Company: HYSR
Filing Date: 2025-09-15
Form Type: 10-K
Source: 0001213900-25-087311
Chunk: 97

Company: SUNHYDROGEN, INC.
Filing Date: 2025-09-15
Form: 10-K
Item: Item 1A
Chunk 97
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 operation.

19

Off-Balance Sheet Arrangements 

We do not have any off-balance
sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, result
of operations, liquidity or capital expenditures. 

Critical Accounting Policies

Our
discussion and analysis of our financial condition and results of operations are based upon our 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 the Binomial valuation
option pricing 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 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

In
accordance with accounting principles generally accepted in the United States, management utilizes estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
These estimates and assumptions relate to useful lives and impairment of tangible and intangible assets, accruals, income taxes, stock-based
compensation expense, Binomial lattice valuation model inputs, derivative liabilities and other factors. Management believes it has exercised
reasonable judgment in deriving these estimates. Consequently, a change in conditions could affect these estimates.

Fair Value of Financial
Instruments

Fair
value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where
it is practicable to estimate that value. As of June 30, 2025 and June 30, 2024, the amounts reported for cash, investment in affiliate,
accrued interest and other expenses, notes payables, and derivative liability approximate the fair