10-Q: NewHydrogen Reports Q3 Loss, Cash Declines Amid R&D Push
Quarterly Report
NewHydrogen, Inc. reported a wider net loss and decreased cash reserves for the third quarter and nine months ended September 30, 2025, as it continues to invest in green hydrogen technology development.
Summary
- Net loss for the nine months ended September 30, 2025, was $1,581,894, compared to $1,347,183 for the same period in 2024.
- Cash reserves decreased to $1,306,271 as of September 30, 2025, from $2,104,521 at December 31, 2024.
- The company used $1,413,695 in cash for operating activities during the nine months ended September 30, 2025, an increase from $1,189,145 in the prior year period.
- No revenues have been generated to date, as the company remains in the development stage for its green hydrogen technology.
- Working capital decreased to $1,318,162 as of September 30, 2025, from $2,102,307 at December 31, 2024.
- The accumulated deficit reached $179,524,441 as of September 30, 2025.
- The company raised $615,445 through an equity financing agreement with GHS Investments, LLC during the nine months ended September 30, 2025, and an additional $530,628 in October 2025.
- Management believes current cash balances are sufficient to support development and general and administrative expenses for the next nine months.
Sentiment
Score: 3
Explanation: The company is in a critical development stage with no revenue and increasing losses, relying heavily on external financing. While the technology focus is promising, the significant cash burn and going concern warning indicate high financial risk. The capital raise provides some short-term liquidity but doesn't resolve the underlying operational challenges.
Positives
- Secured an equity financing agreement with GHS Investments, LLC for up to $3,000,000, with $615,445 already raised during the period and an additional $530,628 in October 2025.
- Continued development of ThermoLoop technology, which aims to produce low-cost green hydrogen using heat instead of expensive electricity.
- Collaboration with a research team at UC Santa Barbara for technology development.
- Management believes current cash and investment balances are sufficient to support development activity and general and administrative expenses for the next nine months.
Negatives
- Increased net loss for the nine months ended September 30, 2025, to $1,581,894 from $1,347,183 in the prior year period.
- Significant decrease in cash reserves, from $2,104,521 at December 31, 2024, to $1,306,271 at September 30, 2025.
- Increased cash used in operating activities to $1,413,695 for the nine months ended September 30, 2025, compared to $1,189,145 for the prior period.
- No revenues generated to date, indicating the company is still in the pre-revenue development stage.
- Accumulated deficit grew to $179,524,441.
- Working capital decreased from $2,102,307 at December 31, 2024, to $1,318,162 at September 30, 2025.
- Auditors expressed "substantial doubt" about the company's ability to continue as a going concern in their report for the year ended December 31, 2024.
Risks
- Ability to continue as a going concern is dependent on achieving profitable operations and receiving additional cash infusions.
- No assurance that future financing will be available or on satisfactory terms, potentially leading to undue restrictions or substantial dilution for stockholders.
- The company has not generated significant revenues to date and is in the development stage, making its financial future uncertain.
- Cash balances in excess of FDIC limits ($1,056,271 as of September 30, 2025) expose the company to credit risk.
- The probability of satisfying vesting conditions for certain performance-based stock options (Tranches I, II, IV of the 100,000,000 options granted June 15, 2023) is believed to be less than ten percent during the next 12 months due to current market cap of less than $5,000,000 and average trading stock volume of less than $5,000 per day.
Future Outlook
The company plans to utilize its cash balances to maintain the existing ThermoLoop technology development program at UC Santa Barbara. Management believes current cash and investment balances will be sufficient to support development activity and general and administrative expenses for the next nine months, but anticipates requiring additional cash resources during 2025 and expects increased expenses in early 2026 when prototyping efforts for its thermochemical water splitting technology ramp up.
Management Comments
- "Management believes that it will continue to receive funding from its current investors and from new investors."
- "Management believes the existing shareholders, and the prospective new investors will provide the additional cash needed to meet the Company's obligations as they become due and will allow the development of its core business operations."
- "Management believes the Company's present cash flows will enable it to meet its obligations for nine months from the date of these financial statements."
- "Management will continue to assess its operational needs and seek additional financing as needed to fund its operations."
- "Management believes the probability of satisfying vesting conditions in the above four tranches is less than ten (10) percent during next 12 months based on the current market cap of less than $5,000,000 and average trading stock volume of less than $5,000 per day."
Industry Context
NewHydrogen operates in the nascent but rapidly growing green hydrogen economy, which Goldman Sachs estimated to have a future market value of $12 trillion. The company's focus on thermochemical water splitting using heat rather than electricity aims to address the high cost of green electricity, which currently accounts for 73% of green hydrogen production costs. This approach positions NewHydrogen as a potential disruptor in the industry by seeking to fundamentally lower production costs, differentiating it from conventional electrolysis methods.
Comparison to Industry Standards
- The company's strategy to use heat directly for water splitting contrasts with the most common method of green hydrogen production, which relies on expensive green electricity (accounting for 73% of costs). This aims to achieve a lower cost basis than competitors using electrolysis.
- The company is collaborating with a "world class research team at UC Santa Barbara," suggesting a focus on cutting-edge academic research to develop its proprietary technology, ThermoLoop.
- The company cites a Goldman Sachs report from 2022 estimating the green hydrogen economy's future market value at $12 trillion, indicating a belief in the significant market potential for its technology, though specific comparable companies or projects are not detailed.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Technology Officer | NA | Consultant (unnamed) | 2025-04-15 | Entered into an agreement for general business services, including technology development and business development services. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Advisory Agreement Extension | An advisory agreement with a consultant for general business consulting services (including technology, business development, and product development) was extended from March 15, 2025, to March 15, 2028. | 2025-03-15 | Ensures continued access to external advisory expertise for technology and business development. |
Legal Proceedings
- As of September 30, 2025, there were no legal proceedings against the company.
Related Party Transactions
- The company entered into a research agreement with the Regents of the University of California, paying an aggregate of $716,326, which is the maximum payment under the agreement.
- The company also entered into an option agreement with the Regents of the University of California, paying an option execution fee of $20,000.
Stakeholder Impact
- Shareholders: Significant dilution risk due to ongoing equity financing to cover operating losses and the growing accumulated deficit. The "going concern" warning highlights the risk of investment loss if additional funding or profitability is not achieved.
- Employees/Consultants: Continued employment and compensation are tied to the company's ability to secure ongoing financing. Stock options granted are subject to vesting conditions, some of which are deemed unlikely to be met in the near term.
- Creditors: Current liabilities are low, but the "going concern" warning indicates potential risk if the company cannot secure future funding.
- Research Partners (UC Santa Barbara): Continued funding for the ThermoLoop development program at UCSB is dependent on the company's financial health and ability to raise capital.
Next Steps
- Maintain the existing ThermoLoop technology development program at UC Santa Barbara.
- Seek additional financing as needed to fund operations.
- Ramp up prototyping efforts related to thermochemical water splitting technology in early 2026.
- Evaluate certain inventions for an exclusive license to patent rights from the Regents of the University of California by July 31, 2026.
Key Dates
| Date | Description |
|---|---|
| 2021-02-18 | Company granted 450,000,000 stock options to employees at an exercise price of $0.091. |
| 2021-03-18 | First installment of 8,333,333 shares vested for 400,000,000 options; first installment of 1,388,889 shares vested for 50,000,000 options. |
| 2021-09-29 | Company amended the exercise price of 450,000,000 stock options to $0.028 per share. |
| 2022-03-01 | Company issued 5,000,000 common stock purchase warrants through a securities purchase agreement. |
| 2022-03-15 | Company granted 5,000,000 stock options to a consultant for advisory services. |
| 2022-04-12 | Company cancelled 450,000,000 stock options from Feb 18, 2021, and concurrently granted 450,000,000 new options to employees. |
| 2023-03-11 | One employee separated, and 50,000,000 options were cancelled as of June 11, 2023. |
| 2023-03-20 | Company granted 50,000,000 stock options at an exercise price of $0.0137 per share. |
| 2023-05-09 | Company granted 5,000,000 stock options to a consultant at an exercise price of $0.0126. |
| 2023-06-01 | Vesting period began for 5,000,000 stock options granted to a consultant. |
| 2023-06-15 | Company granted 100,000,000 shares of stock options to two employees at an exercise price of $0.0121. |
| 2023-08-01 | Company entered into a research agreement with the Regents of the University of California. |
| 2023-09-19 | 8,333,333 shares of 50,000,000 stock options granted March 20, 2023, vested. |
| 2023-11-30 | 833,360 options vested for the 5,000,000 stock options granted May 9, 2023. |
| 2024-03-01 | Initial exercise date for 5,000,000 common stock purchase warrants issued March 1, 2022. |
| 2024-12-09 | Company entered into an agreement with a consultant and granted 2,500,000 stock options. |
| 2025-01-01 | Vesting began for 2,500,000 stock options granted December 9, 2024. |
| 2025-03-12 | 5,000,000 stock options granted March 15, 2022, vested. |
| 2025-03-15 | Second amendment to advisory agreement with a consultant, extending term to March 15, 2028. |
| 2025-04-15 | Company entered into an agreement with a consultant to provide general business services as CTO. |
| 2025-05-01 | Company entered into an agreement with a consultant to perform research and granted 2,500,000 common stock options. |
| 2025-05-01 | Company entered into an option agreement with the Regents of the University of California. |
| 2025-05-02 | Company entered into an equity financing agreement with GHS Investments, LLC for up to $3,000,000. |
| 2025-05-02 | Company issued 803,536 shares of common stock to GHS for equity commitment fees of $30,000. |
| 2025-05-19 | Company filed registration statement on Form S-1 with the SEC. |
| 2025-05-30 | Registration statement on Form S-1 declared effective by the SEC. |
| 2025-07-17 | Company issued 11,616,962 shares of common stock through equity financing agreement, receiving $298,770 net. |
| 2025-07-31 | Expiration date for the option agreement with the Regents of the University of California. |
| 2025-08-06 | Company issued 4,770,259 shares of common stock through equity financing agreement, receiving $145,604 net. |
| 2025-09-03 | Company issued 5,499,766 shares of common stock through equity financing agreement, receiving $108,546 net. |
| 2025-09-18 | Company issued 3,358,693 shares of common stock through equity financing agreement, receiving $62,861 net. |
| 2025-09-30 | End of the reporting period for the 10-Q filing. |
| 2025-10-08 | Company issued 6,034,628 shares to GHS Investments, receiving $96,226 net. |
| 2025-10-29 | Company issued 22,535,036 shares to GHS Investments, receiving $434,402 net. |
| 2025-11-10 | Date of filing of the 10-Q report. |
Recommendation
strong sellNewHydrogen is a pre-revenue company with a rapidly increasing net loss and significant cash burn from operations. The cash balance is critically low, and the company explicitly states a 'going concern' doubt, indicating a high risk of financial distress without continuous external funding. While the equity financing agreement provides some capital, it comes with substantial dilution for existing shareholders, and the company projects needing more capital in 2025 and increased expenses in 2026. The market capitalization and trading volume are very low, making it difficult for performance-based options to vest, further highlighting the company's early and speculative stage. Given the severe financial challenges, lack of revenue, and high reliance on dilutive financing, the stock presents a strong sell recommendation for investors.
Keywords
Green Hydrogen, Clean Energy, ThermoLoop, Hydrogen Production, Renewable Energy, SEC Filing, 10-Q, Financial Results, Research and Development, Startup, Technology Development, GHS Investments
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