NewHydrogen, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) CONDENSED BALANCE SHEET FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (Unaudited) June 30, 2021 December 31, 2020 (Unaudited) ASSETS CURRENT ASSETS Cash $ 7,569,822 $ 63,496 Prepaid expenses 286,207 55,435 TOTAL CURRENT ASSETS 7,856,029 118,931 PROPERTY AND EQUIPMENT Machinery and equipment 37,225 37,225 Less accumulated depreciation ( 32,695 ) ( 32,023 ) NET PROPERTY AND EQUIPMENT 4,530 5,202 OTHER ASSETS Patents, net of amortization of $ 16,623 and $ 15,112 , respectively 28,713 30,224 Deposit 770 770 TOTAL OTHER ASSETS 29,483 30,994 TOTAL ASSETS $ 7,890,042 $ 155,127 LIABILITIES AND SHAREHOLDERS’ DEFICIT CURRENT LIABILITIES Accounts payable $ 530 $ - Accrued expenses 9,647 991,716 Derivative liability 73,395 148,590,100 Convertible promissory notes net of debt discount of $ 6,889 and $ 219,850 , respectively 100,111 1,069,974 TOTAL CURRENT LIABILITIES 183,683 150,651,790 LONG TERM LIABILITIES Convertible promissory notes net of debt discount of $ 0 and $ 0 , respectively - 1,418,225 TOTAL LONG TERM LIABILITIES - 1,418,225 TOTAL LIABILITIES 183,683 152,070,015 SHAREHOLDERS’ EQUITY Preferred stock, $ 0.0001 par value; 10,000,000 authorized shares; 34,461 shares of Preferred Series C shares issued and outstanding 3 - Common stock, $ 0.0001 par value; 3,000,000,000 authorized shares 685,496,051 and 456,198,529 shares issued and outstanding, respectively 68,549 45,620 Preferred treasury stock, 0 and 1,000 shares outstanding, respectively - - Additional paid in capital 131,582,079 13,114,993 Accumulated deficit ( 123,944,272 ) ( 165,075,501 ) TOTAL SHAREHOLDERS’ EQUITY (DEFICIT) 7,706,359 ( 151,914,888 ) TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 7,890,042 $ 155,127 The accompanying notes are an integral part of these unaudited condensed financial statements. 1 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (Unaudited) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Three Months Ended Six Months Ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 REVENUE $ - $ - $ - $ - OPERATING EXPENSES General and administrative expenses 3,637,312 100,240 18,438,830 219,059 Research and development 251,776 40,212 508,440 83,832 Depreciation and amortization 1,091 1,091 2,182 2,182 TOTAL OPERATING EXPENSES 3,890,179 141,543 18,949,452 305,073 LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSES) ( 3,890,179 ) ( 141,543 ) ( 18,949,452 ) ( 305,073 ) OTHER INCOME/(EXPENSES) Interest income 919 5 1,285 12 Gain on settlement of debt and derivative - - 96,666,293 - Gain (Loss) on change in derivative liability 250,293 6,507,665 ( 30,039,479 ) ( 169,011 ) Interest expense ( 15,977 ) ( 231,874 ) ( 563,914 ) ( 457,187 ) TOTAL OTHER INCOME (EXPENSES) 235,235 6,275,796 66,064,185 ( 626,186 ) NET INCOME (LOSS) $ ( 3,654,944 ) $ 6,134,253 $ 47,114,733 $ ( 931,259 ) BASIC EARNINGS (LOSS) PER SHARE $ ( 0.01 ) $ 0.03 $ 0.18 $ ( 0.01 ) DILUTED EARNING (LOSS) PER SHARE $ ( 0.01 ) $ 0.00 $ 0.06 $ ( 0.01 ) WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC 659,726,820 223,425,846 267,786,651 184,830,379 DILUTED 659,726,820 2,124,796,718 740,069,136 184,830,379 The accompanying notes are an integral part of these unaudited condensed financial statements. 2 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) CONDENSED STATEMENT OF SHAREHOLDERS’ DEFICIT FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (Unaudited) Shares Amount Shares Amount Capital Deficit Total SIX MONTHS ENDED JUNE 30, 2020 Additional Preferred Stock Common Stock Paid-in Accumulated Shares Amount Shares Amount Capital Deficit Total Balance at December 31, 2019 - - 133,912,520 13,391 12,301,739 ( 24,530,841 ) ( 12,215,711 ) Issuance of common shares for cash Issuance of common shares for cash, shares Issuance of common shares for converted promissory notes and accrued interest - - 148,822,552 14,882 398,852 - 413,734 Issuance of commons shares for services Issuance of commons shares for services, shares Issuance of preferred shares in exchange for fair value of convertible notes Issuance of preferred shares in exchange for fair value of convertible notes, shares Issuance of common shares for conversion of preferred stock Issuance of common shares for conversion of preferred stock, shares Stock compensation cost Issuance of common stock warrants deemed dividends Net Loss - - - - - ( 931,259 ) ( 931,259 ) Balance at June 30, 2020 (unaudited) - $ - 282,735,072 $ 28,273 $ 12,700,591 $ ( 25,462,100 ) $ ( 12,733,236 ) SIX MONTHS ENDED JUNE 30, 2021 Additional Preferred Stock Common Stock Paid-in Accumulated Shares Amount Shares Amount Capital Deficit Total Balance at December 31, 2020 - - 456,198,529 45,620 13,114,993 ( 165,075,501 ) ( 151,914,888 ) Issuance of common shares for cash - - 178,333,334 17,833 8,763,868 - 8,781,701 Issuance of common shares for converted promissory notes and accrued interest - - 21,964,188 2,196 203,779 - 205,975 Issuance of commons shares for services - - 1,000,000 100 149,700 - 149,800 Issuance of preferred shares in exchange for fair value of convertible notes 34,853 3 - - 85,555,201 - 85,555,204 Issuance of common shares for conversion of preferred stock ( 392 ) - 28,000,000 2,800 ( 2,800 ) - - Stock compensation cost - - - - 17,813,834 - 17,813,834 Issuance of common stock warrants deemed dividends - - - - 5,983,504 ( 5,983,504 ) - Net Income - - - - - 47,114,733 47,114,733 Balance at June 30, 2021 (unaudited) 34,461 $ 3 685,496,051 $ 68,549 $ 131,582,079 $ ( 123,944,272 ) $ 7,706,359 The accompanying notes are an integral part of these unaudited condensed financial statements. 3 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (Unaudited) June 30, 2021 June 30, 2020 Six Months Ended June 30, 2021 June 30, 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ 47,114,733 $ ( 931,259 ) Adjustment to reconcile net income(loss) to net cash (used in) provided by operating activities Depreciation and amortization expense 2,182 2,182 Common stock issued for services 149,800 - Stock compensation expense 17,813,834 - (Gain) Loss on net change in derivative liability 30,039,479 169,011 Amortization of debt discount recognized as interest expense 449,100 320,742 Gain on settlement of debt and derivative ( 96,666,293 ) - (Increase) Decrease in Changes in Assets Prepaid expenses ( 230,772 ) 11,854 Increase (Decrease) in Changes in Liabilities Accounts payable 530 109 Accrued expenses 63,033 162,843 NET CASH USED IN OPERATING ACTIVITIES ( 1,264,374 ) ( 264,518 ) CASH FLOWS FROM INVESTING ACTIVITIES: - - CASH FLOWS FROM FINANCING ACTIVITIES: Procceds for the sale of common stock for cash 8,781,700 - Principal payments on convertible debt ( 203,000 ) - Net prroceeds from convertible promissory notes 192,000 265,500 NET CASH PROVIDED BY FINANCING ACTIVITIES 8,770,700 265,500 NET INCREASE IN CASH 7,506,326 982 CASH, BEGINNING OF PERIOD 63,496 61,794 CASH, END OF PERIOD $ 7,569,822 $ 62,776 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Interest paid $ - $ 439 Taxes paid $ - $ - SUPPLEMENTAL SCHEDULE OF NON-CASH TRANSACTIONS Common stock issued for convertible notes and accrued interest $ 205,975 $ 413,734 Fair value of initial derivative $ 180,004 $ 265,500 Fair value of convertible notes exchanged for preferred stock $ 85,555,204 $ - The accompanying notes are an integral part of these unaudited condensed financial statements. 4 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 1. Basis of 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 Regulation 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 six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the December 31, 2020. Going Concern The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.   The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions. During the six months ended June 30, 2021, the Company obtained funds from the sale of shares of common stock, and from the issuance of a convertible note agreement. Management believes this funding will continue from its’ current investors and from new investors. Management believes the existing shareholders, and the prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the development of its core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company 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. Revenue Recognition The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. The Company adopted Accounting Standards Codification (“ASC”) 606, whereby revenue will be recognized as performance obligations are satisfied and customers obtain control of goods or services. However, in the event of a loss on a sale is foreseen, the Company will recognize the loss as it is determined. To date, the Company has not had significant revenues and is in the development stage. Cash and Cash Equivalent The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. 5 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, derivative liabilities and the fair value of stock options. Actual results could differ from those estimates. Property and Equipment Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives: SCHEDULE OF PROPERTY AND EQUIPMENT Computer equipment 5 Years Machinery and equipment 10 Years Depreciation expense for the six months ended June 30, 2021 and 2020 was $ 1,343 and $ 1,343 , 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. SCHEDULE OF INTANGIBLE ASSETS AMORTIZED OVER THEIR USEFUL LIVES Useful Lives 2021 2020 Patents $ 45,336 $ 45,336 Less accumulated amortization 15 years ( 16,623 ) ( 15,112 ) Intangible assets $ 28,713 $ 30,224 Amortization expense for the six months ended June 30, 2021 and the year ended December 31, 2020 was $ 1,511 and $ 3,022 , respectively. Stock-Based Compensation The Company measures the cost of employee services received in exchange for an equity award based on the grant-date fair value of the award. All grants under our stock-based compensation programs are accounted for at fair value and that cost is recognized over the period during which an employee, consultant, or director are required to provide service in exchange for the award (the vesting period). Compensation expense for options granted to employees and non-employees is determined in accordance with the standard as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Compensation expense for awards granted is re-measured each period. On March 24, 2015 and September 2, 2015, the Company granted 12,000,000 stock options to its employees and 3,950,000 stock options to its directors for services. On February 18, 2021, the Company granted 450,000,000 stock options to its employees for services at an exercise price of $ 0.091 . On June 29, 2021, the Company amended the exercise price to $0.028 per share. The options expire, and all rights to purchase the shares shall terminate seven (7) years from the date of grant or termination of employment. Half of the 400,000,000 options vest immediately, and the remaining half of the option to purchase 200,000,000 shares of the Company’s common stock shall become exercisable in equal amounts over a twenty-four ( 24 ) month period during the term of the optionee’s employment, with the first installment of 8,333,333 shares vesting on March 18, 2021. The 50,000,000 options are exercisable in equal amounts over a thirty-six ( 36 ) month period during the term of the optionee’s employment, with the first installment of 1,388,889 shares vesting on March 18, 2021. 6 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Stock-Based Compensation (Continued) Determining the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based payment and stock price volatility. The Company used Black Scholes to value its stock option awards which incorporated the Company’s stock price, volatility, U.S. risk-free rate, dividend rate, and estimated life. The stock options terminate seven (7) years from the date of grant or upon termination of employment. As of June 30, 2021, 465,950,000 stock options were outstanding. As of June 30, 2021, the Company granted no warrants and had no warrants outstanding. Research and Development Research and development costs are expensed as incurred. Total research and development costs were $ 508,440 and $ 83,832 for the six months ended June 30, 2021 and 2020, respectively. Net Earnings (Loss) per Share Calculations Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year. 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), plus the assumed conversion of convertible debt (Note 5).   The Company has included shares issuable from convertible debt of $ 107,000 and 465,950,000 stock options for the six months ended June 30, 2021, because their impact on the income per share is dilutive. For the six months ended June 30, 2020, the Company’s diluted loss per share is the same as the basic loss per share, and the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. The Company has excluded 15,950,000 stock options, and the shares issuable from convertible debt of $ 2,739,790 , because their impact was anti-dilutive. SCHEDULE OF NET EARNINGS PER SHARE 2021 2020 For the Six Months Ended June 30, 2021 2020 Income (Loss) to common shareholders (Numerator) $ 46,279,525 $ ( 931,259 ) Basic weighted average number of common shares outstanding (Denominator) 267,786,651 184,830,379 Diluted weighted average number of common shares outstanding (Denominator) 740,069,136 184,830,379 Fair Value of Financial Instruments Fair Value of Financial Instruments requires disclosure of the fair value information, whether recognized in the balance sheet, where it is practicable to estimate that value. As of June 30, 2021, the amounts reported for cash, inventory, prepaid expenses, accounts payable, and accrued expenses, approximate the fair value because of their short maturities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: 7 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair Value of Financial Instruments (Continued) ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. 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 at June 30, 2021: SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS Total (Level 1) (Level 2) (Level 3) Assets: $ - $ - $ - $ - Liabilities: Derivative Liability at fair value as of June 30, 2021 $ 73,395 $ - $ - $ 73,395 The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value: SCHEDULE OF RECONCILIATION OF DERIVATIVE LIABILITY FOR LEVEL 3 INPUTS Balance as of January 31, 2021 $ 148,590,100 Fair value of derivative liabilities issued 180,004 Derecognition of derivative liability ( 178,736,187 ) Loss on change in derivative liability 30,039,478 Balance as of June 30, 2021 $ 73,395 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. 8 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Recently Issued Accounting Pronouncements In May 2021, the FASB issued an amendment to accounting standards ASU 2021-04, (Subtopic 470-50) – Debt Modifications and Extinguishments”, which requires that an entity apply the new guidance to a modification or an exchange of a freestanding equity-classified written call option that is a part of or directly related to a modification or an exchange of an existing debt. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for all entities. The Company has evaluated the impact of the adoption of ASU 2021-04, which has no effect on the Company’s financial statements. Management 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. 3. CAPITAL STOCK Preferred Stock On January 14, 2021, the Board of Directors adopted a certificate of designation establishing the rights, preferences, privileges and other terms of 1,000 Series B Preferred Stock, par value $0.0001 per share, providing for supermajority voting rights to holders of the Series B Preferred Stock. The shares of the Series B Preferred Stock were issued to David Lee, Chief Executive Officer, Chairman of the Board, President and acting Chief Financial Officer. The Series B Preferred Stock total purchase price is $ 0.10 for 1,000 shares of Series B Preferred Stock. The Series B Preferred stock expired on February 28, 2021. As of June 30, 2021, there were no shares outstanding. On March 26, 2021, the Company entered into an agreement with an investor for an exchange of convertible debt to equity. The investor exchanged convertible notes in the amount of $ 2,462,060 , plus interest in the amount of $ 1,023,253 for an aggregate total of $ 3,485,313 in exchange for 34,853 shares of the Company’s Series C Preferred Stock. The extinguishment of the convertible debt was recognized in the Company’s financials as a gain on settlement of convertible notes and derivative. A valuation was prepared based on a stock price of $ 0.075 , with a volatility of 206.03 %, based on an estimated term of 5 years. SCHEDULE OF EXTINGUISHMENT OF DEBT Per Valuation Preferred shares issued 34,853 Stated value of debt and interest $ 3,485,313 Calculated fair value of preferred shares $ 85,555,204 Fair value of derivative liability removed $ 178,464,388 Gain $ 96,394,494 The Company recognized a gain on settlement of $ 96,394,494 for the extinguishment of convertible debt, plus derivative liability for the period ended June 30, 2021. On April 14, 2021, the Board of Directors of the Company authorized the issuance of 1,000 shares of Series D Preferred Stock, par value $ 0.0001 per share, to David Lee, Chief Executive Officer, Chairman of the Board, President and acting Chief Financial Officer. The Series D Preferred Stock total purchase price is $0.10 for 1,000 shares of Series D Preferred Stock. The Series D Preferred stock expired on May 29, 2021. As of June 30, 2021, there were no shares of Series D outstanding. 9 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 3. CAPITAL STOCK (Continued) Common Stock On June 10, 2021, the Company filed an amendment to its Articles of Incorporation to effect an increase in the authorized number of shares of common stock of the Corporation from 3,000,000,000 shares of common stock, par value $ 0.0001 per share to 6,000,000,000 shares of common stock, par value $ 0.0001 per share. During the six months ended June 30, 2021, the Company issued an aggregate of 52,000,000 shares of common stock and separate pre-funded warrants to purchase up to 31,333,334 shares of common stock, plus warrants to purchase up to 83,333,334 at an exercise price of $ 0.06 per share. During the six months ended June 30, 2021, the Company issued 65,000,000 shares of common stock and separate pre-funded warrants to purchase up to 60,000,000 shares of common stock, plus warrants to purchase up to 125,000,000 at an exercise price of $ 0.04 per shares. During the six months ended June 30, 2021, the Company issued 21,964,188 shares of common stock upon conversion of convertible promissory notes in the principal amount of $ 184,124 , plus accrued interest of $ 20,851 , and other fees of $ 1,000 at prices ranging from $ 0.0014 - $ 0.0641 . During the six months ended June 30, 2021, the Company issued 73,273,212 shares of common stock upon conversion of convertible promissory notes in the principal amount of $ 587,628 , plus accrued interest of $ 74,006 , and other fees of $ 500 at prices ranging from $ 0.00495 - $ 0.0172 . During the six months ended June 30, 2021, the Company issued 1,000,000 shares of common stock for services at fair value. During the six months ended June 30, 2021, the Company issued 28,000,000 shares of common stock upon conversion of 392 shares of preferred stock. 4. STOCK OPTIONS Stock Options During the six months ended June 30, 2021, the Company granted 400,000,000 stock options to its CEO and 50,000,000 stock options to an employee of the Company (Please see Note 2). SCHEDULE OF STOCK OPTIONS 6/30/2021 6/30/2020 Number of Options Weighted average exercise price Number of Options Weighted average exercise price Outstanding as of the beginning of the periods 15,950,000 $ 0.23 15,950,000 $ 0.23 Granted 450,000,000 $ 0.028 - - Exercised - - - - Expired - - Outstanding as of the end of the periods 465,950,000 $ 0.035 15,950,000 $ 0.23 Exercisable as of the end of the periods 254,838,889 $ 0.041 15,950,000 $ 0.23 The weighted average remaining contractual life of options outstanding as of June 30, 2021 and 2020 was as follows: SCHEDULE OF WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF OPTIONS OUTSTANDING 6/30/2021 6/30/2020 Exercisable Price Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) Exercisable Price Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) $ 0.09 2,450,000 2,450,000 0.73 $ 0.09 2,450,000 2,450,000 1.73 $ 0.26 13,500,000 13,500,000 1.18 $ 0.26 13,500,000 13,500,000 2.18 $ 0.028 450,000,000 238,888,888 6.64 - 7.64 - - - - 465,950,000 254,838,888 15,950,000 15,950,000 The stock-based compensation expense recognized in the statement of operations during the six months ended June 30, 2021 and 2020, related to the granting of these options was $ 17,813,834 and $ 0 , respectively. As of June 30, 2021 and 2020, respectively, there was no intrinsic value with regards to the outstanding options. 10 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 5. CONVERTIBLE PROMISSORY NOTES As of June 30, 2021, the Company’s outstanding convertible promissory notes net of debt discount are summarized as follows: SCHEDULE OF OUTSTANDING CONVERTIBLE PROMISSORY NOTES Convertible Promissory Notes, net of debt discount $ 100,111 Less current portion 100,111 Total long-term liabilities $ - At June 30, 2021, the Company had $ 107,000 in convertible promissory notes with a remaining debt discount of $ 6,889 , leaving a net balance of $ 100,111 . The Company issued an unsecured convertible promissory note (the May 2014 Note”), in the amount of $ 500,000 on May 2, 2014. The May Note matured on September 18, 2019 , and was extended to May 2, 2022 on December 26, 2019. The May 2014 Note bears interest at 10 % per annum. The May 2014 Note is convertible into shares of the Company’s common stock at a conversion price of a) the lesser of $0.25 per share of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the average three (3) lowest trading prices of three (3) separate trading days recorded after the effective date, or c) the lowest effective price granted to any person or entity after the effective date to acquire common stock. If the Borrower fails to deliver shares in accordance with the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower. In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the May 2014 Note has been determined by using the Binomial lattice formula from the effective date of each tranche. During the six months ended June 30, 2021, the Company exchanged principal of $ 1,560 , plus accrued interest of $ 970 for preferred stock. As of June 30, 2021, the remaining balance of the May 2014 Note was $ 0 . The Company issued various unsecured convertible promissory notes (the 2015-2018 Notes”) in the aggregate amount of $ 2,145,000 on various dates of January 30, 2015 through February 9, 2018. The 2015-2018 Notes mature on January 30, 2023 . The 2015-2018 Notes bears interest at 10 % per annum. The 2015-2018 Notes are convertible into shares of the Company’s common stock at conversion prices ranging from the a) the lesser of $0.03 to $0.25 per share of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the lowest trade price recorded since the original effective date, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Borrower fails to deliver shares in accordance within the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower. In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the 2015-2018 Notes have been determined by using the Binomial lattice formula from the effective date of each tranche. During the June 30, 2021, the Company exchanged the Note for Preferred Stock for principal in the amount of $ 1,960,500 , plus accrued interest of $ 923,717 . As of June 30, 2021, the remaining balance of the 2015-2018 Notes was $ 0 . 11 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 5. CONVERTIBLE PROMISSORY NOTES (Continued) The Company issued various unsecured convertible promissory notes (the Feb 18 Note”) in the aggregate amount of $ 430,000 on various dates from February 26, 2018 through December 22, 2018. On January 13, 2021 and February 23, 2021, the Company received additional tranches in the amount of $ 70,000 , associated with the Feb 2018 Note for a total aggregate of $ 500,000 . The maturity date of the Feb 18 Note was extended, and as a result matures on February 18, 2023 . The Feb 18 Note bears interest at 10 % per annum. The Feb 18 Note is convertible into shares of the Company’s common stock at conversion prices ranging from the a) the lesser of $0.03 per share of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the lowest trade price recorded since the original effective date, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Borrower fails to deliver shares in accordance with-in the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower. In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the Feb 18 Note was determined by using the Binomial lattice formula from the effective date of each tranche. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 126,134 during the six months ended June 30, 2021. During the three months ended March 31 2021, the Company exchanged the Note for Preferred Stock for principal in the amount of $ 500,000 , plus accrued interest of $ 98,566 . As of June 30, 2021, the balance of the Feb 18 Note was $ 0 . The Company issued an unsecured convertible promissory note on August 8, 2019 (the “August 2019 Note”), in the aggregate principal amount of $ 53,500 . The Company paid an original issue discount of $ 2,000 and received funds in the amount of $ 51,500 . The August 2019 Note shall mature on February 14, 2021 . The August 2019 Note bears interest at 10 % per annum. The August 2019 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date. The parties agree that if shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the August 2019 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the August 2019 Note. The fair value of the August 2019 Notes has been determined by using the Binomial lattice formula from the effective date of the notes. The Company issued 21,000,000 shares of common stock upon conversion of principal in the amount of $ 40,676 , plus other fees of $ 3,000 . The August 2019 Note was converted based on the terms of the agreement and the Company did not recognize a gain or loss on conversion in the financials. During the six months ended June 30, 2021, the Company issued 908,119 shares of common stock for principal in the amount of $ 12,824 , plus accrued interest of $ 5,564 and other fees of $ 1,000 . The August 2019 Note as of June 30, 2021, had a remaining balance of $ 0 . 12 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 5. CONVERTIBLE PROMISSORY NOTES (Continued) The Company issued an unsecured convertible promissory note on February 13, 2020 (the “Feb 2020 Note”), in the aggregate principal amount of $ 53,500 . The Company paid an original issue discount of $ 2,000 and received funds in the amount of $ 51,500 . The Feb 2020 Note matures on February 13, 2021 . The Feb 2020 Note bears interest at 10 % per annum. The Feb 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date. The parties agree that if the shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Feb 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Feb 2020 Note. The fair value of the Feb 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 6,578 during the six months ended June 30, 2021. The Feb 2020 Note as of June 30, 2021, had a remaining balance of $ 53,500 . The Company issued an unsecured convertible promissory note on July 6, 2020 (the Jul 2020 Note), in the aggregate principal amount of $ 53,000 . The Company paid an original issue discount of $ 3,000 and received funds in the amount of $ 50,000 . The Jul 2020 Note matures on July 6, 2021 . The Jul 2020 Note bears interest at 10 % per annum. The Jul 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Jul 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jul 2020 Note. The fair value of the Jul 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 27,153 during the three months ended June 30, 2021. The Company issued 4,062,044 shares of common stock upon conversion of principal in the amount of $ 53,000 , plus accrued interest of $ 2,650 . The Jul 2020 Note as of June 30, 2021, had a remaining balance of $ 0 . The Company issued an unsecured convertible promissory note on August 4, 2020 (the Aug 2020 Note), in the aggregate principal amount of $ 53,000 . The Company paid an original issue discount of $ 3,000 and received funds in the amount of $ 50,000 . The August 4, 2020 Note matures on August 4, 2021 . The Aug 2020 Note bears interest at 10 % per annum. The Aug 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Aug 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Aug 2020 Note. The fair value of the Aug 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 31,219 during the six months ended June 30, 2021. The Company issued 868,175 shares of common stock upon conversion of principal in the amount of $ 53,000 , plus accrued interest of $ 2,650 . The Aug 2020 Note as of March 31, 2020 had a remaining balance of $ 0 . The Company issued an unsecured convertible promissory note on August 17, 2020 (the “Aug 2020 Note”), in the aggregate principal amount of $ 53,500 . The Company paid an original issue discount of $ 2,000 and received funds in the amount of $ 51,500 . The Aug 2020 Note matures on August 17, 2021 . The Aug 2020 Note bears interest at 10 % per annum. The Aug 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date. The parties agree that if the shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Aug 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Aug 2020 Note. The fair value of the Aug 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 13,338 during the six months ended June 30, 2021. The Aug 2020 Note as of June 30, 2021, had a remaining balance of $ 53,500 . 13 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 5. CONVERTIBLE PROMISSORY NOTES (Continued) The Company issued an unsecured convertible promissory note on September 14, 2020 (the Sep 2020 Note), in the aggregate principal amount of $ 53,000 . The Company paid an original issue discount of $ 3,000 and received funds in the amount of $ 50,000 . The September 14, 2020 Note matures on September 14, 2021 . The Sep 2020 Note bears interest at 10 % per annum. The Sep 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Sep 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Sep 2020 Note. The fair value of the Sep 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 37,318 during the six months ended June 30, 2021. The Company issued 2,100,000 shares of common stock upon conversion of principal in the amount of $ 53,000 , plus accrued interest of $ 2,650 . The Sep 2020 Note as of June 30, 2021, had a remaining balance of $ 0 . The Company issued an unsecured convertible promissory note on November 2, 2020 (the Nov 2020 Note), in the aggregate principal amount of $ 53,000 . The Company paid an original issue discount of $ 3,000 and received funds in the amount of $ 50,000 . The November 2, 2020 Note matures on November 2, 2021 . The Nov 2020 Note bears interest at 10 % per annum. The Nov 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Nov 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Nov 2020 Note. The fair value of the Nov 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 44,433 during the June 30, 2021. The Note was paid off in cash for principal and interest. Company issued The Nov 2020 Note as of June 30, 2021 had a remaining balance of $ 0 . The Company issued an unsecured convertible promissory note on December 2, 2020 (the Dec 2020 Note), in the aggregate principal amount of $ 53,000 . The Company paid an original issue discount of $ 3,000 and received funds in the amount of $ 50,000 . The December 2, 2020 Note matures on December 2, 2021 . The Dec 2020 Note bears interest at 10 % per annum. The Dec 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. 14 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 5. CONVERTIBLE PROMISSORY NOTES (Continued) The conversion feature of the Dec 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Dec 2020 Note. The fair value of the Dec 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 3,416 during the June 30, 2021. The Note was paid off in cash for principal and interest. The Dec 2020 Note as of June 30, 2021 had a remaining balance of $ 0 . The Company issued an unsecured convertible promissory note on January 4, 2021 (the Jan 4, 2021 Note), in the aggregate principal amount of $ 53,500 . The Company paid an original issue discount of $ 3,000 and received funds in the amount of $ 50,000 . The January 4, 2021 Note matures on March 4, 2021. The Jan 2021 Note bears interest at 10 % per annum. The Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Jan 4 2021 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jan 4 2021 Note. The fair value of the Jan 4 2021 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 53,500 during the six months ended June 30, 2021. The Note was paid off in cash for principal and interest. The Jan 4 2021 Note as of June 30, 2021 had a remaining balance of $ 0 . The Company issued an unsecured convertible promissory note on January 14, 2021 (the Jan 14 2021 Note), in the aggregate principal amount of $ 53,500 . The Company paid an original issue discount of $ 3,000 and received funds in the amount of $ 50,000 . The Jan 14 2021 Note matures on January 14, 2021 . The Jan 14 2021 Note bears interest at 10 % per annum. The Jan 14 2021 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Jan 14 2021 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jan 14 2021 Note. The fair value of the Jan 14 2021 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $ 53,500 during the June 30, 2021. The Note was paid off in cash for principal and interest. The Jan 14 2021 Note as of June 30, 2021 had a remaining balance of $ 0 . During the period ended June 30, 2021, the Company exchanged convertible notes in the amount of $ 2,462,060 in principal, plus accrued interest of $ 1,023,253 for 34,853 shares of Series C Preferred Shares. In addition, the Company repaid convertible notes in the amount of $ 203,000 in principal, plus accrued interest of $ 52,780 . We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable, so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically per the stock price fluctuations. 15 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 6. DERIVATIVE LIABILITIES We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable, so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically per the stock price fluctuations. The convertible notes issued and described in Note 5 do not have fixed settlement provisions because their conversion prices are not fixed. The conversion feature has been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations. During the six months ended June 30, 2021, as a result of the convertible notes (“Notes”) issued that were accounted for as derivative liabilities, we determined that the fair value of the conversion feature of the convertible notes at issuance was $ 180,004 , based upon a Binomial-Model calculation. We recorded the full value of the derivative as a liability at issuance with an offset to valuation discount, which will be amortized over the life of the Notes. During the six months ended June 30, 2021, the Company converted $ 184,124 in principal of convertible notes, plus accrued interest of $ 20,851 , and other fees of $ 1,000 . The convertible notes were valued using the binomial lattice valuation model showing an increase in fair value of the derivatives issued by $ 638,936 and the loss on the change in derivatives by $ 30,039,479 . As of June 30, 2021, the fair value of the derivative liability was $ 73,395 . For purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used the Binomial lattice valuation model. The significant assumptions used in the Binomial lattice valuation model for the derivative are as follows: SCHEDULE OF DERIVATIVE LIABILITIES VALUATION ASSUMPTIONS 6/30/2021 Risk free interest rate 0.05 % Stock volatility factor 63.0 % - 65.0 % Weighted average expected option life 6 months - 1 year Expected dividend yield None Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry-forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry-forwards may be limited as to use in future years. 7. RELATED PARTY TRANSACTION On January 14, 2021, the Company issued 1,000 shares of Series B Preferred Stock to David Lee. As of June 30, 2021, there were no Series B Preferred Stock outstanding. The total purchase price is $ 0.10 for 1,000 shares of Series B Preferred Stock. The Series B Preferred stock expired on January 29, 2021. As of June 30, 2021, there were no shares of Series B outstanding. 16 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 On April 14, 2021, the Company issued 1,000 shares of Series D Preferred Stock to David Lee s. The total purchase price is $ 0.10 for 1,000 shares of Series D Preferred Stock. The Series D Preferred stock expired on May 29, 2021. As of June 30, 2021, there were no shares of Series D outstanding. 8. SECURITIES PURCHASE AGREEMENT On January 27, 2021, the Company entered into a securities purchase agreement with an investor to sell through a private placement an aggregate of 52,000,000 shares of common stock and separate pre-funded warrants to purchase up to 31,333,334 shares of common stock, plus warrants to purchase up to 83,333,334 at an exercise price of $ 0.06 per share. In addition, the combined purchase price of $ 0.06 per one (1) share of common stock and associated warrant had a purchase price of $ 0.0599 per one (1) pre-funded and associated warrant for aggregate gross proceeds of $ 4,996,866 ( 5,000,000 0 assuming full exercise of the pre-funded warrants) for gross proceeds to the Company of approximately $ 5,000,000 . After closing cost the Company received net funds of $ 4,406,217 , plus pre-funded proceeds of $ 3,133 for total cash received of $ 4,409,350 . In connection with the closing, the Company issued an additional 6,250,000 shares of warrants to purchase common stock with an exercise price of $ 0.075 and a termination date of July 27, 2026 . On April 4, 2021, the Company entered into a securities purchase agreement with an investor to sell through a direct registered offering an aggregate of 65,000,000 shares of common stock and separate pre-funded warrants to purchase up to 60,000,000 shares of common stock, plus warrants to purchase up to 125,000,000 at an exercise price of $ 0.04 per shares. In addition, the combined purchase price of $ 0.04 per one (1) share of common stock and associated warrant had a purchase price of $ 0.0399 per one (1) pre-funded and associated warrant for aggregate gross proceeds of $ 4,994,000 ( 5,000,000 0 assuming full exercise of the pre-funded warrants) for gross proceeds to the Company of approximately $ 5,000,000 . After closing cost, the Company received net funds of $ 4,369,350 , plus pre-funded proceeds of $ 3,000 for total cash received of $ 4,372,350 . As of June 30, 2021, there remains 30,000,000 pre-funded warrants to be purchased. In connection with the closing, the Company issued an additional 9,375,000 shares of warrants to purchase common stock with an exercise price of $ 0.05 and a termination date of April 4, 2026 . SCHEDULE OF WARRANTS ACITIVITY 6/30/2021 Number of Warrants Weighted average exercise price Outstanding as of the beginning of the periods - - Issued 315,291,668 $ 0.048 Purchased 61,333,334 - Expired - - Outstanding as of the end of the periods 253,958,334 $ 0.048 Exercisable as of the end of the periods 253,958,334 $ 0.048 17 NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 The weighted average remaining contractual life of the warrants outstanding as of June 30, 2021 was as follows: SCHEDULE OF WARRANTS OUTSTANDING 6/30/2021 Exercisable Price Stock Warrants Outstanding Stock Warrants Exercisable Weighted Average Remaining Contractual Life (years) $ 0.0001 30,000,000 30,000,000 4.77 $ 0.04 125,000,000 125,000,000 4.77 $ 0.05 9,375,000 9,375,000 4.76 $ 0.06 83,333,334 83,333,334 5.08 $ 0.075 6,250,000 6,250,000 5.08 253,958,334 253,958,334 9. COMMITMENTS AND CONTINGENCIES The Company rents office space on a yearly basis with a monthly rent payment in the amount of $ 550 . In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising. 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 operations. As of June 30, 2021, there were no legal proceedings against the Company. 10. SUBSEQUENT EVENT Management has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has determined that there are no subsequent events to report. On July 20, 2021, the Company issued 30,000,000 shares of common shares upon exercise of pre-funded warrants at an exercise price of $ 0.0001 . 18