NewHydrogen, Inc.

CONDENSED NOTES TO FINANCIAL STATEMENTS

AS OF SEPTEMBER 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 clean hydrogen production technology that uses water and heat rather than electricity to potentially produce the world’s cheapest clean hydrogen.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of September 30, 2026 the Company has an accumulated deficit of $183,402,872. During the nine months ended September 30, 2026 the company had a net loss of $2,613,382 and used $1,963,639 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 nine months ended September 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.

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 Corporation (FDIC) limits. At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of September 30, 2026, the cash balance in excess of the FDIC limits was $51,508. 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.

Offering Costs

The Company pays commitment fees related to equity financing agreements (see Note 7). Commitment fees are costs directly related to an equity financing agreement and are accounted for as deferred offering costs. Deferred offering costs are initially recorded on the balance sheet and will be recognized as a reduction of additional paid-in capital on a pro-rata basis as the Company utilizes the financing facility. Should the financing facility not be utilized, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. As of September 30, 2026 and December 31, 2025 deferred offering costs totaled $16,476 and $0, respectively. During the nine months ended September 30, 2026 and 2025, $0 and $30,000 in deferred costs were amortized to additional paid-in capital, respectively.

The company also incurs finance fees each time they request a put through their equity financing agreements (see Note 7). Finance fees are accounted for as an offering cost and are recognized as a reduction to additional paid- in capital. During the nine months ended September 30, 2026 and 2025 clearing fees totaled $7,776 and $23,582, respectively.

Property and Equipment

Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives:

Depreciation expense for the nine months ended September 30, 2026 and 2025 was $195 and $195, respectively. Depreciation expense for the three months ended September 30, 2026 and 2025 was $65 and $65, respectively.

Intangible Assets

The Company has patent applications to protect the inventions and processes behind its proprietary thermochemical water splitting technology and 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.

Amortization expense for the nine months ended September 30, 2026 and 2025 was $2,267 and $2,267, respectively. Amortization expense for the three months ended September 30, 2026 and 2025 was $756 and $756, 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).

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 a binomial lattice valuation model 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 $1,033,604 and $354,074 for the nine months ended September 30, 2026 and 2025, respectively and $359,217 and $104,689 for the three months ended September 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 $276,901 and $296,034 for the nine months ended September 30, 2026 and 2025, respectively and $73,454 and $95,463 for the three months ended September 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 nine months ended September 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 September 30, 2026 and 2025, as their inclusion would be anti-dilutive.

The following table presents potentially dilutive securities that were not included in the computation of diluted net income per share for the nine months ended September 30, 2026 and 2025, as their inclusion would be anti-dilutive.

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 September 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:

We measure certain financial instruments at fair value on a recurring basis. As of September 30, 2026, there were no financial instruments to report.

Recently Issued Accounting Pronouncements

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 September 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 nine months ended September 30, 2026,392 shares of Series C Preferred Stock with a stated value of $39,200 were cancelled.

The Series C 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.

4. COMMON STOCK

On May 2, 2025 the Company entered into an equity financing agreement (“2025 Finance Agreement”) with an investor, pursuant to which the investor may purchase up to $3,000,000 worth of common stock (see Note 7).

On September 8, 2026 the Company entered into an equity financing agreement (“2026 Finance Agreement”) with the same investor, which provides for the purchase by the investor of up to $3,000,000 worth of common stock (see Note 7).

On September 8, 2026 the Company issued 980,713 shares of common stock totaling $16,476 for equity commitment fees related to the 2026 Finance Agreement. These shares were valued at a market price of $0.0168. These shares were recorded as a deferred offering cost (see Note 2).

During the nine months ended September 30, 2026 the Company issued an aggregate of 51,700,349 shares of common stock for $836,593 under the 2025 Finance Agreement at prices ranging from $0.012-$0.019, pursuant to put notices sent to the investor. Finance costs of $7,766 were deducted from the gross proceeds, leaving net proceeds of $828,827 (see Note 2).

On May 2, 2025 the Company issued 803,536 shares of common stock at a price of $0.037 for a total of $30,000 for equity commitment fees related to the 2025 Finance Agreement.

During the nine months ended September 30, 2025 the Company issued an aggregate of 25,245,680 shares of common stock for $639,027 under the 2025 Finance Agreement at prices ranging from $0.019-$0.031, pursuant to put notices sent to the investor. Finance costs of $23,582 were deducted from the gross proceeds, leaving net proceeds of $615,445 (see Note 2).

As of September 30, 2026 and December 31, 2025820,712,103 and 768,031,041 shares were outstanding, respectively.

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 stock options are summarized as follows:

Details of our options outstanding as of September 30, 2026, are as follows:

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 our outstanding stock options for the nine months ended September 30, 2026, and 2025, was $510,090 and $179,842, respectively. As of September 30, 2026, there was $534,536 of unrecognized compensation cost related to the Options, which is expected to be recognized over a remaining weighted-average vesting period of approximately 0.41 years.

The Company uses the binomial lattice valuation model to value option grants. The binomial lattice valuation 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:

Details of our warrants outstanding as of September 30, 2026, are as follows:

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 September 30, 2026, there wereno legal proceedings against the Company.

7. EQUITY FINANCING AGREEMENT

On May 2, 2025, the Company entered into an equity financing agreement (“2025 Financing Agreement”) with GHS pursuant to which GHS has agreed to provide up to three million dollars ($3,000,000) upon effectiveness of a registration statement on Form S-1. The Company filed the registration statement with the SEC on May 19, 2025, which was declared effective on May 30, 2025. Following effectiveness of the registration statement, the Company shall have the right to deliver puts to GHS and GHS will be obligated to purchase shares of our common stock based on the investment amount specified in each put notice. The maximum amount that the Company shall be entitled to put to GHS in each put notice will not exceed two hundred percent (200%) of the average of the daily trading dollar volume of the Company’s common stock during the ten (10) trading days preceding the put, so long as such amount does not exceed 4.99% of the outstanding shares of the Company. Pursuant to the 2025 Financing Agreement, GHS and its affiliates will not be permitted to purchase, and the Company may not put shares of the Company’s common stock to GHS that would result in GHS’s beneficial ownership equaling more than 4.99% of the Company’s outstanding common stock. The price of each put share shall be equal to ninety-two- and one-half percent (92.5%) of the lowest traded price of the Company’s common stock for the ten (10) consecutive trading days preceding the date on which the applicable put is delivered to GHS and one hundred twelve and one-half percent (112.5%) of the put amount shall be delivered in shares in each particular put. No put will be made in an amount greater than $500,000. Puts may be delivered by the Company to GHS until the earlier of twenty-four (24) months after the effectiveness of the registration statement on Form S-1 or the date on which GHS has purchased an aggregate of $3,000,000 worth of put shares. As consideration for the financing, the company issued 803,536 shares for a commitment fee. These shares were valued using a price of $0.037 per share for a total of $30,000 and were accounted for as a deferred offering cost (see Note 2 and 4).

On September 8, 2026, we entered into an additional equity financing agreement with GHS (“2026 Financing Agreement”). Pursuant to the 2026 Financing Agreement, the Company has the right, in its sole discretion, subject to the conditions and limitations in the GHS Financing Agreement, to direct GHS, by delivery of a put notice from time to time (a “Put Notice”) to purchase (each, a “Purchase”) over the period ending twenty-four (24) months after the date the Financing Agreement, a minimum of $10,000 and up to a maximum of one million dollars ($1,000,000). The maximum dollar amount of each Put shall not exceed two hundred percent (200%) of the average daily trading dollar volume of the Company’s common stock during the ten trading days preceding the date the Company delivers a Put Notice to GHS; or (2) one million dollars ($1,000,000), provided that the parties may agree to waive such limitations. The aggregate value of Purchase Shares sold to GHS may not exceed $3,000,000 (the “Commitment Amount”). Each Put Notice will set forth the Purchase Price and number of Purchase Shares in accordance with the terms of the GHS Financing Agreement. The number of Purchase Shares the Company will issue under each Purchase will be equal to 112.5% of the Purchase Amount sold under such Purchase, divided by the Purchase Price per share (as defined under the GHS Financing Agreement). The Purchase Price is defined as 92.5% of the Market Price. Following an up-list to the NASDAQ or any equivalent national exchange by the Company, the Purchase Price shall mean 95% of the lowest volume weighted average price during the Pricing Period, subject to a floor of $5.00 (“floor”) below which Floor the Company shall not deliver a Put. The Pricing Period is the ten consecutive trading days immediately preceding, but not including, the date a Put Notice is delivered. The GHS Financing Agreement prohibits the Company from directing GHS to purchase any shares of common stock if those shares, when aggregated with all other shares of the Company’s common stock then beneficially owned by GHS and its affiliates, would result in GHS and its affiliates having beneficial ownership, at any single point in time, of more than 4.99% of the then total outstanding shares of the Company’s common stock. As consideration for the financing, 980,713 shares of common stock were issued to GHS as commitment shares representing 0.5% of the Commitment Amount calculated at a price equal to 95% of the volume weighted average price on the trading day preceding the execution of the GHS Financing Agreement. These shares were valued using the market price of $0.0168 per share for a total of $16,476 and were accounted for as a deferred offering cost (see Note 2 and 4).

8. SUBSEQUENT EVENTS

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 October 8, 2026, the Company amended its Option Agreement with The Regents of the University of California, to extend through November 30, 2027. Under the amended agreement, an option execution fee of $10,000 is due on or before December 31, 2026.

On October 14, 2026, the Company amended its Research Agreement with The Regents of the University of California, on behalf of its Santa Barbara Campus to extend through November 30, 2027. Under the amended agreement, the Company’s total cost under the agreement shall not exceed $2,330,038.

On October 21, 2026, the Company entered into an agreement with Green Investment Strategies, LLC to cancel and terminate the warrant for 5,000,000 shares of Common Stock.

On October 23, 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with SunHydrogen, Inc., a Nevada corporation (the “Purchaser”), pursuant to which the Company agreed to issue and sell to the Purchaser (i)203,650,000 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share, at a purchase price of $0.01473 per share, and (ii) a Common Stock purchase warrant (the “Warrant”) to purchase up to 407,300,000 shares of Common Stock. The aggregate purchase price for the Shares and the Warrant was $2,999,764.50. The transaction closed on October 26, 2026.

The Warrant is exercisable for cash immediately upon issuance at an exercise price of $0.016203 per share and expires on October 23, 2031. Upon certain fundamental transactions, the holder may require the Company or any successor entity to purchase the unexercised portion of the Warrant for an amount equal to its Black Scholes Value (as defined in the Warrant).

The Purchase Agreement contains customary representations, warranties, covenants and indemnification obligations. The Company intends to use the net proceeds for general corporate purposes, including working capital.