UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~March~~September 3130, 2024

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

FOR THE TRANSITION PERIOD FROM __________ TO __________

COMMISSION FILE NUMBER: 000-54437

SUNHYDROGEN, INC.

(Name of registrant in its charter)

Nevada		26-4298300
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

BioVentures Center, 2500 Crosspark Road, Coralville, IA 52241

(Address of principal executive offices) (Zip Code)

Issuer’s telephone Number: (805) 966-6566

Former address, 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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

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

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

The number of shares of registrant’s common stock outstanding, as of ~~May~~November 157, 2024 was 5,~~087~~205,~~245~~759,~~974~~708.

SUNHYDROGEN, INC.

INDEX

		Page
PART I: FINANCIAL INFORMATION		1
Item 1:	Financial Statements (Unaudited)	1
	Condensed Balance Sheets	1
	Condensed Statements of Operations	2
	Condensed Statements of Shareholders’ Equity/(Deficit)	3
	Condensed Statements of Cash Flows	4
	Notes to the Condensed Financial Statements	5
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1814
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	2117
Item 4:	Controls and Procedures	2117
PART II: OTHER INFORMATION		2218
Item 1	Legal Proceedings	2218
Item 1A:	Risk Factors	2218
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	2218
Item 3:	Defaults Upon Senior Securities	2218
Item 4:	Mine Safety Disclosures	2218
Item 5:	Other Information	2218
Item 6:	Exhibits	2218
Signatures		2319

PART I –- FINANCIAL INFORMATION

Item 1. Financial Statements.

SUNHYDROGEN, INC.

CONDENSED BALANCE SHEETS

	March 31, 2024			June 30, 2023
	September 30,			June 30,
	(Unaudited)
	2024			2024
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalent	$	39,215,765		$	37,185,989
Cash and cash equivalents	$	40,506,034		$	39,044,795
Marketable securities at cost		-			3,188,040
Prepaid expenses		28,843			-
Interest receivable		56,921			-
Equity securities, related party		2,613,117			4,101,402
Short term investment at fair value, related party		2,976,192			7,655,601
TOTAL CURRENT ASSETS		43,147,994			43,146,197
TOTAL CURRENT ASSETS		42,248,878			48,029,630
OTHER ASSETS
INVESTMENT
Convertible notes receivable, related party		3,000,000			3,000,000
TOTAL INVESTMENTS		3,000,000			3,000,000
PROPERTY & EQUIPMENT
Machinery and equipment		3336,~~814~~830			3336,~~814~~830
Computers and peripherals		11,529			11,529
Vehicle		~~155~~135,~~000~~260			~~155~~135,~~000~~260
		200,343			200,343
		183,619			183,619
Less: accumulated depreciation		(~~110~~28,~~592~~233	)		(8320,~~468~~549	)
NET PROPERTY AND EQUIPMENT		89155,~~751~~386			~~116~~163,~~875~~070
INTANGIBLE ASSETS
Domain, net of amortization of $5,315 and $5,286, respectively		-			29
Trademark, net of amortization of $856 and $827, respectively		286			315
Trademark, net of amortization of $800 and $714, respectively		343			428
Patents, net of amortization of $44,550 and 42,909, respectively		56,593			58,234
Patents, net of amortization of $41,268 and $36,344, respectively		59,875			64,799
TOTAL INTANGIBLE ASSETS		56,879			58,549
TOTAL INTANGIBLE ASSETS		60,218			65,256
TOTAL OTHER ASSETS		212,265			221,619
TOTAL OTHER ASSETS		3,149,969			3,182,131
TOTAL ASSETS	$	43,360,259		$	43,367,816
TOTAL ASSETS	$	45,398,847		$	51,211,761
LIABILITIES, PREFERRED STOCK SUBJECT TO REDEMPTION AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable and other payables	$	~~382~~493,~~745~~158		$	~~232~~573,~~893~~127
Accrued expenses		5684,~~436~~524			~~628~~140,558
Loan payable, related party		559,~~735~~207			~~106~~45,~~728~~829
TOTAL CURRENT LIABILITIES		494,916			340,249
TOTAL LIABILITIES		586,889			759,514
LONG TERM LIABILITIES
COMMIMENTS AND CONTINGENCIES (SEE NOTE 9)		-			-
Loan payable, related party		9,206			36,731
Series C 10% Preferred Stock, 8,851 and 8,851 shares issued and outstanding,
TOTAL LONG TERM LIABILITIES		9,206			36,731
redeemable value of $885,100 and $885,100, respectively		885,100			885,100
TOTAL LIABILITIES		504,122			376,980
COMMIMENTS AND CONTINGENCIES (SEE NOTE 9)
Series C 10% Preferred Stock, 8,851 and 10,951 shares issued and outstanding, redeemable value of $885,100 and $1,095,100, respectively		885,100			1,095,100
SHAREHOLDERS’ EQUITY
Preferred Stock, $0.001 par value; 5,000,000 authorized preferred shares outstanding		-			-
Preferred Stock, $0.001 par value; 5,000,000 authorized preferred shares		-			-
Common Stock, $0.001 par value; 10,000,000,000 authorized common shares 5,087,245,974 and 4,821,298,283 shares issued and outstanding, respectively		5,087,246			4,821,298
Common Stock, $0.001 par value; 10,000,000,000 authorized common shares 5,205,759,708 and 5,087,245,974 shares issued and outstanding, respectively		5,205,760			5,087,246
Additional Paid in Capital		~~128~~130,~~392~~581,~~402~~591			~~126~~128,~~889~~488,~~423~~199
Accumulated deficit		(8993,~~470~~899,~~023~~081	)		(8191,~~971~~852,~~040~~243	)
TOTAL SHAREHOLDERS’ EQUITY		4441,~~009~~888,~~625~~270			4941,~~739~~723,~~681~~202
TOTAL LIABILITIES, PREFERRED STOCK SUBJECT TO REDEEMPTION AND SHAREHOLDERS’ EQUITY	$	4543,~~398~~360,~~847~~259		$	5143,~~211~~367,~~761~~816

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

SUNHYDROGEN, INC.

CONDENSED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2024 AND 2023

(Unaudited)

	THREE MONTHS ENDED						NINE MONTHS ENDED
	Three Months Ended September 30,
	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023
	2024			2023
REVENUE	$	-		$	-		$	-		$	-
OPERATING EXPENSES
Selling and Marketing		~~554~~324			-44,000			~~44,554~~			~~87,745~~
General and administrative expenses		1418,~~070,340~~744			~~500~~504,~~455~~661			~~2,072,845~~			~~4,011,604~~
Research and development cost		~~750~~608,~~583~~005			~~764~~439,~~919~~064			~~1,945,910~~			~~2,845,239~~
Depreciation and amortization		109,~~382~~354			11,~~064~~005			~~32,162~~			~~32,504~~
TOTAL OPERATING EXPENSES		1,~~831~~036,~~859~~427			1998,~~276,438~~730			~~4,095,471~~			~~6,977,092~~
LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSES)		(1,~~831~~036,~~859~~427	)		(1998,~~276,438~~730	)		~~(4,095,471~~	)		~~(6,977,092~~	)
OTHER INCOME/(EXPENSES)
Investment income		~~520~~479,~~319~~723			~~507~~475,~~991~~609			~~1,480,912~~			~~951,646~~
Dividend expense		(181,~~362~~306	)		(620,~~750~~929	)		~~(61,882~~	)		~~(20,250~~	)
Unrealized Gain(loss) on investments, related party		(2,740,574	)		(3,451,984	)		(4,679,409	)		4,668,652
Unrealized (gain)/loss on change in fair value of investment, related party		(1,488,285	)		285,669
Realized gain (loss)		14,916			(24,617	)		(173,124	)		(24,617	)
Realized gain(loss) on redemption of marketable securities		-			(188,040	)
Realized Gain(Loss) on redemption of marketable securties		35,080			(104,035	)		35,080			(149,962	)
Interest expense		(543	)		(1,691	)
Gain (Loss) on change in derivative liability		-			6,118,044			-			7,059,883
TOTAL OTHER INCOME (EXPENSES)		(1,010,411	)		550,618
Interest expense		(1,684	)		(19,561	)		(5,089	)		(64,611	)
NET INCOME (LOSS)	$	(2,046,838	)	$	(448,112	)
TOTAL OTHER INCOME (EXPENSES)		(2,190,305	)		3,019,088			(3,403,512	)		12,420,741
BASIC & DILUTED EARNINGS (LOSS) PER SHARE	$	(0.00	)	$	(0.00	)
NET INCOME (LOSS)	$	(4,022,164	)	$	1,742,650		$	(7,498,983	)	$	5,443,649
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC EARNINGS (LOSS) PER SHARE	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00
BASIC & DILUTED		5,102,454,360			4,861,570,005
DILUTED EARINGINS (LOSS) PER SHARE	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC		5,094,214,845			4,542,170,528			5,008,173,456			4,397,662,987
DILUTED		5,094,214,845			5,536,927,470			5,008,173,456			5,392,419,929

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

SUNHYDROGEN, INC.

CONDENSED STATEMENTS OF ~~SHAREHOLDERS~~SHAREHOLDER’S ~~EQUITY/(~~DEFICIT)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH~~ 31SEPTEMBER 30, 2024 AND 2023

	THREE MONTHS ENDED MARCH 31, 2024
														Additional
	Preferred stock							Common stock						Paid-in			Accumulated
	Shares		Amount		Mezzanine			Shares			Amount			Capital			Deficit			Total
Balance at December 31, 2023 (unaudited)		-	$	-	$	885,100			5,092,814,633		$	5,092,815		$	127,509,819		$	(85,447,859	)	$	47,154,775
Balance at June 30, 2023		-	$	-	$	1,095,100			4,821,298,283		$	4,821,298		$	126,889,423		$	(81,971,040	)	$	49,739,681
Issuance of common stock upon partial conversion of purchase agreement for cash		-		-		-			3518,~~931~~684,~~341~~057			3518,~~931~~684			~~306~~225,~~044~~291			-			~~341~~243,975
Cancellation of restricted stock awards		-		-		-			(41,500,000	)		(41,500	)		(576,500	)		-			(618,000	)
Issuance of common stock upon conversion of Series C Preferred stock		-		-		(210,000	)		221,052,632			221,053			(11,053	)		-			210,000
Stock compensation expense		-		-		-			-			-			172,~~153,039~~481			-			172,~~153,039~~481
Net Loss		-		-		-			-			-			-			(4448,~~022,164~~112	)		(4448,~~022,164~~112	)
Balance at March 31, 2024 (unaudited)		-	$	-	$	885,100			5,087,245,974		$	5,087,246		$	128,392,402		$	(89,470,023	)	$	44,009,625
Balance at September 30, 2023		-	$	-	$	885,100			5,061,034,972		$	5,061,035		$	127,176,142		$	(82,419,152	)	$	49,818,025
Balance at June 30, 2024		-	$	-	$	885,100			5,087,245,974		$	5,087,246		$	128,488,199		$	(91,852,243	)	$	41,723,202
Issuance of common stock upon partial conversion of purchase agreement for cash		-		-		-			118,513,734			118,514			2,083,411			-			2,201,925
Stock compensation expense		-		-		-			-			-			9,981			-			9,981
Net Loss		-		-		-			-			-			-			(2,046,838	)		(2,046,838	)
Balance at September 30, 2024		-	$	-	$	885,100			5,205,759,708		$	5,205,760		$	130,581,591		$	(93,899,081	)	$	41,888,270

	THREE MONTHS ENDED MARCH 31, 2023
											Additional
	Preferred stock						Common stock				Paid-in		Accumulated
	Shares		Amount		Mezzanine		Shares		Amount		Capital		Deficit			Total
Balance at December 31, 2022 (unaudited)		-	$	-	$	540,000		4,449,997,804	$	4,449,998	$	107,063,659	$	(79,245,024	)	$	32,268,633
Issuance of common stock upon partial conversion of purchase agreement for cash		-		-		-		24,815,655		24,815		463,135		-			487,950
Issuance of common stock for conversion of debt and acrued interest		-		-		-		154,198,530		154,199		-7,710		-			146,489
Stock compensation expense		-		-		-		-		-		99,887		-			99,887
Adjustment due to rounding		-		-		-		-		-		-		4			4
Net Income		-		-		-		-		-		-		1,742,650			1,742,650
Balance at March 31, 2023 (unaudited)		-	$	-	$	270,000		4,629,011,989	$	4,629,012	$	107,618,971	$	(77,502,370	)	$	34,745,613

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

	NINE MONTHS ENDED MARCH 31, 2024
														Additional
	Preferred stock							Common stock						Paid-in			Accumulated
	Shares		Amount		Mezzanine			Shares			Amount			Capital			Deficit			Total
Balance at June 30, 2023		-	$	-	$	1,095,100			4,821,298,283		$	4,821,298		$	126,889,423		$	(81,971,040	)	$	49,739,681
Issuance of common stock upon partial conversion of purchase agreement for cash		-		-		-			86,395,059			86,395			792,530			-			878,925
Issuance of common stock upon conversion of Series C Preferred stock		-		-		(210,000	)		221,052,632			221,053			(11,053	)		-			210,000
Cancellation of restricted stock awards		-		-		-			(41,500,000	)		(41,500	)		(576,500	)		-			(618,000	)
Stock compensation expense		-		-		-			-			-			1,298,002			-			1,298,002
Net Loss		-		-		-			-			-			-			(7,498,983	)		(7,498,983	)
Balance at March 31, 2024 (unaudited)		-	$	-	$	885,100			5,087,245,974		$	5,087,246		$	128,392,402		$	(89,470,023	)	$	44,009,625

	NINE MONTHS ENDED MARCH 31, 2023
											Additional
	Preferred stock						Common stock				Paid-in			Accumulated
	Shares		Amount		Mezzanine		Shares		Amount		Capital			Deficit			Total
Balance at June 30, 2022		-		-	$	270,000		4,271,749,146	$	4,271,749	$	103,311,733		$	(82,946,019	)	$	24,637,463
Issuance of common stock upon partial conversion of purchase agreement for cash		-		-		-		81,130,461		81,130		1,824,920			-			1,906,050
Issuance of common stock for conversion of debt and acrued interest		-		-		-		274,198,530		274,199		(13,710	)		-			260,489
Issuance of common stock for the conversion of stock options		-		-		-		1,933,852		1,934		30,941			-			32,875
Stock compensation for conversion of restricted stock awards		-		-		-		-		-		2,365,200			-			2,365,200
Stock compensation expense		-		-		-		-		-		99,887			-			99,887
Net Loss		-		-		-		-		-		-			5,443,649			5,443,649
Balance at March 31, 2023 (unaudited)		-	$	-	$	270,000	$	4,629,011,989	$	4,629,012	$	107,618,971		$	(77,502,370	)	$	34,745,613

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

SUNHYDROGEN, INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED MARCH 31, 2024 AND 2023

(Unaudited)

	Nine Months Ended
	Three Months Ended September 30,
	March 31, 2024			March 31, 2023
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss		(7,498,983	)		5,443,649
Net Income (Loss)		(2,046,838	)		(448,112	)
Adjustment to reconcile net income (loss) to net cash (used in) provided by operating activities
Depreciation & amortization expense		329,~~162~~354			3211,~~504~~005
Conversion of stock options for services		-			32,875
Stock based compensation expense for services		9,981			72,481
Stock based compensation expense for services		1,298,002			99,887
Loss on redemption of marketable securities		-			188,040
Cancellation of restricted stock awards		(618,000	)		-
Unrealized (gain)/loss on change in fair value of investment, related party		1,488,285			(285,669	)
Realized loss on sale of investment		188,040			-
Net stock compensation expense for conversion of restricted stock awards		-			2,365,200
Loss on redemption of marketable securities		-			149,962
Net (Gain) Loss on change in derivative liability		-			(7,059,883	)
Unrealized gain on change in fair value of investment, related party		4,679,409			(4,668,652	)
Change in assets and liabilities :
Prepaid expense		-(28,843	)		~~17,394~~-
Interest receivable on bonds		(56,921	)		-
Accounts payable		(79,969	)		(12,723	)
Accounts payable		149,852			179,071
Accrued expenses		(56,034	)		212
Accrued expenses		55,808			639
NET CASH USED IN OPERATING ACTIVITIES		(704,064	)		(474,766	)
Accrued interest on convertible notes		-			60,585
NET CASH USED IN OPERATING ACTIVITIES		(1,770,631	)		(3,346,769	)
CASH FLOWS FROM INVESTING ACTIVITIES
Marketable securities purchased		~~(253,920,231~~-	)		(672,~~475~~457,~~678~~347	)
Marketable securities redeemed		~~235,384,616~~-			2072,~~443~~457,~~798~~347
Marketable securities transferred to new account		18,535,615			-
Purchase of certificate of deposit		-			(5,014,728	)
Purchase of certificate of deposit		(5,000,000	)		-
Redemption of short term investments in corporate securities		-			3,000,000
Redemption of certificate of deposit		5,000,000			-
NET CASH USED IN INVESTING ACTIVITIES		-			(2,014,728	)
Purchase of investment, related party		-			(7,000,000	)
Purchase of long term convertible note, related party		-			(3,000,000	)
Redemption of short term investments in corporate securities		3,000,000			-
Purchase of tangible assets		-			(33,814	)
NET PROVIDED BY INVESTING ACTIVITIES:		3,000,000			3,934,306
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of related party note payable		(7836,~~518~~622	)		(4226,~~432~~149	)
Net proceeds from purchase agreements		878,925			1,906,050
Net proceeds from common stock purchase agreements		2,201,925			243,975
NET CASH PROVIDED BY FINANCING ACTIVITIES		~~800~~2,~~407~~165,303			1217,~~863,618~~826
NET INCREASE IN CASH		2,029,776			2,451,155
Net increase (decrease) in cash and cash equivalents		1,461,239			(2,271,668	)
CASH, BEGINNING OF PERIOD		37,185,989			27,681,485
Cash and cash equivalents - beginning of period		39,044,795			37,185,989
CASH, END OF PERIOD		39,215,765			30,132,640
Cash and cash equivalents - end of period		40,506,034			34,914,321
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	~~5,089~~543		$	191,~~561~~691
Taxes paid	$	-		$	-
SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS
Fair value of common stock upon conversion of convertible notes, and accrued interest	$	-		$	260,489
Conversion of Series C Preferred shares to common stock	$	-		$	210,000
Fair value of stock options issued through a cashless exercise	$	-		$	32,875
Reclassification of related party accrued salary to loan payable	$	-		$	211,750
Conversion of Series C Preferred shares to common stock	$	210,000		$	-
Cancellation of restricted stock units	$	(618,000	)	$	-

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

SUNHYDROGEN, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS ~~–UNAUDITED~~

~~MARCH~~AS ~~31,~~OF ~~2024~~SEPTEMBER ~~AND~~30, ~~2023~~2024

~~1. Basis of Presentation~~(Unaudited)

~~The~~ accompanying unaudited condensed 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 Regulation S-X1. ~~Accordingly,~~ORGANIZATION ~~they~~AND doLINE ~~not~~OF 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 nine months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ended June 30, 2024. 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, 2023.BUSINESS

Organization

SunHydrogen, Inc. (the “Company”) was incorporated in the state of Nevada on February 18, 2009. The Company, based in Coralville, IA began operations on February 19, 2009.

Line of Business

The company is currently developing a novel solar-powered nanoparticle system that mimics photosynthesis to separate hydrogen from water. We intend for technology of this system to be used for the production of renewable hydrogen to produce renewable electricity and hydrogen for fuel cells and other applications where hydrogen is used.

SunHydrogen is developing an efficient and cost-effective way to produce truly green hydrogen using sunlight and any source of water. Just like a solar panel is comprised of multiple cells that generate electricity, our hydrogen panel encases multiple hydrogen generators immersed in water. Each hydrogen generator contains billions of electroplated nanoparticles, autonomously splitting water into hydrogen and oxygen. Our technology has the potential to be one of – if not the most – economical green hydrogen solutions: Unlike traditional water electrolysis for hydrogen, our process requires no external power other than sunlight and uses efficient and low-cost materials.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~This~~Basis ~~summary~~ of significant accounting policies of SunHydrogen, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.Presentation

The accompanying unaudited condensed 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, 2024 are not necessarily indicative of the results that may be expected for the year ended June 30, 2025. 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, 2024.

Cash and Cash Equivalent

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, 2024		June 30, 2024
Cash	$	30,725,307	$	29,365,997
U.S. Treasury bills		9,780,727		9,678,798
Total cash and cash equivalents	$	40,506,034	$	39,044,795

The U.S. Treasury bills have a credit quality indicator of AA/A.

Concentration risk

Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Company (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 ~~March~~September 3130, 2024, the cash balance in excess of the FDIC limits was $3438,~~893~~606,~~596~~113. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts.

Marketable Securities

Corporate bonds and U.S. Treasuries are considered current, based on their liquidity. The investments are generally valued using quoted prices and are classified in Level 2 of the fair value hierarchy as prices are not always from active markets. We consider our investments held to maturity and we believe there are no other than temporary declines in fair value. Our investments are recorded at historical cost.

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~~ compensation expense, ~~Binomial~~fair ~~lattice~~value ~~valuation~~of ~~model~~financial ~~inputs~~instruments, ~~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.

SUNHYDROGEN, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS –UNAUDITED

MARCH 31, 2024 AND 2023

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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		5 Years
Vehicle		5 Years

The Company ~~recognized~~ recognized depreciation expense of $277,~~124~~684 and $279,~~229~~306 for the ~~nine~~three months ended ~~March~~September 3130, 2024 and 2023, respectively.

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. Intangible assets that have finite useful lives continue to be amortized over their useful lives.

	Useful Lives	~~3/31/~~September 30, 2024			6/June 30~~/2023~~, 2024
Domain-gross	15 years	$	5,315		$	5,315
Trademark-gross	10 years	$	1,142		$	1,142
Less accumulated amortization			(~~5,315~~856	)		(~~5,286~~827	)
Domain-net		$	-		$	29
Trademark-net		$	286		$	315
Trademark-gross	10 years	$	1,143		$	1,143
Less accumulated amortization			(800	)		(714	)
Domain-net		$	343		$	428
Patents-gross	15 years	$	101,143		$	101,143
Less accumulated amortization			(4144,~~268~~550	)		(3642,~~344~~909	)
Patents-net		$	5956,~~875~~593		$	6458,~~799~~234

The Company recognized amortization expense of $51,~~038~~670 and $71,~~033~~699 for the ~~nine~~three months ended ~~March~~September 3130, 2024 and ~~December 31,~~ 2023, respectively.

~~Net~~Future ~~Earnings~~Amortization ~~(Loss) per Share Calculations~~Expense

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 nine months ended March 31, 2024. 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 (Note 4).

Year	Amount
2025 (remaining)	$	5,009
2026		5,009
2027		5,009
2028		4,952
2029		4,923
Thereafter		31,977
	$	56,879

Nine months ended March 31, 2024

The Company calculated the dilutive impact of 269,894,499 outstanding stock options and awards, 86,495,239 common stock purchase warrant, and 8,851 shares of Series C Preferred shares, which are convertible into shares of common stock. Stock options and awards, common stock purchase warrants, Series C Preferred shares were not included, in the calculation of net earnings per share, because their impact on income per share is antidilutive.

~~SUNHYDROGEN,~~Impairment ~~INC.~~of Long-lived Assets

~~NOTES~~The TOCompany ~~CONDENSED~~applies ~~FINANCIAL~~the ~~STATEMENTS~~provisions ~~–UNAUDITED~~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.

~~MARCH~~When 31long-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, 2024 ~~AND~~and 2023, the Company determined no impairment was required.

2.Net ~~SUMMARY~~Earnings OF(Loss) ~~SIGNIFICANT~~per ~~ACCOUNTING~~Share ~~POLICIES (Continued)~~Calculations

~~Nine~~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 ~~March~~September 3130, 2024 and 2023. 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 ~~Company~~total ~~calculated~~potential ~~the~~common ~~dilutive impact~~shares as of ~~209~~September 30,~~394~~ 2024,~~499~~ ~~outstanding~~include 259,965,911 stock options, 9478,~~895~~095,239 common stock purchase warrants, and ~~the~~931,684,211 ~~convertible~~common ~~debt~~shares ~~and~~issuable ~~accrued~~upon ~~interest~~conversion of ~~$819,359,~~the ~~which~~outstanding is8,851 ~~convertible~~Series ~~into~~C ~~shares~~Preferred ~~of common stock~~shares. ~~The~~Stock options, common stock purchase warrants, ~~stock~~and ~~options,~~common ~~and~~shares ~~convertible~~issuable ~~debt~~upon conversion ~~and~~of ~~accrued~~Series ~~interest,~~C Preferred shares were not included in the calculation of net earnings per share, because their impact on income per share is ~~dilutive~~ antidilutive.

	Nine Months Ended
	March 31,
	2024			2023
Income (Loss) to common shareholders (Numerator)	$	(7,498,982	)	$	5,443,649
Basic weighted average number of common shares outstanding (Denominator)		5,008,173,456			4,397,662,987
Diluted weighted average number of common shares outstanding (Denominator)		5,008,173,456			5,392,419,929

The total potential common shares as of September 30, 2023, include 218,394,499 stock options, 86,495,239 common stock purchase warrants, and 931,684,211 common shares issuable upon conversion of the outstanding 8,851 Series C Preferred shares. Stock options, common stock purchase warrants, and common shares issuable upon conversion of Series C Preferred shares were not included in the calculation of net earnings per share because their impact on income per share is antidilutive.

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.

Warrant Accounting

The Company accounts for ~~the~~ 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 ~~March 31~~September 30, 2024, the amounts reported for cash, accrued interest and other expenses, notes payables, convertible notes, 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.

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).

Reclassification of Expenses

Certain amounts in the 2023 financial statements have been reclassified to conform to the presentation used in the 2024 fianancial statements. There was no material effect on the Company’s previously issued financial statements.

SUNHYDROGEN, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS –UNAUDITED

MARCH 31, 2024 AND 2023

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 (See Note 67):

	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents at March 31, 2024	$	39,215,765	$	39,215,765	$	-	$	-
Marketable securities measured at fair value March 31, 2024	$	2,976,192	$	-	$	2,976,192	$	-
	$	42,191,957	$	39,215,765	$	2,976,192	$	-
Cash and cash equivalents at June 30, 2023	$	37,185,989	$	37,185,989	$	-	$	-
Marketable securities measured at fair value June 30, 2023	$	10,843,641	$	-	$	10,843,641	$	-
	$	48,029,630	$	37,185,989	$	10,843,641	$	-
Liabilities:		-		-		-		-

September 30, 2024

As of March 31, 2024, the Company had no derivative liabilities for which Level 3 inputs were reported.

	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Equity securities, related party	$	2,613,117	$	-	$	2,613,117	$	-
	$	2,613,117	$	-	$	2,613,117	$	-

8June 30, 2024

SUNHYDROGEN, INC.

	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Equity securities, related party	$	4,101,402	$	-	$	4,101,402	$	-
	$	4,101,402	$	-	$	4,101,402	$	-

NOTES TO CONDENSED FINANCIAL STATEMENTS –UNAUDITED

MARCH 31, 2024 AND 2023

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Research and Development

Research and development costs are expensed as incurred. Total research and development costs were $1608,~~945,910~~005 and $2439,~~845,239~~064 for the ~~nine~~three months ended ~~March~~September 3130, 2024 and 2023, respectively.

Advertising and Marketing

Advertising and marketing cost are expensed as incurred. Total advertising and marketing costs were $~~44,554~~324 and $8744,~~745~~000 for the ~~nine~~three months ended ~~March~~September 3130, 2024 and 2023, respectively.

Accounting for Derivatives

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average series Binomial lattice formula pricing models to value the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Recently Issued Accounting Pronouncements

Management ~~does~~believes ~~not believe~~ that ~~any other~~no recently issued accounting standards, ~~but~~which are not yet effective, ~~accounting standards if currently adopted~~ would have a material ~~effect~~impact on the accompanying unaudited financial statements as of ~~March 31~~September 30, 2024, if adopted at this time.

Reclassification

Certain accounts from prior periods have been reclassified to conform to the current period presentation.

3. 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 17,000 shares of preferred stock as Series C Preferred Stock. Each share of Series C Preferred Stock has a stated value of $100 and is convertible into shares of common stock of the Company at a conversion price equal to $0.00095. The Series C Preferred Stockholders are entitled to receive out of any funds and assets of the Company legally available prior and in preference to any declaration or payment of any dividend on the common stock of the Company, cumulative dividends, at an annual rate of 10% of the stated value, payable in cash or shares of common stock. In the event the Company declares or pays a dividend on its shares of common stock (other than dividend payable in shares of common stock), the holders of Series C Preferred Stock will also be entitled to receive payment of such dividend on an as-if-converted basis. The Series C Preferred Stock confers no voting rights on holders, except with respect to matters that materially and adversely affect the voting powers, rights or preferences of the Series C Preferred Stock or as otherwise required by applicable law. Upon liquidation, dissolution and winding up of the Company, the holder of each outstanding share of Series C Preferred Stock shall be entitled to receive, out of the assets of the Company available for distribution to its shareholders upon such liquidation, before any payments shall be made or any assets distributed to the holders of the common stock, the stated value of the Series C Preferred Shares plus any declared but unpaid dividends. No other current or future equity holders of the Company shall have higher priority of liquidation preference than holders of Series C Preferred Stock.

9The 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.

~~SUNHYDROGEN~~During the three months ended September 30, ~~INC~~2023, an investor converted 2,100 preferred shares with a stated value of $210,000, at a conversion price of $0.00095. The preferred shares were converted into 221,052,632 common shares, no gain or loss was recognized in the financial statements.

~~NOTES~~As TOof ~~CONDENSED~~September ~~FINANCIAL~~30, ~~STATEMENTS~~2024 ~~–UNAUDITED~~and June 30, 2024, the Company had 8,851 shares of Series C Preferred Stock outstanding, respectively. The fair value of the outstanding shares was $885,100, respectively.

MARCH 31, 2024 AND 2023

3. PREFERRED STOCK (Continued)

Series C Preferred Stock (Continued)

On December 15, 2021, the Company entered into a securities purchase agreement with an accredited investor for an exchange of convertible debt to equity. Under the purchase agreement, the Company and investor acknowledged there was $187,800 of principal remaining under the note issued to the investor by the Company on February 3, 2017, plus $80,365 of accrued interest, representing a total aggregate note balance of $268,165. Pursuant to the purchase agreement, the Company sold to the investor 2,700 shares of the Company’s newly designated Series C Preferred Stock for a total purchase price of $268,165, and a loss on settlement of debt of $1,835. On April 15, 2023, the Company entered into another securities purchase agreement with the investor to exchange the remaining notes with principal of $550,000, plus accrued interest of $126,455, representing a total aggregate note balance of $676,455, and a loss on settlement of debt of $45. Pursuant to the purchase agreement, the Company sold 6,765 shares of the Company’s Series C Preferred Stock to the investor, for a total purchase price of $676,455. The investor tendered the Note to the Company for cancellation and agreed to forgo all future accrued interest under the Note, as the total purchase price for the shares. As of June 30, 2023, the Company had a total of 9,465 shares of Series C Preferred Stock outstanding with a fair value of $946,500, and a stated value of one hundred dollars ($100) (“share value’) per share, convertible into shares of common stock of the Company. The stock was presented as mezzanine equity because it is redeemable at a fixed or determinable amount upon an event that is outside of the issuer’s control. Upon liquidation, dissolution and winding up of the Company, the holder of each outstanding share of Series C Preferred Stock shall be entitled to receive, out of the assets of the Company available for distribution to its shareholders upon such liquidation, before any payments shall be made or any assets distributed to the holders of the common stock, the stated value of the Series C Preferred Shares plus any declared but unpaid dividends. No other current or future equity holders of the Company shall have higher priority of liquidation preference than holders of Series C Preferred Stock. The holder has the right, at any time, at its election, to convert shares of Series C Preferred Stock into common stock at a conversion price of $0.00095 per share. During the three months ended September 30, 2023, the investor converted 2,100 preferred shares with a face value of $210,000, at a conversion price of $0.00095. The preferred shares were converted into 221,052,632, no gain or loss was recognized in the financial statements. As of March 31, 2024, 7,365 of such shares of Series C Preferred Stock outstanding.

On June 19, 2023, the Company entered into a securities purchase agreement with an accredited investor for an exchange of convertible debt to equity. Under the purchase agreement, the Company and investor acknowledged there was an aggregate of $100,000 of principal outstanding under the Note issued to the investor by the Company on August 10, 2018, plus $48,603 of accrued interest, representing a total aggregate note balance of $148,603. Pursuant to the Purchase Agreement, the Company issued and sold to the investor 1,486 shares of the Company’s Series C Preferred Stock for a total purchase price of $148,603, and a gain on settlement of debt of $3. The investor tendered the Note to the Company for cancellation and agreed to forego all future accrued interest under the Note, as the total purchase price for the shares. As of March 31, 2024, 1,486 of such shares of Series C Preferred Stock were outstanding.

As of March 31, 2024, the Company had an aggregate total of 8,851 shares of Series C Preferred Stock outstanding with a fair value of $885,100, and a stated value of one hundred dollars ($100) (“share value’) per share, convertible into shares of common stock of the Company. Upon liquidation, dissolution and winding up of the Company, the holder of each outstanding share of Series C Preferred Stock shall be entitled to receive, out of the assets of the Company available for distribution to its shareholders upon such liquidation, before any payments shall be made or any assets distributed to the holders of the common stock, the stated value of the Series C Preferred Shares plus any declared but unpaid dividends. No other current or future equity holders of the Company shall have higher priority of liquidation preference than holders of Series C Preferred Stock. The holder has the right, at any time, at its election, to convert shares of Series C Preferred Stock into common stock at a conversion price of $0.00095 per share.

SUNHYDROGEN, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS –UNAUDITED

MARCH 31, 2024 AND 2023

3. PREFERRED STOCK (Continued)

Series C Preferred Stock (Continued)

During the fiscal year ended June 30, 2023, the Company entered into a purchase agreement with investors for an exchange of convertible debt into equity. The investors exchanged convertible notes in the amount of $837,800, plus interest in the amount of $255,423, and an aggregate loss of $1,877 for an aggregate total of $1,095,100 in exchange for 10,951 shares of the Company’s Series C Preferred Stock. The extinguishment of the convertible debt and derivative was recognized in the Company’s financial statement as a loss on settlement of convertible notes and derivative liability in the amount of $664,627. A valuation was prepared based on a stock price of $0.020 as of April 15, 2023 and $0.0185 as of June 19, 2023, with a volatility of 96.6%, as of April 15, 2023 and 82.9% as of June 19, 2023 based on an estimated term of 5 years.

The stock was presented as mezzanine equity because it is redeemable at a fixed or determinable amount upon an event that is outside of the issuer’s control.

4. COMMON STOCK

OnThree ~~January~~Months ~~27,~~Ended ~~2022,~~September ~~the holder of the majority of the voting power of the shareholders of the Company~~30, and the Company’s chief executive officer, approved by written consent (i) an amendment to the Company’s articles of incorporation to increase the Company’s authorized shares of common stock from 5,000,000,000 to 10,000,000,000, (ii) an amendment to the Company’s articles of incorporation to effect a reverse stock split of the Company’s common stock by a ratio of not less than 1-for-100 and not more than 1-for-500 at any time prior to the one year anniversary of filing the definitive information statement with respect to the reverse split, with the board of directors having the discretion as to whether or not the reverse split is to be effected, and with the exact ratio of any reverse split to be set at a whole number within the above range as determined by the board in its discretion, and (iii) the adoption of the Company’s 2022 Equity Incentive Plan. Shareholder approval for such actions became effective 20 days after the definitive information statement relating to such actions was mailed to shareholders.2024

~~Nine~~On November 11, 2022, the Company entered into a Purchase Agreement with an investor for the sale of up to $45,000,000 of shares of common stock. For the three months ended ~~March~~September 30, 312024, the Company issued 118,513,734 shares of common stock for $2,250,000 under the purchase agreement at prices of ~~2024~~$0.0156 - $0.02024, pursuant to purchase notices received from the investor. The finance cost of $48,075 was deducted from the gross proceeds received, leaving net proceeds of $2,201,925.

On November 11, 2022, the Company entered into a Purchase Agreement with an investor for the sale of up top $45,000,000 of shares of common stock. For the nine months ended March 31, 2024, the Company issued 86,395,059 shares of common stock for $900,000 under a purchase agreement at prices of $0.00944 - $0.0132, pursuant to the purchase notices received from the investor. The finance cost of $21,075 was deducted from the gross proceeds.9

~~Nine~~Three ~~months~~Months ~~ended~~Ended ~~March~~September 3130, 2023

~~During~~On ~~the~~November ~~nine~~11, ~~months~~2022, ~~ended~~the ~~March~~Company entered into ~~31,~~a ~~2023,~~Purchase Agreement with an investor for the ~~Company~~sale ~~issued 274~~of up to $45,~~198~~000,~~530 shares~~000 of common stock. ~~upon~~For ~~conversion~~the ofthree ~~convertible~~months ~~notes~~ended inSeptember 30, 2023, the ~~amount~~Company ofissued ~~$177~~18,~~500 of principal~~684,057 ~~plus~~shares ~~accrued~~of ~~interest~~common ofstock for $82250,~~989 based~~000 ~~upon~~under athe ~~conversion~~purchase ~~price~~agreement at prices of $0.~~00095 per~~0126, ~~share.~~pursuant ~~The~~to ~~notes~~purchase notices ~~were~~received ~~converted~~from ~~per~~ the ~~terms~~investor. ofThe ~~their~~finance ~~respective~~cost ~~agreements~~of ~~and~~$6,025 ~~therefore~~was nodeducted ~~gain~~from orthe ~~loss~~gross onproceeds ~~the~~received, ~~conversion~~leaving ~~was~~gross ~~recorded~~proceeds of $243,975.

On ~~November~~September 118, ~~2022~~2023, the Company ~~entered~~ ~~into~~issued ~~a Purchase Agreement with an investor for a total of $45~~221,~~000~~052,~~000 to purchase~~ 632 shares of common stock~~. During the nine months ended March 31~~, ~~2023,~~upon ~~the~~conversion ~~Company~~of ~~issued 81~~2,~~130,461~~ 100 shares of ~~common~~preferred stock ~~for~~with ~~$1,950,000 under~~ a ~~purchase~~face ~~agreement at~~value ~~prices~~ of $~~0.01968 - $0.02608~~210,000 ~~pursuant~~at toan ~~the~~exercise ~~purchase~~price ~~notices received from the investor. The finance cost~~ of $~~43,950 was deducted from the gross proceeds converted, with net proceeds of $1,906,050~~0.00095.

11We also recognized $62,500 in stock-based compensation based on grant date fair values and vesting terms of restricted stock unit awards granted in prior periods.

~~SUNHYDROGEN, INC~~5. STOCK INCENTIVE PLANS

NOTES TO CONDENSED FINANCIAL STATEMENTS –UNAUDITED

MARCH 31, 2024 AND 2023

4. COMMON STOCK (Continued)

During the nine months ended March 31, 2023, a consultant exercised 3,071,412 nonqualified stock options with an exercise price of $0.01 and a market price of $0.027 per share. Upon exercise of the stock options, the Company issued 1,933,852 shares of common stock through a cashless exercise at the price of $0.017 per share for compensation expense of $32,875.

During the nine months ended March 31, 2023, two employees were granted 150,000,000 restricted stock awards for services, which vested immediately. The Company withheld 62,400,000 shares at a price of $0.027 to pay for the taxes owed by the employees in the amount of $1,684,800, and the remaining 87,600,000 shares priced at $0.027 per share in the amount of $2,365,200 in stock compensation was reported in the financial statements.

5. RESTRICTED STOCK UNITS

On March 30, 2023, the Board of Directors determined that in the best interest of the Company and the Shareholders to grant an employee a restricted stock units in consideration of services to be rendered to the Company. The Board granted 21,500,000 shares of restricted stock units, which vested on March 30, 2023. Under the 2019 Equity Incentive Plan, an employee was granted 21,500,000 restricted stock units at a price of $0.025 per share for services, which vested on March 30, 2023. The stock units of 21,500,000 were cancelled at a unit price of $0.012 in the amount of $258,000, which was netted against the stock compensation expense during the period.

On December 20, 2022 and January 1, 2023, the Board of Directors determined that in the best interest of the Company and the Shareholders, to grant certain employees, a director, and a consultant restricted stock units in consideration of services to be rendered to the Company. The Board granted 33,000,000 shares of restricted stock units under the 2022 Equity Incentive Plan, whereby, 23,000,000 shares vested on January 1, 2023 and 10,000,000 shares, which were to vest on January 1, 2024, but were not granted. During the period ended March 31, 2024, the Company cancelled 20,000,000 of the stock units at a price of $0.012 in the amount of $240,000, which was netted against the stock compensation expense during the period. The remaining 10,000,000 units were to vest on January 1, 2024 were not granted. As of March 31, 2024, there remained a balance of 3,000,000 stock units, with an exercise price of $0.025.

The total stock units cancelled consisted of 21,500,000 units for the 2019 Equity Incentive Plan and 20,000,000 units for the 2022 Equity Incentive Plan for an aggregate total of 41,500,000, The price per stock unit was $0.025.As of March 31, 2024, the Company recorded stock compensation expense of $125,000.

The fair value of the cancellation of the units was $618,000 for the 41,500,000 stock units.

	3/31/2024					3/31/2023
				Weighted				Weighted
	Number			average		Number		average
	Of			exercise		Of		exercise
	Units			price		Units		price
Outstanding, beginning of period		54,500,000		$	0.025		-	$	-
Granted		-			-		54,500,000	$	0.025
Stock units not granted		(10,000,000	)		-		-		-
Cancellation of units		(41,500,000	)	$	0.025		-		-
Outstanding, end of period		3,000,000		$	0.025		54,500,000	$	0.025
Exercisable at the end of period		3,000,000		$	0.025		54,500,000	$	0.025

6. STOCK OPTIONS AND WARRANTS

The Company accounts for stock options .granted 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.

SUNHYDROGEN, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS –UNAUDITED

MARCH 31, 2024 AND 2023

6. STOCK OPTIONS AND WARRANTS (Continued)

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 300,000,000 shares reserved for issuance ~~pursuant to the Plan~~. The purpose of the 2019 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain, and reward selected employees and other eligible persons. The awards are performance-based compensation that are granted under the 2019 Plan as incentive stock options (ISO) or nonqualified stock options. The per share exercise price for each option shall not be less than 100% of the fair market value of a share of common stock on the date of grant of the option. The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing cost.

As of September 30, 2024, under the 2019 Equity Incentive Plan, there were 285,270,561 stock options and shares issued, with a reserve of 14,729,439.

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~~ 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 400,000,000. The number of shares will automatically be increased on the first day of the Company’s fiscal year beginning in 2023 so that the total number of shares issuable ~~will~~equals ~~at all times equal~~ fifteen percent (15%) of the Company’s fully diluted capitalization on the first day of the Company’s fiscal year, unless the Board adopts a resolution providing that the number of shares issuable under the 2022 Plan shall not be so increased.

As of July 1, ~~2023~~2024, the maximum number of shares issuable under the 2022 Equity Incentive Plan was increased ~~by 15%~~ to ~~723~~953,~~194~~548,~~742~~700 shares, based on the Company’s fully diluted capitalization ~~on leaving a reserve~~ of ~~660~~6,~~194~~356,~~742~~991,335. asAs of ~~March~~September 3130, 2024, there were 173,600,000 stock options and shares issued, with a reserve of 779,948,700.

~~During the period ended March 31, 2024, the Company granted 103,000,000 stock options at an exercise price of $0~~6.~~012~~ ~~per~~STOCK ~~share,~~OPTIONS ~~which~~AND ~~vested immediately on January 30, 2024. As of March 31, 2024, 266,394,499 stock options were outstanding, and the Company recognized stock compensation expense of $1,173,002.~~WARRANTS

~~A summary of the Company’s stock option activity and related information follows:~~Options

	3/31/2024				3/31/2023
			Weighted					Weighted
	Number		average		Number			average
	Of		exercise		Of			exercise
	Options		price		Options			price
Outstanding, beginning of period		163,394,499	$	0.0095		157,965,711		$	0.0089
Granted		103,000,000	$	0.012		-			-
Exercised		-				-			-
Redemption of options		-				(3,071,212	)	$	(0.01	)
Outstanding, end of period		266,394,499	$	0.0107		154,894,499		$	0.0124
Exercisable at the end of period		263,144,499	$	0.0105		154,394,499		$	0.0124

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, 2024		266,894,499		$	0.0107	$	0.011
Granted		-		$	-	$	-
Canceled/Expired		(6,928,588	)	$	0.0100	$	.0100
Exercised		-		$	-	$	-
Options outstanding at September 30, 2024		259,965,911		$	0.0108	$	0.011

~~SUNHYDROGEN, INC.~~10

~~NOTES~~Details TOof ~~CONDENSED~~our ~~FINANCIAL~~options ~~STATEMENTS~~outstanding ~~–UNAUDITED~~as of September 30, 2024, is as follows:

MARCH 31, 2024 AND 2023

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)
	254,965,911				0.0107				2.90				2.94

6Total stock compensation expense related to the options for the three months ended September 30, 2024 and 2023, was $9,981 and $9,981, respectively. ~~STOCK~~As ~~OPTIONS~~of ~~AND~~September ~~WARRANTS~~30, ~~(Continued)~~2024 there was approximately $66.5 thousand of unrecognized compensation cost related to the Options, which is expected to be recognized over a remaining weighted-average vesting period of approximately 0.9 years.

~~STOCK OPTIONS (Continued)~~Warrants

~~The~~Transactions ~~weighted~~involving ~~average~~our ~~remaining~~warrants ~~contractual~~are ~~life of options~~summarized ~~outstanding~~ as ~~of March 31, 2024 and 2023 was as~~ follows:

3/31/2024												3/31/2023
						Weighted
Exercise Price				Stock Options Outstanding				Stock Options Exercisable		Weighted Average Remaining Contractual Life (years)		Exercise Price		Stock Options Outstanding		Stock Options Exercisable		Weighted Average Remaining Contractual Life (years)
		Number of				Average
$	0.016				9,000,000				5,250,000		2.17		-		-		-		-
		Shares				Exercise Price
$	0.012				103,000,000				103,000,000		5.84		-		-		-		-
Warrants outstanding at June 30, 2024			78,095,239			$	0.121
$	0.0097				6,000,000				6,000,000		1.84	$	0.0097		6,000,000		6,000,000		1.84
Granted			-			$	-
$	0.0099				138,894,499				138,894,499		1.82	$	0.0099		138,894,499		138,894,499		2.82
Canceled/Expired			-			$	-
$	0.0060				10,000,000				10,000,000		2.31	$	0.0060		10,000,000		10,000,000		3.31
Exercised			-			$	-
					266,894,499				263,144,499						154,894,499		154,894,499
Warrants outstanding at September 30, 2024			78,095,239			$	0.121

~~WARRANTS~~Details of our warrants outstanding as of September 30, 2024, is as follows:

During the nine months ended March 31, 2024, 8,400,000 common stock purchase warrants expired leaving an aggregate of 78,095,239 common stock purchase warrants outstanding, with exercise prices ranging from $0.12 - $0.13125 per share. The warrants were estimated at fair value on the date of issuance as calculated using the Black-Scholes valuation model. The derivative liability calculated on all warrants outstanding as of the nine months ended March 31, 2024, was removed with the exchange of the convertible notes and accrued interest for preferred shares. The warrants can be exercised over a period of three (3) years.

Warrants Exercisable				Weighted Average Contractual Life of Warrants Outstanding and Exercisable (Years)
	78,095,239				1.42

A7. ~~summary~~EQUITY ofSECURITIES, ~~the~~RELATED ~~Company’s~~PARTY ~~warrant~~AND CONVERTIBLE ~~activity~~NOTES ~~and related information follows for the nine months ended March 31~~RECEIVABLE, ~~2024~~RELATED PARTY

	3/31/2024
				Weighted
				average
	Number of			exercise
	Warrants			price
Outstanding, beginning of period		86,495,239		$	0.12
Granted		-			-
Exercised		-			-
Forfeited/Expired		(8,400,000	)	$	(0.0938	)
Outstanding, end of period		78,095,239		$	0.12
Exercisable at the end of period		78,095,239		$	0.12

On November 11, 2022, the Company entered into a subscription agreement with TECO 2030 ASA (“TECO”). TECO is a Norwegian based clean tech company developing zero-emission technology for the maritime and heavy industry. They are developing PEM hydrogen fuel cell stacks and PEM hydrogen fuel cell modules, that enable ships and other heavy-duty applications to become emissions-free. TECO is listed on Euronext Growth on Oslo Stock Exchange under the ticker TECO. Pursuant to the subscription agreement, the Company purchased 13,443,875 shares of TECO stock for an aggregate consideration of $7 million in USD, at an exchange rate of NOK 10.4094. The stocks purchased are adjusted to fair value based on unrealized gain or loss at the end of each period. At the time of this transaction, the Company and TECO became related parties due to the Company owning an 8.3% interest in TECO. Subsequent to the equity purchase, Timothy Young, CEO of the Company, was elected to the board of TECO in January of 2023.

1411

~~SUNHYDROGEN~~Also, ~~INC~~on November 11, 2022 the Company purchased a bond receivable of TECO for a subscription amount of $3 million. The issuance of the bond receivable is through a Tap Issue Addendum to TECO’s secured convertible notes agreement dated June 1, 2022, pursuant to which Nordic Trustee AS is acting as the security agent on behalf of the note holders. The bond receivable would have matured on June 1, 2025, and would have been converted into shares at a rate of NOK 5.0868 per share. The note bore interest at the rate of 8% per annum, which was paid quarterly in arrears. For the three months ended September 30, 2023, the Company recognized interest income of $57,884.

~~NOTES~~In TOApril ~~CONDENSED~~of ~~FINANCIAL~~2024, ~~STATEMENTS~~all ~~–UNAUDITED~~investors of TECO bonds received an option to convert their bonds to receive one share for every two NOK. On May 24, 2024 the Company agreed to the terms and conversion, and agreed to receive 15,884,744 shares of TECO stock in exchange for the convertible bond receivable of $3,000,000 and unpaid interest. The bond receivable had a principal amount of NOK 31,228,200, and accrued and unpaid interest up to May 24, 2024 of NOK 541,289, for a total of NOK 31,769,489. The value of the shares converted on May 24, 2024 was $3,139,302 with contributed capital gain on conversion of convertible bond of $85,815 and interest received of $53,487.

~~MARCH~~On 31September 10, 2024, ~~AND~~after ~~2023~~a delay to allow time for legal review and clarification of the investment statements, the bond was returned. Upon receipt of the 15,884,744 shares, the Company owns a total of 29,328,619 shares, which as of September 30, 2024 represents 13.29% of the outstanding shares of TECO.

6The CEO of the Company elected to not seek reelection to the board of directors at the annual general meeting in June and is no longer a director of TECO after June 19, 2024. ~~STOCK~~The ~~OPTIONS~~CEO ~~AND~~of ~~WARRANTS~~the Company ~~(Continued)~~never received compensation of any kind for his role as director from January of 2023 through June 19, 2024.

~~WARRANTS~~The ~~(Continued)~~following table summarizes our equity investments in TECO:

The weighted average remaining contractual life of warrants outstanding as of March 31, 2024 was as follows:

Date of Investment	Number of Shares		Cost Basis		Fair Value as of June 30, 2024		Unrealized Loss			Fair Value as of September 30, 2024
November 24, 2022		13,443,875	$	7,000,000	$	1,880,032	$	(682,211	)	$	1,197,821
May 24, 2024		15,884,744		3,139,302		2,221,370		(806,074	)		1,415,296
Total		29,328,619	$	10,139,302	$	4,101,402	$	(1,488,285	)	$	2,613,117

3/31/2024						Weighted Average
Exercise Price		Warrants Outstanding		Warrants Exercisable		Remaining Contractual Life (years)
$	0.13125		6,666,667		6,666,667		1.90
$	0.12		71,428,572		71,428,572		1.92
			78,095,239		78,095,239

8. INVESTMENT INCOME

AtThe ~~March~~following ~~31,~~table ~~2024,~~summarizes ~~the~~our ~~aggregate intrinsic~~investment ~~value of the warrants outstanding was $0~~income.

7. CASH, CASH EQUIVALENTS, MARKETABLE SECURITIES, AND EQUITY INVESTMENT, RELATED PARTY

	September 30, 2024		September 30, 2023
Interest earned on cash (NOTE 2)	$	356,736	$	32,826
Interest earned on Treasury Bills (NOTE 2)		121,202		303,336
Interest earned on Certificates of Deposit (NOTE 9)		-		14,728
Interest earned on Corporate Bonds		-		54,375
Interest earned on TECO bond (NOTE 7)		-		57,731
Dividends and other		1,785		12,613
Total investment income	$	479,723	$	475,609

As of March 31, 2024, the Company invested in marketable securities, which have been recognized in the financial statements at cost. The related party, short-term investment is recognized in the financial statements at fair value.

As of March 31, 2024, the components of the Company’s cash, cash equivalents, and short -term investments are summarized as follows:

	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities
Cash	$	30,623,941	$	-	$	-		$	-	$	30,623,941		-
Subtotal		30,623,941		-		-			-		30,623,941		-
Level 1
U.S. Treasury bills		8,591,824		-		-			-		8,591,824		-
Subtotal		8,591,824		-		-			-		8,591,824		-
Level 2
Teco Investment, related party		7,000,000				(4,023,808	)		2,976,192		-		2,976,192
Subtotal		7,000,000		-		(4,023,808	)		2,976,192		-		2,976,192
Total	$	46,215,765	$	-	$	(4,023,808	)	$	2,976,192	$	39,215,765	$	2,976,192

The Company has invested in marketable securities, which mature within ninety days from date of purchase, and are held to maturity. The current trading prices or fair market value of the securities vary, and we believe any decline in fair value is temporary. All securities are current and not in default.

SUNHYDROGEN, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS –UNAUDITED

MARCH 31, 2024 AND 2023

7. CASH, CASH EQUIVALENTS, MARKETABLE SECURITIES, AND EQUITY INVESTMENT, RELATED PARTY (CONTINUED)

During the nine months ended March 31, 2024, the Company recognized interest income pertaining to the investments of $1,073,293 in the financial statements, which is recorded as part of investment income in the statement of operations.

The Company over the past year has considered many companies in the hydrogen space for strategic investments, and believed that TECO 2030 ASA (TECO)’s fuel cell technology, designed with their development partner AVL, has shown incredible potential to become a key player in the fuel cell market. On November 11, 2022, the Company entered into a subscription agreement with TECO a public limited company incorporated in Norway. Pursuant to the subscription agreement, the Company purchased 13,443,875 shares of TECO stock for an aggregate consideration of $7 million in USD, at an exchange rate of NOK 10.4094. The stocks purchased are adjusted to fair value based on unrealized gain or loss at the end of each period. The Company has an 8.3% interest as a shareholder of TECO. The CEO is also a director of TECO, which makes this a related party.

8. EQUITY INVESTMENT IN SECURITIES -RELATED PARTY AND BOND RECEIVABLE -RELATED PARTY

The Company purchased a bond receivable of TECO for a subscription amount of $3 million in USD. The issuance of the bond receivable is through a Tap Issue Addendum to TECO’s secured convertible notes agreement dated June 1, 2022, pursuant to which Nordic Trustee AS is acting as the security agent on behalf of the note holders. The bond receivable matures on June 1, 2025, and bears interest at the rate of 8% per annum paid quarterly in arrears and are convertible into shares of TECO at a rate of NOK 5.0868 per share. For the nine months ended March 31, 2024, the Company recognized interest income of $171,573 in the financial statements. All interest income has been paid timely each quarter.

The CEO of the Company is a director of TECO, which makes this a related party relationship.

		Cost Basis				Unrealized Gain 6/30/2023				Unrealized Loss 3/31/2024				Fair Value 3/31/2024
Short term equity investments at fair value, related party		$	7,000,000			$	655,601			$	(4,679,409	)		$	2,976,192

During the nine months ended March 31, 2024, the Company recognized an unrealized loss of $(4,679,409) in the financial statements.

9. SHORT TERM INVESTMENTS

On September 12, 2023, the Company invested in a $5,000,~~0000~~000 certificate of deposit (CD), which matured on March 12, 2024. CDs should be reported as part of cash and cash equivalents at cost plus accrued interest if less than 90 days from the purchase date, and on its own line in the financial statements if the purchase is greater than 90 days. The CD has been classified as a short -term investment due to the length of time to maturity at acquisition and was is measured using Level 2. The CD was reinvested upon maturity. The Company recognized interest income of $~~171~~14,~~573~~728 which was reported in the Company’s financial statements as of ~~March~~September 3130, 2024.

10. COMMITMENTS AND CONTINGENCIES

Effective October 1, ~~2022~~2023, the Company ~~extended~~ extended its research agreement with the University of Iowa through ~~March~~September 3130, 2024. As consideration under the research agreement, the ~~University~~ University of Iowa will receive a maximum of $~~343~~365,~~984~~493 from the Company in four equal installments of $8591,~~996~~373. The agreement can be terminated by either party upon sixty (60) days prior written notice to the other. As of ~~March~~September 3130, 2024, ~~the~~there ~~contract~~is ~~was~~a ~~paid~~balance indue of $274,120 per ~~full~~the agreement.

16Effective October 1, 2023, the Company extended its research agreement with the University of Michigan through September 30, 2024. As consideration under the research agreement, the University of Michigan received payments of $223,645 on the $298,194 research agreement. The research agreement was amended for an additional $85,000, which will be paid in four installments. In the event of early termination by the Sponsor, the Sponsor will pay all costs accrued by the University as of the date of termination, including non-cancellable obligations. As of September 30, 2024, there is a balance due of $40,091 per the agreement.

~~SUNHYDROGEN~~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, ~~INC~~2024, the Company renewed the space needed for its lab work at a monthly rent of $6,400 per month. Due to the rental being month-to-month, ASC 842 lease accounting is not applicable.

NOTES TO CONDENSED FINANCIAL STATEMENTS –UNAUDITED

MARCH 31, 2024 AND 2023

10. COMMITMENTS AND CONTINGENCIES (Continued)

Effective October 1, 2022, the Company extended its research agreement with the University of Michigan through March 31, 2024. As consideration under the research agreement, the University of Michigan will receive a maximum of $298,194, from the Company in four equal installments of $74,549. In the event of early termination by the Sponsor, the Sponsor will pay all costs accrued by the University as of the date of termination, including non-cancellable obligations. As of March 31, 2024, there remains a balance of $149,098 per the agreement.

The Company rented lab space with the University of Iowa as of February 2022. The monthly rent was $1,468, plus an additional $500 for the rental of a lab on a month-to-month basis and is cancellable with a thirty (30) day notice. On July 1, 2022, the Company increased the space needed for its’ lab work for a monthly rental of $5,468 per month. Due to the rental being month-to-month, ASC 842 lease accounting is not applicable.

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.

11. RELATED PARTY

Shareholders Loan

AsDuring ofthe ~~March~~period ended December 31, ~~2024~~2022, the ~~Company~~ ~~reported~~Company anentered ~~accrual~~into ~~associated~~a ~~with the CEO’s prior years’ salary in the amount of~~ $211,750 ~~for~~loan with the ~~current year, which is recorded in related party accrued expenses. The~~ Company’s ~~began~~CEO ~~accruing the salary in 2011 and used the funds~~ for ~~operating expenses. During~~ the ~~period~~repayment ~~ended~~of ~~December 31, 2022, the~~ accrued salary ~~was~~expense. ~~reclassified~~The ~~as a~~ loan ~~from~~bears ~~the CEO, with an~~ interest ~~rate~~ of five percent (5%). ~~The~~and ~~loan~~ will be repaid with monthly payments of $9,290, including interest and principal over a two-year period. As of ~~March~~September 3130, 2024 and June 30, 2024, the principal balance remaining on the loan was $649,~~941~~207 and $45,829, respectively and interest paid during the ~~nine~~three months ended ~~March~~September 3130, 2024 and 2023 was $5536 and $1,~~090~~721, respectively.

Other Related Party Activity

AsSee ~~discussed in~~ Note 8,7 ~~the~~for ~~Company purchased~~related anparty ~~interest~~transactions inwith respect ~~a company that the CEO became a director of subsequent~~ to ~~the~~TECO ~~purchase~~2030 A.S.A.

12. SUBSEQUENT EVENTS

Management evaluated subsequent events as of the date of the financial statements pursuant to ASC TOPIC 855 and had nothe following subsequent events to report.

17On October 14, 2024, David W. Raney was appointed as a director of the Company. Mr. Raney will be eligible to receive compensation for his service as a director that is approved by the Board from time to time and will receive an initial grant of stock options to purchase ten million shares of the Company’s common stock (the “Stock Options”). The Stock Options will be subject to the terms and conditions of the Company’s 2022 Equity Incentive Plan and a stock option agreement. As of the date of this filing, the Board has not yet approved the grant of the Stock Options.

As of market close on November 11, 2024, the fair value of the TECO equity securities held by the Company was $1,209,818, a significant decrease from the fair value as of September 30, 2024 which was $2,613,117.

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

Cautionary Statement Regarding Forward-Looking Statements

The information in this report may contain forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business strategy and expectations. Any statements that are not of historical fact may be deemed to be forward-looking statements. These forward-looking statements involve substantial risks and uncertainties. In some cases you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue”, the negative of the terms or other comparable terminology. Actual events or results may differ materially from the anticipated results or other expectations expressed in the forward-looking statements. In evaluating these statements, you should consider various factors, including the risks included from time to time in our reports filed with the Securities and Exchange Commission, or the SEC. These factors may cause our actual results to differ materially from any forward-looking statements. We disclaim any obligation to publicly update these statements, or disclose any difference between actual results and those reflected in these statements, except as may be required under applicable law.

Unless the context otherwise requires, references in this Form 10-Q to “we,” “us,” “our,” “SunHydrogen,” or the “Company” refer to SunHydrogen, Inc.

Overview

At SunHydrogen, our goal is to replace fossil fuels with clean, renewable hydrogen.

Hydrogen is the most abundant chemical element in the universe. When hydrogen fuel is used to power transportation and industry, the only byproduct left behind is pure water, unlike hydrocarbon fuels such as oil, coal and natural gas that emit carbon dioxide and other harmful pollutants into the atmosphere. However, naturally occurring elemental hydrogen is rare –- so rare, in fact, that today about 95% of hydrogen is produced from steam reforming of natural gas (Source: US Department of Energy, Hydrogen Fuel Basics). This process is both economically and environmentally unsound.

The SunHydrogen solution offers an efficient and cost-effective way to produce truly green hydrogen using sunlight and any source of water. Our core technology is a self-contained, nanoparticle-based hydrogen generator that mimics photosynthesis to split water molecules, resulting in hydrogen. By optimizing the science of water electrolysis at the nano-level, we believe we have developed a low-cost method to potentially produce environmentally friendly renewable hydrogen.

We believe renewable hydrogen has already proven itself to be a key solution in helping the world meet climate targets, and we believe our technology potentially offers solutions to the challenges that the hydrogen future presents, including cost of production and transportation.

Because our process only requires sunlight and water, our technology can be installed near the point of hydrogen use. This eliminates the need for pipelines and trucks that result in high carbon emissions and high capital investment. Additionally, because our process directly uses the electrical charges created by sunlight to generate hydrogen, our nanoparticle technology does not rely on grid power or require the costly power electronics that conventional electrolyzers do. Lastly, our planned scalable system configuration of many individual hydrogen-generating panels ensures redundancy, security and stability.

With a target cost of $2.50/kg., we aspire for our technology to be cost-competitive with brown hydrogen and below the cost of clean hydrogen competitors. We believe our solution has the potential to clear a path for green hydrogen to compete with natural gas hydrogen and gain mass market acceptance as a true replacement for fossil fuels.

Our technology is primarily developed at three laboratories – our independent laboratory in Coralville, Iowa, the SunHydrogen laboratory at the University of Iowa, and the Singh laboratory at University of Michigan. 14

Our technology is primarily developed at three laboratories - our independent laboratory in Coralville, Iowa, the SunHydrogen laboratory at the University of Iowa, and the Singh laboratory at University of Michigan.

Additionally, in parallel to the ongoing development of our own technology, we are well-capitalized to begin pursuing synergistic strategic investments in the hydrogen space. SunHydrogen is committed to furthering renewable hydrogen technology to grow the hydrogen ecosystem, and we are actively pursuing opportunities for investment and acquisition of complimentary hydrogen technologies. We are fortunate to have the resources to maximize our impact in this fast-growing industry.

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.

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 ~~March~~September 3130, 2024, 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.

Recently Issued Accounting Pronouncements

Management reviewed currently issued pronouncements during the three months ended ~~March~~September 3130, 2024, 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 March 31, 2024 compared to Three Months Ended March 31, 2023~~15

Results of Operations for the Three Months ended September 30, 2024 compared to Three Months Ended September 30, 2023

Operating Expenses

Operating expenses for the three months ended ~~March~~September 3130, 2024 were $1,~~831~~036,~~859~~427, compared to $1998,~~276,438~~730 for the three months ended ~~March~~September 3130, 2023. The net change of $~~555~~37,~~421~~697 in operating expenses consisted primarily of an increase in ~~salaries~~research ~~expense~~and development costs offset by decreases in general and administrative expenses and selling and marketing expenses.

Other Income/(Expenses)

Other income and (expenses) for the three months ended ~~March~~September 3130, 2024 were $(21,~~190~~010,~~305~~411), compared to $3550,~~019,088~~618 for the three months ended ~~March~~September 3130, 2023. The decrease in other income of $51,~~209~~561,~~393~~029 was the result of aan ~~decrease~~unrealized loss on the Company’s investment in ~~non-cash~~TECO ~~loss~~(Equity securities, related party on ~~change~~the Condensed Balance Sheets) in ~~derivative~~the ~~and~~ current period compared to an unrealized gain in ~~related~~the prior ~~party~~year ~~investments~~offset with a realized loss on redemption of marketable securities in the prior year with no similar transactions in the current year.

Net ~~Income/(~~Loss)

For the three months ended ~~March~~September 3130, 2024, our net loss was $(42,~~022~~046,~~164)~~838, compared to a net ~~income~~loss of $1448,~~742,650~~112 for the three months ended ~~March~~ 31September 30, 2023. The ~~majority~~increase ~~of the decrease~~ in net ~~income~~loss of $(51,~~764~~598,~~814),~~726 was ~~related~~ primarily due to ~~the~~an ~~decrease in~~ unrealized ~~gain in~~loss ~~related party investments and net change of derivative instruments estimated each period. These estimates are based~~ on ~~multiple inputs, including~~ the ~~market~~Company’s ~~price~~investment ofin ~~our~~TECO ~~stock,~~(Equity ~~interest rates~~securities, ~~our~~related ~~stock~~party ~~price,~~on ~~volatility,~~the ~~variable~~Condensed ~~conversion~~Balance ~~prices based on market prices~~Sheets) ~~defined~~ in the ~~respective~~current ~~agreements~~period ~~and~~compared ~~probabilities~~to ofan ~~certain~~unrealized ~~outcomes~~gain ~~based~~in onin ~~managements’~~the ~~estimates~~prior year. These ~~inputs~~equity securities are ~~subject to~~measured ~~significant~~at ~~changes from period to period, therefore, the estimated~~ fair value ofon ~~the~~a ~~derivative liabilities will fluctuate from period~~recurring tobasis. ~~period~~In addition, ~~and~~ the ~~fluctuation may be material. The~~ Company has not generated any revenues.

Results of Operations for the Nine months ended March 31, 2024 compared to Nine Months Ended March 31, 2023.

Operating Expenses

Operating expenses for the nine months ended March 31, 2024 were $4,095,472, compared to $6,977,092 for the nine months ended March 31,2023. The net decrease of $2,881,620 in operating expenses consisted primarily of a decrease in salary expenses.

Other Income/(Expenses)

Other income and (expenses) for the nine months ended March 31, 2024 were $(3,403,512), compared to $12,420,741, for the nine months ended March 31, 2023. The net increase in other expenses of $15,824,253 was the result of a decrease in non-cash net change in derivatives.

Net Income/(Loss)

For the nine months ended March 31, 2024, our net loss was $(7,498,984), compared to net income of $5,443,649, for the nine months ended March 31, 2023. The majority of the decrease in net income of $12,942,633 was related primarily to the decrease in unrealized gain in related party investments, and a non-cash gain in change in derivative. Company has not generated any revenues.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

As of ~~March~~September 3130, 2024, we we had working capital of $4142,~~753~~561,~~962~~105, compared to $4742,~~689~~386,~~381~~683 as of June 30, ~~2023~~2024. This ~~decrease~~increase in working capital of $5174,~~935,419~~422 was primarily due to a decrease in ~~marketable~~current ~~securities and fair market value of short term investment~~liabilities.

Cash used in operating activities was $1704,~~770,631~~064 for the ~~nine~~three months ended ~~March~~September 3130, 2024, compared to $3474,~~346,769~~766 for the ~~nine~~three months ended ~~March~~September 3130, 2023. The net ~~decrease~~ increase of $1229,~~576,138~~298 in cash used in operating activities was due to aincrease ~~decrease~~in increase in ~~salary~~the ~~expense~~net loss offset an unrealized loss in equity securities, related party in the current period compared to an unrealized gain in equity securities, related party in the prior year. The Company has had no revenues.

Cash ~~provided~~used byin investing ~~activities~~ activities during the ~~nine~~three months ended ~~March~~September 3130, 2024 and ~~March~~September 3130, 2023 was $~~3,000,000~~0 and $32,~~934~~014,~~306~~728, respectively. The net decrease of $~~934~~2,~~306~~ 014,728 in cash used in investing activities was due to athe ~~decrease~~purchase inof certificate of deposits offset by the ~~purchase~~redemption of ~~marketable~~short-term investments in corporate securities during the three months ended September 30, 2023 with no similar transactions in the three months ended September 30, 2024.

Cash provided by financing activities during the three months ended ~~March~~September 3130, 2024 and ~~March~~September 3130, 2023 was $~~800~~2,~~407~~165,303 and $1217,~~863~~826,~~618,~~ respectively. The net ~~decrease~~ increase of $1,~~063~~947,~~211~~477 in cash provided by financing activities was due to increased proceeds from a ~~decrease~~Purchase inAgreement ~~net~~entered ~~proceeds~~with ~~from~~an investor ~~cash~~for ~~purchase~~the ~~agreements~~sale of up to $45,000,000 of common stock .

Our ability to continue as a going concern is dependent upon raising capital through financing transactions and future revenue. Our capital needs have primarily been met from the proceeds of private placements and registered offerings of our securities, as we have not generated any revenues to date.

We have historically obtained funding from investors, through private placements and registered offerings of equity and debt securities. Management believes that the Company will be able to continue to raise funds through the sale of its securities to its existing shareholders and prospective new investors, which will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the Company to continue to develop its core business. There can be no assurance that we will be able to continue raising the required capital for our operations on terms and conditions that are acceptable to us, or at all. If we are unable to obtain sufficient funds, we may be forced to curtail and/or cease our operation.

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.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

AsOur ofmanagement, ~~the~~with ~~end of~~ the ~~period~~ ~~covered~~participation byof ~~this~~our ~~report,~~CEO weand ~~conducted~~our anActing ~~evaluation~~CFO, ~~under~~evaluated the ~~supervision~~effectiveness ~~and with the participation~~ of our ~~chief executive officer and chief financial officer of our~~ disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based ~~upon~~on ~~this~~that evaluation, our ~~chief~~CEO ~~executive officer~~ and ~~chief~~our ~~financial~~Acting ~~officer~~CFO concluded that, due to the material weakness described below, our disclosure controls and procedures as ~~are~~of the end of the period covered by this report were not effective to ensure that information required to be disclosed is made known to management and others, as appropriate, to allow timely decision regarding required disclosure and that the information required to be disclosed by us in ~~the~~ reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and (ii) accumulated and communicated to our management, including our ~~chief~~CEO ~~executive officer~~ and ~~chief~~Acting ~~financial officer~~CFO, or ~~person~~persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and acting principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this Annual Report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

As of September 30, 2024, due to the inherent issue of segregation of duties in a small company, we have relied heavily on entity or management review controls and engaged an outside financial consultant to lessen the issue of segregation of duties over accounting, financial close procedures and controls over financial statement disclosure. Accordingly, management has determined that this control deficiency constitutes a material weakness.

Changes in Internal Control Over Financial Reporting

There was no change to our internal control over financial reporting that occurred during our ~~last~~ fiscal quarter ended September 30, 2024 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 2930, ~~2023~~2024.

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 ~~March~~September 3130, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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.

May 21, 2024	SUNHYDROGEN, INC.
November 12, 2024	SUNHYDROGEN, INC.
	By:	/s/ Timothy Young
		Timothy Young Chief Executive Officer and Acting Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

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Filing Compare · SUNHYDROGEN, INC.