NewHydrogen, Inc. 10-K

ITEM 1. BUSINESS. 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 more than 200 years, 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 rare materials with inexpensive earth abundant materials in electrolyzers to help usher in a Green Hydrogen economy. In a 2022 report, Goldman Sachs estimates that Green Hydrogen will be a $11 trillion market opportunity for the utilities industry along by 2050. 1 Industry Overview Hydrogen is the most abundant and prevalent clean energy in the universe. ● 73% of the Sun is made up of hydrogen. ● On a weight basis, hydrogen (142 MJ/kg) contains 3X as much energy as gasoline (46 MJ/kg), and 200X as much energy as lithium-ion batteries (0.6 MJ/kg). ● It can be used in fuel cells to power electric vehicles or cities. ● It can be combusted in gas turbines or internal combustion engines for power generation. ● It is a zero-emission clean fuel and produces only water vapor when used. ● It is the main ingredient in fertilizers that feed our hungry world. Hydrogen does not exist in its pure form, and must be extracted. According to a 2022 report from the U.S. Department of Energy, more than 95% of hydrogen in the world are made by steam reforming of natural gas (“Grey Hydrogen”) or coal gasification (“Brown Hydrogen”). Both sources of hydrogen are basically different forms of dirty, carbon heavy, and non-renewable fossil fuels. This does nothing to help fight climate change or lead to renewable energy and a sustainable planet. According to a 2023 research report from Vantage Market Research, green hydrogen has an annual market size of more than$374 million in 2021, and is expected to hit $8.7 billion in 2028. Developing cost-competitive Green Hydrogen made from renewable resources such as solar, wind and water can significantly expand the market for hydrogen. At this time, we believe electrolyzer technology represents the most certain way forward. Solar or Wind Energy + Water + Electrolyzers = Green Hydrogen Abundant sources of Green Hydrogen can power a clean energy world of fast charging fuel cell electric vehicles, light up our homes, make our fertilizers and ultimately replace many forms of fossil fuels. An overwhelming amount of scientific evidence shows that carbon emissions from fossil fuels have contributed to increasing global climate change. Policymakers around the world have accelerated programs to enable the development and adoption of renewable energy. The U.S has been slow to adopt such programs but is quickly becoming a formidable force. According to the World Resources Institute, more than 14 U.S. states have legislative mandates requiring 100% renewable electricity, some as early as 2040. Both the U.K. and European Union are targeting net zero greenhouse gas emissions by 2050. With this global backdrop and concerted actions toward climate policies and clean energy, we believe the Green Hydrogen revolution is ready to take off. The Sun does not always shine, and the wind does not always blow. Therefore, green energy from solar and wind power is inherently intermittent and unreliable as a primary source of power. However, by converting that green electricity into Green Hydrogen, it can be used anywhere and anytime for electricity, chemicals, heating and all necessities of life. Because of the versatility of hydrogen, we believe Green Hydrogen has the potential to fundamentally improve the world economy and usher in a new era of economic prosperity, sustainability, and energy independence to those with access to solar, wind and water which describes most of the entire world. Electrolyzer Technology For more than 200 years, scientists have known how to split water into hydrogen (H 2 ) and oxygen (O 2 ). By placing two metal electrodes into a jar of salted water (electrolytic solution) and applying an electrical voltage between them, H 2 and O 2 will bubble up at the separate electrodes. This process is called electrolysis and the device is called an electrolyzer. If the source of electricity is renewable such as solar or wind, then the resulting hydrogen is a zero-greenhouse gas renewable resource - Green Hydrogen. 2 There are two primary types of commercial electrolyzers. The original alkaline electrolyzer and the modern proton exchange membrane (PEM) electrolyzer. However, neither technology can currently produce Green Hydrogen at scale that is cost competitive with Grey or Brown Hydrogen sourced from fossil fuels. PEM electrolysis has the advantage of higher efficiency and quickly reacting to fluctuating input energy, which is ideally matched to the fluctuating nature of solar and wind energy. Its smaller footprint also makes it ideal for distributed systems, which is how most renewable energy systems are implemented. PEM electrolyzers are expensive because they rely on rare materials such as platinum and iridium - which is akin to stardust found only in asteroids - as chemical catalysts for the water-splitting reactions. According to National Renewable Energy Laboratory (NREL), these materials account for nearly 50% of the capital cost of PEM electrolyzers. Additionally, the cost of electricity contributes to over 50% of hydrogen production costs. Our technology is aimed at lowering the cost of catalysts and key components in PEM electrolyzers by: ● Replacing rare materials with inexpensive earth abundant materials, ● significantly reducing the amount of rare materials used, and ● Reducing energy consumption. 3 Applications of Green Hydrogen Unlike lithium-ion where it is simply a battery technology, Green Hydrogen is an economy. There are many applications for Green Hydrogen, some with larger markets than others. Here are just a few. (Source: U.S. Department of Energy) ● Green Electric Grid - The electric grid is finicky, sometimes it needs a lot of electricity sometimes it does not. Unused electricity from solar and wind farms are wasted if it is not used immediately. The Sun does not always shine, and the wind does not always blow, and this makes solar and wind sourced electricity unreliable. One solution is to use an electrolyzer system to convert the excess solar/wind electricity into hydrogen and store it in inexpensive nearby underground caverns. When electricity demand spikes, the hydrogen can be converted back into electricity through a fuel cell. We believe, this is a very scalable solution as opposed to miles and miles of very expensive grid-scale battery systems. In fact, the Advanced Clean Energy Storage project in Utah aims to do just this by building the world’s largest storage facility for 1,000 megawatts of clean power, partly by putting hydrogen into underground salt caverns. 4 ● Fuel Cell Electric Vehicles (FCEV) - Perhaps the most exciting application of hydrogen is the direct use in fuel cell electric vehicles. A hydrogen tank in a passenger car can be filled in under five minutes. The only tailpipe emission is water. According to a recent article by Hydrogen Fuel News, hydrogen car market is expected to take off by 2028. Until now, the zero-emission passenger vehicle market has been dominated by battery electric technology by a wide margin. The falling price of green hydrogen and energy security issues in terms of electricity in many areas of the world, however, are causing automakers, governments and consumers to look more favorably at hydrogen than had previously been the case. ● Battery Electric Vehicles (BEV) - We believe BEV and FCEV can coexist just like diesel and gasoline cars coexist today. BEVs running on electricity generated through the Green Electric Grid is a beneficiary and indirect user of hydrogen technology. The Green Electric Grid is the network of solar, wind and other alternative energy generation and distribution. ● Hydrogen Fueling Stations - We believe electrolyzers are well suited and scalable for distributed onsite Green Hydrogen generation in fueling station applications. With green electricity from a nearby solar array or renewable electric grid, Green Hydrogen can be produced anywhere and anytime. This distributed model of hydrogen production eliminates the need for expensive transportation from a centralized facility. ● Lower Carbon Gas Infrastructure - Green Hydrogen can serve as a steppingstone to a lower carbon footprint natural gas supply. Southern California Gas, and others, have demonstrated that the existing natural gas pipelines that supply gas to our cooking stoves and homes can safely contain 5-10% hydrogen without any modifications. This means that an electrolyzer system near a natural gas plant can inject Green Hydrogen directly into the existing gas infrastructure, lowering the carbon footprint of our meals and our warm homes. ● Air Taxis of the Future - Hydrogen has 200 times the theoretical energy of lithium-ion batteries per kilogram. We believe hydrogen is the obvious choice because of its lighter weight, in the emerging but potentially revolutionary air mobility market of small electric aircrafts, such as the Skai air tax drone. According to Skai, battery-powered air mobility vehicles are projected to have flight durations of less than half an hour before needing to recharge - Skai’s hydrogen fuel cells give them the ability to fly continuously for up to 4 hours or more with higher capacity auxiliary tanks. Research and Development Our electrolyzer technology research and development is conducted at the University of California at Los Angeles through a sponsored research agreement. The current program is focused on replacing iridium with earth abundant materials that meet or exceed the performance characteristics of iridium. We have also identified additional components and materials in electrolyzers where meaningful cost reductions can be performed. While iridium is the oxygen catalyst, its counterpart on the hydrogen side is platinum, a material so rare that only 200 tons are mined every year. Another critical component is the porous transport layer (“PTL”), also known as the gas diffusion layer, which facilitates the movement of water and gases to and from the catalyst surfaces. According to the National Renewable Energy Laboratory, the catalysts, membrane and PTL assembly account for more than 50%-75% of the capital cost of the electrolyzer stack. Marketing Strategy We will begin marketing our electrolyzer catalyst technologies as soon as a tangible form of quantitative performance demonstration becomes available. Our marketing plan includes engaging with manufacturers of existing electrolyzer component and delivery infrastructure, as well as identifying and developing relationships with potential licensing partners with large scale hydrogen generation and supply logistics all over the world. We are currently outsourcing our promotion efforts to a public relations firm that is assisting us with comprehensive advertising and promotion of the Company. Backlog of Orders We do not have any backlog of orders. 5 Government Contracts We do not have any government contracts at this time. Compliance with Environmental Laws and Regulations Our operations are subject to local, state and federal laws and regulations governing environmental quality and pollution control. To date, our compliance with these regulations has had no material effect on our operations, capital, earnings, or competitive position, and the cost of such compliance has not been material. We are unable to assess or predict at this time what effect additional regulations or legislation could have on our activities. Manufacturing and Distribution On February 2, 2022, we entered into a Manufacturing Supply Agreement with Verde LLC providing for the future commercial production of hydrogen generation plants. The term of the Agreement continues through December 31, 2024, unless earlier terminated pursuant to the terms thereof. Additionally, the Agreement contemplates that the quantities, pricing and delivery date and other terms will be set forth in purchase orders issued under the Agreement. We may enter into additional agreements for the manufacture and distribution of our own technology products in the future. Intellectual Property On May 19, 2011, we filed a U.S. patent to protect the intellectual property rights for “Photovoltaic Module Backsheet, Materials for Use in Module Backsheet and Process for Making the Same,” application number 13/093,549. The inventor listed on the patent application is Stanley Levy, our former Chief Technology Officer. The Company is listed as assignee. This patent was issued on July 14, 2015. Our BioBacksheet R is currently available for licensing only. On March 26, 2018, North Carolina Agricultural and Technical State University filed a U.S. patent application U.S. Serial No. 62/473,772 titled “Prelithiated Silicon Particles for Lithium Ion Batteries”, and we currently have a non-exclusive License Agreement for the use of the technology. The patent was issued on December 29, 2020. Competition There are a number of companies developing green hydrogen technologies including ITM Power, Clean Power Hydrogen Group, Sunfire, Greenway Energy, Amalyst, and AFC Energy. We expect a high level of competition, but the market opportunity is very large. Once we implement the prototype demonstration of our technology for commercial application, we plan on seeking partnership or licensing arrangements for our green hydrogen technology with a select group of equipment manufacturers of green hydrogen. Technology Development Partners On September 28, 2017, the Company entered into an Exclusive License Agreement (the “License Agreement”) with the North Carolina A&T State University related to the use of the University’s intellectual property in the Company’s business of developing, producing and marketing lithium-ion batteries. Within thirty (30) days after entering into the License Agreement, the Company paid to the University a one-time, non-refundable license fee in the sum of $15,000. Pursuant to the terms of the License Agreement, the Company is obligated to pay all costs of preparing, filing, prosecution, issuance and maintenance related to the patents underlying the intellectual property licensed by the Company. In addition, the Company is obligated to make certain annual royalty payments and sub-licensing fees. On September 28, 2020, the Company again paid to the University annual non-refundable licensee fee of $15,000. On September 28, 2021, the Company chose not to renew the exclusive licensing arrangement. The Company still retains a nonexclusive license to use the technology. 6 On June 14, 2018, the Company executed a joint development agreement with Silicio Ferrosolar SLU, a subsidiary of Ferroglobe, PLC (NASDAQ:GSM), for collaborative efforts to assess, develop, and/or market silicon anode materials for high power, high energy lithium ion batteries by integrating BioSolar technology and Ferroglobe silicon materials. On March 6, 2020, the Company executed a joint development agreement with Soelect, Inc, for collaborative efforts to assess, develop, and/or market a processing technology to produce silicon oxide anode materials for electric vehicle lithium ion batteries. The Company ended the joint development relationship in June 2021 and has pivoted away from pursuing battery technology to focus on pursuing Green Hydrogen Opportunities. On December 14, 2020, the Company executed a sponsored research agreement with the University of California, Los Angeles, for collaborative efforts to discover and develop efficient and stable earth-abundant material-based catalysts for hydrogen production through water electrolysis. On October 30, 2022, the Company entered into Sponsored Research Agreement Third Amendment (the “Amendment Agreement”). Pursuant to the Amendment Agreement, the Sponsored Research Agreement was further amended to among other things (i) extend the term of the Sponsored Research Agreement to December 31, 2025; (ii) increase the consideration payable to the University under the Sponsored Research Agreement to $2,797,368; (iv) amend the scope of work under the Sponsored Research Agreement; and (iii) update the schedule of payments to the University. To assist us in the development of our technology, we intend to seek out and enter into technology development agreements with other entities with battery testing and materials expertise. Corporate Information and History We were incorporated in the State of Nevada on April 24, 2006, as BioSolar Labs, Inc. Our name was changed to BioSolar, Inc. on June 8, 2006, and to NewHydrogen, Inc. on April 30, 2021. Our principal executive offices are located at 27936 Lost Canyon Road, Suite 202, Santa Clarita, California 91387, and our telephone number is (661) 251-0001. Our fiscal year end is December 31. Available Information We file annual, quarterly, and current reports, proxy statements and other information with the U.S. Securities Exchange Commission (the “SEC”). These filings are available to the public on the Internet at the SEC’s website at http://www.sec.gov. We maintain our corporate website at http://newhydrogen.com (this website address is not intended to function as a hyperlink and the information contained on our website is not intended to be a part of this Report ). Human Capital Resources As of March 1, 2023 we had one (1) full time employee. We have not experienced any work stoppages and we consider relations with our employees to be good. 7