Company: HYSR
Filing Date: 2025-09-15
Form Type: 10-K
Source: 0001213900-25-087311
Chunk: 90

Company: SUNHYDROGEN, INC.
Filing Date: 2025-09-15
Form: 10-K
Item: Item 1A
Chunk 90
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future earnings, if any, to provide funds for operations of our business. Therefore, any return investors in our common stock will be
in the form of appreciation in the market value of our shares of common stock, which may not occur.

Our common stock is subject to the SEC’s
penny stock rules.

Unless our common stock is
listed on a national securities exchange, including the Nasdaq Capital Market, or we have stockholders’ equity of $5,000,000 or
less and our common stock has a market price per share of less than $5.00, transactions in our common stock will be subject to the SEC’s
“penny stock” rules. If our common stock remains subject to the “penny stock” rules promulgated under the Securities
Exchange Act of 1934, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our securities
may be adversely affected.

In accordance with these rules,
broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document that describes the
risks associated with such stocks, the broker-dealer’s duties in selling the stock, the customer’s rights and remedies and
certain market and other information. Furthermore, the broker-dealer must make a suitability determination approving the customer for
low-priced stock transactions based on the customer’s financial situation, investment experience and objectives. Broker-dealers
must also disclose these restrictions in writing to the customer, obtain specific written consent from the customer, and provide monthly
account statements to the customer. The effect of these restrictions will probably decrease the willingness of broker-dealers to make
a market in our common stock, decrease liquidity of our common stock and increase transaction costs for sales and purchases of our common
stock as compared to other securities. Our management is aware of the abuses that have occurred historically in the penny stock market.

This may make it more difficult
for investors to dispose of our common stock and cause a decline in the market value of our stock.

Our articles of incorporation allow for
our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights
of the holders of our common stock.

Our board of directors has
the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors has the authority to
issue up to 5,000,000 shares of our preferred stock without further stockholder approval. As a result, our board of directors could authorize
the issuance of