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 September 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 November 20, 2023, was 29,145,537.

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 September 30, 2023, and December 31, 2022 (unaudited)	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023, and 2022 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023, and 2022 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 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	23
Item 3	Quantitative and Qualitative Disclosures about Market Risk	30
Item 4	Controls and Procedures	30

Part II – Other Information

Item 1	Legal Proceedings	31
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3	Defaults Upon Senior Securities	33
Item 4	Mine Safety Disclosures	33
Item 5	Other Information	33
Item 6	Exhibits	34

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HEMPACCO CO., INC.

Condensed Consolidated Balance Sheets

(Unaudited)

As of	September 30, 2023			December 31, 2022

ASSETS
Current Assets
Cash and cash equivalents	$	17,076		$	548,331
Accounts receivable		554,344			231,269
Accounts receivable, related parties		-			5,100
Loans receivable, related parties		286,174			-
Inventory		909,750			645,132
Prepaid expenses and other current assets		673,522			442,366
Prepaid expenses, related parties		736,941			35,609
Total Current Assets		3,177,807			1,907,807

Property and equipment		8,993,603			7,220,565
Right of use asset, related party		269,634			351,146
Other intangible assets, net of amortization		-			2,661
Equity investment – related party		1,747,381			-
Other investments and Warrants		249,634			-

TOTAL ASSETS	$	14,438,059		$	9,482,179

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Current Liabilities
Accounts payable	$	665,033		$	335,605
Accounts payable, related parties		87,412			42,831
Accrued liabilities		374,444			-
Customer prepaid invoices and deposits		806,029			838,164
Line of credit		100,000			-
Loans and notes payable, related parties		-			69,282
Convertible promissory notes payable		3,200,000			125,000
Other short-term loans		137,173			-
Right of use liability, related party – current		114,926			109,552
Total Current Liabilities		5,485,017			1,520,434

Long Term Liabilities
Long-term debt		-			142,770
Right of use liability, related party		170,576			258,776
Total Liabilities		5,655,593			1,921,980
Stockholders’ Equity
Preferred stock, $0.001 par value; 50,000,000 shares authorized as of September 30, 2023, and December 31, 2022, respectively.		-			-
Series A Preferred Stock, $0.001 par value; 10,000,000 Shares authorized as of September 30, 2023, and December 31, 2022, respectively. 0 shares issued and outstanding as of September 30, 2023, and December 31, 2022, respectively.		-			-
Common stock, $0.001; 200,000,000 shares authorized as of September 30, 2023, and December 31, 2022, respectively. 28,926,126 and 23,436,505 shares issued and outstanding as of September 30, 2023, and December 31, 2022, respectively.		28,926			23,436
Additional paid-in capital		25,563,373			18,095,184
Accumulated deficit		(16,640,974	)		(10,463,048	)
Total Stockholders’ Equity		8,951,325			7,655,572
Non-controlling interests		(168,859	)		(95,373	)
Total Equity Attributable to Hempacco Co., Inc.		8,782,466			7,560,199

LIABILITIES AND STOCKHOLDERS’ EQUITY	$	14,438,059		$	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 September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues
Product sales	$	1,305,254		$	561,818		$	1,950,460		$	3,373,380
Product sales, related parties		11,709			16,940			32,028			22,940
Manufacturing service revenue		9,049			6,653			22,487			33,248
Kiosk revenue		-			6,824			-			8,890
Total Revenues		1,326,012			592,235			2,004,975			3,438,458

Cost of Sales
Cost of sales		1,349,631			598,627			2,227,521			2,795,661
Cost of sales, related parties		414,374			-			490,260			-
Total Cost of Sales		1,764,005			598,627			2,717,781			2,795,661
Gross Profit (Loss) from Operations		(437,993	)		(6,392	)		(712,806	)		642,797

Operating Expenses
General and administrative		1,037,790			791,562			2,770,482			1,758,561
General and administrative, related parties		135,454			45,000			403,963			195,000
Sales and marketing		306,505			200,976			668,227			685,086
Sales and marketing, related parties		29,794			-			79,881			-
Expensing of related party advances and loans		166,267			-			1,487,042			-
Total Operating Expenses		1,675,810			1,037,538			5,409,595			2,638,647

Net Operating Loss		(2,113,803	)		(1,043,930	)		(6,122,401	)		(1,995,850	)

Other Income (Expense)
Interest expense		(82,109	)		(3,684	)		(88,871	)		(13,080	)
Other income and expense		(36,977	)		(1,859	)		(11,521	)		(15,109	)
Total Other Income (Expense)		(119,086	)		(5,543	)		(100,392	)		(28,189	)

Net Loss before equity investment		(2,232,889	)		(1,049,473	)		(6,222,793	)		(2,024,039	)
Share of net losses of equity method investee		(28,619	)		-			(28,619	)		-
Net Loss	$	(2,261,508	)	$	(1,049,473	)	$	6,251,412		$	(2,024,039	)
Net loss attributable to non-controlling interests		50,995			617			73,486			2,200
Net Loss Attributable to Hempacco Co., Inc.		(2,210,513	)		(1,048,856	)		(6,177,926	)		(2,021,839	)
								5
Basic and Dilutive Loss per Share	$	(0.08	)	$	(0.05	)	$	(0.22	)	$	(0.10	)

Shares Used in Calculating Loss per Share		28,524,410			22,468,140			27,575,488			20,670,278

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 September 30, 2023
	Common Stock				Additional Paid-In			Accumulated			Non-controlling
	Shares		Amount		Capital			Deficit			Interests			Total
Balance as of June 30, 2023		28,343,728	$	28,343	$	25,118,062		$	(14,405,058	)	$	(143,267	)	$	10,598,080
Shares issued for consulting services		250,000		250		307,250									307,500
Common stock issued for Cambero convertible note		332,398		333		117,575			-			-			117,908
Record beneficial conversion feature discount on convertible notes.						21,486									21,486
Reversal of capital contribution related to joint venture		-		-		(1,000	)		-			-			(1,000	)
Net loss / assets attributable to non-controlling interests		-		-		-			25,592			(25,592	)		-
Net loss for the three months ended September 30, 2023		-		-		-			(2,261,508	)		-			(2,261,508	)
Balance as of September 30, 2023		28,926,126	$	28,926	$	25,563,373		$	(16,640,974	)	$	(168,859	)	$	8,782,466

	For the Nine Months Ended September 30, 2023
	Common Stock				Additional Paid-In			Accumulated			Non-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		265,000		265		320,135			-			-			320,400
Capitalized value of warrants		-		-		374,453			-			-			374,453
Common stock issued for convertible notes		394,621		395		146,545			-			-			146,940
Record beneficial conversion feature discount on convertible notes.						21,486									21,486
Net loss / assets attributable to non-controlling interests		-		-		-			73,486			(73,486	)		-
Net loss for the nine months ended September 30, 2023		-		-		-			(6,251,412	)		-			(6,251,412	)
Balance as of September 30, 2023		28,926,126	$	28,926	$	25,563,373		$	(16,640,974	)	$	(168,859	)	$	8,782,466

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

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	For the Three Months Ended September 30, 2022
					Additional						Non-
	Common Stock				Paid-In			Accumulated			controlling
	Shares		Amount		Capital			Deficit			Interests			Total
Balance as of June 30, 2022		19,960,124	$	19,960	$	7,154,605		$	(4,432,197	)	$	(15,833	)	$	2,726,535
Issuance of common stock		1,000,000		1,000		5,999,000			-			-			6,000,000
Offering costs		-		-		(531,188	)		-			-			(531,188	)
Boustead cashless warrant conversion		54,928		55		(55	)								-
Acquisition of machinery and trademarks		2,000,000		2,000		3,998,000									4,000,000
Conversion of accounts payable to common stock		50,000		50		99,950			-			-			100,000
Partner capital contribution to joint venture						52,000									52,000
Titan General Agency Ltd. Debt repayment		266,667		267		1,182,414									1,182,681
North Equities marketing services, paid with shares		41,494		41		99,959									100,000
Net loss/equity attributable to non-controlling interests		-		-		-			(8,546	)		8,546			-
Net loss for the three months ended September 30, 2022		-		-		-			(1,049,473	)		-			(1,049,473	)
Balance as of September 30, 2022		23,373,213	$	23,373	$	18,054,685		$	(5,490,216	)	$	(7,287	)	$	12,580,555

	For the Nine Months Ended September 30, 2022
					Additional						Non-
	Common Stock				Paid-In			Accumulate			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
Acquisition of machinery and trademarks		2,000,000		2,000		3,998,000									4,000,000
Conversion of accounts payable to common stock		50,000		50		99,950									100,000
Partner capital contribution to joint venture						52,000									52,000
Common shares issuance – IPO 2		1,000,000		1,000		5,999,000									6,000,000
Offering costs						(531,188	)								(531,188	)
Boustead cashless warrant conversion		54,926		55		(55	)								-
Titan General Agency, Ltd. Debt repayment		266,667		267		1,182,414									1,182,681
North Equities USA Ltd. Marketing services		41,494		41		99,959									100,000
Net loss/equity attributable to non-controlling interests		-		-		-			(6,963	)		6,963			-
Net loss for the nine months ended September 30, 2022		-		-		-			(2,024,039	)		-			(2,024,039	)
Balance as of September 30, 2022		23,373,213	$	23,373	$	18,054,685		$	(5,490,216	)	$	(7,287	)	$	12,580,555

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)

	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(6,251,412	)	$	(2,024,039	)
Adjustments to reconcile net loss to cash used in operating activities
Reclassification of Organipure capital contribution		(1,000	)		-
Depreciation and amortization		116,807			171,098
Non-cash warrant valuation expense		76,249			437,375
Reserving of related party loans		1,464,475			-
Elimination of loss from equity investment		28,619			-
Gain on disposal of assets		-			10,690
Stock based compensation for services		320,400			100,000
Changes in operating assets and liabilities
Trade receivables, net		(323,075	)		(159,525	)
Accounts receivable, related parties		5,100			(16,481	)
Prepaid expenses and other current assets		(156,265	)		(202,813	)
Prepaid expenses, related parties		(701,332	)		-
Inventories		(264,619	)		(599,572	)
Accounts payable		329,427			253,039
Accounts payable, related parties		44,582			(86,658	)
Accrued liabilities		373,267			14,468
Customer deposits		(32,134	)		(1,115,266	)
Right of use assets and liabilities		(1,314	)		-
Net cash used in operating activities		(4,972,225	)		(3,217,684	)

Cash flows from investing activities
Purchases of property, plant and equipment		(163,184	)		(169,398	)
Proceeds from disposal of equipment		-			40,000
Franchise fees and licenses related to joint venture		-			(152,609	)
Net cash provided by (used in) investing activities		(163,184	)		(282,007	)

Cash flows from financing activities
Line of Credit		100,000
Equipment loan repayment		-			(300,000	)
Long term loan repayment		(5,597	)		-
Loans to related parties		(1,750,649	)		(70,379	)
Proceeds from short-term promissory note, related parties		-			50,000
Repayment of short term note payable		(50,000	)
Equity investment in related party		(300,000	)		-
Proceeds from the sale of common stock		7,245,000			6,468,000
Offering costs paid in connection with sale of common stock		(634,600	)		(607,713	)
Cash flows provided by financing activities		4,604,154			5,539,908

Increase (decrease) in cash and cash equivalents		(531,255	)		2,040,217
Cash and cash equivalents at beginning of period		548,331			933,469
Cash and cash equivalents at end of period	$	17,076		$	2,973,686

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	6,762		$	-
Cash paid for taxes	$	132		$	3,635

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Warrants recorded as prepaid and other assets	$	374,453		$	437,375
Conversion of convertible notes payable and accrued interest to common stock	$	146,940		$	56,592
Marketing services paid with shares	$	320,400		$	100,000
Accounts payable paid with shares		-		$	100,000
Equipment paid with promissory note	$	1,724,000
Equity interest in affiliated entity paid with promissory note	$	1,476,000		$	-
Equipment loan paid with shares		-		$	1,182,681
Payment for equipment and intangible assets with shares		-		$	4,000,000

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. During the current quarter the Company commenced supplying its JV partner, HPDG, Inc. with “Snoop Dogg” branded CBD Gummies.

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. The ban will remain in force until such time as the California Legislature enact a bill to tax the product. It is still 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 nine months ended September 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.

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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.

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 September 30, 2023, the company has accrued $54,656 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 September 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.

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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 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.

On October 2, 2023, the Company officially responded to Nasdaq requesting an additional six-months in which to bring its share price back over the $1,00 minimum price required by Nasdaq rules. The Company also confirmed its willingness to implement a reverse stock split in order to achieve its goal should it not be able to increase its share price through organic growth of the business.

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

Green Globe International, Inc. Hempacco’s parent company owns a 50% interest and the management control of Green Star Labs, Inc. through the existing joint venture agreement and will continue to fully consolidated GSL under the guidance of ASC 810-10. Hempacco, having a significant interest in GSL will account for its investment under the equity method following the guidelines of ASC 323. The company will record its share of earnings or losses after elimination of intercompany gains and losses, as a single amount on its income statement.

The total purchase price to be paid by the Company is $3,500,000. The preliminary purchase price has been allocated as to $1,776,000 for the interest in Green Star Labs, and $1,724,000 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 to the seller, which became effective on July 10, 2023. As noted above, Hempacco had already paid the sum of $300,000 to Curated Nutra as a deposit for the 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.

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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.

In accordance with ASC 323-10-50-3 the following additional disclosures are made with regard to this equity investment:

a)	As mentioned above, the owners of Green Star Labs, Inc. and the respective ownership percentages are:

	i)	Green Globe International, Inc. 50%
	ii)	Hempacco Co., Inc. 50%

b)	Hempacco, as the investor, will account for its interest under the equity method under GAAP/ASC 323

c)	Hempacco purchased the equity interest for the sum of $1,776,000 with a further $1,724,000 being used for the purchase of certain items of production equipment needed to produce a new Hempacco product line.

d)	The $1,776,000 paid for the equity stake is attributable to Basis Difference / (Equity Goodwill). This basis difference will be evaluated each quarter in comparison to the Investees earnings or losses and other changes in equity in order that the value of the equity investment on the Company’s balance sheet can be adjusted accordingly.

e)	GSL was a start-up operation in January 2022 and has recently started to generate operating profits. The purchase price was based on the future profitability and growth that Hempacco’s new business lines and joint ventures will bring to GSL Hence any current comparison of the purchase price and the current net assets of GSL would be misleading.

f)	The Company will, on a quarterly basis, monitor the underlying net assets of GSL in order to evaluate whether or not any adjustment is necessary to the carrying value of the equity investment in the books of the Company. Should GSL report other comprehensive income or changes to equity accounts, the Company will make the appropriate adjustments to its carrying cost to reflect its share of these additional items in accordance with the GAAP accounting standard.

g)	GSL has no contingent issuances of shares, warrants or convertible promissory notes that might affect Hempacco’s share of reported earnings or losses.

A review of the preliminary financial statements of Green Star labs, Inc. resulted in the Company reducing its equity investment in GSL by $28,619, being 50% of the preliminary net losses of GSL for the three months ended September 30, 2023. There will potentially be further adjustments needed in the fourth quarter of 2023.

The non-controlling interests of these ventures have been disclosed on the consolidated balance sheet and income statement.

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Going Concern Matter

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 $6,251,412 during the nine months ended September 30, 2023, and has an accumulated deficit of $16,640,974 as of September 30, 2023. During the nine months ended September 30, 2023, the Company’s net cash used in operations was $4,972,225.

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.

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.

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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 September 30, 2023.

Equity Method Investments in Unconsolidated Affiliates

We apply the equity method of accounting for investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions, operational decision-making authority, and material intercompany transactions. Under this method of accounting, our proportionate share of the net income (loss) resulting from these investments is reported in “Other income and expenses” in the consolidated statements of operations since the activities of the investees are closely aligned with, and a critical part of, our operations. The carrying value of our equity method investments is reported as “Equity od investment in related party” in our consolidated balance sheets.

For all equity method investments, we record our share of an investee’s income or loss on a one quarter lag. We evaluate material events occurring during the quarter lag to determine whether the effects of such events should be disclosed in our financial statements. We classify distributions received from equity method investments using the cumulative earnings approach on our consolidated statements of cash flows. A change in our proportionate share of an investee’s equity resulting from issuance of common shares or in-substance common shares by the investee to third parties is recorded as a gain or loss in our consolidated statements of operations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 323, “Investments-Equity Method and Joint Ventures” (Subtopic 10-40-1).

We assess investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If the decline in value is considered to be other than temporary, the investment is written down to its estimated fair value, which establishes a new cost basis in the investment. We did not record any such impairment charges for any periods presented.

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.

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Revenue Concentration

Sales to two of the Company’s customers made up approximately 35% and 28%, respectively, of our revenues for the three months ended September 30, 2023, and sales to one of the Company’s customers made up approximately 82% of our revenues for the three months ended September 30, 2022. Sales to three of the Company’s customers made up approximately 23%, 19% and 17%, respectively, of our revenues for the nine months ended September 30, 2023, and sales to one of the Company’s customers made up approximately 81% of our revenues for the nine months ended September 30, 2022. The balance receivable from three customers on September 30, 2023, and December 31, 2022 represents approximately 72%, 46% and 22%, respectively, of the total accounts receivable balance of $544,344 and $469,730. 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 during the first half of the current fiscal year.

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.

For the nine months ended September 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.

	September 30,		September 30,
	2023		2022
	(Shares)		(Shares)
Warrants		838,100		-
Promissory notes convertible to shares*		5,572,000		125,000
TOTAL		6,410,100		125,000

·	A note for $3,200,000 is limited to a maximum issuance of 5,572,000 per the terms of the note. See note 1 above.

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.

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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 in the net assets and the current operating income / (loss) held by the respective NCI’s during the accounting period.

NOTE 3 - ACCOUNTS RECEIVABLE

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

	September 30,			December 31,
	2023			2022

Accounts receivable	$	670,321		$	478,680
Accounts receivable - related parties		-			5,100
Allowance for doubtful accounts		(115,977	)		(247,410	)
Total accounts receivable	$	554,344		$	236,370

The Company recorded a reserve of approximately 90% against the entire balance of accounts receivable and loans due from related parties as of September 30, 2023. See Note 11 for additional information on related party transactions related to receivables.

NOTE 4 – INVENTORY

As of September 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:

	September 30,		December 31,
	2023		2022

Finished goods	$	564,778	$	109,879
Raw materials and labor (Net of obsolescence allowance)		344,972		535,253
Total inventory at cost less obsolescence allowance	$	909,750	$	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 September 30, 2023, and December 31, 2022, and 2021, respectively, this allowance remains unchanged. This obsolescence allowance is continually re-evaluated and adjusted as necessary.

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NOTE 5 - PROPERTY AND EQUIPMENT

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

	September 30,			December 31,
	2023			2022
Production equipment	$	5,724,422		$	3,837,236
Leasehold improvements		12,431			12,431
Kiosks		3,631,279			3,631,279
		9,368,132			7,480,946
Accumulated depreciation		(374,529	)		(260,381	)
Total property and equipment	$	8,993,603		$	7,220,565

Depreciation expense was $52,959 and $114,146 for the three and nine months ended September 30, 2023, respectively, and $37,617 and $68,388 for the three and nine months ended September 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.

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 September 30, 2023, and December 31, 2022, were $0 and $5,163 respectively. On September 30, 2023, and December 31, 2022, the amounts of $119,756 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.

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

Year Ending December 31	Operating Leases
2023	$	32,779
2024		135,049
2025		139,100
Total lease payments		306,928
Less: Imputed interest/present value discount		(21,426	)
Total	$	285,502

Rent expenses, on the straight-line basis, were $32,340 and $97,020 during the three and nine months ended September 30, 2023, respectively, and $32,340 and $97,020 during the three and nine months ended September 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 September 30, 2023, and December 31, 2022, the principal balance of the loan was $0.

NOTE 8 - CONVERTIBLE NOTES

During May and September 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 was converted, along with accrued interest, into 56,592 shares of Hempacco common stock on September 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 conversion terms of the promissory note, called for conversion of the principal and accrued interest $29,033 into common shares of Hempacco at a 25% discount to the weighted average closing price for the 30-days prior to the conversion date, which calculation produced a conversion rate of $0.4665. The additional interest expense due to the discounted conversion rate was $6,434.

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The Company’s note payable to Miguel Cambero, including accrued interest, was converted into 332,398 shares of common stock on August 9, 2023.The conversion terms of the promissory note date May 6, 2021, called for conversion of the principal and accrued interest $117,907 into common shares of Hempacco at a 25% discount to the weighted average closing price for the 30-days prior to the conversion date, which calculation produced a conversion rate of $0.3547. The additional interest expense due to the discounted conversion rate was $15,052.

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 September 18, 2022. The note is secured by 50,000 common shares of the Company. On September 18, 2022, the Company and the investor signed Amendment No. 1 to the promissory note extending the maturity date to March 18, 2023. 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 cash at a later date.

NOTE 9 - WARRANTS

As of September 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
			838,100

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”).

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. As of September 30, 2023, total compensation costs related to the common stock warrants not yet recognized amounted to approximately $324,525. 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 September 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 $249,634 is included in other assets. During the nine months ended September 30, 2023, $49,928 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 nine months ended September 30, 2023, and the twelve months ended December 31, 2022:

	September30,	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. The maturity date was subsequently extended to August 15, 2024. As of September 30, 2023, and December 31, 2022, the balance outstanding was $136,173 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 September 30, 2023, and December 31, 2022, $100,000 and $0, respectively, were owed on the line of credit. On September 30, 2023, the interest rate on the facility was 9.25%.

NOTE 11 - RELATED PARTY TRANSACTIONS

As of September 30, 2023, and December 31, 2022, the Company owed Primus $0 and $5,163 respectively, for rent and storage fees. As of September 30, 2023, and December 31, 2022, Primus had been paid $342,638 and $25,000 respectively, in advance, for rent and storage fees. During the nine months ended September 30, 2023, and 2022, the Company expensed $222,883 and $206,821, 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 nine months ended September 30, 2023, the Company incurred expenses of $60,000 and $180,000, respectively, related to salaries for the CEO and CMO. During the three and nine months ended September 30, 2022, the Company incurred expenses of $40,000 and $160,000, 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 September 30, 2023, and December 31, 2022, the Company was owed $0 and $0, respectively, and owed $0, and $0, respectively, by and, to UST Mexico, Inc / US Tobacco de Mexico. (“UST Mexico”) under a mutual line of credit agreement.

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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 $8,800 and $15,359, respectively, for the three and nine months ended September 30, 2023, and $16,840 and $31,840 for the three and nine months ended September 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 $190,807 and $428,753, respectively, for the three and nine months ended September 30, 2023, and $57,181 and $147,184, respectively, for the three and nine months ended September 30, 2022. As of September 30, 2023, the Company prepaid expenses of $616,000 for products and services related to Hempacco Paper Company that are covered by open purchase orders. Subsequent to September 30, 2023, the Company advanced $66,000 to UST Mexico and received $62,600 from UST Mexico.

As of September 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 and on September 30, 2023, the maximum loan amount was increased to $1,800,000.

As of September 30, 2023 and December 31, 2022, the balance owed to the Company by GGII was $1,684,053 and $692,119 respectively. The Company recorded a reserve of $1,684,053 against this balance as of September 30, 2023. Subsequent to September 30, 2023, the Company made additional loans of $96,400 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. On July 10, 2023, the Company acquired a 50% equity interest in Green Star Labs, Inc. As of September 30, 2023, and December 31, 2022, the balance owed by Green Star Labs, Inc. to the Company was $1,232,009 and $605,994, respectively. The Company concluded that collection of a portion of the loan balance may not be recoverable and therefore a partial impairment allowance of $945,835 was created as of September 30, 2023.

During the nine-month period ended September 30, 2023, the Company made payments of approximately $0 (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 nine months ended September 30, 2023, the Company received approximately $409,342 in inventory from Green Star Labs, Inc. In the three months ended September 30, 2023, Green Star Labs shipped $416,551 of product to the Company as a form of repayment of the related party loans. Subsequent to September 30, 2023, the Company made additional loans of $230,500 to Green Star Labs, Inc. The value of all shipments of product by GSL to Hempacco will first be credited against the loans payable to Hempacco.

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.

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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.

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.

On or around February 5, 2023, the Company issued 15,000 shares to Dr. Fischer and Partner GmbH/ Ruediger Beuttenmueller for IR consulting services in Europe pursuant to a consulting contract effective December 1, 2022, and terminating on February 20, 2023.

On February 14, 2023, the Company sold 4,830,000 shares of Hempacco common stock at $1.50 per share to its underwriters in the Company’s second public offering, and to Boustead Securities, LLC (“Boustead”) and EF Hutton pursuant to the underwriting agreement, in connection with the offering (the “Underwriting Agreement”). After deducting the underwriting commission and expenses, the Company received net proceeds of $6,610,400. Further details can be found in Note 1 above.

On May 16, 2023, 62,223 shares of the Company’s common stock were issued to Ernest Sparks for conversion of his promissory note and accrued interest (see Note 8 above).

On August 9, 2023, 332,398 shares of the Company’s common stock were issued to Miguel Cambero for conversion of his promissory note and accrued interest (see Note 8 above).

On or around September 26, 2023, the Company issued 250,000 shares to FMW MediaWorks for services pursuant to an additional consulting contract dated February 2, 2023.

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NOTE 13 - SUBSEQUENT EVENTS

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

On or around October 18, 2023, the Company executed a one-year Promissory Note, a Share Purchase Agreement and other supporting legal documents in connection with a series of Securities Purchase Agreements with First Fire Global Opportunities Fund, LLC.

The aggregate amount of these agreements is $3,000,000 (the Commitment), with the first Promissory Note having a principal amount of $277,778 and a purchase amount of $250,000. Each Note will carry an interest rate of 10% per year in addition to the 10% Original Issuer Discount (“OID”). The Company received net proceeds of $220,000 after deduction of the 10% OID, brokers commission of $20,000 and Investor’s legal expenses of $10,000.

The Note Holder is restricted from holding more than 4.99% of the Company’s outstanding common shares at any time.

The Investor received additional compensation comprised of i) the issue of common shares (the commitment shares) amounting to 10% of each Promissory Note amount, and 2) 120,370 warrants to purchase common shares at $1.50 per share during a period of five years from the date of the Promissory Note.

The Note Holder has the option to convert all or a part of the outstanding debt into common stock at a fixed conversion rate of $1.50 provided that the loan is not in default.

On October 18, 2023, the Company issued 27,777 common shares to the Note Holder in accordance with the Share Purchase agreement together with 120,370 five year warrants. This warrant number is derived from the percentage that 1,300,000 warrants bear to a total purchase commitment of $3,000,000.

On October 19, 2023, a Note and other ancillary documents were signed in connection with a second tranche of funding under the First Fire umbrella commitment. The Promissory Note Holder is Mast Hill Fund, LLC. The gross amount of the Promissory Note is $835,000 and the purchase amount, after deducting the OID is $751,500. The Company received net proceeds of $686,760 after deduction of the brokers commission of $57,240 and Investor’s legal expenses of $7,500.The Investor received additional compensation comprised of i) the issue of common shares (the commitment shares) amounting to 10% of each Promissory Note amount, and 360,805 warrants to purchase common shares at $1.50 per share during a period of five years from the date of the Promissory Note.

On October 19, 2023, the Company issued 83,497 common shares to the Note Holder in accordance with the Share Purchase agreement together with 361,832 5-year warrants.

Both of the above referenced Promissory Notes call for monthly payments of principal and interest in the aggregate of $185,478 commencing on February 18/19, 2024.

On November 6, 2023, the Company signed two agreements with Aspire North America, LLC, (“Aspire”) as follows:

	a)	Manufacturing & Supply Agreement (“MSA”)

	b)	Exclusive Distribution Agreement (“EDA”)

Aspire is a leading Los Angeles based, developer, manufacturer and marketer of cannabis vaporizer hardware.

The MSA provides for the Company, as a client of Aspire, to manufacture at Client’s Facility finished consumer vaporization goods using the products, filling Machines, their respective patents and other IP Rights embodied therein, and to fill with Client’s Finished Oils (collectively, “Finished Goods”); and (b) sell and distribute the Client Products as part of Client’s Finished Goods throughout the Territory (collectively, "Limited Distribution License").

The EDA provides for the Company, in the role of “Supplier” to award a worldwide “Master Distributor” agreement back to Ispire for all the supplier’s celebrity and influencer products produced by the Company. Ispire agrees not to sell nicotine-based products in North America.

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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 1supply 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 1 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”.

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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 580 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.

On July 10, 2023, the Company signed a Purchase Agreement and an accompanying Assignment Agreement with Viva Veritas LLC (“Veritas”) (successor to Curated Nutra) 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 to $1,776,000 for the interest in Green Star Labs, and $1,724,000 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 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 Curated Nutra 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 note carries a conversion price of 95.238% of the average closing price of the Company’s common stock during the three days immediately preceding the conversion.

This acquisition will further our plans to increase our product line to include a full range of nutraceutical products which will be produced at the 50,000-sf certified GMP facility that Green Star Labs, Inc. occupies in San Diego.

Green Star Labs, Inc. is managed by, and co-owned by our parent company, Green Globe International, Inc.

In the coming months the Company, in collaboration with its joint venture partner Snoop Dogg will manufacture and distribute many new product lines containing hemp derived CBD, starting with the “Dogg lbs” brand of gummies.

On November 6, 2023, the Company signed two agreements with Ispire North America, LLC whereby the Company, under license, will manufacture and distribute vaporizer products under the celebrity brands the Company controls through its various joint ventures. See Note 13 of the financial statements for more detailed information on this new product line.

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Results of Operations

For the Three and Nine Months Ended September 30, 2023, compared to the Three and Nine Months Ended September 30, 2022

Revenue

For the three and nine months ended September 30, 2023, and 2022, revenues were as follows:

	Three Months Ended September 30,				Change
	2023		2022		$			%
Revenues
Product sales	$	1,305,254	$	561,818	$	743,436			132	%
Product sales, related parties		11,709		16,940		(5,231	)		(31	)%
Manufacturing service revenue		9,049		6,653		2,396			36	%
Kiosk revenue		-		6,824		(6,824	)		(100	)%
Total Revenues	$	1,326,012	$	592,235	$	733,777			124	%

	Nine Months Ended September 30,				Change
	2023		2022		$			%
Revenues
Product sales	$	1,950,460	$	3,373,380	$	(1,422,920	)		(42	)%
Product sales, related parties		32,028		22,940		9,088			40	%
Manufacturing service revenue		22,487		33,248		(10,761	)		(32	)%
Kiosk revenue		-		8,890		(8,890	)		(100	)%
Total Revenues	$	2,004,975	$	3,438,458	$	(1,433,483	)		(42	)%

The decrease in revenues during the nine months ended September 30, 2023, as compared to the nine months ended September 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.

However, the increase in revenues of 124% for the three months ended September 30, 2023, as compared to September 30, 2022, was primarily a result of our first shipments of CBD gummies under the “Dogg lbs” brand, a product of our joint venture with Snoop Dogg as well as increasing sales by Hempacco Paper Co., Inc.

Cost of Goods Sold

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

	Three Months Ended September 30,				Change
	2023		2022		$		%
Cost of Goods Sold
Cost of goods sold	$	1,349,631	$	598,627	$	751,004		125	%
Cost of goods sold related parties		414,374		-		414,374	-		%
Total Cost of Goods Sold	$	1,764,005	$	598,627	$	1,165,378		195	%

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	Nine months Ended September 30,				Change
	2023		2022		$			%
Cost of Goods Sold
Cost of goods sold	$	2,227,521	$	2,795,661	$	(568,140	)		(20	)%
Cost of goods sold related parties		490,260		-		490,260		-		%
Total Cost of Goods Sold	$	2,717,781	$	2,795,661	$	(77,880	)		(3	)%

The increase in relative total cost of goods sold in the three months ended September 30, 2023, is primarily due to increased production overhead expenses associated with set-up of new product production lines, compared to the same period in 2022.

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

Operating Expenses

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

	Three Months Ended September 30,				Change
	2023		2022		$		%

Operating Expenses
General and administrative	$	1,037,790	$	791,562	$	246,228		31	%
General and administrative, related parties		135,454		45,000		90,454		201	%
Sales and marketing		306,505		200,976		105,529		52	%
Sales and marketing, related parties		29,794		-		29,794	-		%
Expensing of related party advances and loans		166.267		-		166,267	-		%
Total Operating Expenses	$	1,675,810	$	1,037,538	$	638,272		61	%

	Nine Months Ended September 30,				Change
	2023		2022		$			%
Operating Expenses
General and administrative	$	2,770,482	$	1,758,561	$	1,011,921			57	%
General and administrative, related parties		403,963		195,000		208,963			107	%
Sales and marketing		668,227		685,086		(16,859	)		(2	)%
Sales and marketing, related parties		79,881		-		79,881			-	%
Expensing of related party advances and loans		1,487,042		-		1,487,042			-	%
Total Operating Expenses	$	5,409,595	$	2,638,647	$	2,770,948			105	%

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The increase in general and administrative expenses during the three and nine months ended September 30, 2023, compared to the same periods in 2022 was mainly due to accounting, legal and insurance costs related to Nasdaq/SEC compliance expenses plus additional staffing for improvement of internal systems and controls.

During the three and nine months ended September 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 nine months ended September 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 nine months ended September 30, 2023, compared to sales and marketing expenses during the nine months ended September 30, 2022, due to scaling back our expansion efforts in the current year compared to the same period of the prior year. Sales and Marketing expenses increased during the three months ended September 30, 2023, due to the promotional activities related to new joint venture product launches and trade shows.

Related party sales and marketing expenses for the three and nine months ended September 30, 2023, include costs of services provided by the CMO.

During the three months and nine months ended September 30, 2023, the Company recorded an allowance for the potential non-payment of certain inter-company receivables in the amount of $166,267 and $1,487,042, compared to an allowance of $0 and $0, respectively, during the three and nine months ended September 30, 2022.

Net Loss

The Company had net losses of $2,261,508 and $6,251,412, respectively, during the three and nine months ended September 30, 2023, compared to net losses of $1,049,473 and $2,024,039, respectively, during the three and nine months ended September 30, 2022. The increase in net loss for the three months ended September 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 nine months ended September 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:
	Nine months Ended September 30, 2023			Nine months Ended September 30, 2022

Net cash used in operating activities	$	(4,972,225	)	$	(3,217,684	)
Net cash provided by (used in) investing activities		(163,184	)		(282,007	)
Net cash provided by financing activities		4,604,154			5,539,908
Net change in cash	$	(531,255	)	$	2,040,217

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Cash Flows from Operating Activities

We had cash used in operating activities of $4,972,225 in the nine months ended September 30, 2023, as compared to cash used in operating activities of $3,217,684 during the nine months ended September 30, 2022. The increase in cash used in operating activities of $1,754,541 for the nine months ended September 30, 2023, is primarily attributable to the increase in net operating loss of $2,688,705 (after deduction of reserve for related party loans of $1,493,935) as well as increases attributable to prepaid expenses and inventory.

Cash Flows from Investing Activities

We had cash used in investing activities of $163,184 for the nine months ended September 30, 2023, as compared to cash used in investing activities of $282,007 for the nine months ended September 30, 2022. The increase of $1,605,177 was primarily due to the purchase of plant and equipment of $163,184 during the nine months ended September 30, 2023.

Cash Flows from Financing Activities

We had cash provided by financing activities of $4,604,154 in the nine months ended September 30, 2023, as compared to cash provided by financing activities of $5,539,908 in the comparative period in 2022, with this net decrease of $935,754 was primarily due to an increase of $777,000 from the sale of common stock, offset by a $300,000 acquisition investment in Green Star Labs, Inc., a net outflow of $50,000 from a shoirt-term promissory note, and loans to related parties of $1,750,649 and zero payments of equipment loans compared to $300,000 in the nine months ended September 30, 2022.

We anticipate that our cash needs for the next twelve months for working capital and capital expenditures will be approximately $3,000,000. As of September 30, 2023, we had $17,076 in cash, and we believe that our current cash and cash flow from operations will not be 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.

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.

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At the time of this writing, the Company had reached an agreement with a consortium of Convertible Promissory Note lenders to provide a commitment to purchase up to $3,000,000 of the Company’s common shares. Advances will be made in tranches, each subject to a Securities Purchase Agreement (“SPA”). To date the Company has signed promissory Notes in the aggregate amount of $1,112,778 and received net proceeds of $906,760 after deduction of Original Issuer Discount and legal expenses. Full details of the terms of this financing can be found in Note 13 of the Financial Statements above.

The Securities Purchase Agreements also (i) require the Company to satisfy the shareholder approval requirements of Nasdaq Listing Rule 5635, which currently would prohibit the issuance of more than 5,782,332 shares of Company common stock (the “Exchange Cap”) until shareholder approval has been received to issue shares in excess of the Exchange Cap under the Financing Transactions and such approval has become effective pursuant to Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended, and (iii) require the Company to file a preliminary information statement on Schedule 14C in connection with the issuance of shares in excess of Exchange Cap under the Financing Transactions with the U.S. Securities and Exchange Commission (the “SEC”) within 10 calendar days of closing, and file a definitive information statement as soon as permissible but no later than December 1, 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.

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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.

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 has not yet, despite on-going improvement programs, achieved the level of operational effectiveness such that 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 yet sufficiently 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.

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Management is committed to remedying this problem through a continuous process of systems and procedures analysis, together with an on-going evaluation of the training, skills and knowledge of accounting staff to ensure that the staff member is fully qualified to handle the assigned tasks. In addition, each team member will be made aware of the importance of their role in ensuring that the systems and procedures achieve the desired effect and how any errors or omissions affect the whole accounting period closing and the preparation of GAAP financial statements in accordance with the SEC rules and regulations.

During the nine-month period ended September 30, 2023, the Company hired additional accounting personnel, and designed and maintained a manual of policies and procedures with a view to ensuring proper procedures were executed and that transactions were regularly reviewed by management. During the audit process it became apparent that there are still inherent weaknesses in our systems and procedures. Special attention will be given to improving these areas prior to the closing of our fiscal year end.

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.

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 September 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.

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On or about August 31, 2023, our defense counsel received a decision from the court in response to our motion to dismiss. The court’s decision is summarized below:

	·	All defendants, except Sandro Piancone and Jorge Olson, have been dismissed without prejudice due to a lack of personal jurisdiction.
	·	Personal jurisdiction exists over Sandro Piancone and Jorge Olson because they are "closely related" to Vidbox Mexico, and thus, subject to the New York forum selection clause included in the Securities Purchase Agreements (Sandro signed the agreement on behalf of Vidbox Mexico and Jorge is purportedly a controlling officer).
	·	Despite the lack of personal jurisdiction over all defendants, except Sandro and Jorge, the Court has directed the parties to conduct jurisdictional discovery and then will allow Plaintiffs to amend the complaint for purposes of asserting jurisdiction over all defendants; and

The Court did not rule on the substantive merits of Plaintiffs' claims despite our request that it do so and dismiss them based on various deficiencies (likely because of its finding that jurisdiction was lacking on 7 of the 9 defendants and its directive regarding jurisdictional discovery).

A conference call with the Court and the Plaintiff was held on October 16, 2023, for the purposes of deciding how to proceed with the pending jurisdictional issues, the Court agreed to give the parties 2 weeks to continue discussions. A joint letter is now due on October 31, 2023, wherein the parties will either inform the court that an agreement of some type has been reached, (i.e., plaintiffs drop certain defendants/Hempacco and MFOF consent to jurisdiction) or will provide the Court with a proposed schedule on jurisdictional discovery.

On or about September 15, 2023, the Company accepted service in a suit filed in the Superior Court of the State of California by the People of the State of California (by and through Rob Bonta, Attorney General), alleging that the Defendant, (together with eight other co-defendants) did knowingly sell inhalable hemp products in California contrary to Assembly Bill 45. The suit also alleges that Defendants failed to warn their customers of the risks involved by the inhalation of the highly toxic chemicals that are present in all commercial hemp products, contrary to Proposition 65 that requires all such products to carry prop 65 warnings on the packaging.

The Plaintiff is asking the court for civil penalties of $2,500 against Defendants for each violation and to award Plaintiff the cost of its suit, and to grant such other and further relief as the court deems just and proper.

The Company recognizes that two transactions with on-line suppliers could have occurred subsequent to the AB 45 ban, however, for all intents and purposes the company ceased its distribution and sale of hemp smokable products as soon as was practical after AB 45 was enacted.

The Company also prints Proposition 65 warnings on all of its products that might be considered to contain (in the opinion of the State of California) “highly toxic chemicals”.

The Company feels that this matter could have been handled through the normal administrative process that applies to any business found to be committing acts or business practices that are contrary to the rules and regulations of the governing authority.

To use a lawsuit for this purpose was highly unnecessary and without merit. The Company expects to be able to negotiate a settlement of the matter without imposing on the valuable time of the Superior Court.

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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 nine months ended September 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.

On or about May 16, 2023, the Company issued 332,398 shares of its common stock to Miguel Cambero upon conversion of a convertible note and accrued interest.

On or around September 26, 2023, the Company issued 250,000 shares to FMW MediaWorks for services pursuant to a consulting contract dated February 2, 2023.

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)

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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.

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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: November 20, 2023	By:	/s/ Sandro Piancone
		Sandro Piancone
		Chief Executive Officer
Date: November 20, 2023	By:	/s/ Neville Pearson
		Neville Pearson

nullnullnullnull

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 20, 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	Sep. 30, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		29,145,537
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 ($)	Sep. 30, 2023	Dec. 31, 2022
Current Assets
Cash and cash equivalents	$ 17,076	$ 548,331
Accounts receivable	554,344	231,269
Accounts receivable, related parties	0	5,100
Loans receivable, related parties	286,174	0
Inventory	909,750	645,132
Prepaid expenses and other current assets	673,522	442,366
Prepaid expenses, related parties	736,941	35,609
Total Current Assets	3,177,807	1,907,807
Property and equipment	8,993,603	7,220,565
Right of use asset, related party	269,634	351,146
Other intangible assets, net of amortization	0	2,661
Equity investment - related party	1,747,381	0
Other investments and Warrants	249,634	0
TOTAL ASSETS	14,438,059	9,482,179
Current Liabilities
Accounts payable	665,033	335,605
Accounts payable, related parties	87,412	42,831
Accrued liabilities	374,444	0
Customer prepaid invoices and deposits	806,029	838,164
Line of credit	100,000	0
Loans and notes payable, related parties	0	69,282
Convertible promissory notes payable	3,200,000	125,000
Other short-term loans	137,173	0
Right of use liability, related party - current	114,926	109,552
Total Current Liabilities	5,485,017	1,520,434
Long Term Liabilities
Long-term debt	0	142,770
Right of use liability, related party	170,576	258,776
Total Liabilities	5,655,593	1,921,980
Stockholders' Equity
Preferred stock, value	0	0
Common stock, $0.001; 200,000,000 shares authorized as of September 30, 2023, and December 31, 2022, respectively. 28,926,126 and 23,436,505 shares issued and outstanding as of September 30, 2023, and December 31, 2022, respectively.	28,926	23,436
Additional paid-in capital	25,563,373	18,095,184
Accumulated deficit	(16,640,974)	(10,463,048)
Total Stockholders' Equity	8,951,325	7,655,572
Non-controlling interests	(168,859)	(95,373)
Total Equity Attributable to Hempacco Co., Inc.	8,782,466	7,560,199
LIABILITIES AND STOCKHOLDERS' EQUITY	14,438,059	9,482,179
Series A Preferred stock
Stockholders' Equity
Preferred stock, value	$ 0	$ 0

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 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	28,926,126	23,436,505
Common stock, shares outstanding	28,926,126	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		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues
Product sales	$ 1,305,254	$ 561,818	$ 1,950,460	$ 3,373,380
Product sales, related parties	11,709	16,940	32,028	22,940
Manufacturing service revenue	9,049	6,653	22,487	33,248
Kiosk revenue	0	6,824	0	8,890
Total Revenues	1,326,012	592,235	2,004,975	3,438,458
Cost of Sales
Cost of sales	1,349,631	598,627	2,227,521	2,795,661
Cost of sales, related parties	414,374	0	490,260	0
Total Cost of Sales	1,764,005	598,627	2,717,781	2,795,661
Gross Profit (Loss) from Operations	(437,993)	(6,392)	(712,806)	642,797
Operating Expenses
General and administrative	1,037,790	791,562	2,770,482	1,758,561
General and administrative, related parties	135,454	45,000	403,963	195,000
Sales and marketing	306,505	200,976	668,227	685,086
Sales and marketing, related parties	29,794	0	79,881	0
Expensing of related party advances and loans	166,267	0	1,487,042	0
Total Operating Expenses	1,675,810	1,037,538	5,409,595	2,638,647
Net Operating Loss	(2,113,803)	(1,043,930)	(6,122,401)	(1,995,850)
Other Income (Expense)
Interest expense	(82,109)	(3,684)	(88,871)	(13,080)
Other income and expense	(36,977)	(1,859)	(11,521)	(15,109)
Total Other Income (Expense)	(119,086)	(5,543)	(100,392)	(28,189)
Net Loss before equity investment	(2,232,889)	(1,049,473)	(6,222,793)	(2,024,039)
Share of net losses of equity method investee	28,619	0	28,619	0
Net Loss	(2,261,508)	(1,049,473)	(6,251,412)	(2,024,039)
Net loss attributable to non-controlling interests	50,995	617	73,486	2,200
Net Loss Attributable to Hempacco Co., Inc.	$ (2,210,513)	$ (1,048,856)	$ (6,177,926)	$ (2,021,839)
Basic and Dilutive Loss per Share	$ (0.08)	$ (0.05)	$ (0.22)	$ (0.10)
Shares Used in Calculating Loss per Share	28,524,410	22,468,140	27,575,488	20,670,278

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
Acquisition of machinery and trademarks, shares		2,000,000
Acquisition of machinery and trademarks, amount	4,000,000	$ 2,000	3,998,000
Conversion of accounts payable to common stock, shares		50,000
Conversion of accounts payable to common stock, amount	100,000	$ 50	99,950
Partner capital contribution to joint venture	52,000		52,000
Common shares issuance - IPO 2, shares		1,000,000
Common shares issuance - IPO 2, amount	6,000,000	$ 1,000	5,999,000
Offering costs	(531,188)		(531,188)
Boustead cashless warrant conversion, shares		54,926
Boustead cashless warrant conversion, amount	0	$ 55	(55)
Titan General Agency, Ltd. Debt repayment, shares		266,667
Titan General Agency, Ltd. Debt repayment, amount	1,182,681	$ 267	1,182,414
North Equities USA Ltd. Marketing services, shares		41,494
North Equities USA Ltd. Marketing services, amount	100,000	$ 41	99,959
Net loss/equity attributable to non-controlling interests	0	0	0	(6,963)	6,963
Net loss for the nine months ended September 30, 2022	(2,024,039)	$ 0	0	(2,024,039)	0
Balance, shares at Sep. 30, 2022		23,373,213
Balance, amount at Sep. 30, 2022	12,580,555	$ 23,373	18,054,685	(5,490,216)	(7,287)
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)
Issuance of common stock, shares		1,000,000
Issuance of common stock, amount	6,000,000	$ 1,000	5,999,000	0	0
Offering costs paid in connection with sale of common stock	(531,188)	$ 0	(531,188)	0	0
Acquisition of machinery and trademarks, shares		2,000,000
Acquisition of machinery and trademarks, amount	4,000,000	$ 2,000	3,998,000
Conversion of accounts payable to common stock, shares		50,000
Conversion of accounts payable to common stock, amount	100,000	$ 50	99,950	0	0
Partner capital contribution to joint venture	52,000		52,000
Boustead cashless warrant conversion, shares		54,928
Boustead cashless warrant conversion, amount	0	$ 55	(55)
Titan General Agency, Ltd. Debt repayment, amount	1,182,681	267	1,182,414
Net loss/equity attributable to non-controlling interests	0	0	0	(8,546)	8,546
Net loss for the nine months ended September 30, 2022	(1,049,473)	$ 0	0	(1,049,473)	0
Titan General Agency Ltd. Debt repayment, shares		266,667
North Equities marketing services, paid with shares, shares		41,494
North Equities marketing services, paid with shares, amount	100,000	$ 41	99,959
Balance, shares at Sep. 30, 2022		23,373,213
Balance, amount at Sep. 30, 2022	12,580,555	$ 23,373	18,054,685	(5,490,216)	(7,287)
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
Offering costs	(634,600)	0	(634,600)	0	0
Net loss/equity attributable to non-controlling interests	0	0	0	73,486	(73,486)
Net loss for the nine months ended September 30, 2022	(6,251,412)	$ 0	0	(6,251,412)	0
Shares issued for consulting services, shares		265,000
Shares issued for consulting services, amount	320,400	$ 265	320,135	0	0
Capitalized value of warrants	374,453	$ 0	374,453	0	0
Common stock issued for convertible notes, shares		394,621
Common stock issued for convertible notes, amount	146,940	$ 395	146,545	0	0
Record beneficial conversion feature discount on convertible notes.	21,486		21,486
Balance, shares at Sep. 30, 2023		28,926,126
Balance, amount at Sep. 30, 2023	8,782,466	$ 28,926	25,563,373	(16,640,974)	(168,859)
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)
Net loss/equity attributable to non-controlling interests	0	0	0	25,592	(25,592)
Net loss for the nine months ended September 30, 2022	(2,261,508)	$ 0	0	(2,261,508)	0
Shares issued for consulting services, shares		250,000
Shares issued for consulting services, amount	307,500	$ 250	307,250
Record beneficial conversion feature discount on convertible notes.	21,486		21,486
Common stock issued for Cambero convertible note, shares		332,398
Common stock issued for Cambero convertible note, amount	117,908	$ 333	117,575	0	0
Reversal of capital contribution related to joint venture	(1,000)	$ 0	(1,000)	0	0
Balance, shares at Sep. 30, 2023		28,926,126
Balance, amount at Sep. 30, 2023	$ 8,782,466	$ 28,926	$ 25,563,373	$ (16,640,974)	$ (168,859)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net loss	$ (6,251,412)	$ (2,024,039)
Adjustments to reconcile net loss to cash used in operating activities
Reclassification of Organipure capital contribution	(1,000)	0
Depreciation and amortization	116,807	171,098
Non-cash warrant valuation expense	76,249	437,375
Reserving of related party loans	1,464,475	0
Elimination of loss from equity investment	28,619	0
Gain on disposal of assets	0	10,690
Stock based compensation for services	320,400	100,000
Changes in operating assets and liabilities
Trade receivables, net	(323,075)	(159,525)
Accounts receivable, related parties	5,100	(16,481)
Prepaid expenses and other current assets	(156,265)	(202,813)
Prepaid expenses, related parties	(701,332)	0
Inventories	(264,619)	(599,572)
Accounts payable	329,427	253,039
Accounts payable, related parties	44,582	(86,658)
Accrued liabilities	373,267	14,468
Customer deposits	(32,134)	(1,115,266)
Right of use assets and liabilities	(1,314)	0
Net cash used in operating activities	(4,972,225)	(3,217,684)
Cash flows from investing activities
Purchases of property, plant and equipment	(163,184)	(169,398)
Proceeds from disposal of equipment	0	40,000
Franchise fees and licenses related to joint venture	0	(152,609)
Net cash provided by (used in) investing activities	(163,184)	(282,007)
Cash flows from financing activities
Line of Credit	100,000
Equipment loan repayment	0	(300,000)
Long term loan repayment	(5,597)	0
Loans to related parties	(1,750,649)	(70,379)
Proceeds from short-term promissory note, related parties	0	50,000
Repayment of short term note payable	(50,000)
Equity investment in related party	(300,000)	0
Proceeds from the sale of common stock	7,245,000	6,468,000
Offering costs paid in connection with sale of common stock	(634,600)	(607,713)
Cash flows provided by financing activities	4,604,154	5,539,908
Increase (decrease) in cash and cash equivalents	(531,255)	2,040,217
Cash and cash equivalents at beginning of period	548,331	933,469
Cash and cash equivalents at end of period	17,076	2,973,686
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	6,762	0
Cash paid for taxes	132	3,635
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Warrants recorded as prepaid and other assets	$ 374,453	$ 437,375
Conversion of convertible notes payable and accrued interest to common stock	146,940	56,592
Marketing services paid with shares	320,400	100,000
Accounts payable paid with shares	$ 0	$ 100,000
Equipment paid with promissory note	$ 1,724,000
Equity interest in affiliated entity paid with promissory note	1,476,000
Equipment loan paid with shares		1,182,681
Payment for equipment and intangible assets with shares		4,000,000

ORGANIZATION, BUSINESS AND LIQUIDITY

9 Months Ended

Sep. 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 nine months ended September 30, 2023, the Company entered into the following Joint Ventures and other significant agreements.

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.

In accordance with ASC 323-10-50-3 the following additional disclosures are made with regard to this equity investment:

a)	As mentioned above, the owners of Green Star Labs, Inc. and the respective ownership percentages are:

	i)	Green Globe International, Inc. 50%
	ii)	Hempacco Co., Inc. 50%

b)	Hempacco, as the investor, will account for its interest under the equity method under GAAP/ASC 323

c)	Hempacco purchased the equity interest for the sum of $1,776,000 with a further $1,724,000 being used for the purchase of certain items of production equipment needed to produce a new Hempacco product line.

d)	The $1,776,000 paid for the equity stake is attributable to Basis Difference / (Equity Goodwill). This basis difference will be evaluated each quarter in comparison to the Investees earnings or losses and other changes in equity in order that the value of the equity investment on the Company’s balance sheet can be adjusted accordingly.

e)	GSL was a start-up operation in January 2022 and has recently started to generate operating profits. The purchase price was based on the future profitability and growth that Hempacco’s new business lines and joint ventures will bring to GSL Hence any current comparison of the purchase price and the current net assets of GSL would be misleading.

f)	The Company will, on a quarterly basis, monitor the underlying net assets of GSL in order to evaluate whether or not any adjustment is necessary to the carrying value of the equity investment in the books of the Company. Should GSL report other comprehensive income or changes to equity accounts, the Company will make the appropriate adjustments to its carrying cost to reflect its share of these additional items in accordance with the GAAP accounting standard.

g)	GSL has no contingent issuances of shares, warrants or convertible promissory notes that might affect Hempacco’s share of reported earnings or losses.

The non-controlling interests of these ventures have been disclosed on the consolidated balance sheet and income statement.

Going Concern Matter

SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 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.

Equity Method Investments in Unconsolidated Affiliates

Use of Estimates

Revenue Concentration

Basic and Diluted Net Loss per Common Share

	September 30,		September 30,
	2023		2022
	(Shares)		(Shares)
Warrants		838,100		-
Promissory notes convertible to shares*		5,572,000		125,000
TOTAL		6,410,100		125,000

·	A note for $3,200,000 is limited to a maximum issuance of 5,572,000 per the terms of the note. See note 1 above.

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.

ACCOUNTS RECEIVABLE

9 Months Ended

Sep. 30, 2023

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

NOTE 3 - ACCOUNTS RECEIVABLE

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

	September 30,			December 31,
	2023			2022

Accounts receivable	$	670,321		$	478,680
Accounts receivable - related parties		-			5,100
Allowance for doubtful accounts		(115,977	)		(247,410	)
Total accounts receivable	$	554,344		$	236,370

INVENTORY

9 Months Ended

Sep. 30, 2023

INVENTORY

INVENTORY

NOTE 4 – INVENTORY

As of September 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:

	September 30,		December 31,
	2023		2022

Finished goods	$	564,778	$	109,879
Raw materials and labor (Net of obsolescence allowance)		344,972		535,253
Total inventory at cost less obsolescence allowance	$	909,750	$	645,132

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2023

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 5 - PROPERTY AND EQUIPMENT

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

	September 30,			December 31,
	2023			2022
Production equipment	$	5,724,422		$	3,837,236
Leasehold improvements		12,431			12,431
Kiosks		3,631,279			3,631,279
		9,368,132			7,480,946
Accumulated depreciation		(374,529	)		(260,381	)
Total property and equipment	$	8,993,603		$	7,220,565

OPERATING LEASES - RIGHT OF USE ASSETS

9 Months Ended

Sep. 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 September 30, 2023, including the total amount of imputed interest/present value discount.

Year Ending December 31	Operating Leases
2023	$	32,779
2024		135,049
2025		139,100
Total lease payments		306,928
Less: Imputed interest/present value discount		(21,426	)
Total	$	285,502

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

OTHER SHORT-TERM LIABILITIES - EQUIPMENT LOAN

9 Months Ended

Sep. 30, 2023

OTHER SHORT-TERM LIABILITIES - EQUIPMENT LOAN

OTHER SHORT-TERM LIABILITIES - EQUIPMENT LOAN

NOTE 7 - OTHER SHORT-TERM LIABILITIES – EQUIPMENT LOAN

CONVERTIBLE NOTES

9 Months Ended

Sep. 30, 2023

CONVERTIBLE NOTES

CONVERTIBLE NOTES

NOTE 8 - CONVERTIBLE NOTES

WARRANTS

9 Months Ended

Sep. 30, 2023

WARRANTS

WARRANTS

NOTE 9 - WARRANTS

As of September 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
			838,100

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

	September30,	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

9 Months Ended

Sep. 30, 2023

OTHER LOANS PAYABLE

OTHER LOANS PAYABLE

NOTE 10 - OTHER LOANS PAYABLE

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2023

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 11 - RELATED PARTY TRANSACTIONS

As of September 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

9 Months Ended

Sep. 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.

On May 16, 2023, 62,223 shares of the Company’s common stock were issued to Ernest Sparks for conversion of his promissory note and accrued interest (see Note 8 above).

On August 9, 2023, 332,398 shares of the Company’s common stock were issued to Miguel Cambero for conversion of his promissory note and accrued interest (see Note 8 above).

On or around September 26, 2023, the Company issued 250,000 shares to FMW MediaWorks for services pursuant to an additional consulting contract dated February 2, 2023.

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 13 - SUBSEQUENT EVENTS

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

The Note Holder is restricted from holding more than 4.99% of the Company’s outstanding common shares at any time.

The Note Holder has the option to convert all or a part of the outstanding debt into common stock at a fixed conversion rate of $1.50 provided that the loan is not in default.

On October 19, 2023, the Company issued 83,497 common shares to the Note Holder in accordance with the Share Purchase agreement together with 361,832 5-year warrants.

Both of the above referenced Promissory Notes call for monthly payments of principal and interest in the aggregate of $185,478 commencing on February 18/19, 2024.

On November 6, 2023, the Company signed two agreements with Aspire North America, LLC, (“Aspire”) as follows:

	a)	Manufacturing & Supply Agreement (“MSA”)

	b)	Exclusive Distribution Agreement (“EDA”)

Aspire is a leading Los Angeles based, developer, manufacturer and marketer of cannabis vaporizer hardware.

SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 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.

Equity Method Investments in Unconsolidated Affiliates

Use of Estimates

Revenue Concentration

Basic and Diluted Net Loss per Common Share

	September 30,		September 30,
	2023		2022
	(Shares)		(Shares)
Warrants		838,100		-
Promissory notes convertible to shares*		5,572,000		125,000
TOTAL		6,410,100		125,000

·	A note for $3,200,000 is limited to a maximum issuance of 5,572,000 per the terms of the note. See note 1 above.

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.

SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2023

SIGNIFICANT ACCOUNTING POLICIES

Schedule of Computation of Diluted Net Loss Per Share

	September 30,		September 30,
	2023		2022
	(Shares)		(Shares)
Warrants		838,100		-
Promissory notes convertible to shares*		5,572,000		125,000
TOTAL		6,410,100		125,000

ACCOUNTS RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2023

ACCOUNTS RECEIVABLE

Scheduele of Accounts Receivable

	September 30,			December 31,
	2023			2022

Accounts receivable	$	670,321		$	478,680
Accounts receivable - related parties		-			5,100
Allowance for doubtful accounts		(115,977	)		(247,410	)
Total accounts receivable	$	554,344		$	236,370

INVENTORY (Tables)

9 Months Ended

Sep. 30, 2023

INVENTORY

Schedule of Inventory

	September 30,		December 31,
	2023		2022

Finished goods	$	564,778	$	109,879
Raw materials and labor (Net of obsolescence allowance)		344,972		535,253
Total inventory at cost less obsolescence allowance	$	909,750	$	645,132

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2023

PROPERTY AND EQUIPMENT

Schedule of Property and Equipment

	September 30,			December 31,
	2023			2022
Production equipment	$	5,724,422		$	3,837,236
Leasehold improvements		12,431			12,431
Kiosks		3,631,279			3,631,279
		9,368,132			7,480,946
Accumulated depreciation		(374,529	)		(260,381	)
Total property and equipment	$	8,993,603		$	7,220,565

OPERATING LEASES - RIGHT OF USE ASSETS (Tables)

9 Months Ended

Sep. 30, 2023

OPERATING LEASES - RIGHT OF USE ASSETS

Schedule of operating lease

Year Ending December 31	Operating Leases
2023	$	32,779
2024		135,049
2025		139,100
Total lease payments		306,928
Less: Imputed interest/present value discount		(21,426	)
Total	$	285,502

WARRANTS (Tables)

9 Months Ended

Sep. 30, 2023

WARRANTS

Schedule of Warrants outstanding

	September30,	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%

Schedule of Calculated Values of Option or Warrant

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
			838,100

ORGANIZATION BUSINESS AND LIQUIDITY (Details Narrative)					1 Months Ended	3 Months Ended		9 Months Ended
ORGANIZATION BUSINESS AND LIQUIDITY (Details Narrative)	Jul. 10, 2023	May 07, 2023	May 03, 2023	Feb. 08, 2023 USD ($) ft²	Mar. 31, 2023 USD ($)	Sep. 30, 2023 USD ($) $ / shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) $ / shares shares	Sep. 30, 2022 USD ($)	Feb. 14, 2023 shares	Feb. 09, 2023 $ / shares	Dec. 31, 2022 USD ($) $ / shares
Leased Area \| ft²				43,000
Promissory notes convertible to shares \| shares								5,572,000
Ownership percentage	50.00%
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
Net loss						$ (2,261,508)	$ (1,049,473)	$ (6,251,412)	$ (2,024,039)
Accrued royalty						54,656		$ 54,656
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
Due and payable of royalty						$ 450,000		$ 450,000
Net cash used in operating activities								$ (4,972,225)	(3,217,684)
Common stock par value \| $ / shares						$ 0.001		$ 0.001				$ 0.001
Accumulated deficit						$ (16,640,974)		$ (16,640,974)				$ (10,463,048)
Monthly rent				$ 2,500
Fund required to joint venture entity								$ 0	$ 152,609
Hempacco Co Inc [Member]
Ownership percentage		50.00%						50.00%
Purchase of equity interest								$ 1,776,000
Purchase of additional equity interest								1,724,000
Paid for equity								1,776,000
Nasir Ghesani [Member]
Ownership percentage		50.00%
Green Star Labs [Member]
Total purchase price to be paid								$ 3,500,000
Description of payment of purchase equipment								The preliminary purchase price has been allocated as to $1,776,000 for the interest in Green Star Labs, and $1,724,000 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 to the seller, which became effective on July 10, 2023. As noted above, Hempacco had already paid the sum of $300,000 to Curated Nutra as a deposit for the 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.
Net loss percentage						50.00%
Interest rate								10.00%
Equity investment amount						$ 28,619
Green Globe International [Member]
Ownership percentage			50.00%					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
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

SIGNIFICANT ACCOUNTING POLICIES (Details) - shares	9 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Details) - shares	Sep. 30, 2023	Sep. 30, 2022
Outstanding dilutive securities	6,410,100	125,000
Warrants [Member]
Outstanding dilutive securities	838,100
Convertible Promissory Note [Member]
Outstanding dilutive securities	5,572,000	125,000

SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Maximum Issuance Shares			5,572,000
Maximum Issuance, Amount	$ 3,200,000		$ 3,200,000
Total accounts receivable	$ 554,344		$ 554,344		$ 236,370
Customer [Member]
Sale of account receivable Concentration	72.00%	46.00%	72.00%	46.00%	22.00%
Sale of revenue concentration	35.00%	82.00%	23.00%	81.00%
Total accounts receivable	$ 544,344	$ 469,730	$ 544,344	$ 469,730
Customer One [Member]
Sale of revenue concentration	28.00%		19.00%
Customer Two [Member]
Sale of revenue concentration			17.00%

ACCOUNTS RECEIVABLE (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
ACCOUNTS RECEIVABLE
Accounts receivable	$ 670,321	$ 478,680
Accounts receivable - related parties	0	5,100
Allowance for doubtful accounts	(115,977)	(247,410)
Total accounts receivable	$ 554,344	$ 236,370

INVENTORY (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
INVENTORY
Finished goods	$ 564,778	$ 109,879
Raw materials (Net of obsolescence allowance)	344,972	535,253
Total inventory at cost less obsolescence allowance	$ 909,750	$ 645,132

PROPERTY AND EQUIPMENT (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Less accumulated depreciation	$ (374,529)	$ (260,381)
Total property and equipment	8,993,603	7,220,565
Property and equipment, gross	9,368,132	7,480,946
Production Equipment [Member]
Property and equipment, gross	5,724,422	3,837,236
Leasehold Improvements [Member]
Property and equipment, gross	12,431	12,431
Kiosks [Member]
Property and equipment, gross	$ 3,631,279	$ 3,631,279

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
PROPERTY AND EQUIPMENT
Depreciation expense	$ 52,959	$ 37,617	$ 114,146	$ 68,388

OPERATING LEASES - RIGHT OF USE ASSETS (Details)	Sep. 30, 2023 USD ($)
OPERATING LEASES - RIGHT OF USE ASSETS
2023	$ 32,779
2024	135,049
2025	139,100
Total lease payments	306,928
Less: Imputed interest/present value discount	(21,426)
Total	$ 285,502

OPERATING LEASES - RIGHT OF USE ASSETS (Details Narrative) - Operating Lease [Member]	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)	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	119,756		119,756		$ 25,000
Rent expense	$ 32,340	$ 32,340	$ 97,020	$ 97,020
Interest rate			6.23%

OTHER SHORT-TERM LIABILITIES - EQUIPMENT LOAN (Details Narrative) - USD ($)	Sep. 06, 2022	Jan. 06, 2022	Dec. 11, 2019	Sep. 30, 2023	Dec. 31, 2022
Outstanding loan balance				$ 137,173	$ 0
Short Term Loan Equipment [Member]
Short-term loan for equipment			$ 1,500,000
Term of loan			18 months
Payment to the lender		$ 50,000
Amortization period			18 months
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 ($)		1 Months Ended	2 Months Ended	3 Months Ended		9 Months Ended
CONVERTIBLE NOTES (Details Narrative) - USD ($)	Jun. 07, 2022	Mar. 18, 2022	Jun. 21, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Aug. 01, 2023	Dec. 31, 2022
Accrued interest				$ 374,444		$ 374,444			$ 0
Interest rate			12.00%			9.25%
Repayment of promissory note principal balance								$ 50,000
Conversion to common stock						5,572,000
Interest expense				(82,109)	$ (3,684)	$ (88,871)	$ (13,080)
Minimum [Member]
Interest rate						8.00%
Maximum [Member]
Interest rate						12.00%
Miguel Cambero [Member]
Notes payable				100,000		$ 100,000
Conversion of the principal and accrued interest						$ 117,907
Conversion to common stock						332,398
Conversion rate						$ 0.3547
Interest expense						$ 15,052
Ernie Sparks [Member]
Notes payable				25,000		25,000
Convertivble notes				62,223		62,223
Accrued interest				$ 4,032		$ 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		$ 1.00
Conversion of the principal and accrued interest						$ 29,033
Conversion to common stock	56,592
Conversion rate						$ 0.4665
Interest expense						$ 6,434

WARRANTS (Details)	Sep. 30, 2023 shares
Number of warrants outstanding	838,100
Compensation Warrants [Member]
Number of warrants outstanding	500,000
Talent Warrants [Member]
Number of warrants outstanding	450,000
Representatives' Warrants [Member]
Number of warrants outstanding	338,100
Talent Designee Warrants [Member]
Number of warrants outstanding	50,000

WARRANTS (Details 1) - Warrants [Member] - $ / shares	9 Months Ended	12 Months Ended
WARRANTS (Details 1) - Warrants [Member] - $ / shares	Sep. 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 ($)		1 Months Ended	3 Months Ended		9 Months Ended
WARRANTS (Details Narrative) - USD ($)	Aug. 11, 2021	Jan. 25, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Sales and marketing expense			$ 306,505	$ 200,976	$ 668,227	$ 685,086
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			249,634		249,634
Prepaid expenses current			74,891		74,891
Warrants issued to purchase common stock		500,000
Exercise price		$ 1.00
Contractual life		5 years
Unrecongnized compensation cost related to common stock warrants			$ 324,525		324,525
Sales and marketing expense					$ 49,928

OTHER LOANS PAYABLE (Details Narrative) - USD ($)		1 Months Ended		2 Months Ended	9 Months Ended
OTHER LOANS PAYABLE (Details Narrative) - USD ($)	Jan. 15, 2021	Jul. 31, 2021	Jun. 15, 2020	Jun. 21, 2021	Sep. 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					$ 136,173	$ 142,770
Terms of loan			one year
Interest rate			0.00%

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Jun. 01, 2023
Due From Related Parties	$ 0		$ 0		$ 0
Inventory recieved			(264,619)	$ (599,572)
Revenue	1,326,012	$ 592,235	2,004,975	3,438,458
Green Star Labs [Member]
Loan, net amount	230,500		$ 230,500
Acquired equity interest rate			50.00%
Inventory recieved			$ 409,342
Purchase order						$ 604,000
Product shipped			0
Partial impairment allowance	$ 945,835		945,835
Discription of reserve	$416,551 of product to the Company as a form of repayment of the related party loans. Subsequent to September 30, 2023, the Company made additional loans of $230,500 to Green Star Labs, Inc. The value of all shipments of product by GSL to Hempacco will first be credited against the loans payable to Hempacco.
Balance owed to related party	$ 1,232,009		1,232,009		605,994
Green Globe International Inc. [Member]
Payment to be made to related party	1,684,053		1,684,053		692,119
Short-term borrowing increased amount			1,800,000		1,500,000
Maximum borrowing outstanding, amount	500,000		500,000
Additional loans			96,400
Reserve of against balance	1,684,053		1,684,053
CEO & CMO [Member]
Salary paid	60,000		180,000
Consulting fees		40,000		160,000
Hempacco Paper Company [Member]
Prepaid expenses	616,000		616,000
Primus Logistics [Member]
Payment to be made to related party	$ 0		0		5,163
Services charge expense			$ 222,883	206,821
Ownership percentage	90.00%		90.00%
Advance rent	$ 342,638		$ 342,638		25,000
UST Mexico, Inc. [Member]
Payment to be made to related party	$ 0		$ 0		$ 0
Common stock share owned	947,200,000		947,200,000
Revenue	$ 8,800	16,840	$ 15,359	31,840
Advanced payment			66,000
Amount received			62,600
Goods and services amount	$ 190,807	$ 57,181	$ 428,753	$ 147,184
Ownership percentage	25.00%		25.00%

STOCKHOLDERS EQUITY (Details Narrative) - USD ($)					1 Months Ended		9 Months Ended		12 Months Ended
STOCKHOLDERS EQUITY (Details Narrative) - USD ($)	Oct. 12, 2022	Sep. 06, 2022	Jul. 15, 2022	Apr. 07, 2022	Feb. 14, 2023	Sep. 17, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Sep. 26, 2023	Aug. 09, 2023	May 16, 2023	Feb. 05, 2023
Common stock share authorized							200,000,000		200,000,000
Common stock share issued							28,926,126		23,436,505				15,000
Proceeds from common stock shares							$ 7,245,000	$ 6,468,000
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
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
Ernest Sparks [Member]
Common stock share issued												62,223
Miguel Cambero [Member]
Common stock share issued											332,398
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
Boustead Securities, LLC [Member] \| September 1, 2022 [Member]
Price per share							$ 6.00
Common stock share sold							1,000,000
Net proceeds from other equity							$ 5,390,753
Boustead Securities, LLC [Member] \| February 14 2023 [Member]
Price per share					$ 1.50
Common stock share sold					4,830,000
Net proceeds from other equity					$ 6,610,400
North Equities Corp. [Member]
Restricted share issuance						41,494
Market value of share issued						$ 100,000
FMW Media Works LLC [Member]
Common stock share issued										250,000
Restricted share issuance	63,292
Market value of share issued	$ 148,103

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	1 Months Ended
SUBSEQUENT EVENTS (Details Narrative) - USD ($)	Oct. 19, 2023	Oct. 18, 2023	Sep. 30, 2023	Feb. 05, 2023	Dec. 31, 2022
Common stock share issued			28,926,126	15,000	23,436,505
Purchase Agreement [Member] \| Subsequent Event [Member] \| Global Opportunities Fund LLC [Member]
Debt, Term		five years
Warrants to purchase price per share	$ 1.50	$ 1.50
Aggregate agreements amount		$ 3,000,000
Purchase amount		$ 250,000
Interest rate	10.00%	10.00%
Maximum ownership		4.99%
Amount of the Promissory Note	$ 835,000
Purchase amount after deducting the OID	751,500
Proceeds from issurance of note	686,760	$ 220,000
Commission of brokers	$ 57,240	$ 20,000
Warrants to purchase common shares	360,805	120,370
Promissory note, principal balance		$ 277,778
Conversion price		$ 1.50
Share Purchase Agreement warrants issued, description		This warrant number is derived from the percentage that 1,300,000 warrants bear to a total purchase commitment of $3,000,000.
Legal expenses	$ 7,500	$ 10,000
Common stock share issued	83,497	27,777
Warrants issued	361,832	120,370
Monthly payment of principal and interest	$ 185,478