NewHydrogen, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS NEWHYDROGEN, INC. CONDENSED BALANCE SHEETS June 30, December 31, 2026 2025 (Unaudited) ASSETS Current assets: Cash $ 739,528 $ 1,436,928 Prepaid expenses and other current assets 55,275 6,021 Total current assets 794,803 1,442,949 Property and equipment: Machinery and equipment 37,225 37,225 Less: accumulated depreciation ( 37,117 ) ( 36,986 ) Net property and equipment 108 239 Other assets: Patents, net of amortization of $ 31,735 and $ 30,224 , respectively 13,601 15,112 Deposit 770 770 Total other assets 14,371 15,882 Total assets $ 809,282 $ 1,459,070 LIABILITIES, MEZZANINE AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued liabilities $ 6,448 $ 9,786 Total current liabilities 6,448 9,786 Mezzanine: Series C Convertible Preferred Stock, 34,461 and 34,853 shares outstanding, respectively 3,446,113 3,485,313 Commitments and contingencies - - Stockholders’ equity (deficit): Preferred stock, $ 0.0001 par value; 10,000,000 authorized shares - - Common stock, $ 0.0001 par value; 3,000,000,000 authorized shares 814,441,380 and 768,031,041 shares issued and outstanding, respectively 81,444 76,803 Additional paid in capital 179,805,585 178,676,658 Accumulated deficit ( 182,530,308 ) ( 180,789,490 ) Total stockholders’ deficit ( 2,643,279 ) ( 2,036,029 ) Total liabilities, mezzanine and stockholders’ equity $ 809,282 $ 1,459,070 The accompanying notes are an integral part of these condensed financial statements. 1 NEWHYDROGEN, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: $ - $ - $ - $ - Operating expenses: Selling and marketing expenses 109,878 94,092 203,447 200,571 General and administrative expenses 464,318 381,053 861,116 648,506 Research and development 342,874 147,867 674,387 249,385 Depreciation and amortization 821 820 1,642 1,641 Total operating expenses 917,891 623,832 1,740,592 1,100,103 Loss from operations before other income (expense) ( 917,891 ) ( 623,832 ) ( 1,740,592 ) ( 1,100,103 ) Other income (expense): Interest income 69 128 173 305 Other expenses - - ( 399 ) - Total other income (expense) 69 128 ( 226 ) 305 Net income (loss) $ ( 917,822 ) $ ( 623,704 ) $ ( 1,740,818 ) $ ( 1,099,798 ) Basic and diluted earnings (loss) per share $ ( 0.00 ) $ ( 0.00 ) $ ( 0.00 ) $ ( 0.00 ) Weighted average number of common shares outstanding, basic and diluted 789,922,604 705,126,274 779,037,297 704,861,438 The accompanying notes are an integral part of these condensed financial statements. 2 NEWHYDROGEN, INC. CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025 (Unaudited) Series C Additional Preferred Stock Preferred Stock Common Stock Paid in Accumulated Shares Amount Shares Amount Shares Amount Capital Deficit Total Balance, December 31, 2025 34,853 $ 3,485,313 - $ - 768,031,041 $ 76,803 $ 178,676,658 $ ( 180,789,490 ) $ ( 2,036,029 ) Stock compensation cost - - - - - - 140,675 - 140,675 Net loss - - - - - - - ( 822,996 ) ( 822,996 ) Balance, March 31, 2026 34,853 3,485,313 - - 768,031,041 76,803 178,817,333 ( 181,612,486 ) ( 2,718,350 ) Issuance of common shares for equity financing at cost - - - - 46,410,339 4,641 758,394 - 763,035 Stock compensation cost - - - - - - 190,658 - 190,658 Adjustment to mezzanine ( 392 ) ( 39,200 ) - - - - 39,200 - 39,200 Net loss - - - - - - - ( 917,822 ) ( 917,822 ) Balance, June 30, 2026 34,461 $ 3,446,113 - $ - 814,441,380 $ 81,444 $ 179,805,585 $ ( 182,530,308 ) $ ( 2,643,279 ) Balance, December 31, 2024 34,853 $ 3,485,313 - $ - 704,599,512 $ 70,460 $ 176,508,484 $ ( 177,942,547 ) $ ( 1,363,603 ) Stock compensation cost - - - - - - 55,376 - 55,376 Net loss - - - - - - - ( 476,094 ) ( 476,094 ) Balance, March 31, 2025 34,853 3,485,313 - - 704,599,512 70,460 176,563,860 ( 178,418,641 ) ( 1,784,321 ) Issuance of common shares for equity financing at cost - - - - 803,536 80 29,920 - 30,000 Stock compensation cost - - - - - - 61,151 - 61,151 Net loss - - - - - - - ( 623,704 ) ( 623,704 ) Balance, June 30, 2025 34,853 $ 3,485,313 - $ - 705,403,048 $ 70,540 $ 176,654,931 $ ( 179,042,345 ) $ ( 2,316,874 ) The accompanying notes are an integral part of these condensed financial statements. 3 NEWHYDROGEN, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ ( 1,740,818 ) $ ( 1,099,798 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 1,642 1,641 Non-cash stock compensation expense 331,333 116,527 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 49,254 ) ( 26,336 ) Accounts payable and accrued liabilities ( 3,338 ) 4,351 Net cash provided by (used in) operating activities ( 1,460,435 ) ( 1,003,615 ) CASH FLOWS FROM INVESTING ACTIVITIES: - - CASH FLOWS FROM FINANCING ACTIVITIES: Common shares issued through an equity financing agreement 763,035 - Net cash provided by financing activities 763,035 - Net increase (decrease) in cash ( 697,400 ) ( 1,003,615 ) Cash, cash equivalents, and restricted cash - beginning of period 1,436,928 2,104,521 Cash, cash equivalents, and restricted cash - end of period $ 739,528 $ 1,100,906 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ - $ - Income taxes $ - $ - Non-cash investing and financing activities: Adjustment to mezzanine $ 39,200 $ - Equity financing cost $ - $ 30,000 The accompanying notes are an integral part of these condensed financial statements. 4 NEWHYDROGEN, INC. CONDENSED NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2026 (Unaudited) 1. ORGANIZATION AND NATURE OF BUSINESS Organization NewHydrogen, Inc. (the “Company”) was incorporated in the state of Nevada on April 24, 2006.  The Company, based in Santa Clarita, California, began operations on April 25, 2006 to develop and market Photovoltaic solar technology products.   Nature of Business We are a developer of clean energy technologies. Our current focus is on developing a green hydrogen production technology that uses water and heat rather than electricity to produce the world’s cheapest green hydrogen. Going Concern The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2026 the Company has an accumulated deficit of $ 182,530,308 . During the six months ended June 30, 2026 the company had a net loss of $ 1,740,818 and used $ 1,460,435 of cash from operating activities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is significantly dependent upon its ability, and will continue to attempt, to secure additional equity and/or debt financing. There are no assurances that the Company will be successful in obtaining additional capital. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting 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 three and six months ended June 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for December 31, 2025. 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. 5 Cash and Cash Equivalent The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. 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 FDIC limits. As of June 30, 2026, the cash balance in excess of the FDIC limits was $ 489,528 . The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. 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 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, 2026 and 2025 was $ 131 and $ 130 , respectively. Depreciation expense for the three months ended June 30, 2026 and 2025 was $ 66 and $ 65 , 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 (See Note 6). SCHEDULE OF INTANGIBLE ASSETS AMORTIZED OVER THEIR USEFUL LIVES Useful Lives June 30, 2026 December 31, 2025 Patents 15 years $ 45,336 $ 45,336 Less accumulated amortization ( 31,735 ) ( 30,224 ) Intangible assets $ 13,601 $ 15,112 SCHEDULE OF PATENT AMORTIZATION Remainder of 2026 $ 1,511 2027 3,022 2028 3,022 Thereafter 6,046 Total $ 13,601 Amortization expense for the six months ended June 30, 2026 and 2025 was $ 1,511 and $ 1,511 , respectively. Amortization expense for the three months ended June 30, 2026 and 2025 was $ 755 and $ 755 , respectively. 6 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). 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. Research and Development Research and development costs are expensed as incurred. Total research and development costs were $ 674,387 and $ 249,385 for the six months ended June 30, 2026 and 2025, respectively and $ 342,874 and $ 147,867 for the three months ended June 30, 2026 and 2025, respectively. Advertising and Marketing The Company expenses the cost of advertising and promotional materials when incurred. The advertising and marketing costs were $ 203,447 and $ 200,571 for the six months ended June 30, 2026 and 2025, respectively and $ 109,878 and $ 94,092 for the three months ended June 30, 2026 and 2025, respectively. Segment Reporting NewHydrogen, Inc. operates as a single operating segment, focusing on developing clean energy technology. The accounting policies of the operating segment are the same as those described in the summary of significant accounting policies. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer and Acting Chief Financial Officer. The CODM assesses performance for the segment and decides how to allocate resources based on net income (loss) that is reported on the income statement. The measure of segment assets is reported on the balance sheet as total assets. As the Company did not generate revenues in the current period, the CODM assessed Company performance through the achievement of target identification goals. In addition to the Company’s Statement of Operations, the CODM regularly works to develop budgeted and forecasted expense information which is used to determine the Company’s liquidity needs and cash allocation. Net Earnings (Loss) per Share Calculations We follow ASC Subtopic 260-10, Earnings per Share, which specifies the computation, presentation, and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Diluted income (loss) per share reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. Due to the net loss for the three and six months ended June 30, 2026 and 2025, basic and diluted income per share were the same, as all securities had an anti-dilutive effect. The following table presents potentially dilutive securities that were not included in the computation of diluted net income per share for the three months ended June 30, 2026 and 2025, as their inclusion would be anti-dilutive. SCHEDULE OF NET EARNINGS PER SHARE June 30, 2026 June 30, 2025 Weighted average options to purchase common stock 567,472,527 565,000,000 Weighted average warrants to purchase common stock 20,027,473 228,958,334 7 The following table presents potentially dilutive securities that were not included in the computation of diluted net income per share for the six months ended June 30, 2026 and 2025, as their inclusion would be anti-dilutive. June 30, 2026 June 30, 2025 Weighted average options to purchase common stock 566,243,094 565,000,000 Weighted average warrants to purchase common stock 95,220,995 228,958,334 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, 2026, the amounts reported for cash, 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: ● 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. As of June 30, 2026, there were no financial instruments to report. Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires incremental disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the amendments may be applied either prospectively or retrospectively. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures. The amendments only impact disclosures and are not expected to have an impact on the Company’s financial condition and results of operations. The Company considers all new pronouncements and management has determined that there have been no recently adopted or issued accounting standards that had or will have a material impact on its financial statements. 3. PREFERRED STOCK As of June 30, 2026, the Company had 34,461 shares of Series C Preferred Stock outstanding with a fair value of $ 3,446,113 , and a stated face value of one hundred dollars ($ 100 ) per share which are convertible into shares of fully paid and non-assessable shares of common stock of the Company. The holder of the Series C preferred stocks is entitled to receive dividends pari passu with the holders of common stock. Upon any liquidation, dissolution or winding up of the Company, the holder of each outstanding share of Series C Preferred Stock is entitled to receive, before any payment is made to holders of common stock, an amount equal to one hundred dollars ($ 100 ) per share, plus all declared and unpaid dividends thereon, with any remaining assets distributed to holders of common stock. A sale of all or substantially all of the Company’s assets, a merger or consolidation resulting in a change of control of more than fifty percent (50%) of the Company’s voting power, or a similar reorganization is deemed a liquidation, dissolutions or winding up for this purpose. 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 $ 0.0014 and has no voting rights. During the six months ended June 30, 2026, 392 shares of Series C Preferred Stock with a stated value of $ 39,200 were cancelled. The Series S Preferred Stock has been classified under mezzanine financing, a hybrid of debt and equity financing that gives a lender the right to convert debt to an equity interest in a company in case of default, generally, after venture capital companies and other senior lenders are paid. 8 4. COMMON STOCK On May 2, 2025, the Company entered into a purchase agreement with an investor for the sale of up to $ 3,000,000 worth of common stock (the “Purchase Agreement”). During the six months ended June 30, 2026, the Company issued 46,410,339 shares of common stock for $ 769,610 under the Purchase Agreement at prices ranging from $ 0.0155 to $ 0.0194 , pursuant to purchase notices received from the investor. The finance cost of $ 6,575 was deducted from the gross proceeds, leaving net proceeds of $ 763,035 . During the six months ended June 30, 2025, the Company issued 803,536 shares of common stock for $ 30,000 of commitment fees paid under the Purchase Agreement. 5. STOCK OPTIONS AND WARRANTS Stock Options The 2022 Incentive Plan authorizes a variety of incentive equity awards consisting of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, and reserves for issuance up to 500,000,000 shares of the Company’s common stock. Transactions involving our options are summarized as follows: SCHEDULE OF STOCK OPTIONS Weighted Average Weighted Grant-Date Number of Average Per Share Options Exercise Price Fair Value Options outstanding at December 31, 2025 565,000,000 $ 0.019 $ 0.005 Granted 2,500,000 $ 0.018 $ 0.018 Canceled/Expired - $ - $ - Exercised - $ - $ - Options outstanding at June 30, 2026 567,500,000 $ 0.019 $ 0.005 Details of our options outstanding as of June 30, 2026, are as follows: SCHEDULE OF WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF OPTIONS OUTSTANDING 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) 507,430,540 0.019 2.35 3.07 On April 1, 2026, the Company granted 2,500,000 non-qualified stock options to a consultant. The options have an exercise price of $ 0.018 , expire on the tenth anniversary of the grant date, and vest 69,444 options per month over a 35-month period from the grant date and the remaining 69,460 options vest at the end of the 36-month. Total stock compensation expense related to the options for the six months ended June 30, 2026, and 2025, was $ 331,333 and $ 116,527 , respectively. As of June 30, 2026, there was $ 713,294 of unrecognized compensation cost related to the Options, which is expected to be recognized over a remaining weighted-average vesting period of approximately 0.53 years. 9 The Company uses the Black Scholes model to value option grants. The Black Scholes model requires the use of these assumptions to determine the fair value of the stock-based awards. The Company uses management’s best estimates, which include the awards expected term, the fair value of the common stock, the expected volatility of the price of the common stock, the risk-free interest rate, and the expected dividend yield of the common stock. The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. The Company has based its expected term on the simplified method available under U.S. GAAP. Warrants Transactions involving our warrants are summarized as follows: SCHEDULE OF WARRANTS ACTIVITY Weighted Average Weighted Grant-Date Number of Average Per Share Warrants Exercise Price Fair Value Warrants outstanding at December 31, 2025 228,958,334 $ 0.048 $ 0.079 Granted - $ - $ - Canceled/Expired ( 223,958,334 ) $ 0.049 $ 0.080 Exercised - $ - $ - Warrants outstanding at June 30, 2026 5,000,000 $ 0.026 $ 0.022 Details of our warrants outstanding as of June 30, 2026, are as follows: SCHEDULE OF WARRANTS OUTSTANDING Warrants Exercisable Weighted Average Contractual Life of Warrants Outstanding and Exercisable (Years) 5,000,000 0.71 6. COMMITMENTS AND CONTINGENCIES Research Agreement On June 28, 2023, the Company entered into a Research Agreement (the “Agreement”) with The Regents of the University of California (the “University”), on behalf of its Santa Barbara Campus. Pursuant to the Agreement, the University will perform certain research with respect to Thermochemical Water Splitting for Hydrogen Production from Water. The Agreement provides that the research will be completed under the direction of Professors Phillip Christopher and Eric McFarland, who will serve as principal Investigators. The Agreement also sets forth the rights to any data or information developed by the University under the Agreement, as well as the ownership of any patentable developments or discoveries arising from the Agreement. On November 17, 2025, the Company and the Regents of the University of California amended the Research Agreement to increase consideration payable to the University to $ 1,690,038 . The effective date of the Amendment is November 17, 2025 and the term of the Agreement runs through November 30, 2026. Legal 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, 2026, there were no legal proceedings against the Company. 7. SUBSEQUENT EVENT Management has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has no subsequent events to report except as described herein. On July 8, 2026, the Company issued 5,290,010 shares of common stock pursuant to the Purchase Agreement and received $ 66,983 less clearing fees of $ 1,191 for a total of $ 65,792 . 10