Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the fiscal quarter ended June 30, 2023

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

For the transition period from ________ to _________

Commission File Number: 001-41487

HEMPACCO CO., INC.

(Exact name of Registrant as specified in its charter)

Nevada		83-4231457
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

9925 Airway Road, San Diego, CA 92154

(Address of Principal Executive Office and Zip Code)

(619) 779-0715

(Registrant’s Telephone Number, including Area Code)

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

Title of Each Class		Trading Symbol		Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share		HPCO		The Nasdaq Stock Market LLC

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

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

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.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards 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 Act. Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of August 11, 2023, was 28,343,728.

HEMPACCO CO., INC.

2023 QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

Part I – Financial Information

Item 1	Financial Statements	3
	Condensed Consolidated Balance Sheets at June 30, 2023 and December 31, 2022 (unaudited)	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023, and 2022 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023, and 2022 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4	Controls and Procedures	24

Part II – Other Information

Item 1	Legal Proceedings	25
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3	Defaults Upon Senior Securities	25
Item 4	Mine Safety Disclosures	25
Item 5	Other Information	25
Item 6	Exhibits	26

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HEMPACCO CO., INC.

Condensed Consolidated Balance Sheets

(Unaudited)

As of	June 30, 2023			December 31, 2022

ASSETS
Current Assets
Cash and cash equivalents	$	1,386,111		$	548,331
Accounts receivable		230,171			231,269
Accounts receivable, related parties		-			5,100
Loans receivable, related parties		263,182			-
Inventory		1,181,531			645,132
Prepaid expenses and other current assets		405,894			442,366
Prepaid expenses, related parties		957,871			35,609
Total Current Assets		4,424,760			1,907,807

Property and equipment		7,307,564			7,220,565
Right of use asset, related party		297,235			351,146
Other intangible assets, net of amortization		-			2,661
Other assets		568,357			-

TOTAL ASSETS	$	12,597,916		$	9,482,179

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Current Liabilities
Accounts payable	$	342,545		$	335,605
Accounts payable, related parties		30,169			42,831
Accrued liabilities		64,015			-
Customer prepaid invoices and deposits		861,314			838,164
Line of credit		100,000			-
Notes payable, related parties		50,000			69,282
Convertible promissory notes payable		100,000			125,000
Other short term loans		138,252			-
Right of use liability, related party – current		113,091			109,552
Total Current Liabilities		1,799,386			1,520,434

Long Term Liabilities
Long-term debt		-			142,770
Right of use liability, related party		200,450			258,776
Total Liabilities		1,999,836			1,921,980

Stockholders’ Equity
Preferred stock, $0.001 par value as of June 30, 2023 and December 31, 2022; 50,000,000 shares authorized as of June 30, 2023 and December 31, 2022, respectively.		-			-
Series A Preferred Stock, $0.001 par value as of June 30, 2023 and December 31, 2022, respectively; 10,000,000 Shares authorized as of June 30, 2023 and December 31, 2022, respectively. 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.		-			-
Common stock, $0.001 par value as of June 30, 2023 and December 31, 2022, respectively; 200,000,000 shares authorized as of June 30, 2023 and December 31, 2022, respectively. 28,343,728 and 23,436,505 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.		28,343			23,436
Additional paid-in capital		25,118,062			18,095,184
Accumulated deficit		(14,405,058	)		(10,463,048	)
Total Stockholders’ Equity		10,741,347			7,655,572
Non-controlling interests		(143,267	)		(95,373	)
Total Equity Attributable to Hempacco Co., Inc.		10,598,080			7,560,199

LIABILITIES AND STOCKHOLDERS’ EQUITY	$	12,597,916		$	9,482,179

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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HEMPACCO CO., INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues
Product sales	$	223,188		$	1,853,996		$	618,187		$	2,811,562
Product sales, related parties		13,760			5,000			20,319			6,000
Manufacturing service revenue		1,386			13,995			13,438			26,595
Kiosk revenue		16,267			2,066			17,017			2,066
Total Revenues		254,601			1,875,057			678,961			2,846,223

Cost of Sales
Cost of sales		417,632			1,398,028			877,891			2,197,034
Cost of sales, related parties		14,423			-			75,885			-
Total Cost of Sales		432,055			1,398,028			953,776			2,197,034
Gross Profit (Loss) from Operations		(177,454	)		477,029			(274,815	)		649,189

Operating Expenses
General and administrative		947,461			235,924			1,684,636			966,999
General and administrative, related parties		53,414			45,000			268,697			150,000
Sales and marketing		229,759			287,866			409,588			484,110
Sales and marketing, related parties		27,491			-			50,087			-
Expensing of related party advances and loans		195,775			-			1,320,775			-
Total Operating Expenses		1,453,900			568,790			3,733,783			1,601,109

Net Operating Loss		(1,631,354	)		(91,761	)		(4,008,598	)		(951,920	)

Other Income (Expense)
Interest expense, net		20,034			(5,799	)		18,746			(9,396	)
Other income & expense		-			210			(52	)		(13,250	)
Total Other Income (Expense)		20,034			(5,589	)		18,694			(22,646	)

Net Loss	$	(1,611,320	)	$	(97,350	)	$	(3,989,904	)	$	(974,566	)

Net Loss Attributable to Non-Controlling Interests		34,911			1,350			47,894			1,583
Net Loss Attributable to Hempacco Co., Inc.		(1,576,409	)		(96,000	)		(3,942,010	)		(972,983	)

Basic and Dilutive Earnings per Share	$	(0.06	)	$	(0.00	)	$	(0.15	)	$	(0.05	)

Shares Used in Calculating Earnings per Share		28,312,275			19,899,969			27,093,163			19,798,315

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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HEMPACCO CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	For the Three Months Ended June 30, 2023
					Additional					Non-
	Common Stock				Paid-In		Accumulated			controlling
	Shares		Amount		Capital		Deficit			Interests			Total
Balance as of March 31, 2023		28,281,505	$	28,281	$	25,088,092	$	(12,828,649	)	$	(108,356	)	$	12,179,368
Common stock issued for convertible note		62,223		62		28,970		-			-			29,032
Capital contribution related to joint venture		-		-		1,000		-			-			1,000
Net loss attributable to non-controlling interests		-		-		-		34,911			(34,911	)		-
Net loss for the three months ended June 30, 2023		-		-		-		(1,611,320	)		-			(1,611,320	)
Balance as of June 30, 2023		28,343,728	$	28,343	$	25,118,062	$	(14,405,058	)	$	(143,267	)	$	10,598,080

	For the Six Months Ended June 30, 2023
					Additional						Non-
	Common Stock				Paid-In			Accumulated			controlling
	Shares		Amount		Capital			Deficit			Interests			Total
Balance as of December 31, 2022		23,436,505	$	23,436	$	18,095,184		$	(10,463,048	)	$	(95,373	)	$	7,560,199
Issuance of common stock		4,830,000		4,830		7,240,170			-			-			7,245,000
Offering costs		-		-		(634,600	)		-			-			(634,600	)
Shares issued for consulting services		15,000		15		12,885			-			-			12,900
Capitalized value of warrants		-		-		374,453			-			-			374,453
Common stock issued for convertible note		62,223		62		28,970			-			-			29,032
Capital contribution related to joint venture						1,000									1,000
Net loss attributable to non-controlling interests		-		-		-			47,894			(47,894	)		-
Net loss for the six months ended June 30, 2023		-		-		-			(3,989,904	)		-			(3,989,904	)
Balance as of June 30, 2023		28,343,728	$	28,343	$	25,118,062		$	(14,405,058	)	$	(143,267	)	$	10,598,080

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	For the Three Months Ended June 30, 2022
					Additional						Non-
	Common Stock				Paid-In			Accumulated			controlling
	Shares		Amount		Capital			Deficit			Interests			Total
Balance as of March 31, 2022		19,695,532	$	19,696	$	6,742,803		$	(4,336,197	)	$	(14,483	)	$	2,411,819
Issuance of common stock		208,000		208		415,792			-			-			416,000
Offering costs		-		-		(60,525	)		-			-			(60,525	)
Common stock issued for convertible note		56,592		56		56,535			-			-			56,591
Net loss attributable to non-controlling interests		-		-		-			1,350			(1,350	)		-
Net loss for the three months ended June 30, 2022		-		-		-			(97,350	)		-			(97,350	)
Balance as of June 30, 2022		19,960,124	$	19,960	$	7,154,605		$	(4,432,197	)	$	(15,833	)	$	2,726,535

	For the Six Months Ended June 30, 2022
					Additional						Non-
	Common Stock				Paid-In			Accumulated			controlling
	Shares		Amount		Capital			Deficit			Interests			Total
Balance as of December 31, 2021		19,695,532	$	19,696	$	6,321,428		$	(3,459,214	)	$	(14,250	)	$	2,867,660
Warrant valuation expense		-		-		437,375			-			-			437,375
Issuance of common stock		208,000		208		415,792			-			-			416,000
Offering costs paid in connection with sale of common stock		-		-		(76,525	)		-			-			(76,525	)
Common stock issued for convertible note		56,592		56		56,535			-			-			56,591
Net loss attributable to non-controlling interests		-		-		-			1,583			(1,583	)		-
Net loss for the six months ended June 30, 2022		-		-		-			(974,566	)		-			(974,566	)
Balance as of June 30, 2022		19,960,124	$	19,960	$	7,154,605		$	(4,432,197	)	$	(15,833	)	$	2,726,535

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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HEMPACCO CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(3,989,904	)	$	(974,566	)
Adjustments to reconcile net loss to cash used in operating activities
Depreciation and amortization		63,848			45,217
Non-cash warrant valuation expense		31,205			437,375
Reserving of related party loans		1,320,775			-
Gain on disposal of assets		-			10,690
Stock based compensation for services		12,900			-
Changes in operating assets and liabilities
Trade receivables, net		1,098			(19,549	)
Accounts receivable, related parties		5,100			5,934
Prepaid expenses and other current assets		111,363			482,948
Prepaid expenses, related parties		(922,262	)		-
Inventories		(536,399	)		(321,390	)
Accounts payable		6,940			265,340
Accounts payable, related parties		(12,662	)		(17,972	)
Accrued liabilities		64,015			10,423
Customer deposits		23,150			(1,046,920	)
Right of use assets and liabilities		(876	)		-
Net cash used in operating activities		(3,821,709	)		(1,122,470	)

Cash flows from investing activities
Purchases of property, plant and equipment		(148,186	)		(7,011	)
Proceeds from disposal of equipment		-			40,000
Net cash provided by (used in) investing activities		(148,186	)		32,989

Cash flows from financing activities
Equipment loan repayment		-			(50,000	)
Long term loan repayment		(4,518	)		-
Loans to related parties		(1,583,957	)		(115,777	)
Proceeds from short-term promissory note, related parties		-			50,000
Proceeds from line of credit		100,000			-
Investment in joint venture		(300,000	)		-
Proceeds from the sale of common stock		7,230,750			416,000
Offering costs paid in connection with sale of common stock		(634,600	)		(76,525	)
Cash flows provided by financing activities		4,807,675			223,698

Increase (decrease) in cash and cash equivalents		837,780			(865,783	)
Cash and cash equivalents at beginning of period		548,331			933,469
Cash and cash equivalents at end of period	$	1,386,111		$	67,686

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	6,762		$	-
Cash paid for taxes	$	132		$	2,770

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Warrants recorded as prepaid and other assets	$	374,453		$	-
Conversion of convertible notes payable and accrued interest to common stock	$	29,032		$	56,592

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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HEMPACCO CO., INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - ORGANIZATION, BUSINESS AND LIQUIDITY

Organization and Operations

These financial statements are those of Hempacco and its subsidiaries.

Hempacco Co., Inc. (the “Company” or “Hempacco”) was formed on April 1, 2019, as a Nevada corporation.

On April 23, 2021, the Company filed a second amendment to its Articles of Incorporation changing the name of the company from The Hempacco Co., Inc. to Hempacco Co., Inc.

The Company merged with, and became a subsidiary of, Green Globe International, Inc. (“GGII” or “Green Globe International”) on May 21, 2021.

Hempacco manufactures and distributes hemp smokables both under its own name and white label products for clients. The Company also owns high-tech CBD vending kiosks that it plans to place in retail venues throughout the US, in conjunction with a number of joint venture partners.

On October 6, 2021, the California Assembly Bill Number 45 (“AB 45”) was passed into law. Despite the fact that industrial hemp is federally legal and not a controlled substance, this bill prohibits the sale of “inhalable” hemp products in California. However, the manufacture of inhalable hemp products for the sole purpose of sale in other states is not prohibited. This ban on any kind of smokable flower will remain in force until such time as the California Legislature enact a bill to tax the product. It is also legal to manufacture Delta-8 products containing less than 0.3% THC for sale in another State.

Because of the risk and uncertainty regarding the potential market for smokable products in California, the Company has focused on building its distribution network in other States and other Countries. Celebrity joint ventures bring a national demand for our products.

During the six months ended June 30, 2023, the Company entered into the following Joint Ventures and other significant agreements.

Effective January 1, 2023, HempBox Vending, Inc. (“HVI”) a wholly owned subsidiary of the Company entered into a joint venture operating agreement (the “Operating Agreement”) with Weedsies Mobile, LLC (“Weedsies)”, a Florida limited liability company, to operate a joint venture entity (the “Joint Venture”) in Florida by the name of Weedsies Vending, LLC. The Joint Venture was created to market the hemp related products of Weedsies using automated kiosks provided by HVI. Pursuant to the Operating Agreement, the Joint Venture will be owned 50% each by HVI and Weedsies with both entities required to fund $1,000 to the Joint Venture. HVI will be responsible for provision of the self-service vending kiosks and will be responsible for technology and marketing support as well as accounting, financial services, and tax preparation for the Joint Venture. Weedsies will be responsible for installations, repair, customer service, marketing support, billing, and reconciliations to the Joint Venture.

Effective January 24, 2023, the Company entered into a joint venture operating agreement (the “Operating Agreement”) with Alfalfa Holdings, LLC (“Alfalfa”), a California limited liability company, to operate a joint venture entity (the “Joint Venture”) in California by the name of HPDG, LLC. The Joint Venture was created to market and sell hemp smokables products. Pursuant to the Operating Agreement, the Joint Venture will be owned 50% each by the Company and Alfalfa. The Company is required to fund $10,000 to the Joint Venture, manufacture product, and provide accounting, inventory management, staff training, and trade show and marketing services. Alfalfa is required to provide online marketing and promotion, design and branding, and brand management and development services as well as arranging appearances by Snoop Dogg at Joint Venture events. The appearances by Snoop Dog are subject to professional availability and a separate Talent License and Services Agreement between the Joint Venture and Alfalfa as described below (the “Services Agreement”).

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In connection with the Operating Agreement, effective January 24, 2023, HPDG, LLC entered into the Services Agreement with Spanky’s Clothing, Inc., and Calvin Broadus, Jr. p/k/a “Snoop Dogg” (collectively “Talent”), pursuant to which Talent will endorse the HDPG, LLC’s smokable hemp products and serve as a spokesperson for the products in the United States. HDPG, LLC shall (i) pay Talent’s legal expenses of $7,500 in connection with entering into the Operating Agreement and Services Agreement; (ii) cause the Company to issue to Talent a fully vested warrant to acquire 450,000 shares of Company common stock at a strike price of $1.00 per share (the “Talent Warrants”); (iii) cause the Company to issue to Talent’s designee a fully vested warrant to acquire 50,000 shares of the Company’s common stock at a strike price of $1.00 per share (the “Talent Designee Warrants”); and (iv) pay Talent royalties of 10% of HDPG, LLC’s gross revenue, with minimum annual royalty payments of $450,000 by the end of the first two years of the initial term of the Services Agreement, an additional $600,000 by the end of the third year of the initial term, and an additional $1,200,000 by the end of the fourth year of the initial term. As of June 30, 2023, the company has accrued $41,956 of the minimum annual royalty payment of $450,000 which will be due and payable on April 10, 2025.On or about January 30, 2023, the Company issued the Talent Warrants and Talent Designee Warrants as required by the Services Agreement (See Note 9).

On February 8, 2023, the Company signed, as guarantor, a lease agreement between US Tobacco de Mexico S.A. de C.V. (“US Tobacco de Mexico,” a related party), which is 100% owned by UST Mexico, Inc. (“UST Mexico,” a related party), and Grupo Fimher, S. de R.I. de C.V. (“Fimher”) for the lease of 43,000 sf of manufacturing space located in Tijuana, Mexico. The term of the lease is three years, commencing on March 1, 2023. The first year’s rent payment is $18,622 per month, with 3.5% inflation increases on the first and second anniversaries of the lease. The estimated total contingent liability at lease inception will be $694,159. Hempacco Co., Inc. and Hempacco Paper Co., Inc. are sub-tenants of US Tobacco de Mexico and will manufacture products at this facility. A liability for the guarantee has not been recorded as of June 30, 2023 as the amount is not probable.

On February 8, 2023, the Company’s subsidiary, Hempacco Paper Co., Inc., leased the above-referenced space for an initial period of one year for a monthly rental of $2,500. Hempacco Paper will use this facility for the manufacture of all its paper products.

Effective February 1, 2023, the Company through its representative in Warsaw, Poland, filed the equivalent of Articles of Incorporation with the court to create Hempacco Europe Sp.z.o.o. (an LLC equivalent), the corporate entity through which the Company will distribute its smokable products throughout the EU. Ownership of the entity rests 99% with the Company, and 1% with Jakub Duda, an individual.

On February 9, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Boustead Securities, LLC, and EF Hutton, a division of Benchmark Investments, LLC, as representatives (the “Representatives”) of the underwriters (the “Underwriters”) in connection with the public offering of additional shares of common stock of the Company. The Underwriting Agreement provides for the offer and sale of 4,200,000 shares of the Company’s common stock, par value $0.001 (the “Common Stock”) at a price to the public of $1.50 per share (the “Offering”). In connection therewith, the Company agreed to issue to the Representatives and/or their designees 338,100 warrants to purchase shares of Common Stock, exercisable from February 14, 2023, through February 10, 2028, at $1.50 per share subject to adjustment as provided therein (the “Representatives’ Warrants”, see Note 9). The Company also granted the Underwriters an option (the “Option”) for a period of 45 days to purchase up to an additional 630,000 shares of Common Stock. The Offering is being made pursuant to a Registration Statement on Form S-1 (File No. 333-269566) (the “Registration Statement”), which was declared effective by the Securities and Exchange Commission on February 9, 2023.

On February 11, 2023, the Underwriters exercised the Option in full, and on February 14, 2023, the Offering was completed. At the closing of the Offering, the Company (i) sold an aggregate of 4,830,000 shares of Common Stock for total gross proceeds of $7,245,000, and (ii) issued the Representatives’ Warrants as directed by the Representatives. After deducting underwriter commissions and Offering expenses, the Company received net proceeds of $6,610,400.

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The Underwriting Agreement includes customary representations, warranties, and covenants by the Company. It also provides that the Company will indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”), or contribute to payments the Underwriter may be required to make because of these liabilities.

On April 6, 2023, Hempacco Co. received a letter notification from the Nasdaq Capital Market (“Nasdaq”) advising of its non-compliance with Nasdaq listing rules because Hempacco had failed to maintain its stock price at above $1.00 for a period of 30-days. The Nasdaq rules provide for a period of 180 days in which Hempacco must restore compliance. This period expires on October 3, 2023.

On April 20, 2023, Hempacco received a further letter notification from Nasdaq advising of its non-compliance with Nasdaq listing rules because Hempacco had failed to file its Annual Report on Form 10-K (for the 2022 fiscal year) with the Securities and Exchange Commission by the required due date. The deficiency was cured by Hempacco by the filing of the Annual Report on Form 10-K on May 15, 2023.

On May 3, 2023, Hempacco paid $300,000 to Curated Nutra, LLC, the 50% partner in Green Star Labs, Inc., (“GSL”) for the purchase of additional manufacturing equipment. This equipment is required to fulfill product orders from Hempacco’s Snoop Dogg JV entity. This equipment will remain the property of Hempacco Inc., until such time that an agreement is reached with Curated Nutra for the transfer of its ownership interest in GSL. On July 10, 2023, Hempacco signed a Purchase Agreement and an accompanying Assignment Agreement with Viva Veritas LLC (“Veritas”) (the successor to Curated Nutra, LLC) whereby Veritas agreed to assign its 50% interest in GSL to Hempacco together with additional equipment lines related to bottling and gummy production (see Note 14).

On May 7, 2023, Hempacco entered into a joint venture agreement with Nasir Ghesani, a New York distribution company doing business as “Reliable Distributor,” with each party to own 50% of the joint venture and working capital needs to be paid by Hempacco. The joint venture is intended to enter new master distributor agreements for Hempacco smokable products to be placed in New York area convenience stores, gas stations and specialty smoke shops. On May 16, 2023. the Company formed a new Nevada Corporation, RD-HPCO, Inc. as the joint venture entity between the Company and Nasir Ghesani.

On May 23, 2023, Hempacco received a letter notification from Nasdaq advising of its non-compliance with Nasdaq listing rules because Hempacco had failed to file its Quarterly Report on Form 10-Q (for the quarter ended March 31, 2023) with the Securities and Exchange Commission by the required due date. The deficiency was cured by the filing of the Quarterly Report on Form 10-Q on July 5, 2023.

Going Concern Matters

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”), which contemplates the Company’s continuation as a going concern. The Company incurred a net loss of $3,989,904 during the six months ended June 30, 2023, and has an accumulated deficit of $14,405,058 as of June 30, 2023. During the three months ended June 30, 2023, the Company’s net cash used in operations was $3,821,709.

Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Due to uncertainties related to these matters, there exists a substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. If we are not able to successfully execute our future operating plans, our financial condition and results of operation may be materially adversely affected, and we may not be able to continue as a going concern.

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Our unaudited consolidated financial statements have been prepared in accordance with US GAAP and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. As permitted under those rules, we omitted certain footnotes or other financial information that are normally required by US GAAP for annual financial statements. We have included all adjustments necessary for a fair presentation of the results of the interim period. These adjustments consist of normal and recurring items. Our consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and related notes filed with the SEC on May 12, 2023. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the Company’s financial condition and results of operations and cash flows for the interim periods presented.

Principles of Consolidation

The financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.

Joint Venture entities where the company owns at least 51% and controls the accounting and administration of the entities will be accounted for under ASC 810-10 which will allow full consolidation of the assets and liabilities into the Company’s balance sheet, with non-controlling interests being calculated and disclosed in the balance sheet and operating statement of the Company. Joint Venture entities where the company owns less than 51% are evaluated for treatment as variable interest entities. The Company may provide accounting and administration for these entities, may have board of director control, and may provide the majority of funding for these entities. Any entities not falling within this criterion will be accounted for under ASC 323-30. These consolidated financial statements include the operating results and the assets of the nine currently operating, joint venture entities, all of which have been deemed variable interest entities for the period ended June 30, 2023. The non-controlling interests of these ventures have been disclosed on the consolidated balance sheet and income statement.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates.

Revenue Concentration

Sales to three of the Company’s customers made up approximately 28%, 18% and 11%, respectively, of our revenues for the three months ended June 30, 2023 and sales to one of the Company’s customers made up approximately 91% of our revenues for the three months ended June 30, 2022. Sales to two of the Company’s customers made up approximately 40% and 12%, respectively, of our revenues for the six months ended June 30, 2023 and sales to one of the Company’s customers made up approximately 91% of our revenues for the six months ended June 30, 2022. The balance receivable from these customers on June 30, 2023 and 2022 represents approximately 23% and 30%, respectively, of the total accounts receivable balance of $230,171 and $326,349 as of that date. As a result of a legal dispute between a major customer and a third party during 2022, we experienced a significant reduction in our projected revenues and cash flow for the three and six months ended June 30, 2023.

Basic and Diluted Net Loss per Common Share

Pursuant to ASC 260, Earnings Per Share, basic net income and net loss per share are computed by dividing the net income and net loss by the weighted average number of common shares outstanding. Diluted net income and net loss per share is the same as basic net income and net loss per share when their inclusion would have an anti-dilutive effect due to our continuing net losses.

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For the six months ended June 30, 2023, and 2022, the following outstanding dilutive securities were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.

	June 30,		June 30,
	2023		2022
	(Shares)		(Shares)
Warrants		838,100		-
Promissory Notes convertible to shares		100,000		50,000
TOTAL		938,100		50,000

Fair Value of Financial Instruments

FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

	·	Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs.
	·	Level 2—Significant other observable inputs that can be corroborated by observable market data; and
	·	Level 3—Significant unobservable inputs that cannot be corroborated by observable market data.

The carrying amounts of cash, accounts receivable, accounts receivable – related parties, inventory, deposits and prepayments, accounts payable and accrued liabilities, accounts payable – related parties, customer pre-paid invoices & deposits, other short-term liabilities – equipment loan, operating lease – right of use liability – short term portion approximate fair value because of the short-term nature of these items.

Non-Controlling Interests

The Company accounts for the non-controlling interests in its subsidiaries and joint ventures in accordance with U.S. GAAP. and ASC 805-20.

The Company has chosen to record the minority interests (NCI’s) in the equity section of the balance sheet, and on the income statement, the profit or loss attributable to the minority interests will be reported as a separate non-operating line item.

The Company measures its non-controlling interests using the percentage of ownership interest held by the respective NCI’s during the accounting period.

NOTE 3 - ACCOUNTS RECEIVABLE

As of June 30, 2023, and December 31, 2022, accounts receivable consisted of the following:

	June 30,			December 31,
	2023			2022

Accounts receivable	$	263,891		$	478,680
Accounts receivable, related parties		-			5,100
Allowance for doubtful accounts		(33,720	)		(247,411	)
Total accounts receivable	$	230,171	)	$	236,369

The Company recorded a reserve against the entire balance of accounts receivable from related parties as of June 30, 2023. See Note 11 for additional information on related party transactions related to receivables.

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NOTE 4 - INVENTORY

As of June 30, 2023, and December 31, 2022, inventory, which consists primarily of the Company’s raw materials, finished products and packaging is stated at the following amounts:

	June 30,		December 31,
	2023		2022

Finished goods	$	462,818	$	109,879
Raw materials (Net of obsolescence allowance)		718,713		535,253
Total inventory at cost less obsolescence allowance	$	1,181,531	$	645,132

The Company identified a potential for obsolescence in particular raw materials and provided an allowance for this risk in full in the year ended December 31, 2020. As of June 30, 2023 and December 31, 2022 and 2021, respectively, this allowance remains unchanged. This obsolescence allowance is continually re-evaluated and adjusted as necessary.

NOTE 5 - PROPERTY AND EQUIPMENT

As of June 30, 2023, and December 31, 2022, property and equipment consisted of the following:

	June 30,			December 31,
	2023			2022
Production equipment	$	4,033,172		$	3,837,236
Leasehold improvements		12,431			12,431
Kiosks		3,583,529			3,631,279
		7,629,132			7,480,946
Accumulated depreciation		(321,568	)		(260,381	)
Total property and equipment	$	7,307,564		$	7,220,565

Depreciation expense was $33,196 and $61,187 for the three and six months ended June 30, 2023, respectively, and $22,813 and $45,217 for the three and six months ended June 30, 2022, respectively.

NOTE 6 - OPERATING LEASES – RIGHT OF USE ASSETS

The Company entered into a 72-month agreement to lease approximately 6,300 square feet of manufacturing, storage, and office space on January 1, 2020, for a period of 6 years with Primus Logistics, Inc. (“Primus”), a related party that is controlled by the Company’s CEO. Approximately 1,800 square feet (28.5%) is used as a manufacturing facility with the balance used as corporate offices and storage. There was no security deposit paid, and the lease carries no optional extension periods. The term of the lease is for six years. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 6.23% within the calculation.

In addition to the rental of manufacturing space, the Company transacts routine storage business with Primus. The primary business of Primus is the provision of cold storage facilities used for perishable raw materials and finished products from pharmaceutical manufacturing companies. The company stores its raw hemp smokable material with Primus.

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Base monthly rent commenced at $10,000 per month, with subsequent defined annual increases. All operating expenses are borne by the lessee. Amounts payable to the related party for rent as of June 30, 2023, and December 31, 2022, were $0 and $5,163 respectively. On June 30, 2023, and December 31, 2022, the amounts of $155,465 and $25,000 respectively, of prepaid rent were included in the deposits and prepayments account.

Operating lease right of use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of maintenance and other operating expenses from our real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

The following are the expected lease payments as of June 30, 2023, including the total amount of imputed interest/present value discount.

Year Ending December 31	Operating Leases
2023	$	65,558
2024		135,049
2025		139,100
Total lease payments		339,707
Less: Imputed interest/present value discount		(26,166	)
Total	$	313,541

Rent expenses were $32,779 and $65,558 during the three and six months ended June 30, 2023, respectively, and $31,827 and $63,654 during the three and six months ended June 30, 2022, respectively.

See Note 1 for information on a new lease between Hempacco Paper Co., Inc., and UST Mexico.

NOTE 7 - OTHER SHORT-TERM LIABILITIES – EQUIPMENT LOAN

On December 11, 2019, the Company entered into a loan for $1,500,000 within an initial maturity of 18 months to fund the purchase of equipment to use in its production. The loan did not have a stated interest rate, and, therefore, the Company calculated an imputed discount of $109,627, which was amortized over 18 months. As of December 31, 2022, the discount had been completely amortized. The loan is secured by the production equipment.

On January 6, 2022, the first payment of $50,000 was made to the lender. The Company was granted forbearance with respect to further loan payments until the Company’s planned initial public offering (“IPO”) was funded. On September 6, 2022, the Company executed a settlement agreement and mutual release with the lender providing for the full repayment of the outstanding loan balance of $1,450,000 with a cash payment of $250,000 and the issuance of 266,667 restricted shares of Hempacco common stock. As of June 30, 2023, and December 31, 2022, the principal balance of the loan was $0.

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NOTE 8 - CONVERTIBLE NOTES

During May and June 2021, the Company entered into financing arrangements to provide working capital. The Company received proceeds of $175,000 from three private investors. The promissory notes carried interest at the rate of between 8% and 12% and matured between May 4, 2022, and October 23, 2022. The notes automatically converted at 75% of the 30-day average bid price of the obligor common stock (or the public company common stock as the case may be), with the exception of the $50,000 Taverna 12% Note, which converted at the lower of $1.00 per share or the current market price of Hempacco stock. The notes could not be converted prior to maturity. The Taverna note matured on May 4, 2022, and were converted, along with accrued interest, into 56,592 shares of Hempacco common stock on June 7, 2022.

The notes payable to Miguel Cambero for $100,000 and Ernie Sparks for $25,000 originally matured on October 23, 2022. Both notes were extended through April 30, 2023. On or about May 16, 2023, Ernest Sparks’ note and accrued interest of $4,032 were converted into 62,223 shares of the Company’s common stock.

The Company’s note payable to Miguel Cambero is convertible under its terms into shares of common stock. Subsequent to June 30, 2023, the note and accrued interest will be converted into common stock.

On or about March 18, 2022, the Company issued a promissory note to a related party, Jerry Halamuda for $50,000. The note carries an interest rate of 8% and the initial maturity date was June 18, 2022. The note is secured by 50,000 common shares of the Company. On June 18, 2022, the Company and the investor signed Amendment No. 1 to the promissory note extending the maturity date to September 18, 2022. Subsequently, additional amendments were executed which extended the maturity date to June 18, 2023, and then to September 18, 2023. The $50,000 principal balance of the note was repaid on August 1, 2023. Accrued interest will be repaid in stock at a later date.

NOTE 9 - WARRANTS

As of June 30, 2023, the following warrants are outstanding:

Talent Warrants (see Note 1)			450,000
Talent Designee Warrants (see Note 1)			50,000
Compensation Warrants			500,000
Representatives’ Warrants (see Note 1)			338,100
			938,100

On August 11, 2021, the Company signed an agreement with Boustead Securities, LLC (the “Representative”), which was amended on or about March 18, 2022, with respect to a number of proposed financing transactions. Included in the agreement was the initial public offering of the Company’s common stock, for which a listing on NASDAQ was successfully applied, the private placement of Hempacco securities prior to the IPO (“pre-IPO Financings”), and other financings separate from the IPO or the pre-IPO Financings (each such other financing an “Other Financing”). See Note 12 below for further details.

In addition to the other compensation delineated in the agreement, the Company agreed to issue and sell to the Representative (and/or its designees) on the closing date of an IPO or Other Financing as applicable, five-year warrants to purchase shares of the Company’s common stock. The warrants are equal to 7% of the gross offering amount at an initial exercise price of 150% of the offering price per share in the IPO, or 100% of the offering price in Other Financing.

On January 25, 2023, the Company issued fully vested warrants to purchase 500,000 shares of the Company’s common stock to non-employees as compensation for services (“Compensation Warrants”). The Compensation Warrants have an exercise price of $1.00 and a contractual life of 5 years. Stock-based compensation expense related to the Compensation Warrants was $12,900 for the six months ended June 30, 2023. As of June 30, 2023, total compensation costs related to the common stock warrants not yet recognized amounted to approximately $343,248. The amounts were recorded as prepaid compensation, for which there is a current and noncurrent portion that is amortized over the life of the contract. As of June 30, 2023, the current portion of $74,891 is included in prepaid expenses and other current assets on the balance sheet and the noncurrent portion of $268,357 is included in other assets. During the six months ended June 30, 2023, $31,205 was amortized to sales and marketing expense.

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The Black-Scholes model uses the following variables to calculate the value of an option or warrant for the six months ended June 30, 2023, and the twelve months ended December 31, 2022:

	Input Range	Input Range
	June 30,	December 31,
Description	2023	2022
a) Price of the Issuer’s Security	$ 0.75-$1.25	$ 1.00 - $7.00
b) Exercise (strike) price of Security	$1.00	$ 0.75 - $1.50
c) Time to Maturity in years	5 years	3 to 5 years
d) Annual Risk-Free Rate	5-year T-Bill	2-year T-Bill
e) Annualized Volatility (Beta)	90% - 100%	59% - 100%

NOTE 10 - OTHER LOANS PAYABLE

On June 15, 2020, Hempacco entered into a loan agreement with a third party whereby the Company received $85,000. The terms of the loan were for one year, with 0% interest. On January 15, 2021, the lender further advanced $83,328 on the same terms. In December 2021, a letter agreement and loan extension were signed by the lender in which it was confirmed that the new maturity date of the loan would be August 15, 2023. As of June 30, 2023, and December 31, 2022, the balance outstanding was $138,252 and $142,770, respectively.

In July 2021, the Company secured a line of credit facility with First Citizens Bank in the amount of $100,000. The line of credit bears interest at a floating rate equal to 1.0% above the Wall Street Journal Prime Rate at any time and matured in July 2023. On July 1, 2023, the facility was renewed for an additional 12 months and will be reviewed by the bank for potential renewal on June 30, 2024. The line of credit is guaranteed by the CEO of the Company. As of June 30, 2023 and December 31, 2022, $100,000 and $0, respectively, was owed on the line of credit. On June 30, 2023, the interest rate on the facility was 9.25%.

NOTE 11 - RELATED PARTY TRANSACTIONS

As of June 30, 2023, and December 31, 2022, the Company owed Primus $0 and $5,163 respectively, for rent and storage fees. As of June 30, 2023, and December 31, 2022, Primus had been paid $169,780 and $25,000 respectively, in advance, for rent. During the six months ended June 30, 2023 and 2022, the Company expensed $94,266 and $70,094, respectively, for services provided by Primus. The Company’s CEO owns 90% of Primus.

As of September 1, 2022, the salaries of the CEO and the CMO, as defined in their respective employment agreements, were paid through the Company’s payroll service. These payments replace the prior independent contractor payments received by their entities, Strategic Global Partners, Inc. and Cube 17, Inc., respectively. Although employment contracts were dated from January 2022, salaries were paid with effect from September 1, 2022. During the three and six months ended June 30, 2023, the Company incurred expenses of $60,000 and $120,000, respectively, related to salaries for the CEO and CMO. During the three and six months ended June 30, 2022, the Company incurred expenses of $60,000 and $30,000, respectively, related to consulting fees for the CEO and CMO. The Company does not believe there is substantial risk that employer taxes with penalties and interest may be due related to payments made to the CEO and CMO as consultants.

As of June 30, 2023, and December 31, 2022, the Company was owed $0 and $0, respectively, and owed $32,108, and $0, respectively, by and, to UST Mexico, Inc. (“UST Mexico”). Amounts payable have been netted against prepaid expenses. The Company sells hemp products to UST Mexico and provides manufacturing consulting services. The value of goods and services provided to UST Mexico, which are recorded as revenue, was $0 and $6,559, respectively, for the three and six months ended June 30, 2023, and $6,000 and $6,000 for the three and six months ended June 30, 2022. UST Mexico is a manufacturer of tobacco cigarettes in Mexico and provides consulting services and parts for the Company’s equipment. The value of goods and services provided by UST Mexico was $103,009 and $148,009, respectively, for the three and six months ended June 30, 2023, and $43,220 and $90,000, respectively, for the three and six months ended June 30, 2022. As of June 30, 2023, the Company prepaid expenses of $790,099 for products and services related to Hempacco Paper Company that are covered by open purchase orders.

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As of June 30, 2023, UST Mexico owned 947,200,000 shares of common stock of Green Globe International, Inc. UST Mexico is a related party by virtue of the CEO’s 25% interest in UST Mexico.

On or about March 1, 2022, the Company entered into a mutual line of credit agreement with its parent company, Green Globe International, Inc. (“GGII”). The purpose of the credit agreement is to facilitate short-term borrowing needs on an interest-free basis, with advances being subject to repayment within 90 days with a maximum of $500,000 allowed to be outstanding within any 90-day period. On December 1, 2022, the maximum amount was increased to $1,500,000. During the twelve months ended December 31, 2022, the Company loaned GGII a net amount of $692,119. As of June 30, 2023, the balance owed to the Company by GGII was $1,614,027. The Company recorded a reserve against the entire balance as of June 30, 2023. The Company concluded that collection of the loan balance is not probable. Thus, during the three and six months ended June 30, 2023, the Company recorded a reserve of $ 195,775 and $1,320,775, respectively, which is included in expensing of related party advances and loans on the statement of operations. Subsequent to June 30, 2023, the Company made additional loans of $50,500 to GGII.

During 2023 and 2022, the Company made short term cash advances directly to Green Star Labs, Inc., a subsidiary joint venture of the Company’s parent, Green Globe International, Inc. As of June 30, 2023 and December 31, 2022, the balance owed by Green Star Labs, Inc. to the Company was $1,200,400 and $605,994, respectively. The Company concluded that collection of a portion of the loan balance is not probable. Thus, the three and six months ended June 30, 2023, the Company recorded a reserve of $0 and $479,000, respectively, which is included in expensing of related party advances and loans on the statement of operations. During the six-month period ended June 30, 2023, the Company made payments of approximately $737,397 (net of repayments) as pre-payment against purchase orders for new products primarily related to the Alfalfa Holdings LLC joint venture (“Snoop Dogg”). During the six months ended June 30, 2023, the Company received approximately $170,000 in inventory from Green Star Labs, Inc. On June 1, 2023, the Company issued a purchase order to Green Star Labs in the amount of $604,000, and in the same period Green Star Labs shipped $0 of product to the Company. Management anticipates that the remaining outstanding loan balance will be eliminated by additional product shipments in the third quarter of 2023. Subsequent to June 30, 2023, the Company made loans of $266,000 to Green Star Labs, Inc.

NOTE 12 - STOCKHOLDERS’ EQUITY

Common Stock

On September 28, 2021, the Company amended its Articles of Incorporation to increase the number of authorized shares of common stock to 200,000,000.

On or about April 7, 2022, the Company issued 208,000 shares of Hempacco common stock at $2.00 per share to nine investors, eight of which were third parties. The Company received gross proceeds of $416,000, and net proceeds of $339,475 after payment of commissions and expenses to the Company’s registered broker and the payment of expenses associated with the private offering and the Public Offering.

On or about July 15, 2022, the Company acquired from Nery’s Logistics, Inc., an entity that is owned by a significant shareholder (greater than 10%) of the Company’s parent, two cigarette production equipment lines together with multiple cigarette and cigar-related trademarks. The total acquisition price was deemed to be $4,000,000 to be paid solely by the issuance of 2,000,000 common shares of the Company. $3,400,000 was initially allocated to the value of the equipment, and the balance of $600,000 was allocated to intangible assets. A subsequent appraisal, performed in Mexico, valued the equipment at $2,278,337. No value was allocated to the trademarks. During the year ended December 31, 2022, the Company recorded a one-time charge of $1,121,663 to its statement of operations account in order to reduce the asset costs to net realizable value.

On July 15, 2022, the Company also settled two vendor accounts payable balances totaling $100,000 by the issuance of 50,000 common shares of the Company.

On September 1, 2022, the Company sold 1,000,000 shares of Hempacco common stock at $6.00 per share to its underwriter in the Company’s IPO, and to Boustead Securities, LLC (“Boustead”) pursuant to the underwriting agreement, in connection with the IPO (the “Underwriting Agreement”). After deducting the underwriting commission and expenses, the Company received net proceeds of $5,390,753.

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On September 6, 2022, Boustead exercised its warrants to purchase the Company’s common stock issued to it in connection with IPO, pursuant to paragraph 1.3.1 of the Underwriting Agreement. Boustead elected to convert its right to purchase 70,000 common shares at $9.00 per share using the cashless basis formula in the warrants. The exercise resulted in the issuance of 54,928 shares of common stock to Boustead. The market price of these shares on the issue date was $4.74 per share, resulting in an increase of $55 in common stock and an increase in additional paid in capital of $260,303 as well as additional underwriting expenses of $260,358, which was a decrease to additional paid in capital.

On September 17, 2022, the Company entered a Marketing Services Agreement with North Equities Corp. of Toronto, Canada, effective as of September 19, 2022, for an initial period of 6-months. Compensation for the initial period will be the issuance of 41,494 restricted shares of the Company’s common stock under SEC Rule 144. This amount represents a market value of approximately $100,000 as of the effective date. The shares were issued to North Equities Corp. of Toronto on October 4, 2022. The Company will also reimburse North Equities for all direct, pre-approved and reasonable expenses incurred in performing the marketing services.

On October 12, 2022, the Company entered a Broadcasting and Billboard Agreement with FMW Media Works LLC (“FMW”) of Hauppauge, New York, for a period of three months. FMW will produce an informative TV show which will discuss the Company and its business. Total compensation will be made through the issuance of 63,292 restricted common shares of Hempacco under SEC Rule 144. The market value of the issued shares was $148,103 and was expensed in full in 2022.

See Note 1 for additional issuance of common stock.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

On or about October 7, 2022, the Company accepted service in a suit filed in the United States District Court for the Southern District of New York by Long Side Ventures LLC, R & T Sports Marketing Inc., Sierra Trading Corp., Taconic Group LLC, KBW Holdings LLC, Robert Huebsch, Ann E. Huebsch, Joseph Camberato, Joseph Crook, Sachin Jamdar, Michael Matilsky, Gerard Scollan, and Daisy Arnold (collectively “Plaintiffs”) against Hempacco Co., Inc., Mexico Franchise Opportunity Fund, LP, Sandro Piancone, Jorge Olson, Neville Pearson, Stuart Titus, Jerry Halamuda, Retail Automated Concepts, Inc. f/k/a Vidbox Mexico Inc., and Vidbox Mexico S.A. De C.V. (collectively “Defendants”) (Case No. 1:22-cv-08152 (ALC)). The suit alleged that (i) Plaintiffs previously received a judgment (the “Judgment”) in a New York state court action (the “State Action”) against Retail Automated Concepts, Inc. (“RAC”) and Vidbox Mexico S.A. De C.V. (“Vidbox Mexico”), for breach of promissory notes issued by RAC to the Defendants in 2018 and guaranteed by Vidbox Mexico, and (ii) prior to the filing of the State Action, the Defendants fraudulently transferred and commingled assets, specifically 600 retail kiosks, in order to avoid enforcement of the Judgment with the Plaintiffs seeking monetary damages from Defendants. On or about November 29, 2022, the court granted the Defendants’ request to file a motion to dismiss the suit, and on December 30, 2022, the Defendants filed a motion to dismiss the suit for failure to state a claim and lack of personal jurisdiction. The court has not yet ruled on the motion to dismiss. Defendants believe the suit is without merit and intend to defend the matter vigorously.

NOTE 14 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of issuance of these financial statements.

On July 10, 2023, the Company signed a Purchase Agreement and an accompanying Assignment Agreement with Viva Veritas LLC (“Veritas”) whereby Veritas agreed to assign its 50% interest in Green Star labs, Inc. to Hempacco together with additional equipment lines related to bottling and gummy production.

The total purchase price to be paid by the Company is $3,500,000. The preliminary purchase price has been allocated as $2,500,000 for the interest in Green Star Labs, and $1,000,000 for the equipment. $3,200,000 of the $3,500,000 total purchase price was paid by the Company’s issuance of a convertible promissory note in the principal amount of $3,200,000 to the seller, which became effective on July 10, 2023. As noted previously (see Note 1), Hempacco had already paid the sum of $300,000 to Veritas for the purchase of additional equipment, which represented the cash portion of the total $3,500,000 purchase price and was credited against the total purchase price by the seller, such that the total $3,500,000 purchase price was deemed paid after issuance of the $3,200,000 promissory note to the seller.

The promissory note carries a 10% interest rate and matures twelve months from the issue date. The holder has the right, after 6-months after the issue date, to convert all or part of the then outstanding principal balance of the note into common stock of the issuer, provided, however, that the holder may not convert the note into Company common stock to the extent that such conversion would result in the holder’s beneficial ownership of the Company common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. Additionally, the note contains a maximum issuance limitation such that the note will no longer be convertible after the Company has issued an aggregate of 5,572,000 shares upon conversion of the Note. The applicable conversion price shall be 95.238% of the average closing price of the Company’s common stock during the three days immediately preceding the conversion.

See Note 8, 10, and 11 for additional subsequent events.

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. For example, statements in this Annual Report regarding our plans, strategy and focus areas are forward-looking statements. You can identify some forward-looking statements by the use of words such as “believe,” “anticipate,” “expect,” “intend,” “goal,” “plan,” and similar expressions. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to risks relating to the continuing impacts of the COVID-19 pandemic (including supply chain disruption), the ongoing war in Ukraine and its impact on the global economy, our history of losses since inception, our dependence on a limited number of customers for a significant portion of our revenue, the demand for hemp smokables products, our dependence on key members of our management and development team, and our ability to generate and/or obtain adequate capital to fund future operations. For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” in our other publicly available filings with the Securities and Exchange Commission. Forward-looking statements reflect our analysis only as of the date of this Quarterly Report on Form 10-Q. Because actual events or results may differ materially from those discussed in or implied by forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statement. We do not undertake responsibility to update or revise any of these factors or to announce publicly any revision to forward-looking statements, whether as a result of new information, future events or otherwise.

The following discussion and analysis should be read in conjunction with the consolidated financial statements and the notes thereto included in Item 8 of this Quarterly Report on Form 10-Q.

Hempacco Co., Inc., collectively with its subsidiaries, is referred to in this Form 10-Q as “Hempacco”, “we”, “us”, “our”, “registrant”, or “Company”.

Overview

We are focused on Disrupting Tobacco™ by manufacturing and selling nicotine-free and tobacco-free alternatives to traditional cigarettes. We utilize a proprietary, patented spraying technology for terpene infusion and patent-pending flavored filter infusion technology to manufacture hemp- and herb-based smokable alternatives.

We have conducted research and development in the smokables space and are engaged in the manufacturing and sale of smokable hemp and herb products, including The Real Stuff™ Hemp Smokables. Our operational segments include private label manufacturing and sales, intellectual property licensing, and the development and sales of inhouse brands using patented counter displays. Our private label customers include well-known and established companies in the cannabis and tobacco-alternatives industries, and we currently own approximately 600 kiosk vending machines which we plan to refurbish and use to distribute our products in a wider fashion under our HempBox Vending brand.

Our hemp cigarette production facility, located in San Diego, California, has the capacity to produce up to 30 million cigarettes monthly. From our facility, we can small-to-large quantities of product—from single displays of product to targeted retail locations to truckloads of product to private label customers—with in-house processing, packing, and shipping capabilities.

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Results of Operations

For the Three and Six Months Ended June 30, 2023, compared to the Three and Six Months Ended June 30, 2022

Revenue

For the three and six months ended June 30, 2023 and 2022, revenues were as follows:

	Three Months Ended June 30,				Change
	2023		2022		$			%
Revenues
Product sales	$	223,188	$	1,853,996	$	(1,630,808	)		(88	)%
Product sales, related parties		13,760		5,000		8,760			175	%
Manufacturing service revenue		1,386		13,995		(12,609	)		(90	)%
Kiosk revenue		16,267		2,066		14,201			687	%
Total Revenues	$	254,601	$	1,875,057	$	(1,620,456	)		(86	)%

	Six Months Ended June 30,				Change
	2023		2022		$			%
Revenues
Product sales	$	628,187	$	2,811,562	$	(2,183,375	)		(78	)%
Product sales, related parties		20,319		6,000		14,319			239	%
Manufacturing service revenue		13,438		26,595		(13,157	)		(49	)%
Kiosk revenue		17,017		2,066		14,951			724	%
Total Revenues	$	678,961	$	2,846,223	$	(2,167,262	)		(76	)%

The decrease in revenues during the three and six months ended June 30, 2023, as compared to the three and six months ended June 30, 2022, was a result of a temporary decline in orders from one of our largest customers due to a legal dispute, as well as the passing of AB 45 by the State of California, which banned the sale of smokable hemp products in California until such time as the legislature decided on a tax policy with regard to these products.

Cost of Goods Sold

For the three and six months ended June 30, 2023 and 2022, cost of goods sold were as follows:

	Three Months Ended June 30,				Change
	2023		2022		$			%
Cost of Goods Sold
Cost of goods sold	$	417,632	$	1,398,028	$	(980,396	)		(70	)%
Cost of goods sold, related parties		14,423		-		14,423			100	%
Total Cost of Goods Sold	$	432,055	$	1,398,028	$	(965,973	)		(69	)%

	Six Months Ended June 30,				Change
	2023		2022		$			%
Cost of Goods Sold
Cost of goods sold	$	877,891	$	2,197,034	$	(1,319,143	)		(60	)%
Cost of goods sold, related parties		75,885		-		75,885			100	%
Total Cost of Goods Sold	$	953,776	$	2,197,034	$	(1,243,258	)		(55	)%

The decrease in relative total cost of goods sold is primarily due to decreasing sales and production in the three and six months ended June 30, 2023, as compared to the same periods in 2022.

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Operating Expenses

For the three and six months ended June 30, 2023 and 2022, operating expenses were as follows:

	Three Months Ended June 30,				Change
	2023		2022		$			%

Operating Expenses
General and administrative	$	947,461	$	235,924	$	711,537			302	%
General and administrative, related parties		53,414		45,000		8,414			19	%
Sales and marketing		229,759		287,866		(58,107	)	(20		)%
Sales and marketing, related parties		27,491		-		27,491			100	%
Expensing of related party advances and loans		195,775		-		195,775			100	%
Total Operating Expenses	$	1,453,900	$	568,790	$	885,110			156	%

	Six Months Ended June 30,				Change
	2023		2022		$			%

Operating Expenses
General and administrative	$	1,684,636	$	966,999	$	717,637			74	%
General and administrative, related parties		268,697		150,000		118,697			79	%
Sales and marketing		409,588		484,110		(74,522	)	(15		)%
Sales and marketing, related parties		50,087		-		50,087			100	%
Expensing of related party advances and loans		1,320,775		-		1,320,775			100	%
Total Operating Expenses	$	3,733,783	$	1,601,109	$	2,132,674			133	%

The increase in general and administrative expenses during the three and six months ended June 30, 2023, compared to the same periods in 2022 was mainly due to accounting, legal and insurance costs related to compliance as a result of the IPO closing.

During the three and six months ended June 30, 2023, related party general and administrative expenses consisted of senior management consulting fees, write offs of related party receivables and rent payable on our premises leased in San Diego, California. During the three and six months ended June 30, 2022, related party general and administrative expenses consisted of related party fees and rent. The landlord, Primus Logistics, is 90%-owned by Sandro Piancone, the Company’s CEO.

The Company’s sales and marketing expenses decreased during the three and six months ended June 30, 2023, compared to sales and marketing expenses during the three and six months ended June 30, 2022 due to scaling back our expansion efforts in the current year compared to the same period of the prior year. Related party sales and marketing expenses for the three and six months ended June 30, 2023 include costs of services provided by the CMO.

During the three and six months ended June 30, 2023, the Company recorded an allowance for the potential non-payment of certain inter-company receivables in the amount of $195,775 and $1,320,775, respectively, compared to an allowance of $0 and $0, respectively, during the three and six months ended June 30, 2022.

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Net Loss

The Company had net losses of $1,611,320 and $3,989,904, respectively, during the three and six months ended June 30, 2023 compared to net losses of $97,350 and $974,566, respectively, during the three and six months ended June 30, 2022. The increase in net loss for the three months ended June 30, 2023, was due primarily to increases in operations of the Company that resulted in additional overhead expenses. The increase in net loss for the six months ended June 30, 2023 was due primarily to significant additional one-off expenses incurred in connection with the provision for impairment of inter-company loans receivable.

Liquidity and Capital Resources

The table below, for the periods indicated, provides selected cash flow information:

	Six Months Ended June 30, 2023			Six Months Ended June 30, 2022

Net cash used in operating activities	$	(3,821,709	)	$	(1,122,470	)
Net cash provided by (used in) investing activities		(148,186	)		32,989
Net cash provided by financing activities		4,807,675			223,698
Net change in cash	$	837,780		$	(865,783	)

Cash Flows from Operating Activities

We had cash used in operating activities of $3,821,709 in the six months ended June 30, 2023, as compared to cash used in operating activities of $1,122,470 during the six months ended June 30, 2022. The increase in cash used in operating activities of $2,699,239 for the six months ended June 30, 2023, is primarily attributable to the increase in net operating loss of $3,056,678, adjusted by a reserve for related party loans of $1,320,775 as well as increases attributable to increases in prepaid expenses and inventory.

Cash Flows from Investing Activities

We had cash used in investing activities of $148,186 for the six months ended June 30, 2023, as compared to cash provided by investing activities of $32,989 for the six months ended June 30, 2022. The change of $181,175 was primarily due to the purchase of plant and equipment of $148,186 during the six months ended June 30, 2023.

Cash Flows from Financing Activities

We had cash provided by financing activities of $4,807,675 in the six months ended June 30, 2023, as compared to cash provided by financing activities of $223,698 in the comparative period in 2022, with this increase primarily due to the receipt of $7,245,000 of gross proceeds from the sale of 4,830,000 shares of common stock in our second IPO, partially offset by advances to related parties of $1,583,957 and the costs of the offering of $634,600 in the six months ended June 30, 2023, as compared to the six months ended June 30, 2022.

We anticipate that our cash needs for the next twelve months for working capital and capital expenditures will be approximately $2,000,000. As of June 30, 2023, we had $1,386,111 in cash, and we believe that our current cash and cash flow from operations will be not sufficient to meet anticipated cash needs for the next twelve months for working capital and capital expenditures. We will likely also require additional cash resources due to possible changed business conditions or other future developments. We plan to seek to sell additional equity securities to generate additional cash to continue operations. We may also sell debt securities to generate additional cash. The sale of equity securities, or of debt securities that are convertible into our equity, could result in additional dilution to our shareholders. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity.

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Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including the following: investors’ perception of, and demand for, securities of cigarette and hemp companies; conditions of the U.S. and other capital markets in which we may seek to raise funds; future results of operations, financial condition and cash flow. Therefore, our management cannot assure that financing will be available in amounts or on terms acceptable to us, or if at all. Any failure by us to raise additional funds on terms favorable to us could have a material adverse effect on our liquidity and financial condition.

On February 11, 2023, the Company sold an additional 4,830,000 shares of common stock in a registered underwritten offering at a price to the public of $1.50 per share. Gross offering proceeds of $7,245,000 were reduced by commission and offering costs of $634,600, with net proceeds of $6,610,400 being received by the Company on February 11, 2023.

Going Concern

In the event we are not successful in reaching our sustained revenue targets, we anticipate that depending on market conditions and our plan of operations, we will likely incur, for the next few months, continued operating losses. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit to cover our operating expenses. Consequently, there remains substantial doubt about the Company’s ability to continue as a going concern. We are subject to many factors which could detrimentally affect us. Many of these risk factors are outside management’s control, including demand for our products, our ability to hire and retain talented and skilled employees and service providers, as well as other factors.

The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and settle its liabilities in the normal course of business for the foreseeable future.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

Our financial statements are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 2 to our financial statements. While these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause an effect on our results of operations, financial position or liquidity for the periods presented in this report.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

The Company does not currently maintain sufficient controls and procedures designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms. Disclosure controls and procedures would include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Company’s Chief Executive Officer, the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2023, have been evaluated, and, based upon this evaluation, the Company’s Chief Executive Officer has concluded that these controls and procedures are not effective in providing reasonable assurance of compliance.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Our independent registered accounting firm determined that we did not maintain effective internal controls over financial reporting and the following material weaknesses existed as of June 30, 2023:

	·	We did not design and maintain adequate controls over the documentation of accounting and financial reporting policies and procedures. Specifically, we did not design and maintain a manual of policies and procedures and we did not maintain a sufficient complement of accounting personnel to ensure proper procedures were executed and transactions were reviewed by management.

	·	We failed to identify and disclose certain related party transactions and certain related party transactions were not formally authorized. We have not properly segregated duties related to cash disbursements.

	·	Our revenue recognition procedures did not prevent us from recording revenue for which the earnings process was not complete.

	·	We failed to obtain written documentation of significant agreements related to joint ventures.

These material weaknesses resulted in material misstatements to the financial statements, which were corrected. There were no changes to previously released financial results. We are in the process of remediating these material weaknesses.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company may be involved in litigation relating to claims arising out of commercial operations in the normal course of business. As of June 30, 2023, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the Company’s results of operations except as set forth below.

On or about October 7, 2022, the Company accepted service in a suit filed in the United States District Court for the Southern District of New York by Long Side Ventures LLC, R & T Sports Marketing Inc., Sierra Trading Corp., Taconic Group LLC, KBW Holdings LLC, Robert Huebsch and Ann E. Huebsch, Joseph Camberato, Joseph Crook, Sachin Jamdar, Michael Matilsky, Gerard Scollan, and Daisy Arnold (collectively “Plaintiffs”) against Hempacco Co., Inc., Mexico Franchise Opportunity Fund, LP, Sandro Piancone, Jorge Olson, Neville Pearson, Stuart Titus, Jerry Halamuda, Retail Automated Concepts, Inc. f/k/a Vidbox Mexico Inc., and Vidbox Mexico S.A. De C.V. (collectively “Defendants”) (Case No. 1:22-cv-08152 (ALC)), alleging that (i) Plaintiffs previously received a judgment (the “Judgment”) in a New York state court action (the “State Action”) against Retail Automated Concepts, Inc. (“RAC”) and Vidbox Mexico S.A. De C.V. (“Vidbox Mexico”), for breach of promissory notes issued by RAC to Defendants in 2018 and guaranteed by Vidbox Mexico, and (ii) prior to the filing of the State Action, Defendants fraudulently transferred and commingled assets, specifically 600 retail kiosks, in order to avoid enforcement of the Judgment, with Plaintiffs seeking monetary damages from Defendants. On or about November 29, 2022, the court granted Defendants’ request to file a motion to dismiss the suit, and on December 30, 2022, Defendants filed the motion to dismiss the suit for failure to state a claim and lack of personal jurisdiction. The court has not yet ruled upon the motion to dismiss. Defendants believe the suit is without merit and intend to defend the matter vigorously.

ITEM 1A. RISK FACTORS

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide information under this item.

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

During the three months ended June 30, 2023, the Company did not issue any unregistered equity securities except as set forth below.

On or about May 16, 2023, the Company issued 62,223 shares of its common stock to Ernest Sparks upon conversion of a convertible note and accrued interest.

The above-described shares were issued pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as there was no general solicitation, the shareholders were accredited and/or financially sophisticated, and the transactions did not involve a public offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit No.		Description
1.1		Underwriting Agreement, between Hempacco Co., Inc. and Boustead Securities, LLC, dated August 29, 2022 (incorporated by reference to Exhibit 1.1 to Current Report on Form 8-K filed on September 2, 2022)
1.2		Underwriting Agreement, dated February 9, 2023, by and between Hempacco Co., Inc. and Boustead Securities, LLC (incorporated by reference to Exhibit 1.1 to Current Report on Form 8-K filed on February 15, 2023)
3.1		Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-1 filed on March 24, 2022)
3.2		Amended and Restated Articles of Incorporation dated April 23, 2021 (incorporated by reference to Exhibit 3.2 to Registration Statement on Form S-1 filed on March 24, 2022)
3.3		Amended and Restated Articles of Incorporation dated September 28, 2021 (incorporated by reference to Exhibit 3.3 to Registration Statement on Form S-1 filed on March 24, 2022)
3.4		Bylaws of Hempacco Co., Inc. (incorporated by reference to Exhibit 3.4 to Registration Statement on Form S-1 filed on March 24, 2022)
10.1		Agreement for Share Exchange between Hempacco Co., Inc. and Green Globe International, Inc., dated May 21, 2021 (incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-1 filed on March 24, 2022)
10.2		Patent License Agreement between Hempacco Co., Inc., and Old Belt Extracts, LLC d/b/a Open Book Extracts, dated April 1, 2021 (incorporated by reference to Exhibit 10.2 to Registration Statement on Form S-1 filed on March 24, 2022)
10.3		Limited Liability Company Agreement of Cali Vibes D8 LLC, dated April 20, 2021 (incorporated by reference to Exhibit 10.3 to Registration Statement on Form S-1 filed on March 24, 2022)
10.4		Joinder Agreement between Cali Vibes D8 LLC, Hempacco Co., Inc., and BX2SD Hospitality, LLC, dated June 3, 2021 (incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-1 filed on March 24, 2022)
10.5		Assignment Agreement between Hempacco Co., Inc. and Green Globe International, Inc., dated December 14, 2021 (incorporated by reference to Exhibit 10.5 to Registration Statement on Form S-1 filed on March 24, 2022)
10.6		Joinder Agreement of Hemp Hop Smokables LLC, by Hempacco Co., Inc., dated December 14, 2021 (incorporated by reference to Exhibit 10.6 to Registration Statement on Form S-1 filed on March 24, 2022)
10.7		Joint Venture Agreement between Hempacco Co., Inc. and Cheech and Chong’s Cannabis Company, dated January 1, 2022 (incorporated by reference to Exhibit 10.7 to Registration Statement on Form S-1 filed on March 24, 2022)
10.8		Joint Venture Agreement between Hempacco Co., Inc. and StickIt Ltd., dated January 19, 2022 (incorporated by reference to Exhibit 10.8 to Registration Statement on Form S-1 filed on March 24, 2022)
10.9		Purchase Finance Agreement between Hempacco Co., Inc., and Titan General Agency Ltd., dated December 3, 2019 (incorporated by reference to Exhibit 10.9 to Registration Statement on Form S-1 filed on March 24, 2022)
10.10		Loan Agreement between Hempacco Co., Inc. and Courier Labs, LLC, dated June 15, 2020 (incorporated by reference to Exhibit 10.10 to Registration Statement on Form S-1 filed on March 24, 2022)
10.11		Security Agreement between Hempacco Co., Inc. and Courier Labs, LLC, dated June 15, 2020 (incorporated by reference to Exhibit 10.11 to Registration Statement on Form S-1 filed on March 24, 2022)
10.12		Side Letter Agreement & Loan Extension between Hempacco Co., Inc. and Courier Labs, LLC (incorporated by reference to Exhibit 10.12 to Registration Statement on Form S-1 filed on March 24, 2022)
10.13		12% 6 Month Note issued to Mario Taverna, dated May 4, 2021 (incorporated by reference to Exhibit 10.13 to Registration Statement on Form S-1 filed on March 24, 2022)
10.14		Note Extension Agreement between Hempacco Co., Inc. and Mario Taverna, dated November 5, 2021 (incorporated by reference to Exhibit 10.14 to Registration Statement on Form S-1 filed on March 24, 2022)
10.15		Convertible Promissory Note issued to Miguel Cambero Villasenor, dated May 6, 2021 (incorporated by reference to Exhibit 10.15 to Registration Statement on Form S-1 filed on March 24, 2022)
10.16		Convertible Promissory Note issued to Miguel Cambero Villasenor, dated June 7, 2021 (incorporated by reference to Exhibit 10.16 to Registration Statement on Form S-1 filed on March 24, 2022)
10.17		Convertible Promissory Note issued to Ernest Sparks and Julee A. Sparks, Joint Tenants, dated May 10, 2021 (incorporated by reference to Exhibit 10.17 to Registration Statement on Form S-1 filed on March 24, 2022)
10.18		12% One Year Note issued to Dennis Holba & Raffaella Marsh, dated November 12, 2019 (incorporated by reference to Exhibit 10.18 to Registration Statement on Form S-1 filed on March 24, 2022)
10.19		Secured Promissory Note issued to Jerry Halamuda, dated February 17, 2020 (incorporated by reference to Exhibit 10.19 to Registration Statement on Form S-1 filed on March 24, 2022)
10.20		Promissory Note issued to Jerry Halamuda, dated February 16, 2021 (incorporated by reference to Exhibit 10.20 to Registration Statement on Form S-1 filed on March 24, 2022)

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10.21		Promissory Note Agreement Amendment 1 between Hempacco Co., Inc. and Jerry Halamuda, dated May 17, 2020 (incorporated by reference to Exhibit 10.21 to Registration Statement on Form S-1 filed on March 24, 2022)
10.22		12% One Year Note issued to Mario Taverna, dated March 5, 2021 (incorporated by reference to Exhibit 10.22 to Registration Statement on Form S-1 filed on March 24, 2022)
10.23		12% One Year Note issued to Mario Taverna, dated March 10, 2021 (incorporated by reference to Exhibit 10.23 to Registration Statement on Form S-1 filed on March 24, 2022)
10.24		12% One Year Note issued to Valentino Mordini, dated March 9, 2021 (incorporated by reference to Exhibit 10.24 to Registration Statement on Form S-1 filed on March 24, 2022)
10.25		12% One Year Note issued to Romeo Fiori, dated March 10, 2021 (incorporated by reference to Exhibit 10.25 to Registration Statement on Form S-1 filed on March 24, 2022)
10.26		12% One Year Note issued to J Lin Inc., dated March 15, 2021 (incorporated by reference to Exhibit 10.26 to Registration Statement on Form S-1 filed on March 24, 2022)
10.27		12% One Year Note issued to Sylvester Barnes, dated April 1, 2021 (incorporated by reference to Exhibit 10.27 to Registration Statement on Form S-1 filed on March 24, 2022)
10.28		12% One Year Note issued to Roger Ladd, dated April 13, 2021 (incorporated by reference to Exhibit 10.28 to Registration Statement on Form S-1 filed on March 24, 2022)
10.29		Standard Industrial/Commercial Multi-Tenant Lease Agreement between Hempacco Co., Inc. and Primus Logistics, Inc., dated January 1, 2020 (incorporated by reference to Exhibit 10.29 to Registration Statement on Form S-1 filed on March 24, 2022)
10.30*		Sales and Marketing Agreement between Hempacco Co., Inc., and Cube17, Inc., dated November 6, 2019 (incorporated by reference to Exhibit 10.30 to Registration Statement on Form S-1 filed on March 24, 2022)
10.31*		Consulting & Marketing Agreement between Hempacco Co., Inc., and Strategic Global Partners, Inc., dated January 3, 2020 (incorporated by reference to Exhibit 10.31 to Registration Statement on Form S-1 filed on March 24, 2022)
10.32*		Consulting & Marketing Agreement between Hempacco Co., Inc., and UST Mexico, Inc., dated January 3, 2020 (incorporated by reference to Exhibit 10.32 to Registration Statement on Form S-1 filed on March 24, 2022)
10.33*		Interim Consulting Agreement between Hempacco Co., Inc. and Neville Pearson, dated March 1, 2021 (incorporated by reference to Exhibit 10.33 to Registration Statement on Form S-1 filed on March 24, 2022)
10.34*		Employment Agreement between Hempacco Co., Inc. and Sandro Piancone, dated January 20, 2022 (incorporated by reference to Exhibit 10.34 to Registration Statement on Form S-1 filed on March 24, 2022)
10.35*		Employment Agreement between Hempacco Co., Inc. and Neville Pearson, dated January 20, 2022 (incorporated by reference to Exhibit 10.35 to Registration Statement on Form S-1 filed on March 24, 2022)
10.36*		Employment Agreement between Hempacco Co., Inc. and Jorge Olson, dated February 3, 2022 (incorporated by reference to Exhibit 10.36 to Registration Statement on Form S-1 filed on March 24, 2022)
10.37*		Indemnification Agreement, between Hempacco Co., Inc. and Sandro Piancone, dated August 29, 2022 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on September 2, 2022)
10.38*		Indemnification Agreement, between Hempacco Co., Inc. and Neville Pearson, dated August 29, 2022 (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on September 2, 2022)
10.39*		Indemnification Agreement, between Hempacco Co., Inc. and Jorge Olson, dated August 29, 2022 (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on September 2, 2022)

Table of Contents

10.40*		Indemnification Agreement, between Hempacco Co., Inc. and Stuart Titus, dated August 29, 2022 (incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K filed on September 2, 2022)
10.41*		Indemnification Agreement, between Hempacco Co., Inc. and Jerry Halamuda, dated August 29, 2022 (incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K filed on September 2, 2022)
10.42*		Indemnification Agreement, between Hempacco Co., Inc. and Miki Stephens, dated August 29, 2022 (incorporated by reference to Exhibit 10.6 to Current Report on Form 8-K filed on September 2, 2022)
10.43*		Independent Director Agreement, between Hempacco Co., Inc. and Miki Stephens, dated August 29, 2022 (incorporated by reference to Exhibit 10.7 to Current Report on Form 8-K filed on September 2, 2022)
10.44		Broker Representation Agreement between Hempacco Co., Inc. and Wizards and Kings LLC, dated November 23, 2021 (incorporated by reference to Exhibit 10.39 to Amendment No. 1 to Registration Statement on Form S-1 filed on May 3, 2022)
10.45		Asset Purchase Agreement between Hempacco Co., Inc. and Nery’s Logistics, Inc., dated July 12, 2022 (incorporated by reference to Exhibit 10.40 to Amendment No. 4 to Registration Statement on Form S-1 filed on August 5, 2022)
10.46		8% 90 Day Note issued to Jerry Halamuda, dated May 18, 2022 (incorporated by reference to Exhibit 10.41 to Amendment No. 4 to Registration Statement on Form S-1 filed on August 5, 2022)
10.47		Promissory Note Agreement Amendment 1 between Hempacco Co., Inc. and Jerry Halamuda, dated June 18, 2022 (incorporated by reference to Exhibit 10.42 to Amendment No. 4 to Registration Statement on Form S-1 filed on August 5, 2022)
10.48		Joint Venture Agreement between Hempacco Co., Inc. and Sonora Paper Co., Inc., dated October 2, 2022 (incorporated by reference to Exhibit 10.48 to Registration Statement on Form S-1 filed on February 3, 2023)
10.49		Joint Venture Agreement between Hempacco Co., Inc. and High Sierra Technologies, Inc., dated November 10, 2022 (incorporated by reference to Exhibit 10.49 to Registration Statement on Form S-1 filed on February 3, 2023)
10.50		Operating Agreement between Hempacco Co., Inc., Alfalfa Holdings, LLC, and HPDG, LLC, dated January 24, 2023 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on February 2, 2023)
14.1		Code of Ethics and Business Conduct (incorporated by reference to Exhibit 14.1 to Registration Statement on Form S-1 filed on March 24, 2022)
31.1		Certification of Principal Executive Officer required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Principal Financial and Accounting Officer required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63
32.2		Certification of Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63
99.1		Settlement Agreement and Mutual Release between Hempacco Co., Inc. and Titan General Agency Ltd., dated September 6, 2022 (incorporated by reference to Exhibit 99.2 to Registration Statement on Form S-1 filed on February 3, 2023)
101.INS**		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH**		Inline XBRL Taxonomy Extension Schema Document.
101.CAL**		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF**		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**		Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE**		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104**		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Executive compensation plan or arrangement.

XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

Table of Contents

SIGNATURES

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

	HEMPACCO CO., INC. (Registrant)

Date: August 14, 2023	By:	/s/ Sandro Piancone
		Sandro Piancone
		Chief Executive Officer
Date: August 14, 2023	By:	/s/ Neville Pearson
		Neville Pearson
		Chief Financial Officer

nullnullnullnull

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 11, 2023
Cover [Abstract]
Entity Registrant Name	HEMPACCO CO., INC.
Entity Central Index Key	0001892480
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		28,343,728
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-41487
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	83-4231457
Entity Address Address Line 1	9925 Airway Road
Entity Address City Or Town	San Diego
Entity Address State Or Province	CA
Entity Address Postal Zip Code	92154
City Area Code	619
Local Phone Number	779-0715
Security 12b Title	Common Stock, par value $0.001 per share
Trading Symbol	HPCO
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Cash and cash equivalents	$ 1,386,111	$ 548,331
Accounts receivable	230,171	231,269
Accounts receivable, related parties	0	5,100
Loans receivable, related parties	263,182	0
Inventory	1,181,531	645,132
Prepaid expenses and other current assets	405,894	442,366
Prepaid expenses, related parties	957,871	35,609
Total Current Assets	4,424,760	1,907,807
Property and equipment	7,307,564	7,220,565
Right of use asset, related party	297,235	351,146
Other intangible assets, net of amortization	0	2,661
Other assets	568,357	0
TOTAL ASSETS	12,597,916	9,482,179
Current Liabilities
Accounts payable	342,545	335,605
Accounts payable, related parties	30,169	42,831
Accrued liabilities	64,015	0
Customer prepaid invoices and deposits	861,314	838,164
Line of credit	100,000	0
Notes payable, related parties	50,000	69,282
Convertible promissory notes payable	100,000	125,000
Other short term loans	138,252	0
Right of use liability, related party - current	113,091	109,552
Total Current Liabilities	1,799,386	1,520,434
Long Term Liabilities
Long-term debt	0	142,770
Right of use liability, related party	200,450	258,776
Total Liabilities	1,999,836	1,921,980
Stockholders' Equity
Preferred stock, value	0	0
Common stock, $0.001 par value as of June 30, 2023 and December 31, 2022, respectively; 200,000,000 shares authorized as of June 30, 2023 and December 31, 2022, respectively. 28,343,728 and 23,436,505 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.	28,343	23,436
Additional paid-in capital	25,118,062	18,095,184
Accumulated deficit	(14,405,058)	(10,463,048)
Total Stockholders' Equity	10,741,347	7,655,572
Non-controlling interests	(143,267)	(95,373)
Total Equity Attributable to Hempacco Co., Inc.	10,598,080	7,560,199
LIABILITIES AND STOCKHOLDERS' EQUITY	12,597,916	9,482,179
Series A Preferred stock
Stockholders' Equity
Preferred stock, value	$ 0	$ 0

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	50,000,000	50,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	28,343,728	23,436,505
Common stock, shares outstanding	28,343,728	23,436,505
Series A Preferred stock
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues
Product sales	$ 223,188	$ 1,853,996	$ 618,187	$ 2,811,562
Product sales, related parties	13,760	5,000	20,319	6,000
Manufacturing service revenue	1,386	13,995	13,438	26,595
Kiosk revenue	16,267	2,066	17,017	2,066
Total Revenues	254,601	1,875,057	678,961	2,846,223
Cost of Sales
Cost of sales	417,632	1,398,028	877,891	2,197,034
Cost of sales, related parties	14,423	0	75,885	0
Total Cost of Sales	432,055	1,398,028	953,776	2,197,034
Gross Profit (Loss) from Operations	(177,454)	477,029	(274,815)	649,189
Operating Expenses
General and administrative	947,461	235,924	1,684,636	966,999
General and administrative, related parties	53,414	45,000	268,697	150,000
Sales and marketing	229,759	287,866	409,588	484,110
Sales and marketing, related parties	27,491	0	50,087	0
Expensing of related party advances and loans	195,775	0	1,320,775	0
Total Operating Expenses	1,453,900	568,790	3,733,783	1,601,109
Net Operating Loss	(1,631,354)	(91,761)	(4,008,598)	(951,920)
Other Income (Expense)
Interest expense, net	20,034	(5,799)	18,746	(9,396)
Other income & expense	0	210	(52)	(13,250)
Total Other Income (Expense)	20,034	(5,589)	18,694	(22,646)
Net Loss	(1,611,320)	(97,350)	(3,989,904)	(974,566)
Net Loss Attributable to Non-Controlling Interests	34,911	1,350	47,894	1,583
Net Loss Attributable to Hempacco Co., Inc.	$ (1,576,409)	$ (96,000)	$ (3,942,010)	$ (972,983)
Basic and Dilutive Earnings per Share	$ (0.06)	$ (0.00)	$ (0.15)	$ (0.05)
Shares Used in Calculating Earnings per Share	28,312,275	19,899,969	27,093,163	19,798,315

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)	Noncontrolling Interest
Balance, shares at Dec. 31, 2021		19,695,532
Balance, amount at Dec. 31, 2021	$ 2,867,660	$ 19,696	$ 6,321,428	$ (3,459,214)	$ (14,250)
Warrant valuation expense	437,375	$ 0	437,375	0	0
Issuance of common stock, shares		208,000
Issuance of common stock, amount	416,000	$ 208	415,792	0	0
Offering costs paid in connection with sale of common stock	(76,525)	$ 0	(76,525)	0	0
Common stock issued for convertible note, shares		56,592
Common stock issued for convertible note, amount	56,591	$ 56	56,535	0	0
Net loss attributable to non-controlling interests	0	0	0	1,583	(1,583)
Net loss for the six months ended June 30, 2022	(974,566)	$ 0	0	(974,566)	0
Balance, shares at Jun. 30, 2022		19,960,124
Balance, amount at Jun. 30, 2022	2,726,535	$ 19,960	7,154,605	(4,432,197)	(15,833)
Balance, shares at Mar. 31, 2022		19,695,532
Balance, amount at Mar. 31, 2022	2,411,819	$ 19,696	6,742,803	(4,336,197)	(14,483)
Issuance of common stock, shares		208,000
Issuance of common stock, amount	416,000	$ 208	415,792	0	0
Common stock issued for convertible note, shares		56,592
Common stock issued for convertible note, amount	56,591	$ 56	56,535	0	0
Net loss attributable to non-controlling interests	0	0	0	1,350	(1,350)
Net loss for the six months ended June 30, 2022	(97,350)	0	0	(97,350)	0
Offering costs	(60,525)	$ 0	(60,525)	0	0
Balance, shares at Jun. 30, 2022		19,960,124
Balance, amount at Jun. 30, 2022	2,726,535	$ 19,960	7,154,605	(4,432,197)	(15,833)
Balance, shares at Dec. 31, 2022		23,436,505
Balance, amount at Dec. 31, 2022	7,560,199	$ 23,436	18,095,184	(10,463,048)	(95,373)
Issuance of common stock, shares		4,830,000
Issuance of common stock, amount	7,245,000	$ 4,830	7,240,170	0	0
Common stock issued for convertible note, shares		62,223
Common stock issued for convertible note, amount	29,032	$ 62	28,970	0	0
Net loss attributable to non-controlling interests	0	0	0	47,894	(47,894)
Net loss for the six months ended June 30, 2022	(3,989,904)	0	0	(3,989,904)	0
Offering costs	(634,600)	$ 0	(634,600)	0	0
Shares issued for consulting services, shares		15,000
Shares issued for consulting services, amount	12,900	$ 15	12,885	0	0
Capitalized value of warrants	374,453	$ 0	374,453	0	0
Capital contribution related to joint venture	1,000		1,000
Balance, shares at Jun. 30, 2023		28,343,728
Balance, amount at Jun. 30, 2023	10,598,080	$ 28,343	25,118,062	(14,405,058)	(143,267)
Balance, shares at Mar. 31, 2023		28,281,505
Balance, amount at Mar. 31, 2023	12,179,368	$ 28,281	25,088,092	(12,828,649)	(108,356)
Common stock issued for convertible note, shares		62,223
Common stock issued for convertible note, amount	29,032	$ 62	28,970	0	0
Net loss attributable to non-controlling interests	0	0	0	34,911	(34,911)
Net loss for the six months ended June 30, 2022	(1,611,320)	0	0	(1,611,320)	0
Capital contribution related to joint venture	1,000	$ 0	1,000	0	0
Balance, shares at Jun. 30, 2023		28,343,728
Balance, amount at Jun. 30, 2023	$ 10,598,080	$ 28,343	$ 25,118,062	$ (14,405,058)	$ (143,267)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities
Net loss	$ (3,989,904)	$ (974,566)
Adjustments to reconcile net loss to cash used in operating activities
Depreciation and amortization	63,848	45,217
Non-cash warrant valuation expense	31,205	437,375
Reserving of related party loans	1,320,775	0
Gain on disposal of assets	0	10,690
Stock based compensation for services	12,900	0
Changes in operating assets and liabilities
Trade receivables, net	1,098	(19,549)
Accounts receivable, related parties	5,100	5,934
Prepaid expenses and other current assets	111,363	482,948
Prepaid expenses, related parties	(922,262)	0
Inventories	(536,399)	(321,390)
Accounts payable	6,940	265,340
Accounts payable, related parties	(12,662)	(17,972)
Accrued liabilities	64,015	10,423
Customer deposits	23,150	(1,046,920)
Right of use assets and liabilities	(876)	0
Net cash used in operating activities	(3,821,709)	(1,122,470)
Cash flows from investing activities
Purchases of property, plant and equipment	(148,186)	(7,011)
Proceeds from disposal of equipment	0	40,000
Net cash provided by (used in) investing activities	(148,186)	32,989
Cash flows from financing activities
Equipment loan repayment	0	(50,000)
Long term loan repayment	(4,518)	0
Loans to related parties	(1,583,957)	(115,777)
Proceeds from short-term promissory note, related parties	0	50,000
Proceeds from line of credit	100,000	0
Investment in joint venture	(300,000)	0
Proceeds from the sale of common stock	7,230,750	416,000
Offering costs paid in connection with sale of common stock	(634,600)	(76,525)
Cash flows provided by financing activities	4,807,675	223,698
Increase (decrease) in cash and cash equivalents	837,780	(865,783)
Cash and cash equivalents at beginning of period	548,331	933,469
Cash and cash equivalents at end of period	1,386,111	67,686
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	6,762	0
Cash paid for taxes	132	2,770
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Warrants recorded as prepaid and other assets	$ 374,453	$ 0
Conversion of convertible notes payable and accrued interest to common stock	29,032	56,592

ORGANIZATION, BUSINESS AND LIQUIDITY

6 Months Ended

Jun. 30, 2023

ORGANIZATION, BUSINESS AND LIQUIDITY

ORGANIZATION, BUSINESS AND LIQUIDITY

NOTE 1 - ORGANIZATION, BUSINESS AND LIQUIDITY

Organization and Operations

These financial statements are those of Hempacco and its subsidiaries.

Hempacco Co., Inc. (the “Company” or “Hempacco”) was formed on April 1, 2019, as a Nevada corporation.

On April 23, 2021, the Company filed a second amendment to its Articles of Incorporation changing the name of the company from The Hempacco Co., Inc. to Hempacco Co., Inc.

The Company merged with, and became a subsidiary of, Green Globe International, Inc. (“GGII” or “Green Globe International”) on May 21, 2021.

During the six months ended June 30, 2023, the Company entered into the following Joint Ventures and other significant agreements.

Going Concern Matters

SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Principles of Consolidation

The financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

Revenue Concentration

Basic and Diluted Net Loss per Common Share

	June 30,		June 30,
	2023		2022
	(Shares)		(Shares)
Warrants		838,100		-
Promissory Notes convertible to shares		100,000		50,000
TOTAL		938,100		50,000

Fair Value of Financial Instruments

ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

	·	Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs.
	·	Level 2—Significant other observable inputs that can be corroborated by observable market data; and
	·	Level 3—Significant unobservable inputs that cannot be corroborated by observable market data.

Non-Controlling Interests

The Company accounts for the non-controlling interests in its subsidiaries and joint ventures in accordance with U.S. GAAP. and ASC 805-20.

The Company measures its non-controlling interests using the percentage of ownership interest held by the respective NCI’s during the accounting period.

ACCOUNTS RECEIVABLE

6 Months Ended

Jun. 30, 2023

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

NOTE 3 - ACCOUNTS RECEIVABLE

As of June 30, 2023, and December 31, 2022, accounts receivable consisted of the following:

	June 30,			December 31,
	2023			2022

Accounts receivable	$	263,891		$	478,680
Accounts receivable, related parties		-			5,100
Allowance for doubtful accounts		(33,720	)		(247,411	)
Total accounts receivable	$	230,171	)	$	236,369

INVENTORY

6 Months Ended

Jun. 30, 2023

INVENTORY

INVENTORY

NOTE 4 - INVENTORY

As of June 30, 2023, and December 31, 2022, inventory, which consists primarily of the Company’s raw materials, finished products and packaging is stated at the following amounts:

	June 30,		December 31,
	2023		2022

Finished goods	$	462,818	$	109,879
Raw materials (Net of obsolescence allowance)		718,713		535,253
Total inventory at cost less obsolescence allowance	$	1,181,531	$	645,132

PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2023

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 5 - PROPERTY AND EQUIPMENT

As of June 30, 2023, and December 31, 2022, property and equipment consisted of the following:

	June 30,			December 31,
	2023			2022
Production equipment	$	4,033,172		$	3,837,236
Leasehold improvements		12,431			12,431
Kiosks		3,583,529			3,631,279
		7,629,132			7,480,946
Accumulated depreciation		(321,568	)		(260,381	)
Total property and equipment	$	7,307,564		$	7,220,565

Depreciation expense was $33,196 and $61,187 for the three and six months ended June 30, 2023, respectively, and $22,813 and $45,217 for the three and six months ended June 30, 2022, respectively.

OPERATING LEASES - RIGHT OF USE ASSETS

6 Months Ended

Jun. 30, 2023

OPERATING LEASES - RIGHT OF USE ASSETS

OPERATING LEASES - RIGHT OF USE ASSETS

NOTE 6 - OPERATING LEASES – RIGHT OF USE ASSETS

The following are the expected lease payments as of June 30, 2023, including the total amount of imputed interest/present value discount.

Year Ending December 31	Operating Leases
2023	$	65,558
2024		135,049
2025		139,100
Total lease payments		339,707
Less: Imputed interest/present value discount		(26,166	)
Total	$	313,541

Rent expenses were $32,779 and $65,558 during the three and six months ended June 30, 2023, respectively, and $31,827 and $63,654 during the three and six months ended June 30, 2022, respectively.

See Note 1 for information on a new lease between Hempacco Paper Co., Inc., and UST Mexico.

OTHER SHORT-TERM LIABILITIES - EQUIPMENT LOAN

6 Months Ended

Jun. 30, 2023

OTHER SHORT-TERM LIABILITIES - EQUIPMENT LOAN

OTHER SHORT-TERM LIABILITIES - EQUIPMENT LOAN

NOTE 7 - OTHER SHORT-TERM LIABILITIES – EQUIPMENT LOAN

CONVERTIBLE NOTES

6 Months Ended

Jun. 30, 2023

CONVERTIBLE NOTES

CONVERTIBLE NOTES

NOTE 8 - CONVERTIBLE NOTES

WARRANTS

6 Months Ended

Jun. 30, 2023

WARRANTS

WARRANTS

NOTE 9 - WARRANTS

As of June 30, 2023, the following warrants are outstanding:

Talent Warrants (see Note 1)			450,000
Talent Designee Warrants (see Note 1)			50,000
Compensation Warrants			500,000
Representatives’ Warrants (see Note 1)			338,100
			938,100

The Black-Scholes model uses the following variables to calculate the value of an option or warrant for the six months ended June 30, 2023, and the twelve months ended December 31, 2022:

	Input Range	Input Range
	June 30,	December 31,
Description	2023	2022
a) Price of the Issuer’s Security	$ 0.75-$1.25	$ 1.00 - $7.00
b) Exercise (strike) price of Security	$1.00	$ 0.75 - $1.50
c) Time to Maturity in years	5 years	3 to 5 years
d) Annual Risk-Free Rate	5-year T-Bill	2-year T-Bill
e) Annualized Volatility (Beta)	90% - 100%	59% - 100%

OTHER LOANS PAYABLE

6 Months Ended

Jun. 30, 2023

OTHER LOANS PAYABLE

OTHER LOANS PAYABLE

NOTE 10 - OTHER LOANS PAYABLE

RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2023

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 11 - RELATED PARTY TRANSACTIONS

As of June 30, 2023, UST Mexico owned 947,200,000 shares of common stock of Green Globe International, Inc. UST Mexico is a related party by virtue of the CEO’s 25% interest in UST Mexico.

STOCKHOLDERS EQUITY

6 Months Ended

Jun. 30, 2023

STOCKHOLDERS EQUITY

STOCKHOLDERS' EQUITY

NOTE 12 - STOCKHOLDERS’ EQUITY

Common Stock

On September 28, 2021, the Company amended its Articles of Incorporation to increase the number of authorized shares of common stock to 200,000,000.

On July 15, 2022, the Company also settled two vendor accounts payable balances totaling $100,000 by the issuance of 50,000 common shares of the Company.

See Note 1 for additional issuance of common stock.

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2023

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 13 - COMMITMENTS AND CONTINGENCIES

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 14 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of issuance of these financial statements.

See Note 8, 10, and 11 for additional subsequent events.

SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2023

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Principles of Consolidation

The financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

Revenue Concentration

Basic and Diluted Net Loss per Common Share

	June 30,		June 30,
	2023		2022
	(Shares)		(Shares)
Warrants		838,100		-
Promissory Notes convertible to shares		100,000		50,000
TOTAL		938,100		50,000

Fair Value of Financial Instruments

ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

	·	Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs.
	·	Level 2—Significant other observable inputs that can be corroborated by observable market data; and
	·	Level 3—Significant unobservable inputs that cannot be corroborated by observable market data.

Non-Controlling Interests

The Company accounts for the non-controlling interests in its subsidiaries and joint ventures in accordance with U.S. GAAP. and ASC 805-20.

The Company measures its non-controlling interests using the percentage of ownership interest held by the respective NCI’s during the accounting period.

SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2023

SIGNIFICANT ACCOUNTING POLICIES

Schedule of Computation of Diluted Net Loss Per Share

	June 30,		June 30,
	2023		2022
	(Shares)		(Shares)
Warrants		838,100		-
Promissory Notes convertible to shares		100,000		50,000
TOTAL		938,100		50,000

ACCOUNTS RECEIVABLE (Tables)

6 Months Ended

Jun. 30, 2023

ACCOUNTS RECEIVABLE

Scheduele of Accounts Receivable

	June 30,			December 31,
	2023			2022

Accounts receivable	$	263,891		$	478,680
Accounts receivable, related parties		-			5,100
Allowance for doubtful accounts		(33,720	)		(247,411	)
Total accounts receivable	$	230,171	)	$	236,369

INVENTORY (Tables)

6 Months Ended

Jun. 30, 2023

INVENTORY

Schedule of Inventory

	June 30,		December 31,
	2023		2022

Finished goods	$	462,818	$	109,879
Raw materials (Net of obsolescence allowance)		718,713		535,253
Total inventory at cost less obsolescence allowance	$	1,181,531	$	645,132

PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2023

PROPERTY AND EQUIPMENT

Schedule of Property and Equipment

	June 30,			December 31,
	2023			2022
Production equipment	$	4,033,172		$	3,837,236
Leasehold improvements		12,431			12,431
Kiosks		3,583,529			3,631,279
		7,629,132			7,480,946
Accumulated depreciation		(321,568	)		(260,381	)
Total property and equipment	$	7,307,564		$	7,220,565

OPERATING LEASES - RIGHT OF USE ASSETS (Tables)

6 Months Ended

Jun. 30, 2023

OPERATING LEASES - RIGHT OF USE ASSETS

Schedule of operating lease

Year Ending December 31	Operating Leases
2023	$	65,558
2024		135,049
2025		139,100
Total lease payments		339,707
Less: Imputed interest/present value discount		(26,166	)
Total	$	313,541

WARRANTS (Tables)

6 Months Ended

Jun. 30, 2023

WARRANTS

Schedule of Warrants outstanding

Talent Warrants (see Note 1)			450,000
Talent Designee Warrants (see Note 1)			50,000
Compensation Warrants			500,000
Representatives’ Warrants (see Note 1)			338,100
			938,100

Schedule of Calculated Values of Option or Warrant

	Input Range	Input Range
	June 30,	December 31,
Description	2023	2022
a) Price of the Issuer’s Security	$ 0.75-$1.25	$ 1.00 - $7.00
b) Exercise (strike) price of Security	$1.00	$ 0.75 - $1.50
c) Time to Maturity in years	5 years	3 to 5 years
d) Annual Risk-Free Rate	5-year T-Bill	2-year T-Bill
e) Annualized Volatility (Beta)	90% - 100%	59% - 100%

ORGANIZATION BUSINESS AND LIQUIDITY (Details Narrative)				1 Months Ended		3 Months Ended		6 Months Ended
ORGANIZATION BUSINESS AND LIQUIDITY (Details Narrative)	May 07, 2023	May 03, 2023 USD ($)	Feb. 08, 2023 USD ($) ft²	Mar. 31, 2023 USD ($)	Feb. 14, 2023 USD ($) shares	Jun. 30, 2023 USD ($) $ / shares	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 USD ($)	Feb. 09, 2023 $ / shares	Dec. 31, 2022 USD ($) $ / shares
Leased Area \| ft²			43,000
Payment of rent				$ 18,622
Contingent liability at lease inception								$ 694,159
Percentage increase in rent due to inflation								3.50%
Description of operating and servicing agreement								pay Talent’s legal expenses of $7,500 in connection with entering into the Operating Agreement and Services Agreement; (ii) cause the Company to issue to Talent a fully vested warrant to acquire 450,000 shares of Company common stock at a strike price of $1.00 per share (the “Talent Warrants”); (iii) cause the Company to issue to Talent’s designee a fully vested warrant to acquire 50,000 shares of the Company’s common stock at a strike price of $1.00 per share (the “Talent Designee Warrants”); and (iv) pay Talent royalties of 10% of HDPG, LLC’s gross revenue, with minimum annual royalty payments of $450,000 by the end of the first two years of the initial term of the Services Agreement, an additional $600,000 by the end of the third year of the initial term, and an additional $1,200,000 by the end of the fourth year of the initial term
Earning of annual royalty						$ 41,956		$ 41,956
Royalty due date								Apr. 10, 2025
Description related to capital market								Hempacco Co. received a letter notification from the Nasdaq Capital Market (“Nasdaq”) advising of its non-compliance with Nasdaq listing rules because Hempacco had failed to maintain its stock price at above $1.00 for a period of 30-days. The Nasdaq rules provide for a period of 180 days in which Hempacco must restore compliance. This period expires on October 3, 2023
Common stock par value \| $ / shares						$ 0.001		$ 0.001			$ 0.001
Gross proceeds from sale of common stock								$ 7,230,750	$ 416,000
Monthly rent			$ 2,500
Accumulated deficit						$ (14,405,058)		(14,405,058)			$ (10,463,048)
Net loss						(1,611,320)	$ (97,350)	(3,989,904)	(974,566)
Net cash used in operations								$ (3,821,709)	$ (1,122,470)
Curated Nutra LLC [Member]
Payment for purchase of additional manufacturing equipment		$ 300,000
Nasir Ghesani [Member]
Ownership percentage	50.00%
Underwriters [Member]
Common stock par value \| $ / shares										$ 0.001
Offering price to the public \| $ / shares										$ 1.50
Common stock available for sale \| shares								4,200,000
Warrrants issued to purchase common stock \| shares					338,100
Additional shares of Common Stock offered for sale \| shares								630,000
Common stock shares sold \| shares					4,830,000
Gross proceeds from sale of common stock					$ 7,245,000
Net proceeds from sale of common stock					$ 6,610,400
HVI And Weedsies [Member]
Ownership percentage								50.00%
Fund required to joint venture entity								$ 1,000
Alfalfa [Member]
Ownership percentage								50.00%
Fund required to joint venture entity								$ 10,000
Going Concern Matters [Member]
Accumulated deficit						(14,405,058)		(14,405,058)
Net loss								$ (3,989,904)
Net cash used in operations						$ 3,821,709

SIGNIFICANT ACCOUNTING POLICIES (Details) - shares	6 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Details) - shares	Jun. 30, 2023	Jun. 30, 2022
Share issued on conversion of promissory notes	938,100	50,000
Convertible Promissory Note [Member]
Share issued on conversion of promissory notes	100,000	50,000
Warrants	838,100	0

SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Total accounts receivable	$ 230,171		$ 230,171		$ 236,369
Customer [Member]
Sale of revenue concentration	28.00%	91.00%	40.00%	91.00%
Sale of account receivable Concentration	23.00%	30.00%	23.00%	30.00%
Total accounts receivable	$ 230,171	$ 326,349	$ 230,171	$ 326,349
Customer One [Member]
Sale of revenue concentration	18.00%
Customer Two [Member]
Sale of revenue concentration	11.00%		12.00%

ACCOUNTS RECEIVABLE (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
ACCOUNTS RECEIVABLE
Accounts receivable	$ 263,891	$ 478,680
Accounts receivable - related parties	0	5,100
Allowance for doubtful accounts	(33,720)	(247,411)
Total accounts receivable	$ 230,171	$ 236,369

INVENTORY (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
INVENTORY
Finished goods	$ 462,818	$ 109,879
Raw materials (Net of obsolescence allowance)	718,713	535,253
Total inventory at cost less obsolescence allowance	$ 1,181,531	$ 645,132

PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Less accumulated depreciation	$ (321,568)	$ (260,381)
Total property and equipment	7,307,564	7,220,565
Property and equipment, gross	7,629,132	7,480,946
Production Equipment [Member]
Property and equipment, gross	4,033,172	3,837,236
Leasehold Improvements [Member]
Property and equipment, gross	12,431	12,431
Kiosks [Member]
Property and equipment, gross	$ 3,583,529	$ 3,631,279

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
PROPERTY AND EQUIPMENT
Depreciation expense	$ 33,196	$ 22,813	$ 61,187	$ 45,217

OPERATING LEASES - RIGHT OF USE ASSETS (Details)	Jun. 30, 2023 USD ($)
OPERATING LEASES - RIGHT OF USE ASSETS
2023	$ 65,558
2024	135,049
2025	139,100
Total lease payments	339,707
Less: Imputed interest/present value discount	(26,166)
Total	$ 313,541

OPERATING LEASES - RIGHT OF USE ASSETS (Details Narrative) - Operating Lease [Member]	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) ft²	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Total Manufacturing unit space \| ft²			6,300
Amounts payable to related party for rent	$ 0		$ 0		$ 5,163
Lease term			72 months
Manufacturing unit space \| ft²			1,800
Operating lease rent expense, monthly			$ 10,000
Prepaid rent	155,465		155,465		$ 25,000
Rent expense	$ 32,779	$ 31,827	$ 65,558	$ 63,654
Interest rate			6.23%

OTHER SHORT-TERM LIABILITIES - EQUIPMENT LOAN (Details Narrative) - USD ($)	Sep. 06, 2022	Jan. 06, 2022	Dec. 11, 2019	Jun. 30, 2023	Dec. 31, 2022
Outstanding loan balance				$ 138,252	$ 0
Short Term Loan Equipment [Member]
Short-term loan for equipment			$ 1,500,000
Amortization period			18 months
Term of loan			18 months
Payment to the lender		$ 50,000
Principal balance of loan				$ 0	$ 0
Outstanding loan balance	$ 1,450,000
Imputed discount			$ 109,627
Cash payment	$ 250,000
Restricted stock shares issued during period	266,667

CONVERTIBLE NOTES (Details Narrative) - USD ($)		1 Months Ended	2 Months Ended	6 Months Ended
CONVERTIBLE NOTES (Details Narrative) - USD ($)	Jun. 07, 2022	Mar. 18, 2022	Jun. 21, 2021	Jun. 30, 2023	Aug. 01, 2023	Dec. 31, 2022
Accrued interest				$ 64,015		$ 0
Interest rate			12.00%	9.25%
Repayment of promissory note principal balance					$ 50,000
Minimum [Member]
Interest rate				8.00%
Maximum [Member]
Interest rate				12.00%
Miguel Cambero [Member]
Notes payable				$ 100,000
Ernie Sparks [Member]
Notes payable				25,000
Convertivble notes				62,223
Accrued interest				$ 4,032
Convertible Promissory Notes [Member]
Proceeds from private investors			$ 175,000
Interest rate		8.00%
Conversion rate of bid price				75.00%
Converted with the exclusion amount				$ 50,000
Maturity date		Jun. 18, 2023		May 04, 2022
Promissory note related party		$ 50,000
Secured notes by common stock shares		50,000
Conversion price per share				$ 1.00
Conversion to common stock	56,592

WARRANTS (Details)	Jun. 30, 2023 shares
Number of warrants outstanding	938,100
Talent Warrants [Member]
Number of warrants outstanding	50,000
Talent Designee Warrants [Member]
Number of warrants outstanding	450,000
Compensation Warrants [Member]
Number of warrants outstanding	500,000
Representatives' Warrants [Member]
Number of warrants outstanding	338,100

WARRANTS (Details 1) - Warrants [Member] - $ / shares	6 Months Ended	12 Months Ended
WARRANTS (Details 1) - Warrants [Member] - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Annual Risk-Free Rate	5-year T-Bill	2-year T-Bill
Exercise (strike) price of Security	$ 1.00
Time to Maturity in years	5 years
Minimum [Member]
Price of the Issuer's Security	$ 0.75	$ 1.00
Exercise (strike) price of Security		$ 0.75
Time to Maturity in years		3 years
Annualized Volatility (Beta)	90.00%	59.00%
Maximum [Member]
Price of the Issuer's Security	$ 1.25	$ 7.00
Exercise (strike) price of Security		$ 1.50
Time to Maturity in years		5 years
Annualized Volatility (Beta)	100.00%	100.00%

WARRANTS (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended		6 Months Ended
WARRANTS (Details Narrative) - USD ($)	Aug. 11, 2021	Jan. 25, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Prepaid expenses current			$ 74,891		$ 74,891
Sales and marketing expense			229,759	$ 287,866	409,588	$ 484,110
GGII [Member]
Warrants to purchase shares of common stock gross offering, percentage rate	7.00%
Initial IPO exercise price, offering percentage rate	150.00%
Offering price percentage in other financing warrants	100.00%
Compensation Warrants [Member]
Prepaid expenses noncurrent			$ 268,357		268,357
Warrants issued to purchase common stock		500,000
Exercise price		$ 1.00
Contractual life		5 years
Stock-based compensation		$ 12,900
Unrecongnized compensation cost related to common stock warrants		$ 343,248
Sales and marketing expense					$ 31,205

OTHER LOANS PAYABLE (Details Narrative) - USD ($)		1 Months Ended		2 Months Ended	6 Months Ended
OTHER LOANS PAYABLE (Details Narrative) - USD ($)	Jan. 15, 2021	Jul. 31, 2021	Jun. 15, 2020	Jun. 21, 2021	Jun. 30, 2023	Dec. 31, 2022
Line of credit facility		$ 100,000
Line of credit interest rate, description		The line of credit bears interest at a floating rate equal to 1.0% above the Wall Street Journal Prime Rate at any time and matured in July 2023
Line of credit owed					$ 100,000	$ 0
Interest rate				12.00%	9.25%
Third Party Loan Agreement [Member]
Loan principal amount	$ 83,328		$ 85,000
Outstanding other loans payble					$ 138,252	$ 142,770
Terms of loan			one year
Interest rate			0.00%

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 01, 2023	Dec. 31, 2022
Due From Related Parties	$ 0		$ 0			$ 0
Inventory recieved			(536,399)	$ (321,390)
Revenue	254,601	$ 1,875,057	678,961	2,846,223
Green Star Labs [Member]
Loan, net amount	266,000		266,000
Inventory recieved			170,000
Purchase order					$ 604,000
Product shipped			0
Reserve	0		479,000
Balance owed to related party	1,200,400		1,200,400			605,994
Alfalfa Holdings LLC [Member]
Cash paid to related party	737,397		737,397
Primus Logistics [Member]
Payment to be made to related party	$ 0		0			5,163
Services charge expense			$ 94,266	70,094
Ownership percentage	90.00%		90.00%
Advance rent	$ 169,780		$ 169,780			25,000
UST Mexico, Inc. [Member]
Payment to be made to related party	32,108		32,108			$ 0
Revenue	0	6,000	6,559	6,000
Goods and services amount	$ 103,009,000	$ 43,220,000	$ 148,009,000	90,000,000
Ownership percentage	25.00%		25.00%
CEO [Member]
Salary paid			$ 60,000	$ 120,000
Consulting fees			30,000
CMO [Member]
Salary paid			60,000
Green Globe International Inc. [Member]
Payment to be made to related party	$ 1,614,027		1,614,027
Short-term borrowing increased amount			1,500,000
Loan, net amount	692,119		692,119
Maximum borrowing outstanding, amount	$ 500,000		$ 500,000
Common stock share owned	947,200,000		947,200,000
Cash paid to related party	$ 50,500		$ 50,500
Reserve	195,775		1,320,775
Hempacco Paper Company [Member]
Prepaid expenses	$ 790,099		$ 790,099

STOCKHOLDERS EQUITY (Details Narrative) - USD ($)					1 Months Ended	6 Months Ended		12 Months Ended
STOCKHOLDERS EQUITY (Details Narrative) - USD ($)	Oct. 12, 2022	Sep. 06, 2022	Jul. 15, 2022	Apr. 07, 2022	Sep. 17, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Common stock share authorized						200,000,000		200,000,000
Common stock share issued						28,343,728		23,436,505
Proceeds from common stock shares						$ 7,230,750	$ 416,000
Business acquiairion share issued			2,000,000
Vendor settelment amount			$ 100,000
Share issued for settelment			50,000
One-time charge, net realizable value								$ 1,121,663
Equipment Allocation amount			$ 3,400,000
Intangible assets allocation amount			600,000			0		$ 2,661
Equipment value			2,278,337
Acuisition amount			$ 4,000,000
Increase in common stock, amount						$ 55
North Equities Corp. [Member]
Restricted share issuance					41,494
Market value of share issued					$ 100,000
FMW Media Works LLC [Member]
Restricted share issuance	63,292
Market value of share issued	$ 148,103
Boustead Securities, LLC [Member]
Price per share		$ 4.74
Common share purchased		70,000
Additional underwriting expenses		$ 260,358
Increase in additional paid in capital		$ 260,303
Cashless basis shares of common stock converted		54,928
September 1, 2022 [Member] \| Boustead Securities, LLC [Member]
Price per share						$ 6.00
Common stock share sold						1,000,000
Net proceeds from other equity						$ 5,390,753
Hempacco Shares [Member]
Common stock share issued				208,000
Price per share				$ 2.00
Proceeds from common stock shares				$ 416,000
Net proceeds from other equity				$ 339,475

SUBSEQUENT EVENTS (Details Narrative) - Purchase Agreement [Member] - Green Star Labs [Member] - Subsequent Event [Member]	Jul. 10, 2023 USD ($) shares
Acquired ownership interest	50.00%
Capital amount paid	$ 300,000
Total purchase price paid	3,500,000
Preliminary purchase price	2,500,000
Purchase price for equipment	1,000,000
Convertible promissory note issued value	$ 3,200,000
Conversion price ratio	95.238%
Conversion terms, description	The holder has the right, after 6-months after the issue date, to convert all or part of the then outstanding principal balance of the note into common stock of the issuer, provided, however, that the holder may not convert the note into Company common stock to the extent that such conversion would result in the holder’s beneficial ownership of the Company common stock being in excess of 4.99% of the Company’s issued and outstanding common stock
Purchase price cash portion	$ 3,500,000
Purchase price paid after issuance of promissory note	3,200,000
Purchase price other portion to seller	$ 3,500,000
Interest rate	10.00%
Ownership excess in common stock	4.99%
Aggregate shares issued upon conversion of notes \| shares	5,572,000
Minimum [Member]
Total purchase price paid	$ 3,200,000
Maximum [Member]
Total purchase price paid	$ 3,500,000