NewHydrogen, Inc. 10-K

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER REPURCHASES OF EQUITY SECURITIES. On February 22, 2007, our common stock became eligible for quotation on the OTC Bulletin Board under the ticker symbol “BSRC” and is currently quoted on the OTC Pink maintained by the OTC Markets Group, Inc. under the ticker symbol “BSRC”. For the periods indicated, the following table sets forth the high and low bid prices per share of common stock. These high and low bid prices represent prices quoted by broker-dealers on the OTC Pink. These prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions. Fiscal 2020 Fiscal 2019 Quarter Ended High Low High Low March 31 $ .04 $ .02 $ .04 $ .02 June 30 $ .04 $ .02 $ .04 $ .02 September 30 $ .04 $ .01 $ .04 $ .01 December 31 $ .03 $ .01 $ .03 $ .01 Common Stock As of February 8, 2021, our common stock was held by 88 stockholders of record and we had 528,062,717 shares of common stock issued and outstanding. We believe that the number of beneficial owners is substantially greater than the number of record holders because a significant portion of our outstanding common stock is held of record in broker street names for the benefit of individual investors. Dividend Policy We have never declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future. In addition, any future determination to pay cash dividends will be at the discretion of the board of directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends. Transfer Agent The Company’s registrar and transfer agent is Worldwide Stock Transfer, LLC, One University Plaza, Suite 505, Hackensack, NJ 07601. Securities Authorized for Issuance Under Equity Compensation Plan We currently do not have an equity compensation plan. Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities None. ITEM 6. SELECTED FINANCIAL DATA N/A ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Special Note on Forward-Looking Statements. Certain statements in “Management’s Discussion and Analysis or Plan of Operation” below, and elsewhere in this annual report, are not related to historical results, and are forward-looking statements. Forward-looking statements present our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements frequently are accompanied by such words such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms or other words and terms of similar meaning. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or timeliness of such results. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this annual report. Subsequent written and oral forward looking statements attributable to us or to persons acting in our behalf are expressly qualified in their entirety by the cautionary statements and risk factors set forth below and elsewhere in this annual report, and in other reports filed by us with the SEC. 14 You should read the following description of our financial condition and results of operations in conjunction with the financial statements and accompanying notes included in this Annual Report beginning on page F-1. Overview We are a developer of clean energy technologies. Our current focus is on developing an electrolyzer technology to lower the cost of Green Hydrogen production. Hydrogen is the cleanest and most abundant fuel in the universe. It is zero-emission and only produces water vapor when used. However, hydrogen does not exist in its pure form on Earth so it must be extracted. For centuries, scientists have known how to use electricity to split water into hydrogen and oxygen using a device called an electrolyzer. Electrolyzers installed behind a solar farm or wind farm can use renewable electricity to split water, thereby producing Green Hydrogen. However, modern electrolyzers still cost too much. The chemical catalysts that enable the water-splitting reactions are currently made from platinum and iridium – both are very expensive precious metals. These catalysts account for nearly 50% of the cost of the electrolyzer. We are developing technologies to significantly reduce or replace catalysts made from rare earth materials with catalysts made from inexpensive earth abundant materials in electrolyzers to lower the cost of Green Hydrogen, thus help usher in a Green Hydrogen economy. In a 2020 report, Goldman Sachs estimated that Green Hydrogen will be a $12 trillion market opportunity by 2050. We are also developing innovative technologies to increase the storage capacity, lower the cost and extend the life of lithium-ion batteries for electric vehicles. We are currently working on a silicon anode material technology intended to reduce the cost of current and future generation of lithium-ion batteries for EVs. We have previously developed an innovative material technology to reduce the cost per watt of electricity produced by Photovoltaic, or PV, solar modules. RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 2020 COMPARED TO THE YEAR ENDED DECEMBER 31, 2019 General and Administrative Expenses General and administrative (“G&A”) expenses increased by $18,997 to $447,665 for the year ended December 31, 2020, compared to $428,668 for the prior period December 31, 2019. This increase in G&A expenses was the result of an increase in salary of $24,000, with an overall decrease of $5,003 in other G&A expenses. Research and Development Research and Development (“R&D”) expenses decreased by $86,965 to $177,722 for the year ended December 31, 2020, compared to $264,687 for the prior period ended December 31, 2019. This overall decrease in R&D expenses was the result of a decrease in consultant fees and prototype cost. Depreciation and amortization Expense Depreciation and amortization expense for the years ended December 31, 2020 and 2019 was $4,365 and $6,890, respectively. Other Income/(Expenses) Other income and (expenses) increased by $(144,737,518) to $(139,914,908) of other expense for the year ended December 31, 2020, compared to $4,822,610 of other income for the prior period ended December 31, 2019. The increase in non-cash loss on change in fair value of the derivative instruments of $144,816,102, with a decrease in interest expense in the amount of $78,545, which includes the net change in amortization of debt discount in the amount of $61,956, and interest income of $39. The decrease in other income and (expenses) was primarily due to the non-cash net change in derivatives for our outstanding convertible promissory notes. Net Loss Our net loss was $(140,544,660) for the year ended December 31, 2020, compared to a net income of $4,122,365 for the prior period ended December 31, 2019. The increase in net income was due to an increase in non-cash other income (expenses) associated with the net change in derivative instruments estimated each period. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on the calculated estimates. These inputs are used to determine the fair value of the derivative liabilities and are subject to significant changes from period to period based on these valuations, therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material. The Company has not generated any revenues. 15 LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2020, we had $150,532,859 in working capital deficit as compared to $10,048,922 for the prior year ended December 31, 2019. The increase in working capital deficit was due primarily to an increase in derivative liability, convertible debt, cash, and prepaid expenses, with an decrease in accounts payable. During the year ended December 31, 2020, the Company used $647,298 of cash for operating activities, as compared to $718,403 for the prior year ended December 31, 2019. The decrease in the use of cash for operating activities was a result of a decrease in research and development, with an increase in salary expense in the fiscal year ended December 31, 2020 compared to December 31, 2019. The Company is focused on development of silicon anode additive technology for next generation lithium-ion batteries. Cash used in investing activities for the years ended December 31, 2020 and 2019 was $0, respectively. Cash provided from financing activities during the year ended December 31, 2020 was $649,000 as compared to $697,500 for the prior year ended December 31, 2019. Our capital needs have primarily been met from the proceeds of convertible debt offerings. We are currently in the development stage of our business and have no revenues. Our financial statements as of December 31, 2020 and 2019 have been prepared under the assumption that we will continue as a going concern. Our independent registered public accounting firm has issued their report dated February 14, 2021 that included an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern ultimately is dependent on our ability to generate a profit which is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, achieve profitable operations. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. PLAN OF OPERATION AND FINANCING NEEDS We are engaged in the development of clean energy technologies including green hydrogen, and lithium-ion battery components. The Company’s current focus is on developing a breakthrough electrolyzer technology to lower the cost of Green Hydrogen production. Our plan of operation within the next six months is to utilize our cash balances to expand the existing electrolyzer technology program focused on significantly reducing or replacing rare earth materials in electrolyzers with inexpensive earth abundant materials to help usher in a Green Hydrogen economy. We will continue developing our silicon anode material processing technology for high capacity and low-cost Lithium-ion batteries. We believe that our current cash and investment balances will be sufficient to support development activity and general and administrative expenses for the next twelvemonths. Management estimates that it will require additional cash resources during 2022, based upon its current operating plan and condition. We expect increased expenses during the second quarter of 2021 as we ramp up prototyping efforts for electrolyzer incorporating our catalyst technology as well as commence an additional related technology program. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA All financial information required by this Item is attached hereto at the end of this report beginning on page F-1 and is hereby incorporated by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.