HNOI filing — read by section

UNITED STATES 

 SECURITIES AND EXCHANGE COMMISSION 

 Washington, D.C. 20549 

 FORM 10-Q 

 (Mark One)

 [X] QUARTERLY REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended July 31,
2025 

 OR

 [ ] TRANSITION REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from _________ to __________

 Commission File Number: 000-56568 

 HNO INTERNATIONAL, INC. 

 (Exact name of registrant as specified in its charter)

 Nevada 
 
 20-2781289 

 (State or other jurisdiction of 
 
 (I.R.S. Employer 

 incorporation or organization) 
 
 Identification No.) 

 41558 Eastman Drive 

 Suite B 

 Murrieta , California 

 (Address of principal executive offices)
 
 92562 

 (Zip Code)
 
 ( 951 ) 305-8872 

 (Registrant's telephone number, including area code)

 N/A 

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

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

 Title of each class 
 
 Trading Symbol(s) 
 
 Name of each exchange on which registered 

 N/A 
 
 N/A 
 
 N/A 

 Indicate
by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x 
 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 (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes 
 x No ¨ 

 1 

 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 
 x 
 Smaller reporting company 
 x 

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

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

 Indicate
the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of September
19, 2025, the registrant had 97,545,491 outstanding shares of Common Stock.

 2 

 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 

 This report on Form 10-Q contains "forward-looking
statements" that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. Our actual
results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described
in our Form 10-K filed on March 20, 2025, as amended by our Form 10-K/A filed on June 26, 2025, and other filings we make with
the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable,
they relate only to events as of the date on which the statements are made. We do not intend to update any of the forward-looking statements
after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.

 The following discussion and analysis of financial
condition and results of operations is based upon and should be read in conjunction with our audited financial statements and related
notes thereto included elsewhere in this report, and in our Annual Report on Form 10-K filed on March 20, 2025, as amended by our Form
10-K/A filed on June 26, 2025.

 3 

 HNO INTERNATIONAL, INC. 

 QUARTERLY REPORT ON FORM 10-Q 

 FOR THE QUARTER ENDED JULY 31, 2025 

 TABLE OF CONTENTS 

 PAGE 

 PART I 
 FINANCIAL INFORMATION 
 
 Item 1. 
 Financial Statements (Unaudited) 
 5 

 Unaudited Condensed Balance Sheets as of July 31, 2025 and October 31, 2024 
 6 

 Unaudited Condensed Statements of Operations for the Three and Nine months Ended July 31, 2025 and July 31, 2024 
 7 

 Unaudited Condensed Statement of Stockholders’ Deficit for the Three and Nine months Ended July 31, 2025 and July 31, 2024 
 8 

 Unaudited Condensed Statements of Cash Flows for the Nine months Ended July 31, 2025 and July 31, 2024 
 9 

 Notes to Unaudited Condensed Financial Statements 
 10 

 Item 2. 
 Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 22 

 Item 3. 
 Quantitative and Qualitative Disclosures About Market Risk 
 27 

 Item 4. 
 Controls and Procedures 
 27 

 PART II 
 OTHER INFORMATION 
 
 Item 2. 
 Unregistered Sales of Equity Securities and Use of Proceeds 
 28 

 Item 5. 
 Other Information 
 28 

 Item 6. 
 Exhibits 
 29 

 Signatures 
 30 

 4 

 PART I - FINANCIAL INFORMATION 

 Item 1. Financial Statements. 

 HNO INTERNATIONAL, INC.

CONDENSED BALANCE SHEETS

(Unaudited) 

 July 31, 
 
 October 31, 
 
 2025 
 
 2024 
 
 ASSETS 
 
 Current Assets 
 
 Cash 
 
 $ 
 31,984 
 
 $ 
 20,255 
 
 Accounts receivable 
 
 — 
 
 — 
 
 Total Current Assets 
 
 31,984 
 
 20,255 
 
 Non-Current Assets 
 
 Property and equipment, net 
 
 1,399,793 
 
 994,898 
 
 Long term asset, net 
 
 — 
 
 112,026 
 
 Right-of-use asset 
 
 79,141 
 
 121,805 
 
 Total Non-Current Assets 
 
 1,478,934 
 
 1,228,729 
 
 TOTAL ASSETS 
 
 $ 
 1,510,918 
 
 $ 
 1,248,984 
 
 LIABILITIES AND STOCKHOLDERS' DEFICIT 
 
 LIABILITIES 
 
 Current Liabilities 
 
 Accounts payable 
 
 $ 
 407,737 
 
 $ 
 138,029 
 
 Accrued payroll 
 
 — 
 
 17,762 
 
 Accrued interest payable 
 
 49,414 
 
 28,845 
 
 Lease liability 
 
 59,966 
 
 57,062 
 
 Payroll tax 
 
 2,838 
 
 2,838 
 
 Advances, related party 
 
 1,091,585 
 
 960,585 
 
 Convertible note payable, at fair value 
 
 60,000 
 
 — 
 
 Customer deposits 
 
 99 
 
 99 
 
 Notes payable, related party 
 
 785,000 
 
 785,000 
 
 Total Current Liabilities 
 
 2,456,639 
 
 1,990,220 
 
 Non-Current Liability 
 
 Lease liability 
 
 20,702 
 
 66,155 
 
 Long term notes payable, related party 
 
 590,000 
 
 590,000 
 
 Total Non-Current Liability 
 
 610,702 
 
 656,155 
 
 Total Liabilities 
 
 3,067,341 
 
 2,646,375 
 
 STOCKHOLDERS’ DEFICIT 
 
 Preferred stock, par value $ 0.001 per share; 15,000,000 shares authorized; 0 shares issued and outstanding as of July 31, 2025 and October 31, 2024, respectively 
 
 — 
 
 — 
 
 Series A, par value $ 0.001 per share; 10,000,000 shares authorized; 5,000,000 and 5,000,000 shares issued and outstanding as of July 31, 2025 and October 31, 2024, respectively 
 
 5,000 
 
 5,000 
 
 Series B, par value $ 0.001 per share; 500,000 shares authorized; 360,000 and 0 shares issued and outstanding as of July 31, 2025 and October 31, 2024, respectively 
 
 360 
 
 — 
 
 Common stock, par value $ 0.001 per share; 985,000,000 shares authorized; 95,920,491 and 419,437,865 shares issued and outstanding as of July 31, 2025 and October 31, 2024, respectively 
 
 95,920 
 
 419,438 
 
 Common stock payable 
 
 15,250 
 
 15,250 
 
 Common stock subscription receivable 
 
 ( 13,750 
 ) 
 
 ( 13,750 
 ) 

 Additional paid-in capital 
 
 50,204,960 
 
 43,611,365 
 
 Accumulated deficit 
 
 ( 51,864,163 
 ) 
 
 ( 45,434,694 
 ) 

 Total Stockholders’ Deficit 
 
 ( 1,556,423 
 ) 
 
 ( 1,397,391 
 ) 

 TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT 
 
 $ 
 1,510,918 
 
 $ 
 1,248,984 
 
 The accompanying notes are an integral part of these condensed unaudited financial statements. 
 
 5 

 HNO INTERNATIONAL, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited) 

 For the Three Months Ended 

July 31, 
 
 For the Nine Months Ended 

July 31, 

 2025 
 
 2024 
 
 2025 
 
 2024 

 (As Restated) 
 
 (As Restated) 

 Revenue 
 
 $ 
 — 
 
 $ 
 4,241 
 
 $ 
 43,708 
 
 $ 
 4,241 
 
 Cost of goods sold 
 
 — 
 
 ( 3,688 
 ) 
 
 — 
 
 ( 3,688 
 ) 

 Gross Profit 
 
 — 
 
 553 
 
 43,708 
 
 553 
 
 Operating expenses 
 
 Advertising and marketing 
 
 2,610 
 
 9,593 
 
 22,770 
 
 9,593 
 
 General and administrative expenses 
 
 421,940 
 
 430,693 
 
 6,130,926 
 
 1,421,333 
 
 Depreciation and amortization 
 
 66,742 
 
 48,927 
 
 178,730 
 
 127,994 
 
 Total Operating Expenses 
 
 491,292 
 
 489,213 
 
 6,332,426 
 
 1,558,920 
 
 Other Income (Expenses) 
 
 Interest income 
 
 2 
 
 7 
 
 8 
 
 5,499 
 
 Interest expense 
 
 ( 6,705 
 ) 
 
 ( 6,931 
 ) 
 
 ( 20,569 
 ) 
 
 ( 20,644 
 ) 

 Loss on fair value of convertible note 
 
 ( 15 
 ) 
 
 — 
 
 ( 15,000 
 ) 
 
 — 
 
 Loss on write-off of intangible asset 
 
 — 
 
 — 
 
 ( 105,190 
 ) 
 
 — 
 
 Total Other (Expenses) 
 
 ( 6,718 
 ) 
 
 ( 6,924 
 ) 
 
 ( 140,751 
 ) 
 
 ( 15,145 
 ) 

 Loss from Operations 
 
 $ 
 ( 498,010 
 ) 
 
 $ 
 ( 495,584 
 ) 
 
 $ 
 ( 6,429,469 
 ) 
 
 $ 
 ( 1,573,512 
 ) 

 Net Loss 
 
 $ 
 ( 498,010 
 ) 
 
 $ 
 ( 495,584 
 ) 
 
 $ 
 ( 6,429,469 
 ) 
 
 $ 
 ( 1,573,512 
 ) 

 PER SHARE AMOUNTS 
 
 Basic and diluted net loss

per share 
 
 $ 
 ( 0.01 
 ) 
 
 $ 
 ( 0.00 
 ) 
 
 $ 
 ( 0.04 
 ) 
 
 $ 
 ( 0.00 
 ) 

 Weighted average number of common shares outstanding - basic and diluted 
 
 85,983,969 
 
 410,591,730 
 
 171,019,802 
 
 416,515,952 
 
 The accompanying notes are an integral part of these condensed unaudited financial statements. 

 6 

 HNO INTERNATIONAL, INC. 

CONDENSED STATEMENTS OF STOCKHOLDERS' DEFICIT

For the three months and nine months ended July 31, 2025 and 2024 (As Restated)

(Unaudited) 

 Series A Preferred Stock 
 
 Series B Preferred Stock 
 
 Common Stock 
 
 Stock 
 
 Share Subscription 
 
 Additional Paid-in 
 
 Accumulated 
 
 Total Stockholders' 

 Shares 
 
 Amount 
 
 Shares 
 
 Amount 
 
 Shares 
 
 Amount 
 
 Payable 
 
 Receivable 
 
 Capital 
 
 Deficit 
 
 Deficit 

 Balance at October 31, 2023 (Restated) 
 
 5,000,000 
 
 $ 
 5,000 
 
 — 
 
 $ 
 — 
 
 419,341,584 
 
 $ 
 419,341 
 
 $ 
 32,251 
 
 $ 
 ( 23,750 
 ) 
 
 $ 
 41,470,177 
 
 $ 
 ( 42,096,104 
 ) 
 
 $ 
 ( 193,085 
 ) 

 Regulation A stock issuances 
 
 — 
 
 — 
 
 — 
 
 — 
 
 91,501 
 
 92 
 
 33,999 
 
 — 
 
 91,409 
 
 — 
 
 125,500 
 
 Net loss for the three months ended January 31, 2024 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 507,073 
 ) 
 
 ( 507,073 
 ) 

 Balance at January 31, 2024 (Restated) 
 
 5,000,000 
 
 $ 
 5,000 
 
 — 
 
 $ 
 — 
 
 419,433,085 
 
 $ 
 419,433 
 
 $ 
 66,250 
 
 $ 
 ( 23,750 
 ) 
 
 $ 
 41,561,586 
 
 $ 
 ( 42,603,177 
 ) 
 
 $ 
 ( 574,658 
 ) 

 Regulation A stock issuances 
 
 — 
 
 — 
 
 — 
 
 — 
 
 120,400 
 
 120 
 
 13,250 
 
 — 
 
 120,280 
 
 — 
 
 133,650 
 
 Net loss for the three months ended April 30, 2024 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 570,855 
 ) 
 
 ( 570,855 
 ) 

 Balance at April 30, 2024 (Restated) 
 
 5,000,000 
 
 $ 
 5,000 
 
 — 
 
 $ 
 — 
 
 419,553,485 
 
 $ 
 419,553 
 
 $ 
 79,500 
 
 $ 
 ( 23,750 
 ) 
 
 $ 
 41,681,866 
 
 $ 
 ( 43,174,032 
 ) 
 
 $ 
 ( 1,011,863 
 ) 

 Regulation A stock issuances 
 
 — 
 
 — 
 
 — 
 
 — 
 
 219,028 
 
 219 
 
 ( 61,750 
 ) 
 
 — 
 
 218,809 
 
 — 
 
 157,278 
 
 Regulation D stock issuances 
 
 — 
 
 — 
 
 — 
 
 — 
 
 966,879 
 
 967 
 
 — 
 
 — 
 
 274,533 
 
 — 
 
 275,500 
 
 Shares cancelled as per settlement agreement - Vivaris Capital 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 10,000,000 
 ) 
 
 ( 10,000 
 ) 
 
 — 
 
 10,000 
 
 — 
 
 — 
 
 — 
 
 Net loss for the three months ended July 31, 2024 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 495,584 
 ) 
 
 ( 495,584 
 ) 

 Balance at July 31, 2024 
 
 5,000,000 
 
 5,000 
 
 — 
 
 — 
 
 410,739,392 
 
 410,739 
 
 17,750 
 
 ( 13,750 
 ) 
 
 42,175,208 
 
 ( 43,669,616 
 ) 
 
 ( 1,074,669 
 ) 

 7 

 HNO INTERNATIONAL, INC. 

CONDENSED STATEMENTS OF STOCKHOLDERS' DEFICIT (CONTINUED)

For the three months and nine months ended July 31, 2025 and 2024 (As Restated)

(Unaudited) 

 Series A Preferred Stock 
 
 Series B Preferred Stock 
 
 Common Stock 
 
 Stock 
 
 Share Subscription 
 
 Additional Paid-in 
 
 Accumulated 
 
 Total Stockholders' 

 Shares 
 
 Amount 
 
 Shares 
 
 Amount 
 
 Shares 
 
 Amount 
 
 Payable 
 
 Receivable 
 
 Capital 
 
 Deficit 
 
 Deficit 

 Balance at October 31, 2024 
 
 5,000,000 
 
 $ 
 5,000 
 
 — 
 
 $ 
 — 
 
 419,437,865 
 
 $ 
 419,438 
 
 $ 
 15,250 
 
 $ 
 ( 13,750 
 ) 
 
 $ 
 43,611,365 
 
 $ 
 ( 45,434,694 
 ) 
 
 $ 
 ( 1,397,391 
 ) 

 Regulation D stock issuances 
 
 — 
 
 — 
 
 — 
 
 — 
 
 29,293 
 
 29 
 
 — 
 
 — 
 
 14,971 
 
 — 
 
 15,000 
 
 Shares cancelled as per exchange agreement 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 360,000,000 
 ) 
 
 ( 360,000 
 ) 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 360,000 
 ) 

 Series B preferred stock issuances 
 
 — 
 
 — 
 
 360,000 
 
 $ 
 360 
 
 — 
 
 — 
 
 — 
 
 — 
 
 359,640 
 
 — 
 
 360,000 
 
 Stock-based compensation 
 
 — 
 
 — 
 
 — 
 
 — 
 
 16,125,000 
 
 16,125 
 
 — 
 
 — 
 
 5,076,432 
 
 — 
 
 5,092,557 
 
 Net loss for the three months ended January 31, 2025 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 5,461,393 
 ) 
 
 ( 5,461,393 
 ) 

 Balance at January 31, 2025 
 
 5,000,000 
 
 $ 
 5,000 
 
 360,000 
 
 $ 
 360 
 
 75,592,158 
 
 $ 
 75,592 
 
 $ 
 15,250 
 
 $ 
 ( 13,750 
 ) 
 
 $ 
 49,062,408 
 
 $ 
 ( 50,896,087 
 ) 
 
 $ 
 ( 1,751,227 
 ) 

 Regulation D stock issuances 
 
 — 
 
 — 
 
 — 
 
 — 
 
 4,558,333 
 
 4,558 
 
 — 
 
 — 
 
 522,942 
 
 — 
 
 527,500 
 
 Net loss for the three months ended April 30, 2025 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 470,066 
 ) 
 
 ( 470,066 
 ) 

 Balance at April 30, 2025 
 
 5,000,000 
 
 $ 
 5,000 
 
 360,000 
 
 $ 
 360 
 
 80,150,491 
 
 $ 
 80,150 
 
 $ 
 15,250 
 
 $ 
 ( 13,750 
 ) 
 
 $ 
 49,585,350 
 
 $ 
 ( 51,366,153 
 ) 
 
 $ 
 ( 1,693,793 
 ) 

 Regulation D stock issuances 
 
 — 
 
 — 
 
 — 
 
 — 
 
 13,190,000 
 
 13,190 
 
 — 
 
 — 
 
 380,810 
 
 — 
 
 394,000 
 
 Stock-based compensation 
 
 — 
 
 — 
 
 — 
 
 — 
 
 2,580,000 
 
 2,580 
 
 — 
 
 — 
 
 238,800 
 
 — 
 
 241,380 
 
 Net loss for the three months ended July 31, 2025 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 498,010 
 ) 
 
 ( 498,010 
 ) 

 Balance at July 31, 2025 
 
 5,000,000 
 
 5,000 
 
 360,000 
 
 360 
 
 95,920,491 
 
 95,920 
 
 15,250 
 
 ( 13,750 
 ) 
 
 50,204,960 
 
 ( 51,864,163 
 ) 
 
 ( 1,556,423 
 ) 

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

 8 

 HNO INTERNATIONAL, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited) 

 For the Nine Months Ended 

July 31, 

 2025 
 
 2024 

 (As Restated) 

 Cash Flow from Operating Activities 
 
 Net loss 
 
 $ 
 ( 6,429,469 
 ) 
 
 $ 
 ( 1,573,512 
 ) 

 Adjustments to reconcile net loss to net cash used in operating activities: 
 
 Depreciation and amortization 
 
 178,730 
 
 127,994 
 
 Legal services provided in exchange for convertible note 
 
 45,000 
 
 — 
 
 Loss on fair value of convertible note 
 
 15,000 
 
 — 
 
 Loss on write-off of intangible asset 
 
 105,190 
 
 — 
 
 Stock-based compensation 
 
 5,333,937 
 
 — 
 
 Changes in operating assets and liabilities: 
 
 Decrease in due from related party 
 
 — 
 
 56,392 
 
 Decrease in accounts payable 
 
 ( 129,137 
 ) 
 
 ( 433 
 ) 

 Decrease in accrued payroll 
 
 ( 17,762 
 ) 
 
 — 
 
 Decrease in accrued interest payable 
 
 20,569 
 
 20,643 
 
 Operating lease ROU assets and lease liabilities, net 
 
 115 
 
 990 
 
 Decrease payroll taxes 
 
 — 
 
 ( 14,802 
 ) 

 Net Cash Used in Operating Activities 
 
 ( 877,827 
 ) 
 
 ( 1,382,728 
 ) 

 Cash Flows from Financing Activities 
 
 Proceeds from related party advances 
 
 509,000 
 
 800,585 
 
 Repayment of related party advances 
 
 ( 378,000 
 ) 
 
 — 
 
 Proceeds from security deposits 
 
 — 
 
 100,000 
 
 Proceeds from customer deposits 
 
 — 
 
 99 
 
 Proceeds from sale of common stock subscription payable 
 
 — 
 
 ( 14,501 
 ) 

 Proceeds from sale of common stock 
 
 936,500 
 
 706,429 
 
 Net Cash Provided by Financing Activities 
 
 1,067,500 
 
 1,592,612 
 
 Cash Flows from Investing Activities 
 
 Purchase of property and equipment 
 
 ( 177,944 
 ) 
 
 ( 30,354 
 ) 

 Purchase of long term asset 
 
 — 
 
 ( 335,772 
 ) 

 Net Cash Used in Investing Activities 
 
 ( 177,944 
 ) 
 
 ( 366,126 
 ) 

 Net increase (decrease) in cash 
 
 11,729 
 
 ( 156,242 
 ) 

 Cash at beginning of period 
 
 20,255 
 
 235,159 
 
 Cash at end of period 
 
 $ 
 31,984 
 
 $ 
 78,917 
 
 Supplemental Disclosure of Interest and Income Taxes Paid: 
 
 Interest paid during the period 
 
 $ 
 — 
 
 $ 
 — 
 
 Income taxes paid during the period 
 
 $ 
 — 
 
 $ 
 — 
 
 Supplemental Disclosure for Non-Cash Investing and Financing Activities: 
 
 Property and equipment acquired through accounts payable 
 
 $ 
 398,845 
 
 $ 
 — 
 
 Common stock cancellation per share exchange agreement 
 
 $ 
 ( 360,000 
 ) 
 
 $ 
 ( 10,000 
 ) 

 Series B preferred stock issuance per exchange agreement 
 
 $ 
 360,000 
 
 $ 
 — 
 
 Record right-to-use asset and lease liability per ASC 842 
 
 $ 
 — 
 
 $ 
 167,749 
 
 Convertible note issued in exchange for legal services, recorded at fair value 
 
 $ 
 60,000 
 
 $ 
 — 
 
 The accompanying notes are an integral part of these condensed unaudited financial statements. 
 
 9 

 HNO INTERNATIONAL, INC. 

 NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS 

 JULY 31, 2025 

 NOTE 1 – ORGANIZATION AND BASIS OF ACCOUNTING 

 Organization 

 HNO International, Inc. (the “Company”)
was incorporated in the State of Nevada on May 2, 2005.

 The Company specializes in the design, integration,
and development of green hydrogen-based clean energy technologies. The Company is committed to providing scalable products that help businesses
and communities decarbonize, reduce emissions, and cut operational costs. HNO stands for Hydrogen and Oxygen. The Company is at the forefront
of developing innovative solutions, such as the Compact Hydrogen Refueling System (CHRS) and the Compact Hydrogen Production System (CHPS),
which can be used to produce hydrogen for various applications including fuel cell electric vehicles, hydrogen internal combustion engines,
heating and cooking applications. A CHPS is highly scalable, capable of producing 100-2,000 (or more) kilograms of hydrogen per day for
commercial use in various applications. In addition, the Company develops energy systems that complement the zero-emissions EV infrastructure,
reduce harmful emissions, and cut maintenance costs of commercial diesel fleets. By integrating components from leading industry partners,
the Company aims to transition fossil fuels to cleaner alternatives and promote lower emissions.

 NOTE 2 – FINANCIAL STATEMENT RESTATEMENT 

 In connection with the Company’s re-audit
of its financial statements for the year ended October 31, 2023, the Company’s management, in consultation with its independent
registered public accounting firm, identified corrections to the valuation of service stock issued during the year ended October 31, 2023,
and the termination of the patent agreement entered into on January 24, 2023. The corrections made that impact the condensed financial
statements for the quarter ended July 31, 2024, are summarized as follows:

 Stock Price Valuation Adjustment: The valuation of the stock price was adjusted
from $ 0.001 to $ 0.23 and there was an increase in stock-based compensation reflecting the revised valuation of stock.

 Equity Adjustments: There was a corresponding increase in additional paid-in capital and
an adjustment in the accumulated deficit to reflect the revised stock valuation and related stock-based compensation.

 Termination of Patent Purchase Agreement: On March 13, 2025, the Company and
Donald Owens mutually agreed to terminate the Patent Purchase Agreement as of January 24, 2023. As part of the termination, the patents
were returned to Mr. Owens, and the 5,000,000 shares of Series A Preferred Stock were canceled. The $ 82,500 value previously reported
in intangible assets and additional paid-in capital was reversed, resulting in a reduction in intangible assets. Additionally, the related
amortization expense of $ 3,176 and the issuance of Series A Preferred Stock were removed from the financial statements.

 Reclassification of Expenses: Expenses incurred during the fiscal year ended October 31,
2023, and paid subsequently, have been reclassified to accounts payable as of October 31, 2023. This adjustment ensures that financial
obligations are accurately reported in the period in which they were incurred.

 The restatement includes the initial recognition of right-of-use assets and corresponding
lease liabilities on the balance sheet to properly reflect lease accounting in accordance with ASC 842.

 These adjustments have been reflected in the restated financial
statements for the quarter ended July 31, 2024.

 Impact of the Restatement 

 The impact of the restatement on the financial statements for the
affected period is presented below. In addition to the below, the related notes to the financial statements have also been adjusted as
appropriate to reflect the impact of the restatement.

 10 

 The impact of the restatement on the relevant line items within the previously
reported Condensed Unaudited Statement of Operations for the three and nine months ended July 31, 2024, previously filed is as follows: 

 Schedule of statement of operations 
 
 Statement of Operations for the three months ended July 31, 2024 
 
 As Previously Reported 
 
 Adjustment 
 
 As Restated 

 Depreciation and amortization 
 
 $ 
 49,964 
 
 $ 
 ( 1,037 
 ) 
 
 $ 
 48,927 
 
 Total Operating Expenses 
 
 $ 
 490,250 
 
 $ 
 ( 1,037 
 ) 
 
 $ 
 489,213 
 
 Loss from Operations 
 
 $ 
 ( 496,621 
 ) 
 
 $ 
 1,037 
 
 $ 
 ( 495,584 
 ) 

 Net Loss 
 
 $ 
 ( 496,621 
 ) 
 
 $ 
 1,037 
 
 $ 
 ( 495,584 
 ) 

 PER SHARE AMOUNTS 
 
 Basic and diluted net loss

per share 
 
 $ 
 ( 0.00 
 ) 
 
 $ 
 — 
 
 $ 
 ( 0.00 
 ) 

 Weighted average number of common shares outstanding - basic and diluted 
 
 410,591,730 
 
 — 
 
 410,591,730 
 
 Statement of Operations for the nine months ended July 31, 2024 
 
 As Previously Reported 
 
 Adjustment 
 
 As Restated 

 Operating expenses 
 
 General and administrative expenses 
 
 $ 
 1,440,197 
 
 $ 
 ( 18,864 
 ) 
 
 $ 
 1,421,333 
 
 Depreciation and amortization 
 
 $ 
 120,056 
 
 $ 
 7,938 
 
 $ 
 127,994 
 
 Total Operating Expenses 
 
 $ 
 1,569,846 
 
 $ 
 ( 10,926 
 ) 
 
 $ 
 1,558,920 
 
 Loss from Operations 
 
 $ 
 ( 1,584,438 
 ) 
 
 $ 
 10,926 
 
 $ 
 ( 1,573,512 
 ) 

 Net Loss 
 
 $ 
 ( 1,584,438 
 ) 
 
 $ 
 10,926 
 
 $ 
 ( 1,573,512 
 ) 

 PER SHARE AMOUNTS 
 
 Basic and diluted net loss

per share 
 
 $ 
 ( 0.00 
 ) 
 
 $ 
 — 
 
 $ 
 ( 0.00 
 ) 

 Weighted average number of common shares outstanding - basic and diluted 
 
 416,515,952 
 
 — 
 
 416,515,952 
 
 The impact of the restatement on the relevant line items within the previously
reported Condensed Unaudited Statement of Changes in Stockholders’ Deficit for the three and nine months ended July 31, 2024, previously
filed is as follows: 

 Schedule of statement of changes in stockholders deficit 
 
 Changes in Statement of Stockholders' Deficit for the three months ended July 31, 2024 
 
 As Previously Reported 
 
 Adjustment 
 
 As Restated 

 Beginning Additional Paid-in Capital - Balance at April 30, 2024 
 
 $ 
 41,291,591 
 
 $ 
 390,275 
 
 $ 
 41,681,866 
 
 Beginning Accumulated Deficit - Balance at April 30, 2024 
 
 $ 
 ( 42,697,762 
 ) 
 
 $ 
 ( 476,270 
 ) 
 
 $ 
 ( 43,174,032 
 ) 

 Beginning Total Stockholders' Deficit - Balance at April 30, 2024 
 
 $ 
 ( 920,868 
 ) 
 
 $ 
 ( 90,995 
 ) 
 
 $ 
 ( 1,011,863 
 ) 

 Series A preferred issued pursuant to patent agreement, shares 
 
 10,000,000 
 
 ( 5,000,000 
 ) 
 
 5,000,000 
 
 Series A preferred issued pursuant to patent agreement, amount 
 
 $ 
 10,000 
 
 $ 
 ( 5,000 
 ) 
 
 $ 
 5,000 
 
 Net loss for the three months ended July 31, 2024 
 
 $ 
 ( 496,621 
 ) 
 
 $ 
 1,037 
 
 $ 
 ( 495,584 
 ) 

 Ending Additional paid in capital - Balance at July 31, 2024 
 
 $ 
 41,784,933 
 
 $ 
 390,275 
 
 $ 
 42,175,208 
 
 Ending Accumulated Deficit - Balance at July 31, 2024 
 
 $ 
 ( 43,194,383 
 ) 
 
 $ 
 ( 475,233 
 ) 
 
 $ 
 ( 43,669,616 
 ) 

 Ending Total Stockholders' Deficit - Balance at July 31, 2024 
 
 $ 
 ( 984,711 
 ) 
 
 $ 
 ( 89,958 
 ) 
 
 $ 
 ( 1,074,669 
 ) 

 11 

 Changes in Statement of Stockholders' Deficit for the nine months ended July 31, 2024 
 
 As Previously Reported 
 
 Adjustment 
 
 As Restated 

 Beginning Additional Paid-in Capital - Balance at October 31, 2023 
 
 $ 
 41,079,902 
 
 $ 
 390,275 
 
 $ 
 41,470,177 
 
 Beginning Accumulated Deficit - Balance at October 31, 2023 
 
 $ 
 ( 41,609,945 
 ) 
 
 $ 
 ( 486,159 
 ) 
 
 $ 
 ( 42,096,104 
 ) 

 Beginning Total Stockholders' Deficit - Balance at October 31, 2023 
 
 $ 
 ( 92,201 
 ) 
 
 ( 100,884 
 ) 
 
 ( 193,085 
 ) 

 Series A preferred issued pursuant to patent agreement, shares 
 
 10,000,000 
 
 ( 5,000,000 
 ) 
 
 5,000,000 
 
 Series A preferred issued pursuant to patent agreement, amount 
 
 $ 
 10,000 
 
 $ 
 ( 5,000 
 ) 
 
 $ 
 5,000 
 
 Net loss for the nine months ended July 31, 2024 
 
 $ 
 1,584,438 
 
 $ 
 ( 10,926 
 ) 
 
 $ 
 1,573,512 
 
 Ending Additional paid in capital - Balance at July 31, 2024 
 
 $ 
 41,784,933 
 
 $ 
 390,275 
 
 $ 
 42,175,208 
 
 Ending Accumulated Deficit - Balance at July 31, 2024 
 
 $ 
 ( 43,194,383 
 ) 
 
 $ 
 ( 475,233 
 ) 
 
 $ 
 ( 43,669,616 
 ) 

 Ending Total Stockholders' Deficit - Balance at July 31, 2024 
 
 $ 
 ( 984,711 
 ) 
 
 $ 
 ( 89,958 
 ) 
 
 $ 
 ( 1,074,669 
 ) 

 The impact of the restatement relevant on the
line items within the previously reported Condensed Unaudited Statement of Cash Flows for the nine months ended July 31, 2024, previously
filed is as follows: 

 Schedule of statement of cash flows 
 
 Statement of Cash Flows for the nine months ended July 31, 2024 
 
 As Previously Reported 
 
 Adjustment 
 
 As Restated 

 Cash Flow from Operating Activities 
 
 Net loss 
 
 $ 
 ( 1,584,438 
 ) 
 
 $ 
 10,926 
 
 $ 
 ( 1,573,512 
 ) 

 Adjustments to reconcile net loss to net cash used in operating activities: 
 
 Depreciation and amortization 
 
 $ 
 120,056 
 
 $ 
 7,938 
 
 $ 
 127,994 
 
 Changes in operating assets and liabilities: 
 
 Increase/(Decrease) in accounts payable 
 
 $ 
 21,127 
 
 $ 
 ( 21,560 
 ) 
 
 $ 
 ( 433 
 ) 

 Operating lease ROU assets and lease liabilities, net 
 
 $ 
 844 
 
 $ 
 146 
 
 $ 
 990 
 
 Net Cash Used in Operating Activities 
 
 $ 
 ( 1,380,178 
 ) 
 
 $ 
 ( 2,550 
 ) 
 
 $ 
 ( 1,382,728 
 ) 

 Cash Flows from Investing Activities 
 
 Purchase of property and equipment 
 
 $ 
 ( 32,904 
 ) 
 
 $ 
 2,550 
 
 $ 
 ( 30,354 
 ) 

 Net Cash Used in Investing Activities 
 
 $ 
 ( 368,676 
 ) 
 
 $ 
 2,550 
 
 $ 
 ( 366,126 
 ) 

 Net increase (decrease) in cash 
 
 $ 
 ( 156,242 
 ) 
 
 $ 
 — 
 
 $ 
 ( 156,242 
 ) 

 Cash at beginning of period 
 
 $ 
 235,159 
 
 $ 
 — 
 
 $ 
 235,159 
 
 Cash at end of period 
 
 $ 
 78,917 
 
 $ 
 — 
 
 $ 
 78,917 
 
 Supplemental Disclosure for Non-Cash Investing and Financing Activities: 
 
 Record right-to-use asset and lease liability per ASC 842 
 
 $ 
 ( 135,875 
 ) 
 
 $ 
 ( 31,874 ) 
 
 $ 
 ( 167,749 
 ) 

 12 

 NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

 Basis of Presentation 

 The accompanying condensed financial statements have
been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and
pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting
of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations
and cash flows of the Company for the three and nine months ended July 31, 2025.

 Out-of-Period Adjustment 

 During the nine months ended July
31, 2025, the Company recorded an out-of-period adjustment to write off the full gross amount of a previously capitalized intangible asset
related to the prototype Compact Hydrogen Refueling Station (“CHRS”). The asset was originally recorded at $ 136,725 following
the conversion of a SAFE investment into intellectual property. Upon further evaluation, management determined that the asset did not
meet the criteria for capitalization.

 Management evaluated the error,
both qualitatively and quantitatively, and concluded that the adjustment was not material to any prior interim or annual period. The Company
recorded an expense of $ 105,190 , presented as “Loss on write-off of intangible asset” within other expenses for the nine months
ended July 31, 2025. The remaining balance of the gross asset and related accumulated amortization were removed from the balance sheet
as part of the adjustment. The previously recorded amortization from earlier periods was not reversed and remains reported in those respective
periods.

 Use of Estimates 

 The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount
of revenues and expenses during the reporting period. The management makes its best estimate of the outcome for these items based on information
available when the financial statements are prepared.

 Cash and Cash Equivalents 

 The Company considers all highly liquid investments
with original maturities of three months or less to be cash equivalents. As of July 31, 2025, and October 31, 2024, the Company did not
hold any investments that qualify as cash equivalents. Therefore, the cash and cash equivalents line item in the balance sheet solely
comprises cash.

 The Company maintains its cash balances at financial
institutions, which at times may exceed federally insured limits. While the Company monitors the credit quality of its banking institutions,
cash balances in excess of Federal Deposit Insurance Corporation (FDIC) insurance limits expose the Company to a certain degree of credit
risk in the event of the financial institutions' failure.

 Stock-Based Compensation 

 The Company accounts for stock-based
compensation in accordance with Accounting Standards Codification (“ASC”) 718 Compensation - Stock Compensation
(“ASC 718”). ASC 718 requires that the cost of equity awards, issued in exchange for services, including those issued to
employees and predominantly to consultants, be measured at the grant-date fair value. The Company does not adhere to a formal
stock-based compensation plan; rather, it issues stock awards on a discretionary basis as part of compensation agreements with
selected employees and consultants. Compensation for stock-based awards is recognized as a non-cash expense on the statement of
operations. The fair value of restricted stock grants is determined using the closing market price on the grant date, adjusted for
an appropriate discount to reflect the restrictions on transferability and marketability of the shares. The discount is calculated
using a weighted average of comparable restricted stock transactions, which better reflects the economic impact of larger issuances
and provides a more accurate representation of fair value under ASC 718. The expense associated with these awards is recorded based
on the fair value on the date of grant, as determined using a pricing model commensurate with the terms of the award. This cost is
recognized over the period during which the award recipient is required to perform services, typically known as the vesting period.
The total compensation cost related to vested stock-based awards is recognized after adjusting for estimated forfeitures at the time
of vesting. The expense related to stock-based compensation is included within the same income statement lines as cash compensation
for the consultants and employees who receive the awards, currently included in general and administrative expenses on the statement
of operations as the Company does not allocate compensation costs to Costs of Goods Sold. As of the report date, the Company has not
established any plans to issue dividends on stock-based awards. Any tax benefits arising from deductions for these awards are
recorded in additional paid-in capital, provided they exceed the cumulative compensation cost recognized.

 13 

 Employee Benefits 

 During the three months ended July 31, 2025,
the Company paid $ 743 in employer retirement contributions, representing 3 % of semi-monthly payroll for one employee over three pay
periods. These contributions are made in accordance with the terms of the Company’s state-mandated retirement plan for eligible
employees and are recorded as employee benefits expense in the period incurred.

 Income Taxes 

 Income taxes are computed using the asset and liability
method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between
the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation
allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 The Company follows the provisions of
ASC 740, Income Taxes , related to accounting for uncertainty in income taxes. ASC 740 prescribes a recognition threshold and measurement
process for uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes the financial statement effects
of a tax position when it is more likely than not that, based on technical merits, the position will be sustained upon examination by
the relevant taxing authorities. The Company had no unrecognized tax benefits as of July 31, 2025 and October 31, 2024, and does not anticipate
any significant changes in unrecognized tax benefits within the next 12 months. 

 Revenue Recognition 

 We recognize revenue in accordance with ASC 606, Revenue
from Contracts with Customers (“ASC 606”). The standard’s stated core principle is that an entity should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 includes provisions within a five-step
model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the
transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies
a performance obligation.

 In certain arrangements where the Company facilitates
the provision of goods or services provided by a third party, and does not take control of those goods or services, revenue is recognized
on a net basis, limited to the margin or fee earned, consistent with the Company’s role as an agent under ASC 606-10-55-36 through
55-40.

 During the nine months ended July 31,
2025, the Company recognized $ 43,708 in revenue related to the facilitation of delivery of hydrogen refueling equipment and related services.
Based on its evaluation of the arrangement, the Company determined that it acted as an agent with respect to the facilitation of delivery
of equipment, as it did not obtain control of the goods and the third-party vendor delivered directly to the customer. As a result, revenue
was recognized on a net basis, excluding gross billings and associated third-party costs, in accordance with ASC 606.

 Basic and Diluted Net Loss per
Common Share 

 Basic loss per common share is computed by
dividing the net loss by the weighted average number of shares of common stock outstanding for each period. Diluted loss per share is
computed by dividing the net loss by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares
issuable as common stock equivalents. As the Company is currently presenting net losses the weighted-average number of common shares outstanding
excludes potential common stock equivalents because their inclusion would be anti-dilutive.

 14 

 Property and Equipment 

 Property and equipment are carried at cost and,
less accumulated depreciation. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are
capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any
resulting gains or losses are included in the statement of operations in the year of disposal. The Company examines the possibility
of decreases in the value of property and equipment when events or changes in circumstances reflect the fact that their recorded
value may not be recoverable.

 The Company’s property and equipment consists
of specialized hydrogen equipment, related processing systems, and vehicles. Depreciation is computed using the straight-line method over
the estimated useful lives of the assets. Small equipment is depreciated over 3 years, vehicles are depreciated over 4 years, and large
equipment is depreciated over 7 years.

 Schedule of estimated useful lives 
 
 Useful life 

 Small equipment 
 
 3 Years 

 Large equipment 
 
 7 Years 

 Vehicles 
 
 4 Years 

 Impairment of Long-Lived Assets 

 The Company reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine
recoverability of a long-lived asset, management evaluates whether the estimated future undiscounted net cash flows from the asset are
less than its carrying amount. If impairment is indicated, the long-lived asset would be written down to fair value. Fair value is determined
by an evaluation of available price information at which assets could be bought or sold, including quoted market prices, if available,
or the present value of the estimated future cash flows based on reasonable and supportable assumptions.

 Leases 

 The Company accounts for leases in accordance
with ASC 842, Leases (“ASC 842”). At contract inception, the Company determines if an arrangement is or contains a lease.
Where the Company is the lessee, for each lease with a term greater than twelve months, the Company records a right-of-use asset and lease
liability. A right-of-use asset represents the economic benefit conveyed to the Company by the right to use the underlying asset over
the lease term. A lease liability represents the obligation to make lease payments arising from the use of the asset over the lease term.
As most of the Company’s leases do not provide an implicit interest rate, the lease liability is calculated at lease commencement
as the present value of unpaid lease payments using the Company’s estimated incremental borrowing rate. The incremental borrowing
rate represents the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized
basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the
lease. Leases with an initial expected term of 12 months or less are not recorded in the Balance Sheet and the related lease expense is
recognized on a straight-line basis over the lease term.

 Fair value of financial instruments 

 The Company’s financial instruments, including
cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are carried at cost, which approximates their
fair value, due to the relatively short maturity of these instruments.

 The Company’s convertible promissory note issued
on April 7, 2025, is classified as a liability and measured at fair value on a recurring basis in accordance with ASC 480, Distinguishing
Liabilities from Equity , as the instrument requires settlement in a variable number of shares for a fixed monetary amount. The fair
value of the convertible note was determined based on the conversion terms and observable market price of the Company’s common stock.

 Fair value is defined as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic
820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest
priority to unobservable inputs (Level 3 measurements). These tiers include:

 · 
 Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; 

 · 
 Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and 

 · 
 Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. 

 15 

 Assets and liabilities measured at fair
value on a recurring basis as of July 31, 2025 were as follows:

 Schedule of fair value of assets and liabilities 
 
 Total 
 
 (Level 1) 
 
 (Level 2) 
 
 (Level 3) 

 Liabilities 
 
 Convertible note payable 
 
 60,000 
 
 — 
 
 — 
 
 60,000 
 
 Total liabilities 
 
 $ 
 60,000 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 60,000 
 
 The fair value of the convertible note increased by $ 15 
during the three months ended July 31, 2025. This change was recognized as a loss on fair value of convertible note in the condensed statements
of operations.

 NOTE 4 – GOING CONCERN 

 On
July 31, 2025, we had an accumulated deficit of $ 51,864,163 . We have not been able to generate sufficient cash from operating activities
to fund our ongoing operations. We will be required to raise additional funds through public or private financing, additional collaborative
relationships, or other arrangements until we are able to raise revenues to a point of positive cash flow. We are evaluating various options
to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining
loans and selling common stock. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support
operations.

 Based on the above factors, substantial doubt exists
about our ability to continue as a going concern within one year after the date that the financial statements are issued.

 The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.

 NOTE
5 – PROPERTY AND EQUIPMENT 

 Property and
equipment consisted of the following: 

 Schedule of property and
equipment 
 
 July 31, 
 2025 
 
 October 31, 
 2024 
 
 Vehicles 
 $ 60,702 
 $ 60,702 

 Small equipment 
 32,943 
 32,943 

 Large equipment 
 1,669,954 
 1,093,166 

 Property and Equipment, Gross 
 $ 1,763,599 
 $ 1,186,811 

 Less: Accumulated depreciation 
 ( 363,806 ) 
 ( 191,913 ) 

 Property and Equipment, Net 
 $ 1,399,793 
 $ 994,898 

 Depreciation
expenses for the nine months ended July 31, 2025 and 2024 were $ 171,893 and $ 110,132 respectively. 

 NOTE 6 – LEASES 

 Operating leases 

 The Company has an operating lease agreement for office space in Murrieta,
California, expiring on November 30, 2026.

 On November 18, 2020, the Company entered
into a lease commencing on December 1, 2020, and ending on November 30, 2023, for the office spaces located at 41558 Eastman Drive, Suites
B and C, Murrieta, California 92562. The monthly rent was $4,183. Both suites are approximately 2,088 square feet of space. The Company’s
principal executive office is located at 41558 Eastman Drive, Suite B, Murrieta, California 92562. Suite C is utilized for testing and
research equipment. 

 16 

 On November 14, 2023, the lease for Suite
B was extended for 36 months to November 30, 2026. The monthly rental amount for Suite B was $2,501 for the period from December 1, 2023,
to November 30, 2024, with an increase to $2,573 for the period from December 1, 2024, to November 30, 2025, and an increase to $2,647
for the period from December 1, 2025, to November 30, 2026. 

 On January 4, 2024, the lease for Suite
C was extended for 34 months to November 30, 2026. The monthly rental amount for Suite C is $2,434 for the period from February 1, 2024,
to November 30, 2024, with an increase to $2,506 for the period from December 1, 2024, to November 30, 2025, and an increase to $2,555
for the period from December 1, 2025, to November 30, 2026. 

 The Company determined the above office space leases
and related extensions are classified as operating leases under ASC 842. Therefore, the Company recognized operating lease liabilities with corresponding
Right-Of-Use ("ROU") assets based on the present value of the minimum rental payments of such leases . 

 As the Company’s leases do
not provide an implicit interest rate, the lease liability is calculated at lease commencement as the present value of unpaid lease payments
using the Company’s estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that the
Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined
using a portfolio approach based on information available at the commencement date of the lease. As of July 31, 2025, the ROU asset was
$ 79,141 and operating lease liabilities were $ 80,668 . The operating lease liabilities consist of a current portion of $ 59,966 and a non-current
portion of $ 20,702 . The weighted average remaining lease term was 1.33 years and the weighted average discount rate was 4.14 %.

 Remaining lease term as of July 31, 2025:

 Schedule of remaining lease term 
 
 Year 
 Operating Lease Payment 

 2025 
 $ 15,227 

 2026 and above 
 65,986 

 Total Payments 
 $ 81,213 

 NOTE 7 – COMMON STOCK 

 Stock Issued 

 During the quarter ended January 31, 2024,
the Company issued 74,500 shares of common stock for $ 74,500 in cash under its Regulation A offering, qualified by the SEC on May 3, 2023.
The Company also issued 17,001 Regulation A shares previously classified as common stock payable and sold 51,000 Regulation A shares,
classified as $ 51,000 common stock payable.

 During the quarter ended April 30, 2024,
the Company issued 69,400 shares of common stock for $ 69,400 in cash under its Regulation A offering, qualified by the SEC on May 3, 2023.
The Company also issued 51,000 Regulation A shares previously classified as common stock payable and sold 64,250 Regulation A shares,
classified as $ 64,250 common stock payable.

 During the quarter
ended January 31, 2025, the Company entered into a Stock Subscription Agreement with accredited investors (under Rule 506 (b) of Regulation
D under the Securities Act of 1933, as amended). Whereby the Company privately sold a total of 29,293 shares of its common stock for an
aggregate cash purchase price of $ 15,000 . The proceeds from the sale of common stock will be used for operating capital. The shares were
issued as ‘restricted securities’ under Rule 144 of the Securities Act.

 During
the quarter ended January 31, 2025, the Company's Board of Directors granted approval for the issuance of 16,125,000 shares of our common
stock valued at $ 5,092,557 , in exchange for services rendered to the Company. These shares were considered "restricted securities"
under Rule 144 and were issued under the exemption provided by Section 4(a)(2) of the Securities Act. The issuance of these shares resulted
in the recognition of stock-based compensation expense in the accompanying statement of operations. 

 17 

 During the quarter ended
April 30, 2025, the Company entered into Stock Subscription Agreements with accredited investors (under Rule 506(b) of Regulation D under
the Securities Act of 1933, as amended). Whereby the Company privately sold a total of 4,558,333 shares of its common stock, for a cash
purchase price of $ 527,500 . The proceeds from the sale of common stock will be used for operating capital.

 During the quarter ended
July 31, 2025, the Company entered into Stock Subscription Agreements with accredited investors (under Rule 506(b) of Regulation D under
the Securities Act of 1933, as amended). Whereby the Company privately sold a total of 13,190,000 shares of its common stock, for a cash
purchase price of $ 394,000 . The proceeds from the sale of common stock will be used for operating capital.

 During
the quarter ended July 31, 2025, the Company's Board of Directors granted approval for the issuance of 2,580,000 shares of our common
stock valued at $ 241,380 , in exchange for services rendered to the Company. These shares were considered "restricted securities"
under Rule 144 and were issued under the exemption provided by Section 4(a)(2) of the Securities Act. The issuance of these shares resulted
in the recognition of stock-based compensation expense in the accompanying statement of operations. 

 Stock
Receivable 

 As of July 31, 2025 and October 31, 2024,
the Company issued 13,750 shares of common stock under Regulation A offering to various shareholders that have not yet paid for shares;
therefore, $ 13,750 has been classified as common stock receivable.

 Stock Payable 

 As of July 31, 2025, the Company sold
 15,250 shares of common stock under its Regulation A offering to various shareholders that have not yet been issued by the transfer agent;
therefore, $ 15,250 has been classified as common stock payable.

 NOTE 8 – PREFERRED STOCK 

 Series A Preferred Stock 

 On January 24,
2023, the Company issued 5,000,000 shares of its Series A Preferred Stock to Donald Owens, the Company’s Chief Executive Officer
(CEO) and Chairman, valued at $ 82,500 for patents. On March 13, 2025, the Company and Mr. Owens mutually agreed to terminate the Patent
Purchase Agreement as of January 24, 2023. As part of the termination, the 5,000,000 shares of Series A Preferred Stock were canceled
(see Note 11).

 Series B Preferred Stock 

 On January 2, 2025, the Company entered
into a Share Exchange Agreement with the CEO. Pursuant to the agreement, the CEO exchanged 245,000,000 shares of the Company’s
common stock for 245,000 shares of Series B Preferred Stock. On January 9, 2025, 245,000,000 shares of common stock
held by Donald Owens were cancelled, and 245,000 shares of Series B Preferred Stock were issued to Donald Owens.

 On January 2, 2025, the Company entered
into a Share Exchange Agreement with HNO Green Fuels, Inc. (“HNO Green Fuels), a related party. Pursuant to the agreement, HNO Green
Fuels exchanged 115,000,000 shares of the Company’s common stock for 115,000 shares of Series B Preferred Stock.
On January 9, 2025, 115,000,000 shares of common stock held by HNO Green Fuels, Inc. were cancelled, and 115,000 shares
of Series B Preferred Stock were issued to HNO Green Fuels, Inc.

 18 

 NOTE 9 – RELATED PARTY TRANSACTIONS 

 Notes Payable, Related Party 

 On December 1, 2021, the Company issued a note
payable in the amount of $ 500,000 to HNO Green Fuels, Inc. (HNO Green Fuels) of which the CEO of the Company is also the Chief
Executive Officer of HNO Green Fuels. This note bears an interest rate of 2 % per annum and had an original maturity date of January
1, 2023. During the year ended October 31, 2023, $ 65,000 of principal was repaid. On January 17, 2024, the Company entered into an
extension to the promissory note, extending the maturity date to December 31, 2024, and waiving all prior defaults. On December 19,
2024, the Company executed another extension, further extending the maturity date to December 31,
2025 , and waiving all prior defaults. At July 31, 2025, there is $ 435,000 of principal and $ 6,507 of accrued interest due on this
note. 

 On May 31, 2022, the Company issued a
note payable in the amount of $ 590,000 to HNO Green Fuels. This note bears an interest rate of 2 % per annum and has a maturity date of
May 31, 2030. At July 31, 2025, there is $ 590,000 of principal and $ 37,404 of accrued interest due on this note.

 On
September 29, 2022, the Company issued a note payable in the amount of $ 50,000 to HNO Green Fuels. This note bears an interest rate of
 2 % per annum and had an original maturity date of October 31, 2023 . On January 17, 2024, the Company entered into an extension to the
promissory note, extending the maturity date to December 31, 2024, and waiving all prior defaults. On December 19, 2024, the Company executed
another extension, further extending the maturity date to December 31, 2025, and waiving all prior defaults. At July 31, 2025, there is
$ 50,000 of principal and $ 748 of accrued interest due on this note.

 On October 20, 2022, the Company issued
a note payable in the amount of $ 50,000 to HNO Green Fuels. This note bears an interest rate of 2 % per annum and had an original maturity
date of November 20, 2023 . On January 17, 2024, the Company entered into an extension to the promissory note, extending the maturity date
to December 31, 2024, and waiving all prior defaults. On December 19, 2024, the Company executed another extension, further extending
the maturity date to December 31, 2025, and waiving all prior defaults. At July 31, 2025, there is $ 50,000 of principal and $ 748 of accrued
interest due on this note.

 On March 1, 2023, the Company issued a
note payable in the amount of $ 50,000 to HNO Green Fuels. This note bears an interest rate of 2 % per annum and had an original maturity
date of March 1, 2024 . On March 1, 2024, the Company entered into an extension to the promissory note, extending the maturity date to
December 31, 2024, and waiving all prior defaults. On December 19, 2024, the Company executed another extension, further extending the
maturity date to December 31, 2025, and waiving all prior defaults. At July 31, 2025, there is $ 50,000 of principal and $ 748 of accrued
interest due on this note. 

 On March 8, 2023, the Company issued a
note payable in the amount of $ 50,000 to HNO Green Fuels. This note bears an interest rate of 2 % per annum and had an original maturity
date of March 8, 2024 . On March 1, 2024, the Company entered into an extension to the promissory note, extending the maturity date to
December 31, 2024, and waiving all prior defaults. On December 19, 2024, the Company executed another extension, further extending the
maturity date to December 31, 2025, and waiving all prior defaults. At July 31, 2025, there is $ 50,000 of principal and $ 748 of accrued
interest due on this note.

 On March 23, 2023, the Company issued
a note payable in the amount of $ 50,000 to HNO Green Fuels. This note bears an interest rate of 2 % per annum and had an original maturity
date of March 23, 2024 . On March 1, 2024, the Company entered into an extension to the promissory note, extending the maturity date
to December 31, 2024, and waiving all prior defaults. On December 19, 2024, the Company executed another extension, further extending
the maturity date to December 31, 2025, and waiving all prior defaults. At July 31, 2025, there is $ 50,000 of principal and $ 748 of accrued
interest due on this note.

 On April 3, 2023, the Company issued a
note payable in the amount of $ 50,000 to HNO Green Fuels. This note bears an interest rate of 2 % per annum and had an original maturity
date of April 3, 2024 . On March 1, 2024, the Company entered into an extension to the promissory note, extending the maturity date to
December 31, 2024, and waiving all prior defaults. On December 19, 2024, the Company executed another extension, further extending the
maturity date to December 31, 2025, and waiving all prior defaults. At July 31, 2025, there is $ 50,000 of principal and $ 748 of accrued
interest due on this note.

 On April 13, 2023, the Company issued
a note payable in the amount of $ 20,000 to HNO Green Fuels. This note bears an interest rate of 2 % per annum and had an original maturity
date of April 13, 2024 . On March 1, 2024, the Company entered into an extension to the promissory note, extending the maturity date to
December 31, 2024, and waiving all prior defaults. On December 19, 2024, the Company executed another extension, further extending the
maturity date to December 31, 2025, and waiving all prior defaults. At July 31, 2025, there is $ 20,000 of principal and $ 299 of accrued
interest due on this note.

 On April 17, 2023, the Company issued
a note payable in the amount of $ 30,000 to HNO Green Fuels. This note bears an interest rate of 2 % per annum and had an original maturity
date of April 17, 2024 . On March 1, 2024, the Company entered into an extension to the promissory note, extending the maturity date to
December 31, 2024, and waiving all prior defaults. On December 19, 2024, the Company executed another extension, further extending the
maturity date to December 31, 2025, and waiving all prior defaults. At July 31, 2025, there is $ 30,000 of principal and $ 588 of accrued
interest due on this note.

 19 

 As of July 31, 2025 and October 31, 2024,
these current and long-term notes payable had an aggregate outstanding balance of $ 1,375,000 .

 As of July 31, 2025 and October 31, 2024,
the Company has recorded $ 49,286 and $ 28,718 , respectively in accrued interest in connection with these notes in the accompanying condensed
unaudited financial statements.

 Advances from Related Party 

 During the year ended October 31, 2024,
the Company’s CEO, advanced $ 950,585 to the Company to cover operating expenses.

 During the year ended October 31, 2024,
HNO Green Fuels advanced $ 10,000 to the Company to cover operating expenses.

 During the nine months ended July 31,
2025, the Company repaid $ 52,000 to Donald Owens as partial repayment of previously advanced funds.

 During
the nine months ended July 31, 2025, HNO Green Fuels, advanced $ 183,000 to the Company to cover operating expenses. 

 These advances are non-interest bearing and due on
demand.

 As of July 31, 2025 and October 31, 2024,
related party advances had an outstanding balance of $ 1,091,585 and $ 960,585 , respectively.

 NOTE
10 – CONVERTIBLE PROMISSORY NOTE 

 On
April 7, 2025, the Company entered into a Legal Services Agreement with Newlan Law Firm, PLLC, pursuant to which the Company issued a
$ 45,000 principal amount convertible promissory note in payment of legal services. This convertible promissory note is convertible any
time beginning 180 days from its issue date, bears interest at 8 % per annum and is due in April 2026. The conversion price under this
convertible promissory note is equal to 75% of the closing price of the Company’s common stock on the trading day immediately preceding
the date of conversion. The convertible note is classified as a liability and measured at fair value in accordance with ASC 480, with
changes in fair value recognized in the condensed statements of operations.

 On
the issuance date, April 7, 2025, the Company determined the fair value of the note to be $ 59,985 and recorded the full amount as a liability.
The excess of $ 14,985 over the $ 45,000 principal amount was recognized as a loss on fair value of convertible note in the condensed statements
of operations for the quarter ended April 30, 2025.

 As of July
31, 2025, the fair value of the note was remeasured using the closing share price on that date. The resulting increase in fair value of
$ 15 was recognized as a loss on fair value of convertible note in the condensed statements of operations for the three months ended July
31, 2025.

 As of July 31, 2025, the
Company would have accrued $ 1,134 in interest based on the 8 % per annum rate applied to the $ 45,000 principal balance. This amount was
not required to be recorded separately due to the fair value measurement of the convertible promissory note.

 Following is the maturity schedule for
the Company’s convertible notes payable as of July 31, 2025:

 Schedule of maturity convertible notes payable 
 
 Fiscal year ended October 31, 
 
 Amount Due 

 2025 
 $ 
 — 

 2026 
 $ 
 45,000 

 20 

 NOTE 11 – TERMINATION OF PATENT AGREEMENT 

 Patent Purchase Agreement 

 On January 24,
2023, the Company entered into a Patent Purchase Agreement with the Company’s CEO, to acquire several patents related to hydrogen
supplemental systems for on-demand hydrogen generation for internal combustion engines and a method and apparatus for increasing combustion
efficiency and reducing particulate matter emissions in jet engines. In exchange for these patents, the Company issued 5,000,000 shares
of its Series A Preferred Stock to Mr. Owens, valued at $ 82,500 .

 Termination of Patent Purchase Agreement 

 On March 13, 2025, the Company
and Donald Owens mutually agreed to terminate the Patent Purchase Agreement as of January 24, 2023. As part of the termination, the patents
were returned to Mr. Owens, and the 5,000,000 shares of Series A Preferred Stock were canceled. See Note 2 – Correction of Previously
Issued Financial Statements. A copy of the Termination Agreement was attached to the Company’s Annual Report on Form 10-K as Exhibit
10.27.

 NOTE 12 – SUBSEQUENT EVENTS 

 Subsequent events have been
evaluated through September 12, 2025, which represents the date the financial statements were issued, and no events, other than discussed
below have occurred through that date that would impact the financial statements.

 Common
Stock Issued 

 The Company entered into a Stock Subscription Agreement
with an accredited investors (under Rule 506(b) of Regulation D under the Securities Act of 1933, as amended), whereby the Company privately
sold a total of 1,625,000 shares of its common stock, $ 0.001 par value per share (“common stock”), for a cash purchase price
of $ 50,000 . The Company issued 1,000,000 shares on August 13, 2025 and 625,000 on September 5, 2025 as "restricted securities"
under Rule 144 of the Securities Act. The Company intends to use the proceeds for general working capital purposes.

 21 

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

 Overview 

 HNO International, Inc. focuses on systems engineering
design, integration, and product development to generate green hydrogen-based clean energy solutions to help businesses and communities
decarbonize in the near term.

 HNO stands for Hydrogen and Oxygen and our experienced
management team has over 14 years of expertise in the green hydrogen production industry.

 HNO International provides green hydrogen systems
engineering design, integration, and products to multiple markets, which include:

 (i) the zero-emission vehicle and mobile equipment
market consisting of hydrogen fuel cell electric passenger vehicles, material handling equipment such as forklifts and airport ground
support equipment, as well as the medium and heavy-duty truck market;

 (ii) the current and emerging hydrogen gas markets
encompassing ammonia, fertilizer, steel, mining, electronics, semiconductors, and fuel cell electric vehicles;

 (iii) and the gasoline and diesel engine emissions
and maintenance reduction product and services market;

 (iv) decentralized clean power generation through
the newly launched EcoFlare Power division, which captures and converts flared natural gas into electricity and hydrogen for data centers,
Bitcoin mining, and industrial use; and

(v) distributed hydrogen infrastructure through the newly introduced HyGrid™ intelligent microgrid system, a solar-hydrogen hybrid
platform enabling off-grid hydrogen production, storage, and refueling.

 Results of Operations 

 For the three months ended July 31, 2025 and
2024 

 Revenue 

 For the three months ended July 31, 2025 and
2024, the Company recognized revenue of $0 and $4,241, respectively. Revenue in the prior year was generated from hydrogen engineering
services and combustion solutions.

 Cost of Goods Sold 

 For the three months ended July 31, 2025
and 2024, total cost of sales was $0 and $3,688, respectively. The cost of goods sold in prior year consisted of expenses related to contract
labor associated with revenue generation. 

 Gross Profit 

 For the three months ended July 31, 2025 and 2024, gross profit
was $0 and $553, respectively. The decrease from the prior year reflects the absence of revenue-generating activities in the current quarter.

 Operating Expenses 

 General and administrative expenses were $421,940
for the three months ended July 31, 2025, compared to $430,693 during the same period in 2024, a decrease of $8,751. The current period
included $241,380 of stock-based compensation expense. No stock-based compensation was recorded during the same period in 2024. Excluding
stock-based compensation, general and administrative expenses decreased by $250,133, primarily due to reduced professional fees, lower
consultant costs, and a general reduction in administrative overhead.

 22 

 Depreciation and amortization expense increased by $17,815, totaling
$66,742 for the three months ended July 31, 2025, compared to $48,927 for the three months ended July 31, 2024, due to depreciation associated
with additional property and equipment acquired during recent prior periods.

 Advertising
and marketing expenses were $2,610 for the three months ended July 31, 2025, compared to $9,593 for the same period in 2024. The decrease
was due to reduced outreach activities compared to the prior year, which had higher spending to support the Company’s hydrogen engineering
and combustion solutions.

 Other Income (Expenses) 

 Other expenses decreased from $6,924 for the three
months ended July 31, 2024 to $6,718 for the period ended July 31, 2025.

 Net Loss 

 Net loss for the three months ended July 31, 2025,
was $498,010 compared to a net loss of $495,584 during the same period in 2024.

 For the nine months ended July 31, 2025 and
2024 

 Revenue 

 For the nine months ended July 31, 2025 and
2024, the Company recognized revenue of $43,708 and $4,241, respectively. Revenue in the current period was generated from the facilitation
of delivery of hydrogen equipment and related integration support. The Company concluded that it acted as an agent with respect to the
equipment component of the arrangement, as it did not take control of the goods and the third-party supplier shipped directly to the customer.
As a result, revenue was recognized on a net basis, limited to the Company’s retained margin. Revenue in the prior year was generated
from hydrogen engineering services and combustion solutions.

 Cost of Goods Sold 

 Cost of Goods Sold consists of direct
expenses related to hydrogen engineering services and combustion solution projects, including materials, subcontracted labor, and other
project-specific implementation costs. For the nine months ended July 31, 2025 and 2024, total cost of sales was $0 and $3,688, respectively.
The Company acted as an agent in facilitating delivery of certain hydrogen refueling equipment during the 2025 period and did not generate
separate cost of sales. The prior year’s cost of goods sold related to contract labor expenses associated with revenue-generating
activities.

 Gross Profit 

 For the nine months ended July 31, 2025 and
2024, gross profit was $43,708 and $553, respectively. The increase reflects revenue generated from the facilitation of delivery of hydrogen
equipment and integration support services. As the Company was acting as an agent with respect to the equipment delivered by a third-party
vendor, no cost of goods sold was recognized, and gross profit equaled the margin retained.

 Operating Expenses 

 General and administrative expenses were $6,130,926
for the nine months ended July 31, 2025, compared to $1,421,333 during the same period in 2024, a decrease of $4,709,593. The current
period included $5,333,937 of stock-based compensation expense. No stock-based compensation was recorded during the same period in 2024.
Excluding stock-based compensation, general and administrative expenses decreased by $358,842, primarily due to reduced professional fees,
lower consultant costs, and a general reduction in administrative overhead.

 Depreciation and amortization expense increased by
$50,736 to $178,730 for the nine months ended July 31, 2025, compared to $127,994 for the same period in 2024, reflecting depreciation
on additions to property and equipment.

 Advertising and marketing expenses were $22,770 for
the nine months ended July 31, 2025, compared to $9,593 for the same period in 2024. The increase reflects the Company’s expanded
outreach and promotional activities supporting its hydrogen engineering and combustion solutions offerings.

 23 

 Other Income (Expenses) 

 Other expenses increased from $15,145 for the nine
months ended July 31, 2024 to $140,751 for the period ended July 31, 2025, the increase primarily related to $15,000 loss on fair value
of convertible note related to the issuance of a convertible note in exchange for legal services and $105,190 loss on the write-off of
intangible asset as a result of an out-of-period adjustment due to the incorrect capitalization of costs associated with developed intellectual
property.

 Net Loss 

 Net loss for the nine months ended July 31, 2025,
was $6,429,469 compared to a net loss of $1,573,512 during the same period in 2024.

 Forward-Looking Considerations 

 The Company recognizes the possibility of future increases
in labor or material costs. Factors such as evolving market conditions, potential inflation, and global economic dynamics are considered.
We are actively monitoring these aspects to anticipate and navigate any forthcoming rises in labor or material expenses.

 Cost-to-Revenue - The Company is assessing
alterations in the relationship between cost of sales and revenue. We are examining the factors influencing these changes, including shifts
in prices and fluctuations in the volume of services sold. Understanding the impact of these elements is crucial for maintaining a balanced
and effective cost-to-revenue structure.

 Liquidity and Capital Resources 

 We incurred
a net loss for the three months ended July 31, 2025 of $498,010 and had an accumulated deficit of $51,864,163 at July 31, 2025. At July
31, 2025, we had a cash balance of $31,984, compared to a cash balance of $20,255 at October 31, 2024. At July 31, 2025, the working capital
deficit was $2,424,655, compared to a working capital deficit of $1,969,965 at October 31, 2024. Our existing and available capital resources
are not expected to be sufficient to satisfy our funding requirements through one year from the date of this filing in the absence of
share issuances or other sources of financing. 

 We have not
been able to generate sufficient cash from operating activities to fund our ongoing operations. We have raised capital through sales of
common stock and debt securities. 

 The effect of
existing or probable government regulations on our business is not known at this time. Due to the nature of our business, it is anticipated
that there may be increasing government regulation that may cause us to have to take serious corrective actions or make changes to the
business plan. 

 There are no external sources of liquidity available
to the Company at this time. The Company will need to raise additional capital through equity financings or other means in order to continue
operations and meet its obligations. Failure to obtain additional funding could have a material adverse effect on our financial condition
and the results of operations.

 Cash Flow 

 For the Nine months Ended July 31, 2025 and 2024 

 The following table summarizes our cash flows for
the periods indicated below:

 For the Nine months Ended July 31, 
 2025 
 
 For the Nine months Ended July 31, 
 2024 
 
 Cash Used in Operating Activities 
 $ (877,827 ) 
 $ (1,382,728 ) 

 Cash Provided by Financing Activities 
 1,067,500 
 1,592,612 

 Net cash used in investing activities 
 $ (177,944 ) 
 $ (366,126 ) 

 24 

 Cash Used in Operating Activities 

 During the nine
months ended July 31, 2025, cash used in operating activities amounted to $(877,827), primarily reflecting our net loss of $(6,429,469).
This impact was largely offset by non-cash items, primarily $5,333,937 in stock-based compensation, along with depreciation and amortization
of $178,730, a $105,190 loss on write-off of an intangible asset, and $60,000 related to a convertible note issued for legal services,
including $45,000 recognized as legal expense and a $15,000 fair value adjustment. Changes in working capital included a decrease in accounts
payable of $(129,137) and a decrease in accrued payroll of $(17,762), partially offset by a $20,569 increase in accrued interest payable. 

 During the nine months ended July 31, 2024, cash used
in operating activities totaled $(1,382,728), primarily reflecting our net loss of $(1,573,512). This was offset by non-cash charges such
as depreciation and amortization amounting to $127,994. Additionally, there was a decrease in due from related party of $56,392 and an
increase in accrued interest payable of $20,643 and a decrease in payroll taxes of $14,802, contributing to the overall cash movements
during the period.

 Cash provided by Financing Activities 

 During the nine months ended July 31, 2025, cash provided
by financing activities was $1,067,500, which consisted of net proceeds from related party advances of $131,000 and proceeds from the
sale of common stock of $936,500.

 During the nine months ended July 31, 2024, cash provided
by financing activities was $1,592,612, which consisted of proceeds from related party advances of $800,585, $706,429 from the sale of
common stock, $14,501 in proceeds from common stock subscription payable, and a $100,000 refund of a security deposit.

 Cash Used in Investing Activities 

 During the nine months ended July 31, 2025, cash used
in investing activities was $(177,944), which consisted of the purchase of property.

 During the nine months ended July 31, 2024, cash used
in investing activities was $(366,126), which consisted of the purchase of property and equipment and purchase long-term assets. 

 Going Concern 

 The Company’s financial statements have been
prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. During the nine months ended July 31, 2025, the Company incurred a net loss of $6,429,469 and used cash
in operating activities of $877,827, and on July 31, 2025, had stockholders’ deficit of $1,556,423. These factors, among others,
raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset amounts or amounts and the classification of liabilities
that might result from this uncertainty.

 Management is actively seeking additional sources
of capital through the sale of equity, advances from related parties, and exploring strategic partnerships. The Company is also focused
on attracting suitable investors to support its business plan without relying heavily on existing cash reserves. Additionally, management
is implementing cost-saving measures and exploring opportunities to diversify through acquisitions or entering into new markets. However,
there can be no assurance that these efforts will result in sufficient funding, and the Company may continue to face substantial uncertainty
regarding its ability to achieve profitable operations and sustain its business.

 Off-Balance Sheet Arrangements 

 There are no off-balance sheet arrangements with any
party.

 25 

 Critical Accounting Policies 

 Our discussion and analysis of results of
operations and financial condition are based upon our condensed financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The preparation of these condensed financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related to
provisions for uncollectible accounts receivable, inventories, valuation of intangible assets and contingencies and litigation. We
base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions.

 Stock Based-Compensation 

 The Company accounts for stock-based compensation
in accordance with Accounting Standards Codification (“ASC”) 718 Compensation - Stock Compensation (“ASC 718”).
ASC 718 requires that the cost of equity instrument awards, issued in exchange for services, including those issued to employees and predominantly
to consultants, be measured at the grant-date fair value. The Company does not adhere to a formal stock-based compensation plan; rather,
it issues stock awards on a discretionary basis as part of compensation agreements with selected employees and consultants. Compensation
for stock-based awards is recognized as a non-cash expense on the statement of operations. The fair value of restricted stock grants is
determined using the closing market price on the grant date, adjusted for an appropriate discount to reflect the restrictions on transferability
and marketability of the shares. The discount is calculated using a weighted average of comparable restricted stock transactions, which
better reflects the economic impact of larger issuances and provides a more accurate representation of fair value under ASC 718. The expense
associated with these awards is recorded based on the fair value on the date of grant, as determined using a pricing model commensurate
with the terms of the award. This cost is recognized over the period during which the award recipient is required to perform services,
typically known as the vesting period. The total compensation cost related to vested stock-based awards is recognized after adjusting
for estimated forfeitures at the time of vesting. The expense related to stock-based compensation is included within the same income statement
lines as cash compensation for the consultants and employees who receive the awards, currently included in general and administrative
expenses on the statement of operations as the Company does not allocate compensation costs to Costs of Goods Sold. As of the report date,
the Company has not established any plans to issue dividends on stock-based awards. Any tax benefits arising from deductions for these
awards are recorded in additional paid-in capital, provided they exceed the cumulative compensation cost recognized.

 As of the report date, the Company has not established
any plans to issue dividends on stock-based awards.

 Employee Benefits 

 During the quarter ended July 31, 2025,
the Company paid $743 in employer retirement contributions, representing 3% of semi-monthly payroll for one employee over three pay
periods. These contributions are made in accordance with the terms of the Company’s state-mandated retirement plan for eligible
employees and are recorded as employee benefits expense in the period incurred.

 Fair Value Measurement of Convertible Instruments 

 The Company evaluates convertible financial instruments
in accordance with ASC 480 to determine whether an instrument should be equity classified, or liability classified. The Company issued
a $45,000 convertible note in connection with a legal service agreement during the period that allows for a fixed dollar amount to be
settled in a variable number of shares which requires liability classification and was measured at fair value on initial recognition.

 On the issuance date, the Company determined the fair
value of the note to be $59,985 and recorded the full amount as a liability. The excess of $14,985 over the $45,000 principal amount was
recognized as a loss on fair value of the convertible note in the condensed statements of operations.

 Fair value is determined in accordance with ASC 820
using available market inputs. Instruments classified as liabilities and measured at fair value are evaluated on a recurring basis, with
changes in fair value recognized in the statements of operations. For the three months ended July 31, 2025, the Company recorded an additional
$15 loss in connection with the change in fair value of the convertible note.

 Revenue Recognition 

 We recognize revenue in accordance with ASC
606, Revenue from Contracts with Customers (“ASC 606”). The standard’s stated core principle is that
an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle,
ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying the
performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance
obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.

 26 

 In certain arrangements where the Company facilitates
the provision of goods or services provided by a third party, and does not take control of those goods or services, revenue is recognized
on a net basis, limited to the margin or fee earned, consistent with the Company’s role as an agent under ASC 606-10-55-36 through
55-40.

 Proposed Transactions 

 The Company is not anticipating any transactions.

 Changes in Accounting Policies Including Initial
Adoption 

 There were no recent accounting pronouncements that
have or will have a material effect on the Company’s financial position or results of operations.

 Financial Instruments 

 The main risks associated with the Company’s
financial instruments include credit risk, market risk, and liquidity risk. The Company does not have significant exposure to foreign
exchange risk, as all of it operations and transactions are denominated in U.S dollars.

 Outstanding Share Data 

 As of July 31, 2025, the following securities were
outstanding:

 Common Stock: 95,920,491 shares

 Series A Preferred Stock: 5,000,000 shares

 Series B Preferred Stock: 360,000 shares 

 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 

 As a Smaller Reporting Company, as defined by Rule
12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore
are not required to provide the information requested by this Item.

 ITEM 4. CONTROLS AND PROCEDURES 

 EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 As required by Rule 13a-15 of the Securities Exchange
Act of 1934, our principal executive officer and principal financial officer evaluated our company's disclosure controls and procedures
(as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this
evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this
report, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company
in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and
communicated to our company's management, including our principal executive officer and principal financial officer, to allow timely decisions
regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of
the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small
staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting
and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles
and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective
until the material weaknesses are remediated.

 27 

 We plan to take steps to enhance and improve the
design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have
not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the
following changes during our fiscal year ending October 31, 2025, subject to obtaining additional financing: (i) appoint additional
qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written
policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our
securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such
funds, remediation efforts may be adversely affected in a material manner.

 Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected.
These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because
of simple error or mistake.

 CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

 There were no changes in our internal control over financial reporting
during the quarter ended July 31, 2025 that have materially affected or are reasonably likely to materially affect, our internal control
over financial reporting.

 PART II - OTHER INFORMATION 

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

 The following table includes all unregistered sales
of securities made by the Company during the quarter ended July 31, 2025: 

 Date 
 Name 
 Consideration 
 Securities 
 Exemption from Registration 

 5/13/2025 
 Johnny Smith 
 Cash 
 400,000 
 Rule 506 (b) of Regulation D 

 5/13/2025 
 Samuel Austin Cutler 
 Cash 
 100,000 
 Rule 506 (b) of Regulation D 

 5/23/2025 
 Ubong E. Ituen 
 Cash 
 1,000,000 
 Rule 506 (b) of Regulation D 

 5/30/2025 
 Theodore O. Spaulding III 
 Cash 
 400,000 
 Rule 506 (b) of Regulation D 

 6/2/2025 
 Samuel Austin Cutler 
 Cash 
 300,000 
 Rule 506 (b) of Regulation D 

 6/5/2025 
 Eno Ituen 
 Cash 
 1,000,000 
 Rule 506 (b) of Regulation D 

 6/18/2025 
 Vindicated Phoenix Corp. 
 Cash 
 400,000 
 Rule 506 (b) of Regulation D 

 6/18/2025 
 Samuel Austin Cutler 
 Cash 
 100,000 
 Rule 506 (b) of Regulation D 

 6/18/2025 
 Jyi Chao Li 
 Cash 
 340,000 
 Rule 506 (b) of Regulation D 

 6/18/2025 
 Deborah D. Phillips 
 Cash 
 1,200,000 
 Rule 506 (b) of Regulation D 

 7/7/2025 
 Eno Ituen 
 Cash 
 1,000,000 
 Rule 506 (b) of Regulation D 

 7/3/2025 
 Ubong E. Ituen 
 Cash 
 1,000,000 
 Rule 506 (b) of Regulation D 

 6/30/2025 
 Vindicated Phoenix Corporation 
 Cash 
 1,000,000 
 Rule 506 (b) of Regulation D 

 7/23/2025 
 Vindicated Phoenix Corporation 
 Cash 
 100,000 
 Rule 506 (b) of Regulation D 

 7/30/2025 
 Stephen Z Morrell 
 Cash 
 4,800,000 
 Rule 506 (b) of Regulation D 

 7/10/2025 
 Samuel Austin Cutler 
 Cash 
 50,000 
 Rule 506 (b) of Regulation D 

 No commissions were paid in connection with
the sales of securities above. Proceeds from the sale of common stock were applied toward operating capital to support the Company's operations.

 ITEM 5. OTHER INFORMATION 

 Securities Trading Plans of Directors
and Executive Officers 

 None of our directors or executive
officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement”
(as such terms are defined in Item 408(c) of Regulation S-K) during the three months ended July 31, 2025.

 28 

 ITEM
6. EXHIBITS 

 Incorporated by reference 

 Exhibit 
 Exhibit Description 
 Filed herewith 
 Form 
 Period ending 
 Exhibit 
 Filing date 

 31.1 
 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 
 X 
 
 31.2 
 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 
 X 
 
 32.1* 
 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 
 X 
 
 32.2* 
 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 
 X 
 
 101.INS 
 Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document XBRL Instance Document 
 X 
 
 101.SCH 
 Inline XBRL Taxonomy Extension Schema Document 
 X 
 
 101.CAL 
 Inline XBRL Taxonomy Extension Calculation Linkbase Document 
 X 
 
 101.LAB 
 Inline XBRL Taxonomy Extension Label Linkbase Document 
 X 
 
 101.PRE 
 Inline XBRL Taxonomy Extension Presentation Linkbase Document 
 X 
 
 101.DEF 
 Inline XBRL Taxonomy Extension Definition Linkbase Definition 
 X 
 
 104 
 Cover page formatted as Inline XBRL and contained in Exhibit 101 
 
 * Furnished, not filed.

 29 

 SIGNATURES 

 In accordance with the requirements of the Exchange
Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 HNO INTERNATIONAL INC. 

 September 19, 2025 
 
 By: /s/ Donald Owens 

 Donald Owens, Chief Executive Officer

 (Principal Executive Officer)
 
 By: /s/ Hossein Haririnia 

 Hossein Haririnia, Treasurer

 (Principal Financial and Accounting Officer)
 
 30
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
HNO International, Inc. 10-Q
