HNO International, Inc 10-Q for FY2026 Q3
HNO International, Inc. (HNOI)
About this 10-Q
HNO International, Inc filed this 10-Q on September 21, 2026, covering the quarter ended July 31, 2026 (FY2026 Q3).
Headline figures
Quarter ended July 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $0
- compared with $0 a year earlier
- Net loss
- $532.21K
- compared with a net loss of $498.01K a year earlier
- Diluted EPS
- -$0.01
- compared with -$0.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from _________ to __________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) | |
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(Address of principal executive offices) |
(Zip Code) | |
(
(Registrant's telephone number, including area code)
N/A
(Former name, 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 | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark
whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.
Indicate 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).
Indicate by check mark whether the registrant is a large accelerated filer, an 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.
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| Large accelerated filer | ¨ | Accelerated filer | ¨ |
| x | 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 provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨
No
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of September 21, 2026 the registrant had outstanding shares of Common Stock.
| 2 |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report on Form 10-Q contains "forward-looking statements" that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in our Form 10-K filed on February 6, 2026 and other filings we make with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made. We do not intend to update any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.
The following discussion and analysis of financial condition and results of operations is based upon and should be read in conjunction with our unaudited condensed financial statements and related notes thereto included in this filing, and in our Annual Report on Form 10-K filed on February 6, 2026.
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HNO INTERNATIONAL, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JULY 31, 2026
TABLE OF CONTENTS
| PAGE | ||
| PART I | FINANCIAL INFORMATION | |
| Item 1. | Financial Statements (Unaudited) | 5 |
| Condensed Balance Sheets as of July 31, 2026 unaudited and October 31, 2025 audited | 5 | |
| Unaudited Condensed Statements of Operations for the Three and Nine months Ended July 31, 2026 and July 31, 2025 | 6 | |
| Unaudited Condensed Statements of Stockholders’ Deficit for the Three and Nine months Ended July 31, 2026 and July 31, 2025 | 7 | |
| Unaudited Condensed Statements of Cash Flows for the Nine months Ended July 31, 2026 and July 31, 2025 | 9 | |
| Notes to Unaudited Condensed Financial Statements | 10 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 34 |
| Item 4. | Controls and Procedures | 34 |
| PART II | OTHER INFORMATION | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 35 |
| Item 5. | Other Information | 35 |
| Item 6. | Exhibits | 35 |
| Signatures | 36 |
| 4 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
| HNO INTERNATIONAL, INC. CONDENSED BALANCE SHEETS | ||||||||
| July 31, | October 31, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | Unaudited | Audited | ||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Other receivable | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use asset | ||||||||
| Total Non-Current Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | ||||||||
| Accrued interest payable | ||||||||
| Lease liability | ||||||||
| Advances, related party | ||||||||
| Convertible notes payable, net of discounts and issue costs | ||||||||
| Notes payable, related party | ||||||||
| Derivative liability | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liability | ||||||||
| Lease liability | ||||||||
| Long term notes payable, related party | ||||||||
| Total Non-Current Liability | ||||||||
| Total Liabilities | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock, par value $ per share; shares authorized | ||||||||
| Series A, par value $ per share; shares authorized; and shares issued and outstanding as of July 31, 2026 and October 31, 2025, respectively | ||||||||
| Series B, par value $ per share; shares authorized; and shares issued and outstanding as of July 31, 2026 and October 31, 2025, respectively | ||||||||
| Common stock, par value $ per share; shares authorized; and shares issued and outstanding as of July 31, 2026 and October 31, 2025, respectively | ||||||||
| Common stock payable | ||||||||
| Common stock subscription receivable | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
| The accompanying notes are an integral part of these condensed unaudited financial statements. | ||||||||
| 5 |
| HNO INTERNATIONAL, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||
| For the Three Months Ended July 31, | For the Nine Months Ended July 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Advertising and marketing | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Share commitment expenses | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Net loss from Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expenses) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain/(Loss) on fair value of convertible note | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain/(Loss) on derivative | ( | ) | ( | ) | ||||||||||||
| Loss on write-off of intangible asset | ( | ) | ||||||||||||||
| Total Other (Expenses) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| PER SHARE AMOUNTS | ||||||||||||||||
| Basic and diluted net loss per share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares outstanding - basic and diluted | ||||||||||||||||
| The accompanying notes are an integral part of these condensed unaudited financial statements. | ||||||||||||||||
| 6 |
| HNO INTERNATIONAL, INC. CONDENSED STATEMENTS OF STOCKHOLDERS' DEFICIT For the three and nine months ended July 31, 2025 and 2026 (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series B Preferred Stock | Common Stock | Stock | Share Subscription | Additional Paid-in | Accumulated | Total Stockholders' | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Payable | Receivable | Capital | Deficit | Deficit | ||||||||||||||||||||||||||||||||||
For the three and nine months ended July 31, 2025
| ||||||||||||||||||||||||||||||||||||||||||||
| Balance at October 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Regulation D stock issuances | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares cancelled as per exchange agreement | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Series B preferred stock issuances | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net loss for the three months ended January 31, 2025 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance at January 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Regulation D stock issuances | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net loss for the three months ended April 30, 2025 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance at April 30, 2025 | $ | $ | $ | $ | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Regulation D stock issuances | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Share based compensation | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net loss for the three months ended July 31, 2025 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance at July 31, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| 7 |
| HNO INTERNATIONAL, INC. CONDENSED STATEMENTS OF STOCKHOLDERS' DEFICIT (Continued) For the three and nine months ended July 31, 2025 and 2026 (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series B Preferred Stock | Common Stock | Stock | Share Subscription | Additional Paid-in | Accumulated | Total Stockholders' | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Payable | Receivable | Capital | Deficit | Deficit | ||||||||||||||||||||||||||||||||||
| Balance at October 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Regulation A stock issuances | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Regulation D stock issuances | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares issued upon conversion of convertible note | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net loss for the three months ended January 31, 2026 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance at January 31, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Commitment shares | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Debt discount - Warrant | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net loss for the three months ended April 30, 2026 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance at April 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Debt discount - Warrant | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Regulation A stock issuances | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Commitment shares | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss for the three months ended July 31, 2026 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance at July 31, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| The accompanying notes are an integral part of these condensed unaudited financial statements. | ||||||||||||||||||||||||||||||||||||||||||||
| 8 |
HNO INTERNATIONAL, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
| For the Nine Months Ended July 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flow from Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Non cash interest expenses | ||||||||
| Legal services provided in exchange for convertible note | ||||||||
| Loss on write-off of intangible asset | ||||||||
| (Gain)/Loss on fair value of convertible note | ||||||||
| (Gain)/Loss on derivative liability | ||||||||
| Share based compensation | ||||||||
| Commitment shares issued for financing expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase)/Decrease in accounts receivable | ||||||||
| (Increase)/Decrease in other receivable | ||||||||
| (Decrease) in accounts payable | ( | ) | ( | ) | ||||
| Increase/(Decrease) in accrued payroll | ( | ) | ||||||
| Increase in accrued interest payable | ||||||||
| Operating lease ROU assets and lease liabilities, net | ( | ) | ||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from related party advances | ||||||||
| Repayment of related party advances | ( | ) | ( | ) | ||||
| Proceeds from sale of common stock | ||||||||
| Proceeds from issuance of convertible notes payable | ||||||||
| Repayment of convertible notes payable | ( | ) | ||||||
| Net Cash Provided by Financing Activities | ||||||||
| Cash Flows from Investing Activities | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash | ||||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental Disclosure for Cash Paid: | ||||||||
| Lease liability paid during the period | $ | $ | ||||||
| Income taxes paid during the period | $ | $ | ||||||
| Interest paid during the period | $ | $ | ||||||
| Supplemental Disclosure for Non-Cash Investing and Financing Activities: | ||||||||
| Property and equipment acquired through accounts payable | $ | $ | ||||||
| Common stock issued in settlement of common stock payable | $ | $ | ||||||
| Common stock cancellation per share exchange agreement | $ | $ | ( | ) | ||||
| Series B preferred stock issuance per exchange agreement | $ | $ | ||||||
| Shares issued upon conversion of convertible notes payable | $ | $ | ||||||
| Convertible note issued in exchange for legal services, recorded at fair value | $ | $ | ||||||
| Derivative liability balance | $ | $ | ||||||
The accompanying notes are an integral part of these condensed unaudited financial statements.
| 9 |
HNO INTERNATIONAL, INC.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
JULY 31, 2026
(Unaudited)
NOTE 1 – ORGANIZATION AND BASIS OF ACCOUNTING
Organization
HNO International, Inc. (the “Company”) specializes in the design, integration, and development of green hydrogen-based clean energy technologies. With the Company’s management having over 14 years of experience in the field of green hydrogen production, the Company is committed to providing scalable products that help businesses and communities decarbonize, reduce emissions, and cut operational costs. HNO stands for Hydrogen and Oxygen. The Company is at the forefront of developing innovative solutions, such as the Compact Hydrogen Refueling System (“CHRS”) and the Compact Hydrogen Production System (“CHPS”), which can be used to produce green hydrogen for various applications including fuel cell electric vehicles, hydrogen internal combustion engines, heating, and cooking. The CHPS is highly scalable, capable of producing 100-2,000 (or more) kilograms of hydrogen per day for commercial use in various applications. In addition, the Company develops energy systems that complement the zero-emissions EV infrastructure, reduce harmful emissions, and cut maintenance costs of commercial diesel fleets. By integrating components from leading industry partners, the Company aims to transition fossil fuels to cleaner alternatives and promote lower emissions.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete annual financial statements and should be read in conjunction with the Company's audited financial statements and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended October 31, 2025. In the opinion of management, the accompanying condensed unaudited financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary to present fairly the Company's financial position as of July 31, 2026 and October 31, 2025, and the results of its operations for the three and nine months ended July 31, 2026 and 2025, and its cash flows for the nine months ended July 31, 2026 and 2025. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full fiscal year ending October 31, 2026.
Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The management makes its best estimate of the outcome for these items based on information available when the financial statements are prepared.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of July 31, 2026, and October 31, 2025, the Company did not hold any investments that qualify as cash equivalents. Therefore, the cash and cash equivalents line item in the balance sheet solely comprises cash.
The Company maintains its cash balances at financial institutions, which at times may exceed federally insured limits. While the Company monitors the credit quality of its banking institutions, cash balances in excess of Federal Deposit Insurance Corporation (FDIC) insurance limits expose the Company to a certain degree of credit risk in the event of the financial institutions' failure.
| 10 |
The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718 Compensation - Stock Compensation (“ASC 718”). ASC 718 requires that the cost of equity awards, issued in exchange for services, including those issued to employees and predominantly to consultants, be measured at the grant-date fair value. The Company does not adhere to a formal stock-based compensation plan; rather, it issues stock awards on a discretionary basis as part of compensation agreements with selected employees and consultants. Compensation for stock-based awards is recognized as a non-cash expense on the statement of operations. The fair value of restricted stock grants is determined using the closing market price on the grant date, adjusted for an appropriate discount to reflect the restrictions on transferability and marketability of the shares. The discount is calculated using a weighted average of comparable restricted stock transactions, which better reflects the economic impact of larger issuances and provides a more accurate representation of fair value under ASC 718. The expense associated with these awards is recorded based on the fair value on the date of grant, as determined using a pricing model commensurate with the terms of the award. This cost is recognized over the period during which the award recipient is required to perform services, typically known as the vesting period. The total compensation cost related to vested stock-based awards is recognized after adjusting for estimated forfeitures at the time of vesting. The expense related to stock-based compensation is presented as a separate line item in the accompanying statements of operations; the Company does not allocate compensation costs to cost of goods sold. As of the report date, the Company has not established any plans to issue dividends on stock-based awards. Excess tax benefits and tax deficiencies arising from stock-based awards are recognized as income tax expense or benefit in the statements of operations in the period in which the awards vest or are settled.
Employee Benefits
During the three months ended July 31, 2026, the Company
paid $
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
The Company follows the provisions of ASC 740, Income
Taxes (“ASC 740”), related to accounting for uncertainty in income taxes. ASC 740 prescribes a recognition threshold and
measurement process for uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes the financial statement
effects of a tax position when it is more likely than not that, based on technical merits, the position will be sustained upon examination
by the relevant taxing authorities. The Company had
Revenue Recognition
We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The stated standard’s core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.
In certain arrangements where the Company facilitates the provision of goods or services provided by a third party, and does not take control of those goods or services, revenue is recognized on a net basis, limited to the margin or fee earned, consistent with the Company’s role as an agent under ASC 606-10-55-36 through 55-40.
| 11 |
During the nine months ended July 31, 2026 and July
31, 2025, the Company recognized $
Basic loss per common share is computed by
dividing the net loss by the weighted average number of shares of common stock outstanding for each period. Diluted loss per share is
computed by dividing the net loss by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares
issuable as common stock equivalents. As the Company is currently presenting net losses the weighted-average number of common shares outstanding
excludes potential common stock equivalents because their inclusion would be anti-dilutive. Potentially dilutive securities excluded from
the computation of diluted net loss per share for the three and nine months ended July 31, 2026 consisted of shares issuable
upon exercise of common stock purchase warrants and approximately shares issuable upon conversion of the Company’s convertible
notes payable, based on the conversion price in effect at July 31, 2026. In addition, shares of Series B Preferred Stock, convertible
into up to shares of common stock subject to a
Property and Equipment
Property and equipment are carried at cost and, less accumulated depreciation. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the statement of operations in the year of disposal. The Company examines the possibility of decreases in the value of property and equipment when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
The Company’s property and equipment consist of specialized hydrogen equipment, related processing systems, and vehicles. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Small equipment is depreciated over 3 years, vehicles are depreciated over 4 years, and large equipment is depreciated over 7 years.
| Schedule of estimated useful lives | ||
| Useful life | ||
| Small equipment | ||
| Large equipment | ||
| Vehicles |
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine recoverability of a long-lived asset, management evaluates whether the estimated future undiscounted net cash flows from the asset are less than its carrying amount. If impairment is indicated, the long-lived asset would be written down to fair value. Fair value is determined by an evaluation of available price information at which assets could be bought or sold, including quoted market prices, if available, or the present value of the estimated future cash flows based on reasonable and supportable assumptions.
Leases
The Company accounts for leases in accordance with ASC 842, Leases (“ASC 842”). At contract inception, the Company determines if an arrangement is or contains a lease. Where the Company is the lessee, for each lease with a term greater than twelve months, the Company records a right-of-use asset and lease liability. A right-of-use asset represents the economic benefit conveyed to the Company by the right to use the underlying asset over the lease term. A lease liability represents the obligation to make lease payments arising from the use of the asset over the lease term. As most of the Company’s leases do not provide an implicit interest rate, the lease liability is calculated at lease commencement as the present value of unpaid lease payments using the Company’s estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease. Leases with an initial expected term of 12 months or less are not recorded in the Balance Sheet and the related lease expense is recognized on a straight-line basis over the lease term.
| 12 |
Fair Value of Financial Instruments
Fair value is defined 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, Fair Value Measurement ("ASC 820"), establishes a three-tier fair value hierarchy that prioritizes the inputs used to measure fair value, giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3):
| · | Level 1 — observable inputs such as quoted prices for identical instruments in active markets; |
| · | Level 2 — inputs other than quoted prices that are directly or indirectly observable, such as quoted prices for similar instruments in active markets, or quoted prices for identical or similar instruments in markets that are not active; and |
| · | Level 3 — unobservable inputs for which little or no market data exists, requiring the Company to develop its own assumptions, including valuations derived from techniques in which one or more significant inputs or value drivers are unobservable. |
Recurring fair value
measurements. The Company's convertible promissory note issued on April 7, 2025 was classified as a liability and measured at fair value
on a recurring basis under ASC 480, Distinguishing Liabilities from Equity ("ASC 480"), because it required settlement in a
variable number of shares for a fixed monetary amount. The Company determined its fair value, a Level 2 measurement, from the conversion
terms and the observable market price of the Company's common stock. The note had a fair value of $
In connection with convertible
notes issued in April and May 2026, the Company recognized a derivative liability of $
Other financial instruments.
The carrying amounts of the Company's remaining financial instruments cash, accounts payable, accrued interest payable, advances from
related parties, and notes payable to related parties approximate fair value as of July 31, 2026 and October 31, 2025, due to the short
maturity of those instruments. It is not practicable to estimate the fair value of the Company’s $
Convertible Debt Issued with Detachable Warrants
When the Company issues convertible debt with detachable common stock purchase warrants, the Company allocates the proceeds between the debt instrument and the warrants based on their relative fair values at the issuance date in accordance with ASC 470-20, Debt with Conversion and Other Options. The fair value allocated to the warrants is credited to additional paid-in capital and recorded as a debt discount on the face of the note. This debt discount, together with any original issue discount, is amortized to interest expense over the term of the debt using the straight-line method, which approximates the effective interest method given the terms of the instruments. If a note is converted or repaid prior to maturity, a proportionate share of the unamortized discount is immediately recognized as interest expense.
Embedded Conversion Features
The Company evaluates embedded conversion features within convertible debt instruments under ASC 815, Derivatives and Hedging, to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative liability at fair value, with changes in fair value reported in earnings each reporting period. Bifurcation is required when: (i) the economic characteristics and risks of the embedded feature are not clearly and closely related to those of the debt host; (ii) the hybrid instrument is not remeasured at fair value with changes in earnings; and (iii) a separate instrument with the same terms as the embedded feature would be a derivative under ASC 815.
| 13 |
An embedded conversion feature that meets the bifurcation criteria under ASC 815 may nonetheless qualify for the equity scope exception under ASC 815-40-15 if it would be classified as equity if it were a freestanding instrument (i.e., the fixed-for-fixed test). A conversion feature that provides for settlement in a variable number of shares such as a conversion price equal to a percentage of the market price generally fails the fixed-for-fixed test and does not qualify for the equity scope exception. If the equity scope exception is not available, the conversion feature is bifurcated and recorded as a derivative liability.
If the conversion feature does not require bifurcation under ASC 815, the convertible note is accounted for as a single liability measured at amortized cost in accordance with ASC 470-20, as amended by ASU 2020-06, which eliminated the beneficial conversion feature model.
Derivative Financial Instruments
The Company evaluates all of its financial instruments, including convertible notes and stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in fair value reported as charges or credits to income.
For warrants classified as equity instruments, the Company uses the Black-Scholes option pricing model to determine the grant-date fair value for purposes of the ASC 470-20 relative fair value allocation. The classification of financial instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
Debt Discount and Debt Issue Costs
The Company records debt discounts and debt issue costs in connection with the issuance of debt instruments. Debt discounts arise from the issuance of warrants with notes (ASC 470-20 allocation), original issue discounts, and bifurcated derivative liabilities (if applicable). Debt issue costs include direct costs incurred in connection with the issuance of debt, such as legal fees and placement agent fees (including amounts withheld by the lender from the note proceeds at funding). These amounts are presented as a reduction of the carrying value of the related debt on the balance sheet and are amortized to interest expense over the term of the debt using the straight-line method. If a note is extinguished prior to maturity, any unamortized debt discount and debt issue costs are immediately recognized as a component of the gain or loss on extinguishment in accordance with ASC 470-50.
Original Issue Discount
For certain convertible debt issued, the Company provides the debt holder with an original issue discount (“OID”), which represents the difference between the face value of the note and the proceeds received. The OID is recorded as a debt discount, reducing the carrying value of the note on the balance sheet, and is amortized to interest expense over the term of the note using the straight-line method. Any unamortized OID is presented net of the related debt on the balance sheet. If a note is converted or repaid prior to maturity, the remaining unamortized OID is immediately expensed as interest expense or recognized as a component of the gain or loss on extinguishment, as applicable.
Common Stock Payable
Common stock payable represents the fair value of shares of the Company’s common stock that have been earned or sold but not yet physically issued by the transfer agent as of the balance sheet date. Common stock payable is classified as a component of stockholders’ equity (deficit). Upon physical issuance of the shares, the common stock payable balance is reclassified to common stock (at par value) and additional paid-in capital. Commitment shares represent shares of common stock issued or issuable to Lambda Ventures, LLC as consideration for its commitment to purchase shares of common stock under the Equity Purchase Agreement described in Note 6.
| 14 |
Segment Information
The Company operates as a operating and reportable segment: the design, integration and support of green hydrogen production and refueling systems. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews financial information on a consolidated basis for purposes of allocating resources and assessing performance. The measure of segment profit or loss used by the CODM is consolidated net loss as presented in the accompanying statements of operations. The significant expense categories regularly provided to the CODM are those presented on the face of the statements of operations, including general and administrative expenses, depreciation, stock-based compensation, interest expense and the changes in fair value associated with the Company’s convertible notes and derivative liabilities; other segment items comprise the remaining amounts presented therein. Segment assets are the consolidated total assets reported on the accompanying balance sheets. This presentation is consistent with the segment disclosure included in the Company’s Registration Statement on Form S-1, applied to the current interim periods in accordance with ASU 2023-07.
NOTE 3 – GOING CONCERN
On July 31, 2026, we had an accumulated deficit of
$
Based on the above factors, substantial doubt exists about our ability to continue as a going concern within one year after the date that the financial statements are issued.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
| Schedule of property and equipment | ||||||||
July 31, 2026 | October 31, 2025 | |||||||
| Vehicles | $ | $ | ||||||
| Small equipment | $ | |||||||
| Large equipment | ||||||||
| Property and Equipment, Gross | $ | $ | ||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and Equipment, Net | $ | $ | ||||||
Depreciation
expense for the nine months ended July 31, 2026 and 2025 were $
NOTE 5 – LEASES
Operating leases
The Company has an operating lease agreement for office space in Murrieta, California, expiring on November 30, 2026.
| 15 |
The Company determined the above office space leases and related extensions are classified as operating leases under ASC 842. Therefore, the Company recognized operating lease liabilities with corresponding Right-Of-Use ("ROU") assets based on the present value of the minimum rental payments of such leases.
As the Company’s leases do not provide
an implicit interest rate, the lease liability is calculated at lease commencement as the present value of unpaid lease payments using
the Company’s estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that the Company
would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using
a portfolio approach based on information available at the commencement date of the lease. As of July 31, 2026, the ROU asset was $
Remaining lease term as of July 31, 2026:
| Schedule of remaining lease term | |||
| Year | Operating Lease Payment | ||
| Remainder of fiscal 2026 | |||
| Fiscal 2027 | |||
| Total Payments | $ | $ |
Lease Not Yet Commenced
In April 2024, the Company entered into a lease agreement for an industrial facility located in Katy, Texas, intended to house a hydrogen processing plant. Under the lease, the landlord was obligated to construct the facility at the landlord's cost, and the lease term was to commence only upon completion of that construction and delivery of the premises to the Company.
As of July 31, 2026, the landlord’s construction had not been completed, the lease had not commenced, and the Company had not taken possession of the facility. Accordingly, no right-of-use asset or lease liability has been recorded on the Company’s balance sheet as of July 31, 2026. Through July 31, 2026, no base rent, additional rent, real property taxes, security deposit or other amounts had been paid or had become payable by the Company under the lease.
On September 15, 2026, the Company and the landlord entered into a Lease Termination and Mutual Release Agreement terminating the lease in its entirety prior to commencement. See Note 10 – Subsequent Events.
NOTE 6 – COMMON STOCK
Stock Issued
During the quarter ended January 31, 2025, the Company
entered into a Stock Subscription Agreement with accredited investors (under Rule 506 (b) of Regulation D under the Securities Act of
1933, as amended (the “Securities Act”)) whereby the Company privately sold a total of shares of its common stock for
an aggregate cash purchase price of $
| 16 |
During the
quarter ended January 31, 2025, the Company's Board of Directors granted approval for the issuance of shares of our
common stock valued at $
During the quarter
ended January 31, 2026, the Company entered into a Stock Subscription Agreement with an accredited investor (under Rule 506(b)
of Regulation D under the Securities Act of 1933, as amended). Whereby the Company privately sold a total of shares
of its common stock for an aggregate cash purchase price of $
Pursuant to the Company’s
Regulation A offering, which was qualified by the Securities and Exchange Commission on December 11, 2025, the Company entered into stock
subscription agreement for its common stock at a purchase price of $ per share. On December 13, 2025, the Company received cash proceeds
of $
Convertible Note Conversion
On December 12, 2025, following
the qualification of the Company’s Regulation A Offering Statement on Form 1-A (“Form 1-A”) by the SEC on December 11,
2025, the Company converted $
During the three months ended July 31, 2026, the transfer agent issued
the Initial Commitment Shares to Lambda Ventures LLC (see Equity Purchase Agreement below) and shares of common stock under
the Regulation A offering in settlement of $
Stock Receivable
As of July 31, 2026 and October 31, 2025, the Company
issued shares of common stock under Regulation A offering to various shareholders that have not yet paid for shares; therefore,
$
Stock Payable
As of July 31, 2026, $ received from investors under the Company’s Regulation A offering remained classified as common stock payable pending issuance of the related shares by the transfer agent.
As of July 31, 2026, the Company sold shares
of common stock under its Regulation D offering to a shareholder that have not yet been issued by the transfer agent; therefore, $
As of July 31, 2026, the Company had agreed to issue
shares of common stock to Lambda Ventures LLC as initial commitment shares in connection with the Equity Purchase Agreement dated
April 27, 2026. The Initial Commitment Shares were issued by the transfer agent during the three months ended July 31, 2026, and
the related fair value of $
As of July 31, 2026 and October 31, 2025, the Company had and shares of common stock issued and outstanding, respectively.
| 17 |
Equity Purchase Agreement – Lambda Ventures LLC
On April 27, 2026, the
Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Lambda Ventures LLC, a Nevada limited
liability company (the “Investor”), pursuant to which the Company has the right, but not the obligation, to direct the
Investor to purchase up to $
As consideration for the
Investor’s commitment to enter into the Purchase Agreement, the Company agreed to issue to the Investor shares of Common
Stock as initial commitment shares (the “Initial Commitment Shares”), which are earned in full upon execution of the Purchase
Agreement. In addition, each time aggregate gross proceeds received by the Company under the Purchase Agreement increase by $
NOTE 7 – PREFERRED STOCK
Issued
On January 2, 2025, the Company entered into a Share Exchange Agreement with the CEO. Pursuant to the agreement, the CEO exchanged shares of the Company’s common stock for shares of Series B Preferred Stock. On January 9, 2025, shares of common stock held by Donald Owens were cancelled, and shares of Series B Preferred Stock were issued to Donald Owens.
On January 2, 2025, the Company entered into a Share Exchange Agreement with HNO Green Fuels, Inc. (“HNO Green Fuels”), a related party. Pursuant to the agreement, HNO Green Fuels exchanged shares of the Company’s common stock for shares of Series B Preferred Stock. On January 9, 2025, shares of common stock held by HNO Green Fuels, Inc. were cancelled, and shares of Series B Preferred Stock were issued to HNO Green Fuels, Inc.
Authorized
Series A Preferred Stock
The Company has authorized shares of Series A Preferred Stock, par value $ per share, of which shares were issued and outstanding as of each of July 31, 2026 and October 31, 2025. Each outstanding share of Series A Preferred Stock entitles the holder to 55 votes on all matters submitted to a vote of the Company's shareholders. The holders of Series A Preferred Stock are not entitled to receive dividends and have no rights to any distribution upon the liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary. The Series A Preferred Stock is not convertible into common stock or any other security of the Company and is not subject to redemption.
| 18 |
Series B Preferred Stock
The Company has authorized shares of Series B Preferred Stock, par value $ per share, of which shares were issued and outstanding as of each of July 31, 2026 and October 31, 2025. The holders of Series B Preferred Stock have no right to vote on any matters submitted to a vote of the Company's shareholders and are not entitled to receive dividends. Upon the liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, each holder of Series B Preferred Stock is entitled to receive, for each share held, out of the assets of the Company legally available for distribution, an amount equal to the distribution that would be made on a pro rata basis with the holders of the Company's common stock, calculated as if the Series B Preferred Stock had been converted into common stock as of the date immediately prior to the record date fixed for such distribution. Each holder of Series B Preferred Stock may, from time to time, convert any or all of such holder's shares into fully paid and non-assessable shares of common stock at a rate of shares of common stock for each share of Series B Preferred Stock surrendered for conversion; provided, however, that no such conversion may be effected to the extent it would cause the holder's beneficial ownership, when aggregated with all other shares of common stock beneficially owned by such holder (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder), to exceed 4.99% of the Company's common stock issued and outstanding at such time. The Series B Preferred Stock is not subject to redemption.
NOTE 8 – RELATED PARTY TRANSACTIONS
Notes Payable, Related Party
On November 19, 2021, the Company issued a note payable
in the amount of $
As of July 31, 2026, the Company had multiple outstanding
promissory notes payable to HNO Green Fuels, Inc. The notes bear interest at
| Schedule of multiple outstanding promissory notes payable | ||||||||||||||
| Issue Date |
Original Principal |
Maturity Date |
Principal Outstanding | Accrued Interest | ||||||||||
| $ | $ | $ | ||||||||||||
| $ | $ | $ | ||||||||||||
| $ | $ | $ | ||||||||||||
| $ | $ | $ | ||||||||||||
| $ | $ | $ | ||||||||||||
| $ | $ | $ | ||||||||||||
| $ | $ | $ | ||||||||||||
| $ | $ | $ | ||||||||||||
| $ | $ | $ | ||||||||||||
| $ | $ | $ | ||||||||||||
| Total | $ | $ | ||||||||||||
Extension of Promissory Notes:
| 19 |
Advances from Related Party
During the year ended October 31, 2024, Donald Owens,
the Company’s Chairman of the Board of Directors, advanced $
During the year ended October 31, 2025, Mr. Owens
advanced an additional $
During the nine months ended July 31, 2026, HNO Green
Fuels, Inc. advanced an additional $
These advances are unsecured, non-interest bearing
and due on demand. As of July 31, 2026, and October 31, 2025, related party advances had outstanding balances of $
NOTE 9 – CONVERTIBLE NOTES PAYABLE
During the nine months ended July 31, 2026, the Company entered into five convertible note financing transactions. The CFI Capital note was issued and fully repaid during the quarter ended April 30, 2026. The Jefferson Street Capital and Lambda Ventures (April 9, 2026) notes were issued during the quarter ended April 30, 2026 and remained outstanding as of July 31, 2026. On May 5, 2026, the Company issued two additional convertible notes, to Monroe Street Capital Partners, LP and to Lambda Ventures, LLC, each of which remained outstanding as of July 31, 2026. The material terms of each transaction are described below.
CFI Capital LLC – Issued and Repaid During the Quarter Ended April 30, 2026
On March 12, 2026, the Company issued an
Jefferson Street Capital, LLC
On April 7, 2026, the Company entered into
a Securities Purchase Agreement with Jefferson Street Capital, LLC, a New Jersey limited liability company (the "JSC Buyer"),
pursuant to which the Company issued a Convertible Promissory Note in the principal amount of $
The JSC Note has a principal amount of $
Lambda Ventures, LLC – Convertible Note Issued April 9, 2026
On April 9, 2026, the Company entered into a Securities Purchase
Agreement with Lambda Ventures, LLC, a Nevada limited liability company (the "LV Buyer"), pursuant to which the Company issued
a Convertible Promissory Note in the principal amount of $
| 20 |
The LV April Note has a principal amount of $
Monroe Street Capital Partners, LP – Convertible Note Issued May 5, 2026
On May 5, 2026, the Company entered into a Securities Purchase Agreement
with Monroe Street Capital Partners, LP, a Delaware limited partnership (the "MSC Buyer"), pursuant to which the Company issued
a Convertible Promissory Note in the principal amount of $
The MSC Note has a principal amount of $
Lambda Ventures, LLC – Convertible Note Issued May 5, 2026
Also on May 5, 2026, the Company entered into a separate Securities
Purchase Agreement with Lambda Ventures, LLC, pursuant to which the Company issued a Convertible Promissory Note in the principal amount
of $
The LV May Note has a principal amount of $
| 21 |
Convertible Notes Payable
The following table summarizes the carrying value of convertible notes payable outstanding as of July 31, 2026:
| Schedule of convertible notes payable outstanding | |||||
| JSC Note | LV April Note | MSC Note | LV May Note | Total | |
| Principal amount | $ |
$ |
$ |
$ |
$ |
| Add: Guaranteed interest payable | |||||
| Gross note balance | |||||
| Less: Original issue discount | ( |
( |
( |
( |
( |
| Less: Guaranteed interest cost | ( |
( |
( |
( |
( |
| Less: Warrant discount (ASC 470-20) | ( |
( |
( |
( |
( |
| Less: Derivative discount | ( |
( |
( |
( |
( |
| Less: Debt issue costs | ( |
( |
( |
( |
( |
| Net carrying value | $ |
$ |
$ |
$ |
$ |
All four notes were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D.
Warrant Accounting – ASC 470-20 Allocation
Each convertible note was issued with a detachable Common Stock Purchase
Warrant. The fair value of each warrant was determined using the Black-Scholes option pricing model at the grant date and credited to
additional paid-in capital, with a corresponding debt discount amortized to interest expense over the note term. Each warrant satisfies
the fixed-for-fixed criteria under ASC 815-40 (fixed exercise price of $
Black-Scholes Assumptions
The following assumptions were used in the Black-Scholes valuation of each warrant tranche. July 31, 2026 fair values are presented for informational purposes only; as equity-classified instruments, the warrants are not remeasured through earnings.
Jefferson Street Capital Warrant
| Schedule of assumptions | ||
| Parameter | Issuance (April 7, 2026) | July 31, 2026 (Informational) |
| Stock Price (S) | $ |
$ |
| Exercise Price (K) | $ |
$ |
| Expected Term (Years) | ||
| Risk-Free Rate | % | % |
| Expected Volatility (σ) | % | % |
| Expected Dividend Yield | % | % |
| d₁ | ||
| d₂ | ( |
( |
| N(d₁) | ||
| N(d₂) | ||
| Fair Value Per Share | $ |
$ |
| Total Warrant Fair Value | $ |
$ |
| 22 |
Lambda Ventures Warrant (April 9, 2026)
| Schedule of assumptions | ||
| Parameter | Issuance (April 9, 2026) | July 31, 2026 (Informational) |
| Stock Price (S) | $ |
$ |
| Exercise Price (K) | $ |
$ |
| Expected Term (Years) | ||
| Risk-Free Rate | % | % |
| Expected Volatility (σ) | % | % |
| Expected Dividend Yield | % | % |
| d₁ | ||
| d₂ | ( |
( |
| N(d₁) | ||
| N(d₂) | ||
| Fair Value Per Share | $ |
$ |
| Total Warrant Fair Value | $ |
$ |
Monroe Street Capital Warrant
| Schedule of assumptions | ||
| Parameter | Issuance (May 5, 2026) | July 31, 2026 (Informational) |
| Stock Price (S) | $ |
$ |
| Exercise Price (K) | $ |
$ |
| Expected Term (Years) | ||
| Risk-Free Rate | % | % |
| Expected Volatility (σ) | % | % |
| Expected Dividend Yield | % | % |
| d₁ | ||
| d₂ | ( |
( |
| N(d₁) | ||
| N(d₂) | ||
| Fair Value Per Share | $ |
$ |
| Total Warrant Fair Value | $ |
$ |
Lambda Ventures Warrant (May 5, 2026)
| Schedule of assumptions | ||
| Parameter | Issuance (May 5, 2026) | July 31, 2026 (Informational) |
| Stock Price (S) | $ |
$ |
| Exercise Price (K) | $ |
$ |
| Expected Term (Years) | ||
| Risk-Free Rate | % | % |
| Expected Volatility (σ) | % | % |
| Expected Dividend Yield | % | % |
| d₁ | ||
| d₂ | ( |
( |
| N(d₁) | ||
| N(d₂) | ||
| Fair Value Per Share | $ |
$ |
| Total Warrant Fair Value | $ |
$ |
Risk-free rates reflect the 5-year Constant Maturity Treasury rate for each measurement date per the U.S. Department of the Treasury Daily Par Yield Curve (4.08% at May 5, 2026; 4.45% at July 31, 2026; issuance-date rates for the April notes as previously disclosed).
| 23 |
Loss on Issuance of Convertible Notes for the Three Months Ended July 31, 2026
At issuance of each May 5, 2026 note, the fair value of the bifurcated conversion-feature derivative was recorded as a debt discount only to the extent of the remaining carrying-value capacity of the note; the excess was recognized immediately as a day-one loss on issuance, consistent with the policy applied in the quarter ended April 30, 2026:
| Schedule of loss on fair value of convertible note | |||
| MSC Note | LV May Note | Total | |
| Note Face Value | $ |
$ |
$ |
| Guaranteed Interest | |||
| Gross Note Balance | |||
| (a) Original Issue Discount (OID) | ( |
( |
( |
| (b) Guaranteed Interest Charge | ( |
( |
( |
| (c) Warrant Fair Value (Black-Scholes) | ( |
( |
( |
| (d) Debt Issue Costs | ( |
( |
( |
| Remaining capacity for derivative discount | |||
| Derivative Liability — Intrinsic Value at Issuance | |||
| Less: Derivative discount recorded (capped) | ( |
( |
( |
| Day-one loss on issuance of note | $ |
$ |
$ |
For the nine months ended July 31, 2026, total day-one losses on
issuance of convertible notes were $
Outstanding Warrants
The following table summarizes the common stock purchase warrants outstanding as of July 31, 2026:
| Schedule of common stock purchase warrants outstanding | |||||
| Holder | Issue Date | Shares | Exercise Price | Expiration | Grant-Date FV |
| Jefferson Street Capital, LLC | $ |
$ | |||
| Lambda Ventures, LLC | $ |
$ | |||
| Monroe Street Capital Partners, LP | $ |
$ | |||
| Lambda Ventures, LLC | $ |
$ | |||
| Total | $ |
$ |
As of July 31, 2026, there were
Interest Expense on Convertible Notes – Three and Nine Months Ended July 31, 2026
The following summarizes non-cash interest expense recognized in connection with convertible notes payable during the three months ended July 31, 2026:
JSC Note: OID amortization $
LV April Note: OID amortization $
MSC Note: OID amortization $
| 24 |
LV May Note: OID amortization $
Total interest expense on convertible notes was $
Embedded Conversion Features – ASC 815 Analysis
Each of the JSC Note, LV April Note, MSC Note and LV May Note contains a variable conversion feature providing for conversion at 60% of the lowest traded price of the Company’s Common Stock during the 20 trading days prior to conversion. The Company evaluated each embedded conversion feature under ASC 815, Derivatives and Hedging. Because the conversion price of each note is indexed to a variable market price rather than fixed, and because each note may be settled in a variable number of shares, the embedded conversion features fail the fixed-for-fixed test and do not qualify for the equity scope exception under ASC 815-40-15. Accordingly, the Company bifurcated each conversion feature from its host debt instrument and recorded it as a derivative liability at fair value in accordance with ASC 815-15, remeasured at each reporting date with changes in fair value recognized in earnings. The fair value of each derivative liability is measured using the intrinsic value method at each measurement date: Fair Value = (Total Face Obligation ÷ Conversion Price) × max(Stock Price − Conversion Price, 0), where the conversion price equals 60% of the lowest traded price of the Common Stock during the 20 trading days preceding the measurement date. The measurement for each note is set out below.
Revision of Previously Reported Interim Amounts
In connection with the preparation of these
financial statements, the Company determined that the derivative liabilities at April 30, 2026 had been measured using the lowest closing
price of the Common Stock during the applicable look-back period rather than the lowest traded price required by the contractual conversion
terms. The April 30, 2026 measurements have been revised to a conversion price of $
JSC Note
Because the conversion price of the Note is
variable and indexed to future market prices rather than being fixed, the embedded conversion feature was bifurcated from the host debt
and recorded as a derivative liability at fair value. At April 30, 2026, as revised (see below), the conversion price was $
| Schedule of roll-forward of derivative liability | |
| Derivative Liability — Conversion Feature | Amount |
| Balance — April 30, 2026 | $ |
| Change in fair value — loss | |
| Balance — July 31, 2026 | $ |
LV April Note
The embedded conversion feature of the LV April
Note was likewise bifurcated and recorded as a derivative liability at fair value. At April 30, 2026, as revised (see below), the conversion
price was $
| 25 |
| Schedule of roll-forward of derivative liability | |
| Derivative Liability — Conversion Feature | Amount |
| Balance — April 30, 2026 | $ |
| Change in fair value — loss | |
| Balance — July 31, 2026 | $ |
MSC Note
Because the conversion price of the MSC Note
is variable and indexed to future market prices rather than being fixed, the embedded conversion feature was bifurcated from the host
debt and recorded as a derivative liability at fair value at issuance. At May 5, 2026 (issuance), the estimated conversion price was $
| Schedule of roll-forward of derivative liability | |
| Derivative Liability — Conversion Feature | Amount |
| Initial recognition — May 5, 2026 (issuance) | $ |
| Change in fair value — loss | |
| Balance — July 31, 2026 | $ |
LV May Note
The embedded conversion feature of the LV May
Note was likewise bifurcated and recorded as a derivative liability at fair value at issuance. At May 5, 2026 (issuance), the estimated
conversion price was $
| Schedule of roll-forward of derivative liability | |
| Derivative Liability — Conversion Feature | Amount |
| Initial recognition — May 5, 2026 (issuance) | $ |
| Change in fair value — loss | |
| Balance — July 31, 2026 | $ |
Summary — Derivative Liabilities
The following table presents the roll-forward of the combined derivative liability for the three months ended July 31, 2026:
| Schedule of roll-forward of derivative liability | |
| Derivative Liability — Conversion Features | Amount |
| Balance — April 30, 2026 | $ |
| Initial recognition — notes issued May 5, 2026 | |
| Change in fair value — loss | |
| Balance — July 31, 2026 | $ |
The loss on change in fair value of derivative
liabilities of $
| 26 |
Fair Value Measurements – Level 3
The derivative liabilities are measured at fair value on a recurring
basis and are classified within Level 3 of the fair value hierarchy because the intrinsic-value measurement relies on a Company-specific
valuation model with significant unobservable inputs. Significant inputs at July 31, 2026 included the 20-trading-day low traded price
($
NOTE 10 – SUBSEQUENT EVENTS
Subsequent events have been evaluated through September 17, 2026, which represents the date the financial statements were issued, and no events other than discussed below have occurred through that date that would impact the financial statements.
Stock Issued
On August 20, 2026, the Company issued
shares of common stock upon partial conversion of the convertible promissory note issued to Monroe Street Capital Partners, LP on May
5, 2026, at a conversion price of $
On August 27, 2026, the Company issued
shares of common stock upon partial conversion of the convertible promissory note issued to Lambda Ventures, LLC on April 9, 2026, at
a conversion price of $
On September 16, 2026, the Company issued
shares of common stock upon partial conversion of the convertible promissory note issued to Lambda Ventures, LLC on April 9, 2026,
at a conversion price of $
Note Issued
On September 4, 2026, the Company entered
into a Securities Purchase Agreement with CFI Capital LLC, pursuant to which the Company issued a
Lease Termination
On September 15, 2026, the Company and Clay Road Real Estate, LLC entered into a Lease Termination and Mutual Release Agreement with respect to the Company's April 2024 lease of an industrial facility in Katy, Texas. The facility contemplated by the lease was never constructed, the premises were never delivered to the Company, the lease term never commenced, and the Company never took possession of or occupied the premises. Under the agreement, the lease was terminated in its entirety, the parties granted each other a mutual release of all claims arising under or relating to the lease, any guaranty of the lease was terminated and released, and the parties confirmed that no rent, security deposit, construction or build-out costs, or any other amounts are or will become due from either party. Because no right-of-use asset or lease liability had been recorded and no amounts had been paid under the lease, the termination did not result in any gain, loss or other charge to the Company's financial statements.
| 27 |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
HNO International, Inc., a Nevada corporation (herein referred to as “we,” “us,” “our,” “HNO” and the “Company”), focuses on systems engineering design, integration, and product development to generate green hydrogen-based clean energy solutions to help businesses and communities decarbonize in the near term.
HNO stands for “Hydrogen” and “Oxygen” and our experienced management team has over 14 years of expertise in the green hydrogen production industry.
HNO provides green hydrogen systems engineering design, integration, and products to multiple markets, which include: (i) the zero-emission vehicle and mobile equipment market consisting of hydrogen fuel cell electric passenger vehicles, material handling equipment such as forklifts and airport ground support equipment, as well as the medium and heavy-duty truck market; (ii) the current and emerging hydrogen gas markets encompassing ammonia, fertilizer, steel, mining, electronics, semiconductors, and fuel cell electric vehicles; (iii) and the gasoline and diesel engine emissions and maintenance reduction product and services market.
HNO is at the forefront of developing innovative integrated products that cater to various uses of green hydrogen, both current and future. These include:
| · | Hydrogen refueling and generation systems for Fuel Cell Electric vehicles, such as forklifts, drones, cars, and trucks, as well as for zero-emission heating and cooking applications. | |
| · | Small to mid-scale green hydrogen production facilities with a capacity of 100kg/day to 2,000 (or more) kg/day. These facilities can help decarbonize industrial processes and increase the use of hydrogen and hydrogen-based fuels for transportation and material handling. | |
| · | Hydrogen technologies that decrease emissions and maintenance for existing gasoline and diesel internal combustion engines. This can aid companies in decarbonizing their operations in the short term. |
Results of Operations
For the three months ended July 31, 2026 and 2025
Revenue
All revenue recognized in the current fiscal year was earned in the quarter ended April 30, 2026 from the facilitation of the delivery of hydrogen equipment and related integration support. The Company concluded that it acted as an agent with respect to the equipment component of that arrangement, as it did not take control of the goods and the third-party supplier shipped directly to the customer. Accordingly, revenue was recognized on a net basis, limited to the Company’s retained margin.
Cost of Goods Sold
Cost of Goods Sold consists of direct expenses related to hydrogen engineering services and combustion solution projects, including materials, subcontracted labor, and other project-specific implementation costs. For the three months ended July 31, 2026 and 2025, total cost of sales was $0 and $0, respectively, as the Company recognized no revenue in either period.
Gross Profit
For the three months ended July 31, 2026 and 2025, gross profit was $0 and $0, respectively, as no revenue was recognized in either period.
Operating Expenses
General and administrative expenses were $186,014 for the three months ended July 31, 2026, compared to $180,560 during the same period in 2025, an increase of $5,454.
| 28 |
Depreciation expense decreased by $3,026 to $63,716 for the three months ended July 31, 2026, compared to $66,742 for the same period in 2025, reflecting a $1,229 reversal of prior-period over-depreciation recorded in the current quarter and small equipment reaching the end of its depreciable life, partially offset by depreciation on equipment additions.
Advertising and marketing expenses were $0 for the three months ended July 31, 2026, compared to $2,610 for the same period in 2025. The decrease was due to reduced outreach activities compared to the prior year, which had higher spending to support the Company’s hydrogen engineering and combustion solutions.
Net Loss
Net loss for the three months ended July 31, 2026, was $532,209 compared to a net loss of $498,010 during the same period in 2025.
For the nine months ended July 31, 2026 and 2025
Revenue
For the nine months ended July 31, 2026 and 2025, the Company recognized revenue of $33,821 and $43,708, respectively. Revenue in the current period was generated from the facilitation of the delivery of hydrogen equipment and related integration support. The Company concluded that it acted as an agent with respect to the equipment component of the arrangement, as it did not take control of the goods and the third-party supplier shipped directly to the customer. As a result, revenue was recognized on a net basis, limited to the Company’s retained margin.
Cost of Goods Sold
Cost of Goods Sold consists of direct expenses related to hydrogen engineering services and combustion solution projects, including materials, subcontracted labor, and other project-specific implementation costs. For the nine months ended July 31, 2026 and 2025, total cost of sales was $0 and $0, respectively. The Company acted as an agent in facilitating delivery of certain hydrogen refueling equipment during the 2026 period and did not generate separate cost of goods sold.
Gross Profit
For the nine months ended July 31, 2026 and 2025, gross profit was $33,821 and $43,708, respectively. These amounts reflect revenue generated from the facilitation of the delivery of hydrogen equipment and integration support services. As the Company was acting as an agent with respect to the equipment delivered by a third-party vendor, no cost of goods sold was recognized, and gross profit equaled the margin retained.
Operating Expenses
General and administrative expenses were $472,583 for the nine months ended July 31, 2026, a decrease of $324,406 from $796,989 in the comparable period of 2025. The decrease was attributable primarily to a decrease in contract labor costs, partially offset by increases in other operating costs.
Depreciation expense increased by $13,639 to $192,369 for the nine months ended July 31, 2026, compared to $178,730 for the same period in 2025, reflecting depreciation on additions to property and equipment.
Advertising and marketing expenses were $2,559 for the nine months ended July 31, 2026, compared to $22,770 for the same period in 2025, a decrease of $20,211. The decrease was due to reduced outreach activities compared to the prior year, which had higher spending to support the Company’s hydrogen engineering and combustion solutions.
Net Loss
Net loss for the nine months ended July 31, 2026, was $1,159,592 compared to a net loss of $6,429,469 during the same period in 2025.
Forward-Looking Considerations
| 29 |
The Company recognizes the possibility of future increases in labor or material costs. Factors such as evolving market conditions, potential inflation, and global economic dynamics are considered. We are actively monitoring these aspects to anticipate and navigate any forthcoming rises in labor or material expenses.
Cost-to-Revenue - The Company is assessing alterations in the relationship between cost of sales and revenue. We are examining the factors influencing these changes, including shifts in prices and fluctuations in the volume of services sold. Understanding the impact of these elements is crucial for maintaining a balanced and effective cost-to-revenue structure.
Liquidity and Capital Resources
We incurred a net loss for the three months ended July 31, 2026 of $532,209 and had an accumulated deficit of $53,209,782 at July 31, 2026. At July 31, 2026, we had a cash balance of $69,427, compared to a cash balance of $9,525 at October 31, 2025. At July 31, 2026, the working capital deficit was $3,031,505, compared to a working capital deficit of $2,422,574 at October 31, 2025. The increase principally reflects the recognition of $450,164 of derivative liabilities associated with the April and May 2026 convertible note financings and growth in related-party advances and convertible notes payable during the period, partially offset by cash provided by financing activities. Our existing and available capital resources are not expected to be sufficient to satisfy our funding requirements through one year from the date of this filing in the absence of share issuances or other sources of financing.
We have not been able to generate sufficient cash from operating activities to fund our ongoing operations. We have raised capital through sales of common stock and debt securities.
The effect of existing or probable government regulations on our business is not known at this time. Due to the nature of our business, it is anticipated that there may be increasing government regulation that may cause us to have to take serious corrective actions or make changes to the business plan.
The Company will need to raise additional capital through equity financings or other means in order to continue operations and meet its obligations. Failure to obtain additional funding could have a material adverse effect on our financial condition and the results of operations. While we do not currently generate sufficient cash from operations, we have access to certain external sources of financing. These include the Equity Purchase Agreement we entered into with Lambda Ventures LLC on April 27, 2026, under which we may sell up to $30,000,000 of our common stock over a period of up to 24 months; our ongoing Regulation A offering; and convertible note financings, including the Jefferson Street Capital and Lambda Ventures notes issued in April 2026 and the Monroe Street Capital Partners and Lambda Ventures notes issued in May 2026. Our ability to access these sources is subject to significant conditions and limitations. Sales under the Equity Purchase Agreement are subject to the effectiveness of a resale registration statement covering the underlying shares, per-put dollar limits, and the prevailing market price of our common stock, and amounts realizable under our Regulation A offering and any future note financings depend on investor demand and market conditions. There can be no assurance that financing from these sources will be available in amounts sufficient, or on terms acceptable, to meet our needs. Accordingly, we will need to raise additional capital through equity financings or other means in order to continue operations and meet our obligations, and failure to obtain additional funding could have a material adverse effect on our financial condition and results of operations.
Cash Flow
For the Nine months Ended July 31, 2026 and 2025
The following table summarizes our cash flows for the periods indicated below:
|
For the Nine months Ended July 31, |
For the Nine months Ended July 31, | |||||||
| Cash Used in Operating Activities | $ | (437,226 | ) | $ | (877,827 | ) | ||
| Cash Provided by Financing Activities | 510,295 | 1,067,500 | ||||||
| Cash Used in investing activities | $ | (13,167) | $ | (177,944 | ) | |||
Cash Used in Operating Activities
| 30 |
During the nine months ended July 31, 2026, cash used in operating activities amounted to $(437,226), primarily reflecting our net loss of $(1,159,592). This was partially offset by non-cash items, including depreciation of $192,369, non-cash interest expense of $111,685, a loss on change in fair value of convertible notes of $231,390, a loss on derivative liability of $98,878 and commitment shares issued for financing expense of $55,000. Changes in operating assets and liabilities included a decrease in accounts receivable of $332,669, a decrease in other receivable of $1,000, a decrease in accounts payable of $320,180, an increase in accrued interest payable of $20,568, and a net change in operating lease right-of-use assets and lease liabilities of $(1,013).
During the nine months ended July 31, 2025, cash used in operating activities amounted to $(877,827), primarily reflecting our net loss of $(6,429,469). This was largely offset by non-cash items, primarily $5,333,937 of stock-based compensation, depreciation of $178,730, a loss on write-off of intangible assets of $105,190, legal services provided in exchange for a convertible note of $45,000, and a loss on change in fair value of convertible notes of $15,000. Changes in operating assets and liabilities included a decrease in accounts payable of $129,137, a decrease in accrued payroll of $17,762, an increase in accrued interest payable of $20,569, and a net change in operating lease right-of-use assets and lease liabilities of $115.
Cash Provided by Financing Activities
During the nine months ended July 31, 2026, cash provided by financing activities was $510,295, which consisted of net proceeds from related party advances of $185,045, proceeds from the sale of common stock of $67,500, and proceeds from the issuance of convertible notes payable of $407,750, partially offset by the repayment of the CFI Capital convertible note of $150,000.
During the nine months ended July 31, 2025, cash provided by financing activities was $1,067,500, which consisted of net proceeds from related party advances of $131,000 and proceeds from the sale of common stock of $936,500.
Cash Used in Investing Activities
During the nine months ended July 31, 2026, cash used in investing activities was $(13,167), which consisted of the purchase of property and equipment and long-term assets.
During the nine months ended July 31, 2025, cash used in investing activities was $(177,944), which consisted of the purchase of property and equipment and long-term assets.
Going Concern
The Company’s financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the nine months ended July 31, 2026, the Company incurred a net loss of $1,159,592 and used cash in operating activities of $437,226, and on July 31, 2026, had stockholders’ deficit of $2,457,321. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and the classification of liabilities that might result from this uncertainty.
Management is actively seeking additional sources of capital through the sale of equity, advances from related parties, and exploring strategic partnerships. The Company is also focused on attracting suitable investors to support its business plan without relying heavily on existing cash reserves. Additionally, management is implementing cost-saving measures and exploring opportunities to diversify through acquisitions or entering into new markets. However, there can be no assurance that these efforts will result in sufficient funding, and the Company may continue to face substantial uncertainty regarding its ability to achieve profitable operations and sustain its business.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements with any party.
Critical Accounting Policies
| 31 |
Our discussion and analysis of results of operations and financial condition are based upon our condensed financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related to provisions for uncollectible accounts receivable, the fair value of derivative liabilities and embedded conversion features, the useful lives of property and equipment, and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Stock Based-Compensation
The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718 Compensation - Stock Compensation (“ASC 718”). ASC 718 requires that the cost of equity instrument awards, issued in exchange for services, including those issued to employees and predominantly to consultants, be measured at the grant-date fair value. The Company does not adhere to a formal stock-based compensation plan; rather, it issues stock awards on a discretionary basis as part of compensation agreements with selected consultants and employees. Compensation for stock-based awards is recognized as a non-cash expense on the income statement. The fair value of restricted stock grants is determined using the closing market price on the grant date, adjusted for an appropriate discount to reflect the restrictions on transferability and marketability of the shares. The discount is calculated using a weighted average of comparable restricted stock transactions, which better reflects the economic impact of larger issuances and provides a more accurate representation of fair value under ASC 718. The cost is recognized over the period during which the award recipient is required to perform services, typically known as the vesting period. The total compensation cost related to vested stock-based awards is recognized as the awards vest; the Company accounts for forfeitures as they occur. The expense related to stock-based compensation is included within the same income statement lines as cash compensation for the consultants and employees who receive the awards. The Company has elected to account for forfeitures as they occur. Accordingly, compensation cost is recognized for all awards granted, and previously recognized compensation cost for unvested awards is reversed in the period an award is forfeited. Stock-based compensation expense is presented as a separate line item in the condensed consolidated statements of operations. As of the report date, the Company has not established any plans to issue dividends on stock-based awards. Excess tax benefits and tax deficiencies arising from share-based payment awards are recognized as a component of income tax expense or benefit in the period in which the awards vest or are settled. The Company maintains a full valuation allowance against its deferred tax assets; accordingly, no income tax benefit has been recognized in connection with share-based compensation for the periods presented.
Employee Benefits
During the nine months ended July 31, 2026, the Company paid $2,970 in employer retirement contributions, representing 3% of semi-monthly payroll for one employee over twelve pay periods. During the three months ended July 31, 2026, the Company paid $1,485 in such contributions, representing six pay periods. These contributions are made in accordance with the terms of the Company's state-mandated retirement plan for eligible employees and are recorded as employee benefits expense in the period incurred.
Fair Value Measurement of Convertible Instruments
Convertible Notes and Embedded Derivatives
The Company evaluates convertible financial instruments at issuance to determine the appropriate classification and measurement model. The Company first assesses whether an instrument is within the scope of ASC 480, Distinguishing Liabilities from Equity — including whether it embodies an unconditional obligation to be settled in a variable number of shares for a fixed monetary amount — and then evaluates any embedded conversion features under ASC 815, Derivatives and Hedging.
Embedded conversion features are bifurcated from the host debt instrument and accounted for separately as derivative liabilities when the feature is not clearly and closely related to the host contract and does not qualify for the scope exception in ASC 815-40-15. The Company's outstanding convertible notes are convertible at a discount to the market price of the Common Stock, so the number of shares issuable is not fixed and the conversion features fail the fixed-for-fixed criterion. Accordingly, each conversion feature has been bifurcated and recorded as a derivative liability at fair value, remeasured at each reporting date with changes recognized in earnings as change in fair value of derivative liabilities.
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The convertible note hosts are carried at amortized cost, net of unamortized original issue discounts, debt discounts recognized upon bifurcation of the embedded derivatives and the relative fair value of warrants issued with the notes, and debt issuance costs. These discounts are accreted to interest expense over the term of each note using the straight-line method, which approximates the effective interest method.
Derivative liabilities are measured at fair value in accordance with ASC 820, Fair Value Measurement. Because the measurement relies on a Company-specific model incorporating significant unobservable inputs, the derivative liabilities are classified within Level 3 of the fair value hierarchy. Significant inputs include the market price of the Common Stock, the contractual discount applied in determining the conversion price, the applicable look-back price over the twenty trading days preceding the measurement date, and the total face obligation of each note.
Revenue Recognition
We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.
In certain arrangements where the Company facilitates the provision of goods or services provided by a third party, and does not take control of those goods or services, revenue is recognized on a net basis, limited to the margin or fee earned, consistent with the Company’s role as an agent under ASC 606-10-55-36 through 55-40.
The Company recognized no revenue during the three months ended July 31, 2026 and 2025. During the nine months ended July 31, 2026 and 2025, the Company recognized $33,821 and $43,708, respectively, in revenue related to the facilitation of delivery of hydrogen refueling equipment and related services. Based on its evaluation of the arrangement, the Company determined that it acted as an agent with respect to the facilitation of delivery of equipment, as it did not obtain control of the goods and the third-party vendor delivered directly to the customer. As a result, revenue was recognized on a net basis, excluding gross billings and associated third-party costs, in accordance with ASC 606.
Proposed Transactions
Other than sales of common stock under its ongoing Regulation A offering and potential draw-downs under the Equity Purchase Agreement with Lambda Ventures LLC (see Note 6), the Company is not anticipating any transactions.
Changes in Accounting Policies Including Initial Adoption
There were no recent accounting pronouncements that have or will have a material effect on the Company’s financial position or results of operations.
Financial Instruments
The main risks associated with the Company’s financial instruments include credit risk, market risk, and liquidity risk. The Company does not have significant exposure to foreign exchange risk, as all of it operations and transactions are denominated in U.S dollars.
Outstanding Share Data
As of July 31, 2026, the following securities were outstanding:
Common Stock: 102,355,323 shares
Series A Preferred Stock: 5,000,000 shares
Series B Preferred Stock: 360,000 shares
| 33 |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a Smaller Reporting Company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to ensure that such information is accumulated and communicated to our company's management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) inadequate segregation of duties consistent with control objectives; (ii) ineffective risk assessment; and (iii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.
We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending October 31, 2026, subject to obtaining additional financing: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during the quarter ended July 31, 2026, that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
| 34 |
PART II - OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 5. OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
None of our directors or
executive officers
ITEM 6. EXHIBITS
| Incorporated by reference | ||||||
| Exhibit | Exhibit Description | Filed herewith | Form | Period ending | Exhibit | Filing date |
| 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
| 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
| 32.1* | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||
| 32.2* | Certification of Principal Financial Officer 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 as its XBRL tags are embedded within the Inline XBRL document XBRL Instance Document | X | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Definition | X | ||||
| 104 | Cover page formatted as Inline XBRL and contained in Exhibit 101 | |||||
* Furnished, not filed.
| 35 |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
HNO INTERNATIONAL, INC.
| |
| September 21, 2026 |
By: /s/ Donald Owens Donald Owens, Chief Executive Officer (Principal Executive Officer) |
| September 21, 2026 |
By: /s/ Hossein Haririnia Hossein Haririnia, Treasurer (Principal Financial and Accounting Officer) |
| 36 |
EXHIBIT 31.1
RULE 13a-14(a)/15d-14(a) CERTIFICATION
I, Donald Owens, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended July 31, 2026, of HNO International Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles,
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
September 21, 2026
/s/ Donald Owens
Donald Owens
Chief Executive Officer
(Principal Executive Officer)
| 1 |
EXHIBIT 31.2
RULE 13a-14(a)/15d-14(a) CERTIFICATION
I, Hossein Haririnia, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended July 31, 2026, of HNO International Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles,
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting.
5. The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
September 21, 2026
/s/ Hossein Haririnia
Hossein Haririnia, Treasurer
(Principal Financial and Accounting Officer)
| 1 |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of HNO International Inc. (the “Company”) on Form 10-Q for the quarter ended July 31, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Donald Owens, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
September 21, 2026
/s/ Donald Owens
Donald Owens
Chief Executive Officer
(Principal Executive Officer)
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or
otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been
provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or
its staff upon request.
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EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of HNO International Inc. (the “Company”) on Form 10-Q for the quarter ended July 31, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Hossein Haririnia, Treasurer of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
September 21, 2026
/s/ Hossein Haririnia
Hossein Haririnia, Treasurer
(Principal Financial and Accounting Officer)
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or
otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been
provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or
its staff upon request.
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