SunHydrogen September-quarter loss widens to $2.46M
SunHydrogen, Inc. reported $0 revenue for the quarter ended September 30, 2026, versus $1,250 a year earlier, and a net loss of $2,463,097 versus $1,559,778.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
SunHydrogen, Inc. reported $0 revenue for the quarter ended September 30, 2026, versus $1,250 a year earlier, and a net loss of $2,463,097 versus $1,559,778. Operating expenses were $2,415,825, compared with $1,924,395, as research and development and general and administrative costs increased. A $354,496 unrealized loss on short-term investments also contributed to the loss; operating cash use was $1,224,093.
As of September 30, 2026, cash and cash equivalents were $9,772,650, short-term investments were $20,706,990, and working capital surplus was $29,719,618. Management believes existing cash, cash equivalents, and short-term investments will fund planned operations for at least 12 months. A segregation-of-duties material weakness remained unremediated, and disclosure controls were ineffective. SunHydrogen extended its Honda R&D Co., Ltd. agreement through March 31, 2028; its Sparc Hydrogen Pty Ltd agreement includes testing and an 18-month option to negotiate a supply agreement or manufacturing license. On October 23, 2026, it bought 203,650,000 NewHydrogen, Inc. shares and warrants to purchase up to 407,300,000 shares for $2,999,764.50.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Major pointSegregation-of-duties weakness remained unremediated at September 30, 2026.
- Moderate pointNet loss was $2,463,097, versus $1,559,778 in the year-earlier quarter.
- Minor pointRevenue was $0, compared with $1,250 in the year-earlier quarter.
Filing Explained
At September 30, potential option and preferred conversion shares mean possible dilution, but no common shares were issued during the quarter.
The report states that no common shares were issued during the quarter ended
At September 30, SunHydrogen had 477,894,499 options outstanding and 291,052,632 common shares issuable upon conversion of 2,765 Series C preferred shares.
The Series C preferred shares also carry cumulative annual dividends at
Key Figures
Key Terms
photoelectrochemical technical
antidilutive financial
mezzanine equity financial
right-of-use asset financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were HYSR's revenue and net loss for the quarter ended September 30, 2026?
What did HYSR buy from NewHydrogen in October 2026?
What are the terms of HYSR's NewHydrogen warrants?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) (Zip Code) |
(Registrant’s telephone number, including area code)
(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 | Ticker symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | 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 Exchange Act). Yes ☐ No
The number of shares of registrant’s common stock outstanding, as of November 9, 2026 was
SUNHYDROGEN, INC.
INDEX
| Page | ||
| PART I: FINANCIAL INFORMATION | 1 | |
| Item 1: | Financial Statements (Unaudited) | 1 |
| Condensed Consolidated Balance Sheets | 1 | |
| Condensed Consolidated Statements of Operations | 2 | |
| Condensed Consolidated Statements of Shareholders’ Equity/(Deficit) | 3 | |
| Condensed Consolidated Statements of Cash Flows | 4 | |
| Notes to the Condensed Consolidated Financial Statements | 5 | |
| Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 |
| Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 17 |
| Item 4: | Controls and Procedures | 18 |
| PART II: OTHER INFORMATION | 19 | |
| Item 1 | Legal Proceedings | 19 |
| Item 1A: | Risk Factors | 19 |
| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 19 |
| Item 3: | Defaults Upon Senior Securities | 19 |
| Item 4: | Mine Safety Disclosures | 19 |
| Item 5: | Other Information | 19 |
| Item 6: | Exhibits | 19 |
| Signatures | 20 | |
i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
SUNHYDROGEN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, | June 30, | |||||||
| 2026 | 2026 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Interest receivable | ||||||||
| Promissory note receivable, net of discount | ||||||||
| Short-term investments | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| OTHER ASSETS | ||||||||
| Fixed assets, net of depreciation | ||||||||
| Deposit | ||||||||
| Intangible assts, net of amortization | ||||||||
| Operating lease right-of-use asset | ||||||||
| TOTAL OTHER ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, PREFERRED STOCK SUBJECT TO REDEMPTION AND SHAREHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and other payables | $ | $ | ||||||
| Accrued expenses | ||||||||
| Accrued consultant settlement | - | |||||||
| Operating lease liability, current | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| LONG TERM LIABILITIES | ||||||||
| Operating lease liability, long term | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMIMENTS AND CONTINGENCIES | - | - | ||||||
| Series C | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Preferred Stock, $ | - | - | ||||||
| Common Stock, $ | ||||||||
| Additional Paid in Capital | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES, PREFERRED STOCK SUBJECT TO REDEEMPTION AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
SUNHYDROGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended September 30, |
||||||||
| 2026 | 2025 | |||||||
| REVENUE | $ | - | $ | |||||
| OPERATING EXPENSES | ||||||||
| Selling and Marketing | ||||||||
| General and administrative expenses | ||||||||
| Research and development cost | ||||||||
| Depreciation and amortization | ||||||||
| TOTAL OPERATING EXPENSES | ||||||||
| LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSES) | ( | ) | ( | ) | ||||
| OTHER INCOME/(EXPENSES) | ||||||||
| Investment income | ||||||||
| Dividend expense | ( | ) | ( | ) | ||||
| Unrealized gain/(loss) on change in fair value of investment, related party | - | - | ||||||
| Unrealized gain/(loss) on change in fair value of short-term investments | ( | ) | ||||||
| Realized gain/(loss) | ( | ) | ||||||
| Other interest income | - | |||||||
| Interest expense | - | - | ||||||
| TOTAL OTHER INCOME (EXPENSES) | ( | ) | ||||||
| NET INCOME (LOSS) BEFORE INCOME TAXES | ( | ) | ( | ) | ||||
| Provision for income taxes | ( | ) | - | |||||
| Net income available to common stockholders | $ | ( | ) | $ | ( | ) | ||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
| Foreign currency translation adjustments | - | |||||||
| COMPREHENSIVE INCOME (LOSS) | $ | ( | ) | $ | ( | ) | ||
| BASIC & DILUTED EARNINGS (LOSS) PER SHARE | $ | ( | ) | $ | ( | ) | ||
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||||||
| BASIC & DILUTED | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
SUNHYDROGEN, INC.
CONENSED CONSOLIDATED STATEMENTS OF SHAREHOLDER’S DEFICIT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025
(Unaudited)
| Accumulated | ||||||||||||||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||||||||||||||
| Preferred stock | Common stock | Paid-in | Comprehensive | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Mezzanine | Shares | Amount | Capital | Income | Deficit | Total | ||||||||||||||||||||||||||||
| Balance at June 30, 2025 | - | $ | - | $ | $ | $ | $ | - | $ | ( | ) | $ | ||||||||||||||||||||||||
| Purchase and cancellation of Series C preferred shares | - | - | ( | ) | - | - | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||
| Stock compensation expense | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net Loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance at September 30, 2025 | - | $ | - | $ | $ | $ | $ | - | $ | ( | ) | $ | ||||||||||||||||||||||||
| Balance at June 30, 2026 | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Stock compensation expense | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net Loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance at September 30, 2026 | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
SUNHYDROGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended September 30, |
||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income (Loss) | ( | ) | ( | ) | ||||
| Adjustment to reconcile net income (loss) to net cash (used in) provided by operating activities | ||||||||
| Amortization of interest on promissory note receivable | - | - | ||||||
| Depreciation & amortization expense | ||||||||
| Stock based compensation expense for services | ||||||||
| Realized (gain)/loss | ( | ) | ||||||
| Unrealized (gain)/loss on change in fair value of investment, related party | - | - | ||||||
| Investment income earned on short-term investments | - | - | ||||||
| Unrealized (gain)/loss on change in fair value of short-term investments | ( | ) | ||||||
| Change in assets and liabilities: | ||||||||
| Accounts receivable, related party | - | ( | ) | |||||
| Interest receivable | ( | ) | ( | ) | ||||
| Prepaid expense | ||||||||
| Deposits | ( | ) | - | |||||
| Accounts payable | ||||||||
| Accrued expenses | ( | ) | ( | ) | ||||
| Accrued consultant settlement | - | |||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of short-term investments | ( | ) | ( | ) | ||||
| Redemption of short-term investments | ||||||||
| Purchase of fixed assts | - | - | ||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Purchase of Series C preferred shares | - | ( | ) | |||||
| Promissory note receivable | - | - | ||||||
| Repayment of related party note payable | - | - | ||||||
| Net proceeds from common stock purchase agreements | - | - | ||||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | - | ( | ) | |||||
| Effect of exchange rate translation on cash | - | |||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents - beginning of period | ||||||||
| Cash and cash equivalents - end of period | ||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Taxes paid | $ | - | $ | - | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
SUNHYDROGEN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2026
(Unaudited)
| 1. | ORGANIZATION AND LINE OF BUSINESS |
Organization
SunHydrogen, Inc. (the “Company”) was incorporated in the State of Nevada on
In April 2026, the Company formed two wholly owned subsidiaries, SunHydrogen Austria GmbH, organized under the laws of Austria, and SunHydrogen Japan GK, organized under the laws of Japan. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Line of Business
The Company is developing photoelectrochemical panels that produce renewable hydrogen from sunlight and water. Sunlight absorbed by the semiconductor generates photovoltage and charge carriers that drive photoelectrochemical oxidation and reduction reactions at catalyst surfaces, producing hydrogen and oxygen without an externally applied electrical bias to the active device. The Company is pursuing two pathways to this architecture: one using commercially available, mass-produced thin film solar modules re-engineered with the Company’s proprietary hydrogen module design, and one using the Company’s patented nanoparticle technology. The Company has not generated revenue from the sale of its products and has not produced hydrogen at commercial scale.
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ended June 30, 2027. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended June 30, 2026.
Foreign Currency Translation and Transaction
The Company’s functional currency is the United States dollar. SunHydrogen GmbH maintains its accounting records in its local currency, the Euro and SunHydrogen Japan GK maintains its accounting records in its local currency, the Yen.
Foreign exchange gains and losses on the settlement of foreign currency transactions are included in general and administration expenses. Except for translations of intercompany balances, all translations of monetary balances to the functional currency at the year-end exchange rate are included in the foreign exchange expense. The translations of intercompany balances to the functional currency at the year-end exchange rate are included in accumulated other comprehensive income or loss.
The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
5
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
The following table provides detail of our cash and cash equivalents.
| September 30, 2026 | June 30, 2026 | |||||||
| Cash | $ | $ | ||||||
| U.S. Treasury bills | ||||||||
| Total cash and cash equivalents | $ | $ | ||||||
The U.S. Treasury bills have a credit quality indicator of AA/A.
Short Term Investments
The Company’s short-term investments are carried at fair value with changes in fair value recognized in net income.
As of September 30, 2026, our short-term investments consisted of various investments held at a brokerage firm.
During the three months ended September 30, 2025, the Company recognized a loss on change in fair value of short-term investments of $
Concentration risk
Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Corporation (FDIC) limits. At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of the FDIC limits. As of September 30, 2026, the cash balance in excess of the FDIC limits was $
Use of Estimates
In accordance with accounting principles generally accepted in the United States, management utilizes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions relate to useful lives and impairment of tangible and intangible assets, accruals, income taxes, stock-based compensation expense, fair value of financial instruments, and other factors. Management believes it has exercised reasonable judgment in deriving these estimates. Consequently, a change in conditions could affect these estimates.
Property and Equipment
Property and equipment are stated at cost and are depreciated using straight line over its estimated useful lives.
| Computers and peripheral equipment | ||
| Vehicle |
The Company recognized depreciation expense of $
6
Intangible Assets
The Company has patent applications to protect the inventions and processes behind its proprietary bio-based back-sheet, a protective covering for the back of photovoltaic solar modules traditionally made from petroleum-based film.
| Useful Lives | September 30, 2026 | June 30, 2026 | ||||||||
| Trademark-gross | $ | $ | ||||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||||
| Trademark-net | $ | $ | ||||||||
| Patents-gross | $ | $ | ||||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||||
| Patents-net | $ | $ | ||||||||
The Company recognized amortization expense of $
Future Amortization Expense
| Year | Amount | |||
| 2026 (remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| $ | ||||
Impairment of Long-lived Assets
The Company applies the provisions of ASC 360, Property, Plant and Equipment, where applicable to all long-lived assets. ASC 360 addresses accounting and reporting for impairment and disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 360. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
When long-lived assets are sold or retired, the related cost and accumulated depreciation or amortization are removed from the accounts and any gain or loss is included in the results of operations. During the three months ended September 30, 2026 and 2025, the Company determined no impairment was required.
7
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes 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.
An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract with the customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4. Allocate the transaction price. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
The Company generates revenue primarily from consulting services for providing technical and strategic consultancy services in support of ongoing projects. The Company’s consulting services are invoiced monthly based on actual hours for the services at a standard rate per hour plus any reimbursements for travel expenses. Consulting services may be terminated by either party with 30 days written notice.
During the three months ended September 30, 2026 and 2025, we generated revenue from consulting services of $
Accounts Receivable
We record accounts receivable at the invoiced amount and we do not charge interest. We determine the allowance for doubtful accounts by regularly evaluating individual receivables, and receivables are written off when deemed uncollectible. There were no provisions for doubtful accounts recorded as of September 30, 2026 and June 30, 2026. The Company recorded $
Net Earnings (Loss) per Share Calculations
Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the three months ended September 30, 2026 and 2025. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of stock options and stock-based awards, if dilutive.
The total potential common shares as of September 30, 2026, include
The total potential common shares as of September 30, 2025, include
Stock Based Compensation
The Company accounts for stock option grants issued and vesting to employees and non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested, and the total stock-based compensation charge is recorded in the period of the measurement date.
8
Warrant Accounting
The Company accounts for warrants to purchase shares of common stock using the estimated fair value on the date of issuance as calculated using the Black-Scholes valuation model.
Fair Value of Financial Instruments
Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized on the balance sheet, where it is practicable to estimate that value. As of September 30, 2025, the amounts reported for cash, accounts payable and other payables, and accrued expenses approximate fair value because of their short maturities.
We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.
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 established 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. |
| ● | 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. |
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows:
September 30, 2026
| Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets: | ||||||||||||||||
| Short-term investments | $ | $ | $ | - | $ | - | ||||||||||
| $ | $ | $ | - | $ | - | |||||||||||
June 30, 2026
| Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets: | ||||||||||||||||
| Short-term investments | $ | $ | $ | - | $ | - | ||||||||||
| $ | $ | $ | - | $ | - | |||||||||||
9
Research and Development
Research and development costs are expensed as incurred. Total research and development costs were $
Advertising and Marketing
Advertising and marketing cost are expensed as incurred. Total advertising and marketing costs were $
Lease Obligation
We determine if an arrangement is a lease at inception. Operating leases are included in the operating lease right-of-use asset account, the operating lease liability, current account, and the operating lease liability, long-term account in our balance sheet. Right-of-use 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.
Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For leases in which the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have elected to not apply the recognition requirements of ASC Topic 842, Leases, to short-term leases (leases with terms of twelve months or less). Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term. We have elected the practical expedient and will not separate non-lease components from lease components and will instead account for each separate lease component and non-lease component associated with the lease components as a single lease component.
Segment Reporting
The Company operates as a single operating segment, focusing on the development of an efficient and cost-effective way to produce renewable hydrogen using sunlight and any source of water.
The accounting policies of the operating segment are the same as those described in the summary of significant accounting policies.
As the Company generated minimal revenues in the current fiscal year, the CODM assessed Company performance through the achievement of target identification goals. In addition to the Company’s Statement of Operations, the CODM regularly works to develop budgeted and forecasted expense information which is used to determine the Company’s liquidity needs and cash allocation.
Recently Issued Accounting Pronouncements
Management believes that no recently issued accounting standards, which are not yet effective, would have a material impact on the accompanying unaudited financial statements as of September 30, 2026, if adopted at this time.
Reclassification
Certain accounts from prior periods have been reclassified to conform to the current period presentation.
10
| 3. | PROMISSORY NOTE RECEIVABLE |
On January 28, 2026, the Company loaned $
Interest receivable on the promissory note receivable as of September 30, 2026 and June 30, 2026 was $
| 4. | PREFERRED STOCK |
Series C Preferred Stock
On December 15, 2021, the Company filed a certificate of designation of Series C Preferred Stock with the Secretary of State of Nevada, designating
The Series C Preferred Stock is presented as mezzanine equity because it is redeemable at a fixed or determinable amount upon an event that is outside of the Company’s control.
During the three months ended September 30, 2026, the Company did not issue, repurchase or cancel any shares of Series C Preferred Stock.
As of September 30, 2026 and June 30, 2026, the Company had
| 5. | COMMON STOCK |
Three Months Ended September 30, 2026
During the three months ended September 30, 2026 the Company did not issue any shares of its common stock.
Three Months Ended September 30, 2025
During the three months ended September 30, 2025 the Company did not issue any shares of its common stock.
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| 6. | STOCK INCENTIVE PLANS |
2019 Equity Stock Incentive Plan
On December 17, 2018, the Board of Directors approved and adopted the 2019 Equity Incentive Plan (“the 2019 Plan”), with
As of September 30, 2026, under the 2019 Equity Incentive Plan, there were
2022 Equity Stock Incentive Plan
On January 27, 2022, the Company adopted the 2022 Equity Incentive Plan, to enable the Company to attract and retain the types of employees, consultants, and directors who will contribute to the Company’s long-range success. The maximum number of shares of common stock that may be issued under the 2022 Plan is initially
As of July 1, 2026, the maximum number of shares issuable under the 2022 Plan remained at
| 7. | STOCK OPTIONS |
Options
Transactions involving our options are summarized as follows:
| Weighted | ||||||||||||
| Average | ||||||||||||
| Weighted | Grant-Date | |||||||||||
| Number of | Average | Per Share | ||||||||||
| Options | Exercise Price | Fair Value | ||||||||||
| Options outstanding at June 30, 2026 | $ | $ | ||||||||||
| Granted | - | $ | - | $ | - | |||||||
| Canceled/Expired | - | $ | - | $ | - | |||||||
| Exercised | - | $ | - | $ | - | |||||||
| Options outstanding at September 30, 2026 | $ | $ | ||||||||||
Details of our options outstanding as of September 30, 2026, is as follows:
| Options Exercisable | Weighted Average Exercise Price of Options Exercisable | Weighted Average Contractual Life of Options Exercisable (Years) | Weighted Average Contractual Life of Options Outstanding (Years) | |||||||||||
Total stock compensation expense related to the options for the three months ended September 30, 2026 and 2025, was $
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| 8. | EQUITY SECURITIES, RELATED PARTY |
As of September 30, 2026, the Company held approximately
| 9. | INVESTMENT INCOME |
The following table summarizes our investment income.
| September 30, 2026 | September 30, 2025 | |||||||
| Interest earned on cash (NOTE 2) | $ | $ | ||||||
| Interest earned on Treasury Bills (NOTE 2) | ||||||||
| Dividends and other | ||||||||
| Total investment income | $ | $ | ||||||
| 10. | COMMITMENTS AND CONTINGENCIES |
Effective October 1, 2025, the Company extended its research agreement with the University of Iowa through September 30, 2026. As consideration under the research agreement, the University of Iowa will receive a maximum of $
Effective August 24, 2026, the Company extended its research agreement with the University of Michigan through September 30, 2027. As consideration under the amended research agreement, the University of Michigan will receive a maximum of $
Effective June 1, 2025, the Company entered into a research agreement with the University of Texas at Austin, which was amended in April 2026 to extend its term, at no additional cost, through December 31, 2026. As consideration under the research agreement, the University of Texas at Austin will receive a maximum of $
The Company began renting lab space in February 2022. The lab rental is on a month-to-month basis and is cancellable with a thirty (30) day notice. On April 1, 2025, the Company renewed the space needed for its lab work at a monthly rent of $
In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position or results of operation.
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| 11. | OPERATING LEASE |
In May 2026, the Company entered into a twenty-four-month operating lease, which provides for approximately
In accordance with ASC 842 a right-of-use asset and lease liability was recorded for $
| At September 30, 2026 | At June 30, 2026 | |||||||
| Operating leases | ||||||||
| Remaining right-of-use assets | $ | $ | ||||||
| Short-term operating lease liabilities | $ | $ | ||||||
| Long-term operating lease liabilities | $ | $ | ||||||
| Total operating lease liabilities | $ | $ | ||||||
Maturities of the Company’s undiscounted lease liabilities are as follows:
| Year Ending | Operating Leases | |||
| 2026 (remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total lease payments | ||||
| Less: Imputed interest/present value discount | ( | ) | ||
| Present value of lease liabilities | $ | |||
| 12. | RELATED PARTY |
Other Related Party Activity
During the three months ended September 30, 2025, the Company had accounts receivable and service income of $
See Note 8 for related party transactions with respect to TECO FUEL CELL TECHNOLOGY AS.
| 13. | SUBSEQUENT EVENTS |
Management evaluated subsequent events as of the date of the financial statements pursuant to ASC TOPIC 855 and had the following to report.
On October 23, 2026, the Company entered into and closed a securities purchase agreement with NewHydrogen, Inc. (“NewHydrogen”). Pursuant to the purchase agreement, NewHydrogen issued and sold to the Company, in a private placement,
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q are not historical facts and are forward-looking statements. Forward-looking statements present our expectations or forecasts of future events, and can often be identified by words such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of those terms. These statements involve known and unknown risks and uncertainties that may cause our actual results to differ materially from those expressed or implied, including the risks described under Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (the “2026 Form 10-K”). We disclaim any obligation to update any forward-looking statement, or to disclose any difference between our actual results and those reflected in any forward-looking statement, except as required by law.
Unless the context otherwise requires, references in this Form 10-Q to “we,” “us,” “our,” “SunHydrogen” or the “Company” refer to SunHydrogen, Inc. and its consolidated subsidiaries.
Overview
We are a development stage company developing photoelectrochemical, or PEC, panels that produce renewable hydrogen from sunlight and water. We are pursuing two pathways: commercially available thin film solar modules re-engineered with our proprietary hydrogen module design, which is the basis of the hydrogen reactors we have built to date, and our patented nanoparticle technology. We have not generated revenue from the sale of our products, we have not produced hydrogen at commercial scale, and we have funded our operations principally through sales of our equity securities.
This discussion should be read together with the condensed consolidated financial statements and notes included in this report and with the 2026 Form 10-K, which describes our business, our technology, and the risks we face.
Recent Developments
On August 11, 2026, we entered into a Technology Collaboration and Intellectual Property Protection Agreement with Sparc Hydrogen Pty Ltd, under which our hydrogen modules will be evaluated through laboratory and pilot scale testing in South Australia, followed by a jointly funded techno-economic assessment. Sparc Hydrogen has an option, exercisable within eighteen months, to negotiate a supply agreement or a manufacturing license. We cannot assure you that any supply agreement or license will result.
On September 23, 2026, we and Honda R&D Co., Ltd. extended our joint development agreement to March 31, 2028.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using the Binomial valuation option pricing model. We base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.
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Use of Estimates
In accordance with accounting principles generally accepted in the United States, management utilizes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions relate to useful lives and impairment of tangible and intangible assets, accruals, income taxes, stock-based compensation expense, Binomial lattice valuation model inputs, derivative liabilities and other factors. Management believes it has exercised reasonable judgment in deriving these estimates. Consequently, a change in conditions could affect these estimates.
Fair Value of Financial Instruments
Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2026, the amounts reported for cash, investment in affiliate, accrued interest and other expenses, notes payables, and derivative liability approximate the fair value because of their short maturities.
We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.
Recently Issued Accounting Pronouncements
Management reviewed currently issued pronouncements during the three months ended September 30, 2026, and does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. Pronouncements are disclosed in notes to the financial statements.
Results of Operations for the Three Months ended September 30, 2026 compared to Three Months Ended September 30, 2025
Revenues
During the three months ended September 30, 2025, the Company recognized service income of $1,250 for consulting services provided to TECO FUEL CELL TECHNOLOGY AS, a related party. During the three months ended September 30, 2026, the Company received shares of TECO FUEL CELL TECHNOLOGY AS as payment for consulting services, which were recorded at $0 (see Note 8).
Operating Expenses
Operating expenses for the three months ended September 30, 2026 were $2,415,825, compared to $1,924,395 for the three months ended September 30, 2025. The net change of $491,430 in operating expenses consisted primarily of an increase in research and development costs and in general and administrative expenses due to increased efforts in operations.
Other Income/(Expenses)
Other income and (expenses) for the three months ended September 30, 2026 were $(46,830), compared to $363,367 for the three months ended September 30, 2025. The decrease in other income of $410,197 was mainly the result of an unrealized loss on the Company’s short-term investments in the current period compared to $727 unrealized gain on the Company’s short-term investments in the same period of the prior year offset by slight changes in investment income, dividend expense, and realized gain and losses.
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Net Loss
For the three months ended September 30, 2026, our net loss was $2,463,097, compared to a net loss of $1,559,778 for the three months ended September 30, 2025. The increase in net loss of $903,877 was primarily due to an unrealized loss on the Company’s short-term investments (on the Condensed Consolidated Balance Sheets) in the current period compared to a minimal unrealized gain on the Company’s short-term investments in the prior period. In addition, the Company had increased research and development and general and administrative expenses in the current period compared to the prior period due to increased efforts in operations.
Liquidity and Capital Resources
As of September 30, 2026, we had a working capital surplus of $29,719,618, compared to $31,819,205 as of June 30, 2026. The decrease of $2,099,587 was primarily due to cash used in operating activities and an unrealized loss on short-term investments, together with an increase in current liabilities. The unrealized loss on our short-term investments primarily reflects changes in market interest rates. Substantially all of these investments are investment-grade corporate, U.S. Treasury and other fixed income securities, and if we hold them until they mature, we expect to receive their full face value, absent a default by the issuer.
Cash used in operating activities was $1,224,093 for the three months ended September 30, 2026, compared to $1,186,098 for the three months ended September 30, 2025. The net increase of $37,995 in cash used in operating activities was due to a $903,319 increase in the net loss, change of $4,051 in interest receivable, change of $331 in deposits offset by change of $105,412 in prepaid expenses, $326,833 change in accounts payable and accrued expenses, change of $1,250 in account receivable – related party and $436,211 change in non-cash net expenses. In addition, the Company had revenues in the prior period compared to none in the current period.
Cash provided by (used in) investing activities during the three months ended September 30, 2026 and September 30, 2025 was $(1,138,301) and $1,022,632, respectively. The net decrease of $2,160,933 in cash provided by investing activities was due to the redemption of short-term investments in corporate securities offset by the purchase of short-term investments in corporate securities during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025.
Cash provided by (used in) financing activities during the three months ended September 30, 2026 and September 30, 2025 was $0 and $(1,000,000), respectively. The net increase of $1,000,000 in cash used in financing activities was due to decrease in cash used for the redemption of Series C preferred shares during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025.
We have funded our operations principally through private placements and registered offerings of our equity securities. Our purchase agreement for the sale of up to $50,000,000 of our common stock expired on June 3, 2026, and we do not currently have a committed equity facility. In October 2026, invested approximately $3.0 million in NewHydrogen, Inc., as described in Note 13 to the condensed consolidated financial statements. We believe that our existing cash, cash equivalents, and short-term investments will be sufficient to fund our planned operations for at least the next twelve months.] We may seek additional capital through the sale of our securities. We cannot assure you that additional financing will be available on acceptable terms, or at all, and if it is not, we may be required to delay, reduce, or discontinue our development programs.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, result of operations, liquidity or capital expenditures.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not required for smaller reporting companies.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Acting Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of September 30, 2026. Based on that evaluation, our Chief Executive Officer and Acting Chief Financial Officer concluded that, because of the material weakness described below, our disclosure controls and procedures were not effective as of September 30, 2026.
As described in Item 9A of the 2026 Form 10-K, management identified a material weakness in our internal control over financial reporting relating to segregation of duties. Because of the small number of personnel involved in our accounting and financial reporting functions, we do not maintain adequate segregation of duties over accounting, the financial close process, and controls over financial statement disclosure, including the review of financial information reported by our foreign subsidiaries. We rely on entity level and management review controls and on an outside financial consultant to mitigate this condition. The material weakness had not been remediated as of September 30, 2026.
Notwithstanding the material weakness, we performed additional analysis and other post-closing procedures in connection with the preparation of the condensed consolidated financial statements included in this report, and management believes that those financial statements fairly present, in all material respects, our financial condition, results of operations, and cash flows for the periods presented.
During the quarter, we maintained/implemented the following controls: payments of $500,000 or more require approval by a second authorized person; bank reconciliations are prepared by personnel independent of the payment approval process; our Board of Directors reviews the quarterly financial statements before filing; and we perform a documented review of the trial balances of our foreign subsidiaries. Management will conclude on remediation of the material weakness after these controls have operated for a sufficient period, and we cannot assure you that they will remediate it.
Changes in Internal Control Over Financial Reporting
There was no change to our internal control over financial reporting that occurred during our fiscal quarter ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently a party to, nor is any of our property currently the subject of, any material legal proceeding.
Item 1A. Risk Factors.
There are no material changes from the risk factors previously disclosed in our annual report on Form 10-K filed with the SEC on September 25, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the quarter ended September 30, 2026, no director or officer of the Company
Item 6. Exhibits.
| Exhibit No. | Description | |
| 31.1* | Certification by Chief Executive Officer and Acting Chief Financial Officer pursuant to Sarbanes-Oxley Section 302* | |
| 32.1** | Certification by Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350** | |
| 101* | Inline XBRL Document Set for the financial statements and accompanying notes in Part I, Item 1, of this Quarterly Report on Form 10-Q. | |
| 104* | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set. |
| * | Filed herewith |
| ** | Furnished herewith |
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SIGNATURES
Pursuant to the requirements 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.
| November 10, 2026 | SUNHYDROGEN, INC. | |
| By: | /s/ Timothy Young | |
| Timothy Young Chief Executive Officer and (Principal Executive Officer, | ||
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