Company: HYSR
Filing Date: 2025-02-10
Form Type: 10-Q
Source: 0001213900-25-011506
Chunk: 12

Company: SUNHYDROGEN, INC.
Filing Date: 2025-02-10
Form: 10-Q
Item: Part I, Item 8
Chunk 12
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value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows (See Note 7):

December 31, 2024

     Total  
     (Level 1)  
     (Level 2)  
     (Level 3) 
  
    Assets: 

    Equity securities, related party 
    $-  
    $  -  
    $-  
    $- 

    $-  
    $-  
    $-  
    $- 

June 30, 2024

    Total  
    (Level 1)  
    (Level 2)  
    (Level 3) 
  
    Assets: 

    Equity securities, related party 
    $4,101,402  
    $             -  
    $4,101,402  
    $              - 

    $4,101,402  
    $-  
    $4,101,402  
    $- 

As of December 31, 2024, the Equity securities, related party had a
fair value of $0 which was measured using a level 3 input due to the underlying securities no longer trading on an active stock exchange
(See Note 7).

Research and Development 

Research and development costs are expensed as
incurred.  Total research and development costs were $1,234,323 and $1,195,327 for the six months ended December 31, 2024 and 2023,
respectively.

Advertising and Marketing

Advertising and marketing cost are expensed as
incurred. Total advertising and marketing costs were $647 and $44,000 for the six months ended December 31, 2024 and 2023, respectively. 

8

Accounting for Derivatives 

The Company evaluates all of its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments
that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each
reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments,
the Company uses a probability weighted average series Binomial lattice formula pricing models to value the derivative instruments at
inception and on subsequent valuation dates.

The classification of derivative instruments,
including whether