~period ~~Act~~ended ofMarch ~~1934~~31, 2022

~~For~~☐ QUARTERLY ~~quarterly~~REPORT ~~period~~PURSUANT ~~ended~~TO ~~September~~SECTION 13 ~~30,~~OR ~~2021~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~☐ Transition~~For ~~report pursuant to Section 13 or 15(d) of~~ the ~~Securities~~transition ~~Exchange~~period ~~Act~~from of_______________ to ~~1934~~__________

~~For~~Commission ~~the~~file ~~transition~~number: ~~period from __________ to __________.~~000-1144546

~~Commission~~HFactor, ~~file number: 000-33467~~Inc.

FICAAR, INC

(Exact name of registrant as specified in its charter)

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

244 Madison Ave., #1249 ~~New York, New York 10016 (Address of principal executive offices) (Zip Code)~~

New York, NY 10016

(Address of principal executive offices)

(516) 647-5171

(Registrant’s telephone number, including area code)

~~N/A~~_______________________________________

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

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

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

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

~~Indicate~~Common by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐Stock

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

~~Large~~Indicate ~~accelerated~~by ~~filer~~check ☐mark ~~Smaller~~if ~~reporting~~the ~~company~~registrant ☒is ~~Non~~a well-~~accelerated~~known ~~Filer~~seasoned ☒issuer, ~~Emerging~~as ~~growth~~defined ~~company~~in ☒Rule ~~Accelerated~~405 ~~filer~~of the Securities Act. Yes ☐ No ☒

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

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

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

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

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

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

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

Indicate by check mark whether the registrant ishas filed a ~~shell~~report ~~company~~on ~~(as~~and ~~defined~~attestation into ~~Rule~~its ~~12b-2~~management’s assessment of the ~~Exchange~~effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No ☒

AsIndicate ofby ~~November,~~check 4,mark ~~2021,~~whether ~~there~~the ~~were 47,381,164~~registrant ~~shares~~is ofa ~~Company~~shell ~~stock~~company ~~issued~~(as ~~and~~defined ~~outstanding.~~in Rule 12b-2 of the Act): Yes ☐ No ☒

~~FICAAR~~As of May 11, ~~INC~~2022 the Registrant had 48,006,164 issued and outstanding shares of common stock.

HFactor, Inc.

FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2519
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2822
Item 4.	Controls and Procedures	2822
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	3023
Item 1A.	Risk Factors	30
Item1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3023
Item 3.	Defaults Upon Senior Securities	3023
Item 4.	Mine Safety Disclosures	3023
Item 5.	Other Information	3023
Item 6.	Exhibits	3024
	Signatures	3125

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL INFORMATION

~~FICAAR~~HFACTOR, INC.

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	March 31,			December 31,
	2021			2020
	2022			2021
	-Unaudited-
ASSETS
Current Assets
Cash	$	3846,~~200~~733		$	–250,854
Accounts receivable, net of allowance for doubtful accounts		~~106~~128,~~832~~675			–75,737
Inventories		~~406~~533,~~449~~700			–468,913
Prepaid expenses and other current assets		5936,~~306~~758			–53,085
Total Current Assets		~~610~~745,~~787~~866			–848,589
Fixed Assets, net of accumulated depreciation		~~278~~238,~~241~~320			–257,219
Total Assets	$	~~889~~984,~~028~~186		$	–1,105,808
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses	$	3,~~292~~227,~~981~~448		$	353,~~931~~097,807
Accrued Interest		~~163~~248,~~007~~737			30212,~~763~~108
Current portion of notes payable-third party, net of debt discount		~~293~~604,~~341~~750			–463,221
Note payable-related party		641,641			–641,641
Government loans payable		160,000			–160,000
Derivative liabilities		~~528~~801,~~733~~449			–793,997
Warrant liability, net of unamortized discount		~~181,543~~–			–335,651
Total Current Liabilities		5,~~261~~684,~~246~~025			665,~~694~~704,425
Long-Term Liabilities
Notes payable - third party		–			108,196
Note payable - Third party		–			–
Note payable - related party		–			6,525
Note payable - Related party		–			–
Total Long-Term Liabilities		–			~~114,721~~–
Total Liabilities		5,~~261~~684,~~246~~025			~~181~~5,~~415~~704,425
Commitments and Contingencies		–			–
Stockholders' Deficit
Preferred stock 30,000,000, $.001 par value shares authorized, shares issued and outstanding as follows:
Preferred stock 219,000,000, $.001 par value shares authorized, shares issued and outstanding as follows:		–			–
Series C voting, convertible Preferred stock, $0.001 par value 1,000,000 shares authorized; 1,000,000 and no shares issued and outstanding September 30, 2021 and December 31, 2020; respectively		1,000			–
Series C voting, convertible Preferred stock, $.001 par value 1,000,000 shares authorized; 1,000,000 shares issued and outstanding March 31, 2022 and December 31, 2021; respectively		1,000			1,000
Series D voting, convertible Preferred stock, $0.001 par value 18,000,000 shares authorized; 3,054 and no shares issued and outstanding September 30, 2021 and December 31, 2020; respectively		3			–
Series D non-voting, convertible Preferred stock, $.001 par value 18,000,000 shares authorized; 3,254 and 3,054 shares issued and outstanding March 31, 2022 and December 31, 2021; respectively		3			3
Common stock 200,000,000, $.001 par value shares authorized; 74,291,164 and 44,093,276 shares issued and outstanding at September 30, 2021 and December 31, 2020; respectively		74,291			44,093
Common stock 200,000,000, $.001 par value shares authorized; 47,956,164 and 47,631,164 shares issued and outstanding at March 31, 2022 and December 31,2021; respectively		47,956			47,631
Additional paid-in capital		(3,547,189	)		(44,093	)
Common stock subscribed, 45,000 and 400,000 shares issued and outstanding at March 31, 2022 and December 31,2021; respectively		45			400
Accumulated deficit		(900,323	)		(181,415	)
Additional paid-in capital		(2,167,862	)		(2,873,543	)
Total Stockholders' Deficit		(4,372,218	)		(181,415	)
Accumulated deficit		(2,580,981	)		(1,774,108	)
Total Liabilities and Stockholders' Deficit	$	889,028		$	–
Total Stockholders' Deficit		(4,699,839	)		(4,598,617	)
Total Liabilities and Stockholders' Deficit	$	984,186		$	1,105,808

Going Concern (Note 2)

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

~~FICAAR~~HFACTOR, INC.

Condensed Consolidated Statements of Operations

-Unaudited-


	Three Months			Three Months
	Ended			Ended
	March 31, 2022			March 31, 2021
	-Unaudited-			-Unaudited-
REVENUES

Sales, net	$	595,623		$	–

TOTAL REVENUES		595,623			–

COST OF REVENUES		275,716			–

GROSS PROFIT		319,907			–

OPERATING EXPENSES
Manufacturing expenses		55,067			–
Sales and marketing		581,042			–
General and administrative		295,105			7,033

Total Expenses		931,214			7,033

Loss from Operations		(611,307	)		(7,033	)

Other (income) expense
Amortization of debt discount		142,687			–
Change in Fair Market Value of derivatives		7,452			–
Interest expense		45,427			2,201
Other (income) expense		–			–

Total Other (income) expense		195,566			2,201

Net Loss	$	(806,873	)	$	(9,234	)

Net Loss per common shares outstanding-Basic and diluted:
Net Loss per share attributable to common stockholders - basic	$	(0.0168	)	$	(0.0002	)
Net Loss per share attributable to common stockholders - diluted	$	(0.0168	)	$	(0.0002	)

Weighted Average Shares Outstanding - basic		48,006,164			44,093,276
Weighted Average Shares Outstanding - diluted		48,006,164			44,093,276

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020
REVENUES
Sales, net	$	513,174		$	–		$	513,174		$	–
TOTAL REVENUES		–			–			–			–
COST OF REVENUES		246,307			–			246,307			–
GROSS PROFIT		266,867			–			266,867			–
OPERATING EXPENSES
Manufacturing expenses		41,226			–			41,226			–
Sales and marketing		358,270			–			358,270			–
General and administrative		234,310			3,360			247,168			10,512
Total expenses		633,806			3,360			646,664			10,512
Loss from operations		(366,939	)		(3,360	)		(379,797	)		(10,512	)
Other (income) expense
Amortization of debt discount		346,478			–			387,996			–
Derivative (income) expense		(314,665	)		–			(97,654	)		–
Change in FMV of derivatives		124,406			–			124,406			–
Interest expense		50,851			2,145			57,411			6,390
Gain on forgiveness of debt		(113,799	)		–			(113,799	)		–
Other (income) expense		3,233			–			(19,249	)		–
Total Other (income) expense		96,504			2,145			339,111			6,390
Net Loss	$	(463,443	)	$	(5,505	)	$	(718,908	)	$	(16,902	)
Net Loss per common shares outstanding - Basic and diluted:
Net Loss per share attributable to common stockholders	$	(0.0072	)	$	(0.0001	)	$	(0.0142	)	$	(0.0004	)
Weighted average shares outstanding		64,225,201			44,093,276			50,803,918			44,093,276

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

~~FICAAR~~HFACTOR, Inc.

Consolidated Statements of Stockholders' Deficit

-Unaudited-

	Series C				Series D										Additional
	Series C Preferred Stock				Series D Preferred Stock				Common Stock
	Preferred Stock				Preferred Stock				Common stock						Paid-In			Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Total
Balance as of December 31, 2020		–	$	–		–	$	–		44,093,276		$	44,093
Balance as of December 31, 2018		–	$	–	$	–	$	–		44,093,276		$	44,093		$	(44,093	)	$	(117,398	)	$	(117,398	)
Net loss for the 3 months ended March 31, 2021		–		–		–		–		–			–
Merger of HyEdge, Inc.		–		–		–		–		–			–			–			–			–
Balance as of March 31, 2021		–	$	–		–	$	–		44,093,276		$	44,093
Net loss for the nine months ended September 30, 2019		–		–		–		–		–			–			–			(28,822	)		(28,822	)
Balance as of December 31, 2020		–	$	–		–	$	–		44,093,276		$	44,093
Balance as of September 30, 2019		–	$	–	$	–	$	–		44,093,276		$	44,093		$	(44,093	)	$	(146,220	)	$	(146,220	)
Merger of HyEdge, Inc.		1,000,000		1,000		3,054		3		30,197,888			30,198
Balance as of December 31, 2019		–		–		–		–		44,093,276			44,093			(44,093	)		(156,166	)		(156,166	)
Sale of common shares		–		–		–		–		250,000			250
Net loss for the nine months ended September 30, 2020		–		–		–		–		–			–			–			(16,902	)		(16,902	)
Cancellation of shares		–		–		–		–		(26,910,000	)		(26,910	)
Balance as of September 30, 2020		–	$	–	$	–	$	–		44,093,276		$	44,093		$	(44,093	)	$	(173,068	)	$	(173,068	)
Net loss for the year ended December 31, 2021		–		–		–		–		–			–
Balance as of December 31, 2020		–		–		–		–		44,093,276			44,093			(44,093	)		(181,415	)		(181,415	)
Balance as of December 31, 2021		1,000,000		1,000		3,054		3		47,631,164			47,631
Merger of HyEdge, Inc.		1,000,000		1,000		3,054		3		30,197,888			30,198			(3,503,096	)		–			(3,471,895	)
Sale of common shares		–		–		–		–		325,000			325
Net loss for the nine months ended September 30, 2021		–		–		–		–		–			–			–			(718,908	)		(718,908	)
Issuance of subscribed shares		–		–		–		–		400,000			400
Balance as of September 30, 2021		1,000,000	$	1,000	$	3,054	$	3		74,291,164		$	74,291		$	(3,547,189	)	$	(900,323	)	$	(4,372,218	)
Cancellation of shares		–		–		–		–		(400,000	)		(400	)
Cancellation of warrants in exchange for preferred stock		–		–		200		–		–			–
Net loss for the 3 months ended March 31, 2022		–		–		–		–		–			–
Balance as of March 31, 2022		1,000,000	$	1,000		3,254	$	3		47,956,164		$	47,956


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

Balance as of December 31, 2020	$	–		$	–		$	(44,093	)	$	(181,415	)	$	(181,415	)

Net loss for the 3 months ended March 31, 2021		–			–			–			(9,234	)		(9,234	)

Balance as of March 31, 2021		–		$	–		$	(44,093	)	$	(190,649	)	$	(190,649	)

Balance as of December 31, 2020	$	–			–		$	(44,093	)	$	(181,415	)	$	(181,415	)

Merger of HyEdge, Inc.		–			–			(3,478,800	)		–			(3,447,599	)

Sale of common shares		400,000			400			649,350			–			650,000

Cancellation of shares		–			–			–			–			(26,910	)

Net loss for the year ended December 31, 2021		–			–			–			(1,592,693	)		(1,592,693	)

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

Sale of common shares		45,000			45			369,630			–			370,000

Issuance of subscribed shares		(400,000	)		(400	)		–			–			–

Cancellation of shares		–			–			400			–			–

Cancellation of warrants in exchange for preferred stock		–			–			335,651			–			335,651

Net loss for the 3 months ended March 31, 2022		–			–			–			(806,873	)		(806,873	)

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

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

~~FICAAR~~HFACTOR, INC.

Condensed Consolidated Statements of Cash Flows

-Unaudited-


	Three Months			Three Months
	Ended			Ended
	March 31, 2022			March 31, 2021
	-Unaudited-			-Unaudited-

OPERATING ACTIVITIES:
Net loss	$	(806,873	)	$	(9,234	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		18,899			–
Amortization of debt discount on convertible notes		142,687			–
Change in fair market value of derivative liabilities		7,452			–
Changes in operating assets and liabilities:
Accounts receivable		(52,938	)		–
Inventory		(64,787	)		–
Prepaid expenses		16,326			–
Accounts payable and accrued expenses		128,486			11,658
Accrued interest		36,627			(96	)

NET CASH PROVIDED BY (USED) IN OPERATING ACTIVITIES		(574,121	)		2,329

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

FINANCING ACTIVITIES:
Sales of common stock		370,000			–
Proceeds (Payments) from loans payable		–			(2,329	)

NET CASH PROVIDED BY (USED) IN FINANCING ACTIVITIES		370,000			(2,329	)

Increase (decrease) in cash and cash equivalents		(204,121	)		–

Cash and cash equivalents - Beginning		250,854			–

Cash and cash equivalents - Ending	$	46,733		$	–

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

NON-CASH TRANSACTIONS:
Preferred stock issued in exchange for cancellation of Warrant Liabilities, net of unamortized discount	$	335,651		$	–
Expenses paid by a non-related party subject to a note	$	–		$	2,329

	Nine Months			Nine Months
	Ended			Ended
	September 30, 2021			September 30, 2020
OPERATING ACTIVITIES:
Net loss	$	(718,908	)	$	(16,902	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		21,332			–
Amortization of debt discount on convertible notes		387,996			–
Derivative expense (income)		(97,654	)		–
Change in fair market value of derivative liabilities		124,406			–
Gain on forgiveness of debt		(113,799	)		–
Changes in operating assets and liabilities:
Accounts receivable		69,096			–
Inventory		(825	)		–
Prepaid expenses		(8,301	)		–
Accounts payable and accrued expenses		176,624			10,511
Accrued interest		49,233			6,391
NET CASH (USED) IN OPERATING ACTIVITIES		(110,800	)		–
CASH FLOWS FROM INVESTING ACTIVITIES:
Equipment purchase		–			–
NET CASH (USED) IN INVESTING ACTIVITIES		–			–
FINANCING ACTIVITIES:
Proceeds from convertible notes payable		152,000			–
Payments of loan payable		(3,000	)		–
NET CASH PROVIDED BY FINANCING ACTIVITIES		149,000			–
Increase (decrease) in cash and cash equivalents		38,200			–
Cash and cash equivalents - Beginning		–			–
Cash and cash equivalents - Ending	$	38,200		$	–
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	167,086		$	–
Cash paid for income taxes	$	–		$	–
NON-CASH TRANSACTIONS:
Common stock and Preferred stock issued in merger in exchange for net assets of HyEdge, Inc	$	(3,457,668	)	$	–

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

~~FICAAR~~HFACTOR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - DESCRIPTION OF BUSINESS

History

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

InOn ~~August~~May ~~2012~~28, ~~certain~~2021, ~~shareholders of~~David ~~the~~Cicalese ~~Ficaar~~ (~~the~~ “~~Shareholders~~Cicalese”), an ~~representing~~officer ~~a majority of the issued~~ and ~~outstanding~~Board ~~common~~member ~~stock~~ of Ficaar, entered into an agreement ~~and consummated such agreement~~ with ~~Sneaker~~Gail ~~Charmz,~~Levy ~~Inc.,~~whereby aCicalese ~~Delaware~~agreed ~~corporation,~~to ~~whereby~~sell 7229,~~020~~900,000 shares, ~~of common~~representing ~~stock~~a ofmajority ~~Ficaar~~interest ~~were~~in ~~assigned~~Ficaar, ~~by the Shareholders~~ to ~~Sneaker Charmz~~Levy. ~~Thereafter,~~Acting ~~Sneaker~~as ~~Charmz,~~the ~~Ficaar~~majority ~~and~~shareholder ~~David~~of ~~Cicalese consummated a transaction where~~ the ~~shares~~Company, ofLevy ~~common~~then ~~stock~~caused of Ficaar ~~owned~~to byenter ~~Sneaker~~into ~~Charmz~~an ~~were transferred~~ Agreement and ~~assigned~~Plan toof ~~Mr.~~Merger ~~Cicalese~~(the ~~and~~“Merger ~~Mr. Cicalese~~Agreement”) ~~transferred~~between ~~his~~the ~~ownership~~Company, ofFCAA ~~Sneaker~~Merger ~~Charmz~~Sub toI, ~~Ficaar~~Inc. ~~Thus~~(“Merger Sub”), ~~Sneaker~~a ~~Charmz~~Delaware corporation ~~became~~and a wholly owned subsidiary of Ficaar, and MrHyEdge, Inc. ~~Cicalese~~ ~~then~~(“Target” ~~owning~~or ~~85%~~“HyEdge”), ofa ~~the~~Delaware ~~total~~corporation, wherein ~~issued~~Merger Sub and ~~outstanding~~Target ~~common~~would ~~stock~~merge, ofwith ~~Ficaar.~~Target Insurviving ~~addition,~~ the ~~Company~~transaction ~~divested~~as ~~Medical Cannabis Network, Inc.,~~ a ~~company~~wholly ~~incorporated~~owned ~~pursuant~~subsidiary ~~to the laws~~ of ~~Delaware and~~ Ficaar’s ~~former~~(the ~~wholly-owned subsidiary~~“Merger”). ~~Mr. Jason Draizin~~ ~~resigned~~The asMerger anAgreement ~~officer~~was ~~and~~executed ~~member~~on ofAugust ~~Ficaar’s~~6, ~~board~~2021 ~~of directors~~ and ~~Mr.~~the ~~David~~Merger ~~Cicalese~~closed ~~(President~~on ~~and~~August ~~sole~~9, ~~member~~2021. ofThe ~~the~~Merger ~~Board of~~effected ~~Directors~~a ofchange ~~Sneaker~~in ~~Charmz)~~control and was ~~appointed~~accounted for as ~~President~~a ~~and~~"reverse aacquisition" ~~member~~whereby ofTarget is the ~~Board~~accounting ofacquiror ~~Directors~~for offinancial ~~Ficaar~~statement purposes. ~~Following~~Accordingly, for ~~the~~all ~~consummation of~~periods subsequent to the ~~Agreement~~Closing Date, ~~Ficaar~~the isfinancial ~~engaged~~statements inof the ~~business~~Company ofreflect ~~Sneaker~~the ~~Charmz,~~historical ~~the~~financial ~~development,~~statements ~~marketing~~of HyEdge and ~~sales~~any operations of ~~designer~~the ~~charms~~Company ~~for~~subsequent ~~footwear~~to the Merger.

In January 2014, Mr. David Cicalese, President, a member of the Board of Directors and majority shareholder of Ficaar, contributed 100 shares of Precious Holdings, Inc., a Delaware corporation, which consists of all of the issued and outstanding equity of Precious Holdings, Inc. Thus, Precious Holdings Inc. became a wholly owned subsidiary of the Company.

On November 16, 2014, the Company acquired 100% of the outstanding common stock of Standard Canna, Inc. (“Standard”), a Florida corporation, and its wholly owned subsidiaries, Standard Cultivation Systems Inc., a Colorado corporation; and Standard Property Group Inc., a California corporation, in exchange for 110,000 shares of common stock of the Company pursuant to a Transfer Agreement (the “Agreement”), by and among, the Company and Jonas Zetzel, sole shareholder of Standard.

On July 28, 2015, the Company transferred its ownership in Sneaker Charmz to David Cicalese, the Company’s sole officer and director and majority shareholder, in exchange for 42,000,000 shares of our common stock, which reduced Mr. Cicalese's share ownership of the Company to 30,020,000 shares of Company Common Stock. In July 2015, the Board of Directors and shareholders representing a majority of the issued and outstanding common stock of the Company appointed Dawn Cames as President of the Company and a member of its Board of Directors. In connection with Ms. Cames appointment, she was issued 1,300,000 shares of Company common stock.

On May 28, 2021, David Cicalese 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.

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - DESCRIPTION OF BUSINESS (CONTINUED)

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

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

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-19 has 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 April 20, 2020, to help ensure adequate liquidity in light of the uncertainties posed by the COVID-19 pandemic, the Company entered into a promissory note with an aggregate principal amount of $112,715 (the “Note”) in favor of Stone Bank, N.A., as lender (the “Lender”) under the Small Business Administration (the “SBA”) Paycheck Protection Program under the recently enacted Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). On April 7, 2021, the Note was fully forgiven by the SBA and the Lender in compliance with the provisions of the CARES Act (see Note 4).

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The accompanying (a) condensed consolidated balance sheet at December 31, ~~2020~~2021, has been derived from audited financial statements and (b) condensed consolidated unaudited financial statements as of ~~September~~March 3031, ~~2021~~2022 and ~~2020~~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, ~~2020~~ 2021 (the “~~2020~~2021 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”) on April 1314, ~~2021~~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 nine~~ months ended ~~September~~March 3031, ~~2021~~ 2022, are not necessarily indicative of the results of operations expected for the year ending December 31, ~~2021~~2022.

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

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 ~~development~~ ~~stage~~recurring losses, working capital deficiency or accumulated deficit.

As of ~~September~~March 3031, ~~2021~~2022, the Company had $3846,~~200~~ 733 in cash to fund its operations. The Company does not believe its current cash balance will be sufficient to allow the Company to fund its planned operating activities for the next twelve months. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. These principal factors raise ~~substantial~~ substantial doubt concerning the Company’s ability to continue as a going concern. Management has financed the Company’s operations ~~principally~~ principally through government loans, third party loans and from related parties, and through equity investments into the Company.

It is the Company’s intent to continue to attempt 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. ~~The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.~~

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~~March 31, ~~2021~~2022 and December 31, ~~2020~~2021, the ~~company~~Company held a cash balance of $3846,~~200~~733 and $ ~~-0-~~250,854, respectively.

Revenue Recognition

Revenue from sales of the Company’s products is recorded when title and risk of loss have passed to the buyer and criteria for revenue recognition is met. The Company sells its products to individual consumers and resellers upon receipt of a written order. The Company has a limited return policy for defective items that requires that buyers give the Company notice within 30 days after receipt of the products. Due to the immaterial quantities of returned products historically, for the periods ended ~~September~~March 3031, ~~2021~~2022 and ~~December 31~~2021, ~~2020,~~ the Company recognized revenue at the time of delivery without providing any reserve.

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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~~ 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~~March 3031, ~~2021~~2022 and December 31,~~2020~~ 2021, the allowance for doubtful accounts were not material.

Inventories

Inventories are stated at the lower of cost (on a first-in, first-out basis) or market value. The stated cost is comprised of finished goods of HFactor® hydrogen infused drinking water, its related raw material and spare parts for machinery. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated annually and are based on the Company’s business plan and from feedback from customers and the product development team. As of ~~September~~March 3031, ~~2021~~2022 and ~~2020~~December 31, 2021, the inventory reserves were not material.

Fixed Assets

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

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

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs for the periods ended ~~September~~March 3031, ~~2021~~2022 and ~~2020~~2021 were $~~121~~ 27,~~943~~565 and $ -0-, respectively.

Income Taxes

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

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

Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The Company's evaluation was performed for the tax years ended December 31, 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 March 31, 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.

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 not incurred any research and development for the ~~three~~periods ~~months~~ ended ~~September~~March 3031, ~~2021~~2022 and ~~2020~~2021.

Net Loss Per Share

The Company computes net income (loss) per share in accordance with ASC Topic 260, Earning per Share, formerly Statement of Accounting Standards SFAS No. 128, “Earnings per Share”, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) before and after discontinued operations, by the weighted average number of common shares outstanding (denominator) during the period, including contingently issuable shares where the contingency has been resolved. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. For the periods ended September 30, 2021 and 2020, outstanding stock options, warrants, and shares issuable upon conversion of convertible notes were anti-dilutive because of net losses, and, as such, their effect has not been included in the calculation of diluted net loss per share.

Income Taxes

The Company accounts for income taxes under ASC 740 (formerly FASB 109) “Accounting for Income Taxes”. Under ASC 740 deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates in recognized in income in the period which includes the enactment date.

In June, 2006, the Financial Accounting Standards Board issued FASB Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes” - An interpretation of FASB Statement No. 109 and codified under ASC 740. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”. This interpretation prescribed a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision taken or expected to be taken in a tax return. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures and transition.

Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions regarding recognition in financial statements. The Company’s evaluation was performed for the tax years, ended December 31, 2020, 2019, 2018, 2017 and 2016 for US federal income tax and state income taxes, the years which remain subject to examination by major tax jurisdictions as of December 31, 2020.

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basic and Diluted Net Loss Per Share

The Company computes loss per common share, in accordance with FASB ASC Topic 260, Earnings Per Share, which requires dual presentation of basic and diluted earnings per share. Basic income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding, plus the issuance of common shares, if dilutive, that could result from the exercise of outstanding stock options and warrants. No potential dilutive common shares are included in the computation of any diluted per share amount when a loss is reported.

Stock Based Compensation

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

Fair Value

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

Level 1 — Quoted market prices for identical assets or liabilities in active markets or observable inputs;

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Level 2 — Significant other observable inputs that can be corroborated by observable market data; and

Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data.

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~~March 3031, ~~2021~~2022 and December 31, ~~2020~~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 ~~2021~~2022 and ~~2020~~2021 and do not believe the adoption of such pronouncements will have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In January 2018, the FASB issued ASU 2018-01, which permits an entity to elect an optional transition practical expedient to not evaluate land easements that exist or expire before the Company's adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. On May 20, 2020, the FASB voted to delay implementing the new lease standard for non-public organizations, making their new effective date the fiscal year starting after Dec. 15, 2021. The Company intends to elect this transition provision.

NOTE 3 – FIXED ASSETS, NET

Fixed assets, net consist of the following:

Schedule of Fixed Assets, Net
Schedule of fixed assets, net
	September 30,			December 31,
	March 31,			December 31,
	2021			2020
	2022			2021
Machinery and equipment	$	577,~~145~~645		$	–577,645
Construction in progress		3,~~090~~089			–3,089
Less accumulated depreciation		(~~301~~342,~~994~~414	)		–(323,515	)
Fixed assets net	$	~~278~~238,~~241~~320		$	–257,219

Depreciation expense for the periods ended ~~September~~ March 31, ~~2021~~2022 and ~~December~~2021 ~~31, 2020~~ was $2118,~~332~~899 and $~~-0-~~35,705, respectively.

13NOTE 4 – NOTES PAYABLE-THIRD PARTIES

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 – GOVERNMENT DEBT

Paycheck Protection Program Loan

On April 20th, 2020, the Company executed a note (the “PPP Note”) for the benefit of Stone Bank, N.A. (the “Lender”) in the aggregate amount of $112,715 under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP is administered by the U.S. Small Business Administration (the “SBA”). The loan is unsecured. The interest rate of the loan is 1% per annum and accrues on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days. Commencing six months after the effective date of the PPP Note, the Company is required to pay the Lender equal monthly payments of principal and interest of $9,443.87, beginning (13) months from the month this Note is dated as required to fully amortize any unforgiven principal balance of the loan by the two-year anniversary of the effective date of the PPP Note (the “Maturity Date”). The Maturity Date can be extended to five years if mutually agreed upon by both the Lender and the Company. The PPP Note contains customary events of default relating to, among other things, payment defaults, making materially false or misleading representations to the SBA or the Lender, or breaching the terms of the PPP Note. The occurrence of an event of default may result in the repayment of all amounts outstanding under the PPP Note, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of the loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. Recent modifications to the PPP by the U.S. Treasury and Congress have extended the time period for loan forgiveness beyond the original eight-week period, making it possible for the Company to apply for forgiveness of its PPP loan. On April 7, 2021, the Company received Notice and Approval for forgiveness of payment of $112,715 and $1,083 in interest of this Note and, accordingly reflected as a Gain on Forgiveness of Debt in the accompanying financial statements.

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. The loan is secured by all tangible and intangible assets of the Company and payable over 30 years at an interest rate of 3.75 % per annum. Installment payments, including principal and interest, totaling $731.00 monthly, will begin twenty-four (24) months from the date of the Note, with first payments applied to accumulated accrued interest. As part of the loan, the Company also received an advance of $10,000 from the SBA. While the SBA refers to this program as an advance, it was written into law as a grant. This means that the amount given through this program does not need to be repaid.

Future maturities of government debt are as follows:

Schedule of Future maturities of government debt
Year Ending December 31,
2021	$	–
2022		–
2023		–
2024		–
2025		27
Thereafter		149,973
Total Principal Payments	$	150,000

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5 – NOTES PAYABLE-THIRD PARTIES

Third party convertible notes payable consists of the following:

Schedule of Third party convertible notes payable
Schedule of third party convertible notes payable
		September 30, 2021				December 31, 2020
	March 31, 2022			December 31, 2021
Convertible promissory note with interest at 8% per annum, convertible into common shares at the lesser of: (i) a 50% discount to market price for the Company’s stock or (ii) $0.01 per share. Matures on June 30, 2022, net of unamortized discount of $61,463 at September 30, 2021.		$	52,406			$	108,196
Convertible promissory note with interest at 8% per annum, convertible into common shares at the lesser of: (i) a 50% discount to market price for the Company’s stock or (ii) $0.01 per share. Matures on June 30, 2022, net of unamortized discount of $40,975 at March 31, 2022.	$	80,394		$	80,394
$250,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days a 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on May 27, 2022, unless earlier converted, net of unamortized discount of $118,200 and September 30, 2021, 2021. (A)			131,800				–
$250,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days at 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on May 27, 2022, unless earlier converted, net of unamortized discount of $28,381 at March 31, 2022. (A) (D)		221,618			176,805
$152,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days a 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on July 22, 2022, net of unamortized discount of $115,866 at September 30, 2021. (B)			36,134				–
$152,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days at 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on July 22, 2022, net of unamortized discount of $44,601 at March 31, 2022. (B) (D)		107,399			71,875
Unsecured promissory note for finder’s fee due with interest at 10% per annum, with monthly payments of $1,000. Matures May 1, 2022, or the earlier of the Company aggregate proceeds exceeding $1,000,000 from the sale of equity securities.			73,000				–
$252,000 convertible promissory notes with interest at 10% per annum, convertible into common shares at any time after 180 days at 30% discount to the lowest daily VWAP during the 10-day period immediately preceding conversion. Matures on October 4, 2022, net of unamortized discount of $129,551 at March 31, 2022. (C) (D)		122,449			60,098
Total Notes Payable-Third Parties		$	293,340			$	108,196
Unsecured promissory note for finder’s fee due with interest at 10% per annum, with monthly payments of $1,000. Matures May 1, 2022, or the earlier of the Company aggregate proceeds exceeding $1,000,000 from the sale of equity securities.		72,900			74,049
Total Notes Payable-Third Parties	$	604,750		$	463,221

(A) Includes a warrant for the right to purchase an additional 250,000 shares of Company Common Stock, subject to adjustments for anti-dilution. Each Warrant is exercisable for a period of five years from the date of issuance at an initial exercise price of $1 per share. The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. In the event the Company files a registration statement with the Securities and Exchange Commission, the Maturity Date shall be the earlier of (i) May 27, 2022; or (ii) the date on which the Company has raised at least $1,250,000 under a registration statement. Interest is payable at the Maturity Date.11

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

~~The~~(C) ~~Company~~Includes ~~allocated~~a ~~$415,608~~warrant for the right to purchase an additional 300,000 shares of ~~the~~Company ~~derivative~~Common ~~liability~~Stock, assubject ato ~~discount~~adjustments ~~against~~for ~~the~~anti-dilution. Each Warrant ~~liabilities~~is exercisable for ~~the~~a period of ~~ended~~five ~~September~~years ~~30,~~from ~~2021~~the ~~and~~date of issuance at an initial exercise price of $-0-.55 ~~for~~per ~~the~~share. ~~year~~The exercise price is also subject to adjustment ~~ended~~due ~~December~~to 31certain events, ~~2020~~including stock dividends, ~~respectively~~stock splits and recapitalizations. ~~The~~In the event the Company ~~recorded~~files ~~$167,935~~a registration statement with the Securities and $Exchange ~~-0-~~Commission, ofthe ~~interest~~Maturity ~~expense~~Date ~~pursuant~~shall tobe the ~~amortization~~earlier of (i) October 4, 2022; or (ii) the ~~note~~ ~~discounts~~date ~~during~~on which the ~~periods~~Company ~~ended~~has ~~September~~raised 30at least $1,500,000 ~~2021~~under ~~and~~a ~~2020,~~registration ~~respectively~~statement. Interest is payable at the Maturity Date

15(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 as of December 31, 2021 was written-off during the period ended March 31, 2022.

~~FICAAR~~In accordance with ASC 470-20 “Debt with Conversion and Other Options”, ~~INC~~the Company allocated $-0- and $654,000 of the derivative liability as discounts against the convertible notes for the period ended March 31, 2022 and year ended December 31, 2021, respectively. The discounts are being amortized to interest expense over the term of the notes using the straight-line method which approximates the effective interest method. The Company recorded $142,687 and $ -0- of interest expense pursuant to the amortization of the note discounts during the periods ended March 31, 2022 and 2021, respectively.

~~NOTES~~NOTE TO5 ~~CONDENSED~~– ~~CONSOLIDATED~~NOTES ~~FINANCIAL~~PAYABLE ~~STATEMENTS~~- RELATED PARTY

(Unaudited)

NOTE 5 – NOTES PAYABLE-THIRD PARTIES (CONTINUED)

In accordance with ASC 470-20 “Debt with Conversion and Other Options”, the Company allocated $2595,528 and $-0- of the derivative liability as discounts against the convertible notes for the period ended September 30, 2021 and the year ended December 31, 2020, respectively. The discounts are being amortized to interest expense over the term of the notes using the straight-line method which approximates the effective interest method. The Company recorded $216,341 and $ -0- of interest expense pursuant to the amortization of the note discounts during the periods ended September 30, 2021 and 2020, respectively.

NOTE 6 – NOTES PAYABLE - RELATED PARTY

Notes payable to related parties consists of the following:

Schedule of Notes Payable Related Party
Schedule of notes payable related parties
	September 30, 2021		December 31, 2020
	March 31, 2022		December 31, 2021
Secured Promissory Note – RP, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on December 31, 2021 (A)	$	445,116	$	–
Secured Promissory Note – RP, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on July 1, 2022 (A)	$	445,116	$	445,116
Secured Promissory Note – LK, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on December 31st, 2021 (A)		100,000		–
Secured Promissory Note – LK, dated September 30, 2019 Note accrues interest at 10 % per annum, due and payable on July 1, 2022 (A)		100,000		100,000
Secured Promissory Note – C Lemen, dated July 23, 2020. Note accrues interest at 10% per annum, due and payable on December 31, 2021 (A)(B)		90,000		–
Secured Promissory Note – C Lemen, dated July 23, 2020. Note accrues interest at 10% per annum, due and payable on July 1, 2022 (A)(B)		90,000		90,000
Unsecured Promissory Note – DC, dated September 30, 2012. Note accrues interest at 7% per annum, due and payable on June 30, 2022		6,525		6,525
Total Notes Payable-Related Party	$	641,~~116~~641	$	6641,~~525~~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.

1612

~~FICAAR,~~NOTE ~~INC.~~6 – GOVERNMENT DEBT

~~NOTES~~Economic TOInjury ~~CONDENSED~~Disaster ~~CONSOLIDATED FINANCIAL STATEMENTS~~Loan

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

Future maturities of government debt are as follows:

Schedule of future maturities of debt
Period Ending March 31,
2022	$	–
2023		–
2024		–
2025		–
Thereafter		150,000
Total Principal Payments	$	150,000

NOTE 7 – DERIVATIVE LIABILITIES

The Company analyzed the notes payable – related parties and convertible notes payable referred to in Notes 34 and 45 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~~March 3031, 2022 ~~2021~~ and December 31, ~~2020~~2021 amounted to $~~528~~801,~~733 and~~449 $and ~~-0-~~$793,997, respectively. The assets or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of the assets that are measured at fair value on a recurring basis.

Schedule of asset measured at fair value
	Consolidated Balance Sheet		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative Liabilities:
September 30, 2021	$	528,773	$	–	$	–	$	528,773
March 31, 2022	$	801,449	$	–	$	–	$	801,449
December 31, 2020	$	–	$	–	$	–	$	–
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
	Nine Months Ended September 30, 2021			Year Ended December 31, 2020
	Period Ended March 31, 2022			Year Ended December 31, 2021
Beginning balance	$	–793,997		$	–
Aggregate fair value of conversion features upon issuance		~~660,696~~–			–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		~~(131~~7,~~963~~452	)		–(124,406	)
Change in fair value of warrant and stock option derivative liabilities		–			–
Ending balance	$	~~528~~801,~~773~~449		$	–793,997

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 8 – MERGER AND RELATED TRANSACTIONS

The Merger

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

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

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

The end of report schedule presents unaudited consolidate pro forma results of operations data as if the acquisitions had occurred on January 1, 2020. This information does not purport to be indicative of the actual results that would have occurred if the acquisition had actually been completed on the date indicated, not is it necessarily indicative of the future operating results or the financial position of the combined company.

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.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

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

18Legal Matters:

~~FICAAR~~From time to time, ~~INC~~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.

~~NOTES~~To TOthe ~~CONDENSED~~best ~~CONSOLIDATED~~of ~~FINANCIAL~~the ~~STATEMENTS~~Company’s knowledge and belief, no material legal proceedings of merit are currently pending or threatened.

~~(Unaudited)~~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 $80,394 until its ultimate resolution.

Employment and Consulting Agreements:

During years from 2017 to 2019, the Company signed employment agreements with five executive officers: the President, Chief Operating Officer, Director of Marketing, President and Chief Medical Officer and its Vice President of Sales. With the exception of one contract, each agreement is at will with no set termination periods., unless terminated earlier. The contracts provide for an annual base salary ranging from $100,000 to $200,00, participation in the Company’s Bonus Plan, Stock Option Plan, Medical benefits, severance pay and two (2) year non-compete clauses.

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 April 20, 2020, to help ensure adequate liquidity in light of the uncertainties posed by the COVID-19 pandemic, the Company entered into a promissory note with an aggregate principal amount of $112,715 (the “Note”) in favor of Stone Bank, N.A., as lender (the “Lender”) under the Small Business Administration (the “SBA”) Paycheck Protection Program under the recently enacted Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). On April 7, 2021, the Note was fully forgiven by the SBA and the Lender in compliance with the provisions of the CARES Act (see Note 5).

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, 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.

NOTE 10 – EQUITY

Common stock:

The Company has authorized 200,000,000 shares of $.001 par value common stock. As of ~~September~~March 3031, ~~2021~~2022, and December 31, ~~2020~~2021, the Company had 7447,~~291~~956,164 and 4447,~~093~~631,~~276~~ 164 shares, respectively, of common stock issued and outstanding.

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

On December 10, 2021 and December 15, 2021, the Company received total proceeds of $650,000 for the sale of 650,000 common stock shares at $1.00 per share. The December 15, 2021 sale of 400,000 shares were issued on January 3, 2022 and accordingly, recorded as common stock subscribed in the accompanying financial statements.

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 for the sale of 370,000 common stock shares at $1.00 per share, of which 45,000 shares were issued in the second quarter ending June 30, 2022 and accordingly, recorded as common stock subscribed in the accompanying financial statements.

Preferred Stock:

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

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 shares and, Series D Preferred, authorized 18,000,000 shares.

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

Additionally, the Company issued 3,054 shares of Series D Convertible Preferred stock, non-dividend, with no voting rights. Each share of Series D Preferred stock is convertible into the number of shares of the Company’s common stock equal to 0.01% of the number of Common shares issued and outstanding at the time of conversion.

AsOn ofDecember ~~September 30~~3, 2021, the 11Company entered into a Stock Purchase Agreement with Boot Capital LLC (“Boot”) whereby Boot Capital agreed to retire all of its outstanding warrants (850,000~~,000~~ in total) in exchange for 200 shares of Series D Preferred stock. ~~remain~~The Preferred stock shares were ~~unissued~~issued on March 29, 2022.

As of March 31, 2022, 28,996,746 shares of Preferred stock remain unissued.

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 $~~19.5~~16 million and $~~18.0~~13 million at ~~September~~March 3031, 2021 and December 31, ~~2020~~2021, respectively, which begin to expire in 2036. Section 382 of the Internal Revenue Code limits the amount of NOL’s available to offset future taxable income when a substantial change in ownership occurs.

~~At December 31, 2020, the Company has a net operating loss carryforward of approximately $11,000,000 for federal and $10,000,000 for state tax purposes.~~ The significant components of deferred income tax assets at ~~September~~March 3031, ~~2021~~2022 and December 31, ~~2020~~2021 were as follows:

Schedule of Components of Deferred Income Tax Asset
	September 30, 2021			December 31, 2020
	March 31, 2022			December 31, 2021
Deferred tax asset:
Net operating loss carry-forward	$	123,~~300~~400,000		$	113,~~000~~150,000
Less: valuation allowance		(123,~~300~~400,000	)		(113,~~000~~150,000	)
Net deferred income tax asset	$	–		$	–

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 11 – INCOME TAXES (CONTINUED)

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.

As of September 30, 2021 and December 31, 2020, the Company has no recognized income tax benefits. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest or penalties have been recorded during the period ended September 30, 2021 and year ended December 31, 2020. As of September 30, 2021 and December 31, 2020, the Company did not have any amounts recorded pertaining to uncertain tax positions.

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"”).

The license will be terminated if 1) the Company fails to perform any term or condition of the Agreement and fails to cure such failure within 30 days. or 2) the Company undergoes any direct or indirect sale, merger, consolidation, or transfer of greater than 50% of the Licensee's ownership shares or business assets to a person or group of persons, or 3) the Company substantially discontinues business operations.

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.

2017

FICAAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 13 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through ~~November~~May 911, ~~2021~~2022, which is the date the financial statements were issued, and has concluded that no such events or transactions took ~~place~~ place which would require adjustment to or disclosure in the financial statements, except for the following:

Equity:

On ~~October~~April 275, 2021 26,~~910,000~~ the ~~shares~~Company ofentered ~~Common Stock~~into ofa ~~the~~Stock ~~Company~~Purchase ~~held~~Agreement bywith ~~the~~Boot ~~Company’s~~Capital ~~Chief~~LLC ~~Executive~~(“Boot”) ~~Officer~~whereby ~~were~~Boot ~~returned~~Capital agreed to ~~treasury~~the ~~and~~purchase of ~~retired~~50,000 common stock shares at $1.00 per share.

~~Financing~~18

On October 4, 2021, the Company issued an additional convertible promissory note in the amount of $252,000 and a warrant for the right to purchase an additional 300,000 shares of Common Stock to Boot Capital LLC. The notes and warrants issued to lender are subject to adjustment for anti-dilution.

Other

On September 2, 2021, the Company’s Board of Directors voted and consented to a name change of the Company’s corporate name from Ficaar, Inc. to HFactor, Inc. As of date of these financial statements the name change is pending regulatory filings.

FICAAR, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED BALANCE SHEETS (Unaudited)

Pro Forma Schedules

	SEPTEMBER 30, 2021													DECEMBER 31, 2020
	FICAAR			HYEDGE				Merger			Pro Forma			FICAAR			HYEDGE				Merger			Pro Forma
	INC.			INC.				Adjustments			Combined			INC.			INC.				Adjustments			Combined
	(Public Co.)			(Private Co.)										(Public Co.)			(Private Co.)
	Accounting			Accounting										Accounting			Accounting
	Acquiree			Acquiror										Acquiree			Acquiror
ASSETS
CURRENT ASSETS:
Cash	$	–		$	38,200						$	38,200		$	–			70,256						$	70,256
Accounts receivable		–			106,832							106,832			–			139,315							139,315
Loan receivable		402,000			–		bb		(402,000	)		–			–			–							–
Inventory		–			406,449							406,449			–			383,245							383,245
Other current assets		–			59,306							59,306			–			74,321							74,321
TOTAL CURRENT ASSETS		402,000			610,787							610,787			–			667,137							667,137
PROPERTY AND EQUIPMENT, net		–			278,241							278,241			–			324,937							324,937
Assets	$	402,000			889,028						$	889,028		$	–		$	992,074						$	992,074
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	71,938		$	3,233,948						$	3,305,886		$	33,203		$	3,022,191						$	3,055,394
Notes payable- Shareholders		6,525			635,116							641,641			–			635,116							635,116
Government Loans		–			160,000							160,000			–			272,715							272,715
Loan payable		–			402,000		bb		402,000			–			–			–							–
Current portion of notes payable, net of debt discount		220,341			73,000							293,341			–			–							–
Derivative liabilities		528,733			–							528,733			–			–							–
Warrant liabilities		181,543			–							181,543			–			–							–
Other current liabilities		–			150,102							150,102			33,491			–							33,491
TOTAL CURRENT LIABILITIES		1,009,080			4,654,165							5,261,245			66,694			3,930,022							3,996,716
NON-CURRENT LIABILITIES
Other non-current liabilities		–			–							–			–			45,496							45,496
Notes payable- Shareholders		–			–							–			114,721			–							114,721
TOTAL NON-CURRENT LIABILITIES		–			–							–			114,721			45,496							160,217
TOTAL LIABILITIES		1,009,080			4,654,165							5,261,245			181,415			3,975,518							4,156,933
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock		1,003			–		aa					1,003			–			245		aa		758			1,003
Common stock		74,291			–		aa					74,291			44,093			143		aa		30,055			74,291
Common stock options		–			–		aa					–			–			58		aa		(58	)		–
Warrants		–			–		aa					–			–			18		aa		(18	)		–
Additional paid-in capital		(75,294	)		10,226,770		aa		(13,991,907	)		(3,840,431	)		(44,093	)		9,826,305		aa		(12,840,950	)		(3,058,738	)
Accumulated earnings (deficit)		(607,080	)		(13,991,907	)	aa		13,991,907			(607,080	)		(181,415	)		(12,810,213	)	aa		12,810,213			(25,801,841	)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(607,080	)		(3,765,137	)						(4,372,217	)		(181,415	)		(2,983,444	)						(3,164,859	)
Total Liabilities and Stockholders' Deficit	$	402,000		$	889,028				–		$	889,028		$	–		$	992,074				(0	)	$	992,074

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

FICAAR, INC.

PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS (Unaudited)

	NINE MONTHS ENDED SEPTEMBER 30,2021												YEAR ENDED DECEMBER 31, 2020
	FICAAR			HYEDGE				Merger		Pro Forma			FICAAR			HYEDGE				Merger		Pro Forma
	INC.			INC.				Adjustments		Combined			INC.			INC.				Adjustments		Combined
	(Public Co.)			(Private Co.)									(Public Co.)			(Private Co.)
	Accounting			Accounting									Accounting			Accounting
	Acquiree			Acquiror									Acquiror			Acquiror
REVENUES
Net Sales	$	–		$	1,522,428					$	1,522,428		$	–		$	2,279,297					$	2,279,297
TOTAL REVENUES
COST OF REVENUES		–			669,436						669,436			–			966,747						966,747
GROSS PROFIT		–			852,991						852,991			–			1,312,550						1,312,550
OPERATING EXPENSES
Manufacturing expenses		–			90,114						–			–			–						–
Sales and Marketing		–			1,276,867						1,276,867			–			2,386,482						2,386,482
General and administrative		15,133			643,453						658,586			16,562			1,185,773						1,202,335
Total Expenses		15,133			2,010,434						1,935,453			16,562			3,572,255						3,588,817
INCOME (LOSS) FROM OPERATIONS		(15,133	)		(1,157,442	)					(1,082,462	)		(16,562	)		(2,259,705	)					(2,276,267	)
OTHER INCOME (EXPENSE)
Amortization of debt discount		(387,996	)		–						(387,996	)		–			–						–
Derivative expense		97,654			–						97,654			–			–						–
Change in FMV of derivatives		(124,406	)		–						–			–			–						–
Interest expense		(18,266	)		(124,639	)					(142,904	)		(8,687	)		(101,685	)					(110,372	)
Other income (expense)		22,482			100,840						123,322			–			(209,533	)					(209,533	)
TOTAL OTHER INCOME (EXPENSE)		(410,532	)		(23,798	)					(309,924	)		(8,687	)		(311,218	)					(319,905	)
NET INCOME (LOSS)	$	(425,665	)	$	(1,181,241	)				$	(1,392,386	)	$	(25,249	)	$	(2,570,923	)				$	(2,596,172	)
Common stock outstanding		44,093,276			–						44,093,276			44,093,276			–						44,093,276
Common stock issued in merger		–			–		aa		30,895,530		30,895,530			–			–		aa		30,895,530		30,895,530
Total common stock outstanding		44,093,276			–						–			74,988,806			44,093,276						74,988,806
NET LOSS PER SHARE	$	(0.0097	)	$	–					$	–		$	(0.0186	)	$	(0.0006	)				$	(0.0346	)

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

aa Reflects the recapitalization of HyEdge through (i) the exchange of 44,136,473 shares of common stock of HyEdge for 30,895,530 shares of common stock of FICAAR public stock on a 1:0.70 exchange basis, and issuance of 1,003,054 shares of Preferred stock (ii) the elimination of the historical retained earnings of HyEdge.

bb Reflects the elimination of the intercompany outstanding notes with HyEdge related parties.

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

This Management’s Discussion and Analysis (“MD&A”) is intended to provide an understanding of our financial condition, results of operations and cash flows by focusing on changes in certain key measures from year to year. This discussion should be read in conjunction with the Condensed Consolidated Unaudited Financial Statements contained in this Quarterly Report on Form 10-Q and the Consolidated Financial Statements and related notes and MD&A of Financial Condition and Results of operations appearing in our Annual Report on Form 10-K as of and for the years ended December 31, ~~2020~~2021 and ~~2019~~2020. The results of operations for an interim period may not give a true indication of results for future interim periods or for the year.

Cautionary Statement Regarding Forward Looking Statements

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

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

Company History and Summary

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

The Company’s fiscal year end is December 31.

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

Plan of Operations

BUSINESS DESCRIPTION

~~Immediately following the Merger executed on August 6, 2021, the business of HyEdge became our business. Overview HyEdge operates primarily through its subsidiary,~~ HFactor ~~Water International, LLC, a Delaware limited liability company ("HFactor"). HFactor~~ water was created by Gail Levy, HyEdge's founder and CEO. Gail is a successful serial entrepreneur who was looking for a new product that could alleviate the toxic side effects of the cancer chemotherapeutic drugs that had riddled a dear friend. As she researched the properties of hydrogen water, she became more and more enthralled by its potential. Ms. Levy felt she could honor her friend by making hydrogen water immaculate, effective, and accessible to everyone. Enlivened by this mission, she collected a team of experts to help her engineer a natural process to combine hydrogen with water with zero impurities and optimal impact. In 2017, she launched her flagship product through retail and ecommerce channels. HFactor was developed and is manufactured by a team of experts in the U.S. and utilizes a patented chemical-free and magnesium-free process to infuse free hydrogen into its water. Its award winning, environmentally friendly ergonomic pouch keeps the hydrogen potent and pure and makes it extremely portable.

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

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

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

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

Comparison of Three Months Ended ~~September 30~~March 31, 2022 ~~2021~~ to Three Months ~~ended~~Ended ~~September~~March 3031, ~~2020~~2021

Results of Operations

	Three months ended September 30,									Percent
	Three Months ended March 31,									Percent
	2021			2020			Change			Change
	2022			2021			Change			Change
Revenues	$	~~513~~595,~~174~~623		$	–		$	~~513~~595,~~174~~623			100%
Gross profit		~~266~~319,~~867~~907			–			~~266~~319,~~867~~907			100%
Operating expenses		(~~633~~931,~~806~~214	)		(37,~~360~~033	)		~~630~~(924,~~446~~181	)		1813,~~763~~141%
Other income (expense)		(96195,~~504~~566	)		(2,~~145~~201	)		94(193,~~359~~365	)		48,~~399~~785%
Net loss	$	(~~463~~806,~~443~~873	)	$	(59,~~505~~234	)	$	~~457~~(797,~~938~~639	)		8,~~319~~638%

Net revenues for the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 were $~~513~~595,~~174~~623 as compared to $-0- for the ~~nine~~three months ended ~~September~~March 31, ~~2020~~2021 which resulted from the ~~merger~~ merger of HyEdge.

Gross ~~profits~~profit for the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 ~~were~~was $~~266~~319,~~867~~907 as compared to $-0- for the ~~nine~~three months ended ~~September~~March 31, ~~2020~~2021.

Total operating expenses were $~~633~~931,~~806~~214 for the three months ended ~~September~~March 3031, ~~2021~~2022 compared to $37,~~360~~033 for the three months ended ~~September~~March 3031, ~~2020~~2021. The 1813,~~763~~141% increase was primarily attributable to the additional operating expenses resulting from the merger of HyEdge, specifically $~~358~~581,~~270~~042 in sales and marketing expenses and $~~141~~138,~~588~~626 in payroll and compensation.

Other income (expense) was $96(195,~~504~~566) for the three months ended ~~September~~March 3031, ~~2021~~2022 compared to $(2,~~145~~201) for the three months ended ~~September~~March 3031, ~~2020~~2021. The $94193,~~359~~365 increase was primarily $~~290~~142,~~342~~687 in amortization of debt discount and derivative expenses associated with embedded liabilities in convertible debt~~, $124,406~~ ~~in change in fair market value of derivatives~~ and $4743,~~622~~226 increase in interest expenses associated with borrowings~~, offset by approximately $113,000 gain from forgiveness of debt~~.

For the ~~nine months~~three months ended ~~September~~March 3031, ~~2021~~2022, the Company reported a net loss of $~~463~~806,~~443~~873 as compared to a net loss of $59,~~505~~234 for the ~~nine~~three months ended ~~September~~ 30March 31, ~~2020~~2021. The $~~457~~797,~~938~~639 increase in net loss for the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 mainly arose from the additional net loss ~~resulting~~ resulting from the merger of HyEdge.

Comparison of Nine Months Ended September 30, 2021 to Nine Months ended September 30, 2020

Results of Operations

	Nine months ended September 30,									Percent
	2021			2020			Change			Change
Revenues	$	513,174		$	–		$	513,174			100%
Gross profit		266,867			–			266,867			100%
Operating expenses		(646,664	)		(10,512	)		(236,656	)		2,251%
Other income (expense)		(339,111	)		(6,390	)		(332,721	)		5,207%
Net loss	$	(718,908	)	$	(16,902	)	$	(702,006	)		4,153%

Net revenues for the nine months ended September 30, 2021 were $513,174 as compared to $-0- for the nine months ended September 31, 2020 which resulted from the merger of HyEdge.

Gross profits for the nine months ended September 30, 2021 were $266,867 as compared to $-0- for the nine months ended September 31, 2020.

Total operating expenses were $646,664 for the nine months ended September 30, 2021 compared to $10,512 for the nine months ended September 30, 2020. The 2,251% increase was primarily attributable to the additional operating expenses resulting from the merger of HyEdge, specifically $358,270 in sales and marketing expenses and $141,588 in payroll and compensation.

Other income (expense) was $339,111 for the nine months ended September 30, 2021 compared to $6,390 for the nine months ended September 30, 2020. The $332,721 increase Net Other Expenses was primarily $290,342 in amortization of debt discount and derivative expenses associated with embedded liabilities in convertible debt, $124,406 in change in fair market value of derivatives and $49,937 increase in interest expenses associated with borrowings. offset by approximately $113,000 gain from forgiveness of debt .

For the nine months ended September 30, 2021, the Company reported a net loss of $718,908 as compared to a net loss of $16,902 for the nine months ended September 30, 2020. The $702,006 increase in net loss for the nine months ended September 30, 2021 mainly resulted from the additional net loss resulting from the merger of HyEdge.

Liquidity and Capital Resources

As of ~~September~~March 3031, ~~2021~~2022, ~~the~~ the Company had $3846,~~200~~733 in cash to fund its operations. The Company reported working capital deficit of $4,~~650~~938,~~438~~159 at ~~September~~March 3031, ~~2021~~ 2022 as compared to a working capital deficit of $664,~~694~~855,836 at December 31, ~~2020~~2021, representing an increase in working capital deficit by $482,~~583,764~~323.

The Company does not believe its current cash balance will be sufficient to allow the Company to fund its planned operating activities for the next twelve months. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations or substantially curtail some of its planned activities. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities should the Company be unable to continue as a going concern.20

AsThe ~~the~~ Company ~~continues~~does tonot believe ~~incur~~its ~~losses,~~current ~~achieving~~cash ~~profitability~~balance iswill ~~dependent~~be onsufficient ~~achieving~~to aallow ~~level~~the ofCompany ~~revenues~~to ~~adequate~~fund toits ~~support~~planned operating activities for the ~~Company's~~next ~~cost~~twelve ~~structure~~months. The ~~Company~~ability ~~may~~of ~~never~~the ~~achieve~~Company ~~profitability,~~to ~~and~~continue ~~unless~~as ~~and~~a ~~until~~going itconcern ~~does,~~is dependent on the Company ~~will~~obtaining ~~continue~~adequate capital to ~~need~~fund tooperating ~~raise~~losses until ~~additional~~it ~~capital~~becomes profitable. ~~Management~~ ~~intends~~If tothe ~~fund~~Company ~~future~~is ~~operations~~unable ~~through~~to ~~additional~~obtain ~~private~~adequate orcapital, ~~public~~it ~~equity~~could ~~offering~~be ~~and~~forced ~~may~~to ~~seek~~cease ~~additional~~operations ~~capital~~or ~~through~~substantially ~~arrangements~~curtail ~~with~~some ~~strategic~~or ~~partners~~all of ~~from~~its ~~other~~planned ~~sources~~activities. ~~There~~These ~~can~~conditions beraise nosubstantial ~~assurances,~~doubt ~~however,~~as ~~that~~to ~~additional~~the ~~funding~~Company's ~~will~~ability beto ~~available~~continue as a going onconcern. ~~terms~~The ~~acceptable~~accompanying financial statements do not include any adjustments relating to the ~~Company,~~recoverability orand atclassification ~~all.~~of ~~Any~~recorded assets ~~equity~~and ~~financing~~classification ~~may~~of liabilities should the Company be ~~dilutive~~unable to ~~existing~~continue ~~shareholders~~as a going concern.

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

Operating Activities:

For the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, net cash flow used by operating activities was $~~110~~(574,~~800~~121) compared to -$0-2,329 for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021. The decreases in cash flow used for operating activities for ~~both~~2022 ~~periods~~period were primarily due to increases in operating expenditures resulting from the HyEdge merger.

Investing and Financing Activities:

Net cash flows provided by (used) in investing and financing activities for the ~~period~~three months ended ~~September~~March 3031, ~~2021~~2022 were $3370,000 infrom ~~net~~sales ~~repayments~~of ~~from~~common ~~borrowings,~~stock ~~offset~~shares ~~with~~compared to $~~152~~2,~~000~~329 in ~~proceeds~~payments from borrowings ~~compared to $-0-~~ for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021.

Liquidity and Capital Resource Measures:

The Company’s primary source of liquidity has been from convertible loans and third party and related party loans.

Going Concern

The Company has experienced a net loss and had an accumulated deficit of $4,699,839 as of March 31, 2022. These conditions raise substantial doubt about the Company’s ability to continue absent raising sufficient capital to fund continued operations. Management expects to incur additional losses in the foreseeable future and recognizes the need to raise capital to remain viable. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Transaction with Related Parties:

None

Critical Accounting Policies

~~Our~~Refer ~~condensed~~to ~~consolidated financial~~Note ~~statements~~2 ~~and accompanying notes have been prepared~~ in ~~accordance~~the ~~with U.S. GAAP. The preparation of these financial statements~~Consolidated ~~requires~~Financial ~~management~~Statements tofor ~~make~~a ~~estimates,~~summary ~~judgments and assumptions that affect reported amounts~~ of ~~assets,~~recently ~~liabilities,~~adopted ~~revenues~~ and ~~expenses. We~~recently ~~continually~~issued ~~evaluate the~~ accounting ~~policies~~standards and ~~estimates~~their ~~used~~related toeffects ~~prepare~~or ~~the condensed financial statements. The estimates are based~~anticipated effects on ~~historical~~our ~~experience~~consolidated ~~and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and~~ results ~~could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results~~ of operations orand financial ~~position are discussed in our Annual Report on Form 10-K for the year ended December 31, 2020, and Note 2 to the Condensed Consolidated Financial Statements in this Form 10-Q~~condition.

Off-Balance Sheet Arrangements

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

Inflation and Changing Prices

We do not believe that inflation nor changing prices for the three months March 31, 2022 had a material effect on our operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

28We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2022, the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses discussed below.

We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2021, the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses discussed below.

Internal Control Over Financial Reporting

Evaluation of Disclosure Controls and Procedures

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

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

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

Changes in internal control over financial reporting.

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

2922

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

As of the date of this report, there have been no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021.

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

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

~~ITEM 6. EXHIBITS~~23

Exhibits		Description
10.1		Securities Purchase Agreement dated May 27, 2021 between Ficaar Inc. and Boot Capital, LLC (**)
10.2		Convertible Promissory Note dated May 27, 2021 between Ficaar Inc. and Boot Capital, LLC (**)
10.3		Common Stock Purchase Warrant dated May 27, 2021 between Ficaar Inc. and Boot Capital, LLC (**)
10.4		Stock Purchase Agreement dated May 28, 2021 between David Cicalese (the “Seller”) and Gail Levy (the “Purchaser”) (**)
17.1		Resignation of David Cicalese dated June 1, 2021 (**)
31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(**) Incorporated by reference to the Current Report on Form 8-K as filed on June 10, 2021.

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

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 of the Securities Exchange Act ~~of 1934~~, the registrant has duly caused this ~~report~~Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Ficaar, Inc.
	HFactor, Inc.
Date: November 10, 2021	/s/ Gail Levy
	(Registrant)
	Gail Levy, Principal Executive Officer
May 19, 2022	By:	/s/ Gail Levy
	/s/ Chris Sanborn
		Gail Levy
	Chris Sanborn, Acting Principal Financial and Accounting Officer
		President
May 19, 2022	By:	/s/ Chris Sanborn
		Chris Sanborn
		Acting Principal Financial Officer

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Filing Compare · HFactor, Inc.