What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-09 compared with 2024-11-01 · 177 added, 191 removed, 3 unchanged (99% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note on Forward-Looking Statements.

statements in “Management’s Discussion and Analysis and Results of Operations” below, and elsewhere in this quarterly

report, are not related to historical results, and are forward-looking statements.

Forward-looking statements present our expectations

or forecasts of future events.

You can identify these statements by the fact that they do not relate strictly to historical or current

These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of

activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements

expressed or implied by such forward-looking statements.

Forward-looking statements frequently are accompanied by such words such as

“may,” “will,” “should,” “could,” “expects,” “plans,” “intends,”

“anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,”

or the negative of such terms or other words and terms of similar meaning.

Although we believe that the expectations reflected in the

forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or timeliness

of such results.

Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking

We are under no duty to update any of the forward-looking statements after the date of this quarterly report.

written and oral forward looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety

by the cautionary statements and risk factors set forth in our annual report on Form 10-K filed with the SEC on March 20, 2024, and in

other reports filed by us with the SEC.

should read the following description of our financial condition and results of operations in conjunction with the financial statements

and accompanying notes included in this report.

are a developer of clean energy technologies.

Our current focus is on developing a thermochemical green hydrogen production technology

to lower the cost of green hydrogen production.

is the cleanest and most abundant element in the universe, and we can’t live without it.

Hydrogen is the key ingredient in making

fertilizers needed to grow food for the world.

It is also used for transportation, refining oil and making steel, glass, pharmaceuticals

Nearly all the hydrogen today is made from hydrocarbons like coal, oil, and natural gas, which are dirty and limited resources.

Water, on the other hand, is an infinite and renewable worldwide resource.

the most common method of making green hydrogen is to split water into oxygen and hydrogen with an electrolyzer using green electricity

produced from solar or wind.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note on Forward-Looking Statements.

Certain statements in “Management’s

Discussion and Analysis and Results of Operations” below, and elsewhere in this quarterly report, are not related to historical

results, and are forward-looking statements.

Forward-looking statements present our expectations or forecasts of future events.

identify these statements by the fact that they do not relate strictly to historical or current facts.

These statements involve known

and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements

to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking

Forward-looking statements frequently are accompanied by such words such as “may,” “will,” “should,”

“could,” “expects,” “plans,” “intends,” “anticipates,” “believes,”

“estimates,” “predicts,” “potential” or “continue,” or the negative of such terms or other

words and terms of similar meaning.

Although we believe that the expectations reflected in the forward-looking statements are reasonable,

we cannot guarantee future results, levels of activity, performance, achievements, or timeliness of such results.

Moreover, neither we

nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements.

We are under no duty

to update any of the forward-looking statements after the date of this quarterly report.

Subsequent written and oral forward looking statements

attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements and risk

factors set forth in our annual report on Form 10-K filed with the SEC on March 25, 2025, and in other reports filed by us with the SEC.

You should read the following

description of our financial condition and results of operations in conjunction with the financial statements and accompanying notes included

in this report.

We are a developer of clean energy

technologies.

Our current focus is on developing a thermochemical green hydrogen production technology to lower the cost of green hydrogen

Hydrogen is the cleanest and most

abundant element in the universe, and we can’t live without it.

Hydrogen is the key ingredient in making fertilizers needed to grow

food for the world.

It is also used for transportation, refining oil and making steel, glass, pharmaceuticals and more.

Nearly all the

hydrogen today is made from hydrocarbons like coal, oil, and natural gas, which are dirty and limited resources.

Water, on the other hand,

is an infinite and renewable worldwide resource.

Currently, the most common method

of making green hydrogen is to split water into oxygen and hydrogen with an electrolyzer using green electricity produced from solar or

However, green electricity is and always will be very expensive.

It currently accounts for 73% of the cost

of green hydrogen.

By using heat directly, we can skip the expensive process of making electricity, and fundamentally lower the cost

of green hydrogen.

Inexpensive heat can be obtained from concentrated solar, geothermal, nuclear reactors and industrial waste heat for

use in our novel low-cost thermochemical water splitting process.

Working with a world class research team at UC Santa Barbara, our goal

is to help usher in the green hydrogen economy that Goldman Sachs estimated to have a future market value of $12 trillion.

have previously developed an innovative material technology to reduce the cost per watt of electricity produced by Photovoltaic, or PV,

solar modules.

of Critical Accounting Policies

discussion and analysis of our financial condition and results of operations are based upon our unaudited financial statements, which

have been prepared in accordance with accounting principles generally accepted in the United States of America.

The preparation of these

financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and

expenses, and related disclosures of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates, including those

related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using a Binomial

lattice valuation model.

We base our estimates on historical experience and on various other assumptions, such as the trading value of

our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results

of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other

Actual results may differ from these estimates under different assumptions or conditions;

however, we believe that our estimates,

including those for the above-described items, are reasonable.

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.

It currently accounts for 73% of the cost of green hydrogen.

using heat directly, we can skip the expensive process of making electricity, and fundamentally lower the cost of green hydrogen.

heat can be obtained from concentrated solar, geothermal, nuclear reactors and industrial waste heat for use in our novel low-cost thermochemical

water splitting process.

Working with a world class research team at UC Santa Barbara, our goal is to help usher in the green hydrogen

economy that Goldman Sachs (in a 2022 report) estimated to have a future market value of $12 trillion.

We have previously developed an

innovative material technology to reduce the cost per watt of electricity produced by Photovoltaic, or PV, solar modules.

Application of Critical Accounting Policies

Our discussion and analysis of

our financial condition and results of operations are based upon our unaudited financial statements, which have been prepared in accordance

with accounting principles generally accepted in the United States of America.

The preparation of these financial statements requires

us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures

of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates, including those related to impairment of property,

plant and equipment, intangible assets, deferred tax assets and fair value computation using a Binomial lattice valuation model.

our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future

undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments

about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these

estimates under different assumptions or conditions;

however, we believe that our estimates, including those for the above-described items,

are reasonable.

Use of Estimates

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.

Value of Financial Instruments

cash, cash equivalents, investments, inventory, prepaid expenses, and accounts payable are stated at cost which approximates fair value

due to the short-term nature of these instruments.

Issued Accounting Pronouncements

reviewed currently issued pronouncements during the nine months ended September 30, 2024, and does not believe that any other recently

issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed unaudited

financial statements.

of Operations – Three months ended September 30, 2024, compared to the Three months ended September 30, 2023.

and Marketing Expenses

and marketing (“S&M”) expenses increased by $47,178 to $83,539 for the three months ended September 30, 2024, compared

to $36,361 for the prior period ended September 30, 2023.

The primary increase in (S&M) expenses was the result of an increase in

service providers of $36,867, with an increase in other cost of $10,311.

and Administrative Expenses

and administrative (“G&A”) expenses decreased by $48,247 to $266,491 for the three months ended September 30, 2024, compared

to $314,738 for the prior period ended September 30, 2023.

The primary decrease in G&A expenses was the result of a decrease in professional

fees of $41,003, with an overall decrease in G&A expenses of $7,244.

and Development

and Development (“R&D”) expenses increased by $1,203 to $90,142 for the three months ended September 30, 2024, compared

to $88,939 for the prior period ended September 30, 2023.

This overall increase in R&D expenses was the result of an increase in

outside research fees.

and Amortization Expense

and amortization expense for the three months ended September 30, 2024 and 2023 was $1,027 and $1,027, respectively.

Income/(Expenses)

income and (expenses) increased by $3,340 to $3,761 for the three months ended September 30, 2024, compared to $421 for the prior period

ended September 30, 2023.

The increase in other income and (expenses) was the result of an increase in interest income of $3,340.

increase in other income and (expenses) was primarily due to the net change in interest income.

Income (Loss)

net loss for the three months ended September 30, 2024 was $441,199, compared to $441,065 for the prior period ended September 30, 2023.

Fair Value of Financial Instruments

Our cash, cash equivalents, investments,

inventory, prepaid expenses, and accounts payable are stated at cost which approximates fair value due to the short-term nature of these

Recently Issued Accounting Pronouncements

Management reviewed currently

issued pronouncements during the three months ended March 31, 2025, and does not believe that any other recently issued, but not yet effective,

accounting standards if currently adopted would have a material effect on the accompanying condensed unaudited financial statements.

Results of Operations – Three months ended

March 31, 2025, compared to the Three months ended March 31, 2024.

OPERATING EXPENSES

Selling and Marketing Expenses

Selling and marketing (“S&M”)

expenses increased by $31,508 to $106,479 for the three months ended March 31, 2025, compared to $74,971 for the prior period ended March

The primary increase in (S&M) expenses was the result of an increase in service providers of $31,508.

General and Administrative Expenses

General and administrative (“G&A”)

expenses decreased by $249 to $267,453 for the three months ended March 31, 2025, compared to $306,404 for the prior period ended March

The overall decrease in G&A expenses was the combination of all expenses.

Research and Development

Research and Development (“R&D”)

expenses increased by $12,579 to $101,518 for the three months ended March 31, 2025, compared to $88,939 for the prior period ended March

This overall increase in R&D expenses was the result of an increase in outside research fees.

Depreciation and Amortization Expense

Depreciation and amortization

expense for the three months ended March 31, 2025 and 2024 was $821 and $1,027, respectively.

Other Income/(Expenses)

Other income and (expenses) decreased

by $160 to $177 for the three months ended March 31, 2025, compared to $337 for the prior period ended March 31, 2024.

The decrease in

other income and (expenses) was the result of an increase in interest income of $160.

The decrease in other income and (expenses) was

primarily due to the net change in interest income.

Our net loss for the three months

ended March 31,2025 was $476,094, compared to $471,004 for the prior period ended March 31,2024.

The Company has not generated any revenues.

of Operations – Nine months ended September 30, 2024 Compared to the Nine months ended September 30, 2023.

and Marketing Expenses

and marketing (“S&M”) expenses increased by $52,210 to $228,739 for the nine months ended September 30, 2024, compared

to $176,529 for the prior period ended September 30, 2023.

The primary increase in (S&M) expenses was the result of an increase in

marketing cost.

and Administrative Expenses

and administrative (“G&A”) expenses decreased by $1,714,129 to $851,738 for the nine months ended September 30, 2024,

compared to $2,565,867 for the prior period ended September 30, 2023.

The primary decrease in G&A expenses was the result of a decrease

in fair value of non-cash stock compensation of $1,766,554, with an overall increase in G&A expenses of $52,425.

and Development

and Development (“R&D”) expenses increased by $154,082 to $268,021 for the nine months ended September 30, 2024, compared

to $113,939 for the prior period ended September 30, 2023.

This overall increase in R&D expenses was the result of an increase in

outside research fees.

and Amortization Expense

and amortization expense for the nine months ended September 30, 2024 and 2023 was $3,080 and $3,080, respectively.

Income/(Expenses)

income and (expenses) increased by $3,060 to $4,395 for the nine months ended September 30, 2024, compared to $1,335 for the prior period

ended September 30, 2023.

The decrease in other income and (expenses) was primarily due to the net change in interest income.

Income (Loss)

net loss for the nine months ended September 30, 2024 was $1,347,183, compared to $2,8598,080 for the prior period ended September 30,

The majority of the decrease in net loss was due to a decrease in non-cash expense associated with the net change in stock option

expense in the current period.

These estimates were based on multiple inputs, including the market price of our stock, interest rates,

our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities

of certain outcomes based on management projections.

These inputs were subject to significant changes from period to period and to management’s

therefore, the estimated fair value of the stock options fluctuate, and the fluctuation may be material.

The Company has not

generated any revenues.

AND CAPITAL RESOURCES

is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate

on an ongoing basis.

Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable

and accounts payable and capital expenditures.

unaudited condensed financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of

operations, realization of assets and liabilities and commitments in the normal course of business.

The accompanying unaudited

condensed financial statements do not reflect any adjustments that might result if we are unable to continue as a going concern.

During the nine months ended September 30, 2024, we did not generate any revenues, and recognized a net loss of $1,347,183, due to a

decrease in non-cash stock compensation of $1,766,554, and cash of $1,189,145 used in operations.

As of September 30, 2024, we had working

capital of $2,509,114 and a shareholders’ deficit of $955,769.

Management believes the Company’s present cash flows will enable

it to meet its obligations for fifteen months from the date of these financial statements.

Management will continue to assess it operational

needs and seek additional financing as needed to fund its operations.

believes that we will be able to continue to raise funds through the sale of our securities to existing and new investors.

believes that funding from existing and prospective new investors and future revenue will provide the additional cash needed to meet

our obligations as they become due and will allow the development of our 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.

of September 30, 2024, we had working capital of $2,509,114 compared to $3,678,942 for the year ended December 31, 2023.

This decrease

in working capital was due primarily to a decrease in cash.

the nine months ended September 30, 2024, we used $1,189,145 of cash for operating activities, as compared to $790,889 for the prior

period ended September 30, 2023.

The increase in the use of cash for operating activities for the current period was a result of an increase

in research and development cost, advertising and marketing, and salaries.

cash provided from equity financing activities for the nine months ended September 30, 2024 and September 30, 2023 was $0.

no equity financing during the current or prior period.

Our capital needs have primarily been met from the proceeds of the sale of our

securities, as we currently have not generated any revenues.

independent auditors, in their report on our audited financial statements for the year ended December 31, 2023, expressed substantial

doubt about our ability to continue as a going concern without additional capital becoming available.

Our financial statements as of

September 30, 2024, have been prepared under the assumption that we will continue as a going concern.

Our ability to continue as a going

concern, ultimately is dependent upon our ability to generate revenue, which is dependent upon our ability to obtain additional equity

or debt financing, attain further operating efficiencies and, ultimately, to achieve profitable operations.

Our financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

OF OPERATION AND FINANCING NEEDS

are engaged in the development of clean energy technologies to lower the cost of producing green hydrogen.

The Company’s current

focus is on developing ThermoLoop™, a breakthrough technology that uses water and heat rather than electricity to potentially produce

the world’s lowest cost green hydrogen.

plan of operation within the next twelve months is to utilize our cash balances to maintain the existing ThermoLoop™ technology

development program at UCSB.

believe that our current cash and investment balances will be sufficient to support development activity and general and administrative

expenses for the next twenty-four months.

Management estimates that it will require additional cash resources during 2025, based upon

its current operating plan and condition.

We do not expect increased expenses until early 2026 when we ramp up prototyping efforts related

to our thermochemical water splitting technology.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

a smaller reporting company, as that term is defined in Item 10(f)(1) of Regulation S-K, we are not required to provide information required

by this Item.

The majority of the decrease in net loss was due to an overall decrease in operating expenses and non-cash expense associated with the

net change in stock option expense in the current period.

These estimates were based on multiple inputs, including the market price of

our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective

agreements and probabilities of certain outcomes based on management projections.

These inputs were subject to significant changes from

period to period and to management’s judgment;

therefore, the estimated fair value of the stock options fluctuate, and the fluctuation

may be material.

The Company has not generated any revenues.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability of a

company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis.

Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable

and capital expenditures.

The unaudited condensed financial

statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets

and liabilities and commitments in the normal course of business.

The accompanying unaudited condensed financial statements do not reflect

any adjustments that might result if we are unable to continue as a going concern.

During the three months ended March 31, 2025, we did

not generate any revenues, and recognized a net loss of $476,094, due to a change in operating expenses and cash of $492,812 used in operations.

As of March 31, 2025, we had working capital of $1,643,210 and a shareholders’ deficit of $1,784,321.

Management believes that we will

be able to continue to raise funds through the sale of our securities to existing and new investors.

Management believes that funding

from existing and prospective new investors and future revenue will provide the additional cash needed to meet our obligations as they

become due and will allow the development of our 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.

As of March 31, 2025, we had working

capital of $1,643,210 compared to $2,118,257 for the year ended December 31, 2024.

This decrease in working capital was due primarily

to a decrease in cash.

During the three months ended

March 31, 2025, we used $492,812 of cash for operating activities, as compared to $431,405 for the prior period ended March 31, 2024.

The increase in the use of cash for operating activities for the current period was a result of an increase in research and development

cost, and advertising and marketing.

Net cash provided from equity

financing activities for the three months ended March 31, 2025 and March 31, 2024 was $0.

There was no equity financing during the current

or prior period.

Our capital needs have primarily been met from the proceeds of the sale of our securities, as we currently have not generated

any revenues.

Our independent auditors, in their

report on our audited financial statements for the year ended December 31, 2024, expressed substantial doubt about our ability to continue

as a going concern without additional capital becoming available.

Our financial statements as of March 31, 2025, have been prepared under

the assumption that we will continue as a going concern.

Our ability to continue as a going concern, ultimately is dependent upon our

ability to generate revenue, which is dependent upon our ability to obtain additional equity or debt financing, attain further operating

efficiencies and, ultimately, to achieve profitable operations.

Our financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

PLAN OF OPERATION AND FINANCING NEEDS

We are engaged in the development

of clean energy technologies to lower the cost of producing green hydrogen.

The Company’s current focus is on developing ThermoLoop™,

a breakthrough technology that uses water and heat rather than electricity to potentially produce the world’s lowest cost green

Our plan of operation within the

next twelve months is to utilize our cash balances to maintain the existing ThermoLoop™ technology development program at UCSB.

We believe that our current cash

and investment balances will be sufficient to support development activity and general and administrative expenses for the next nine months.

Management estimates that it will require additional cash resources during 2025, based upon its current operating plan and condition.

We do not expect increased expenses until early 2026 when we ramp up prototyping efforts related to our thermochemical water splitting

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As a smaller reporting company,

as that term is defined in Item 10(f)(1) of Regulation S-K, we are not required to provide information required by this Item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis