Company: HYSR
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001213900-25-108125
Chunk: 22

Company: SUNHYDROGEN, INC.
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 8
Chunk 22
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 (Source: US Department of Energy, Hydrogen Fuel Basics). This process is both economically and environmentally unsound.

We believe the SunHydrogen solution we are developing potentially offers
an efficient and cost-effective way to produce renewable hydrogen using sunlight and any source of water. Our core technology is a self-contained,
nanoparticle-based hydrogen generator that mimics photosynthesis to split water molecules, resulting in hydrogen. By optimizing the science
of water electrolysis at the nano-level, we are developing what we believe a low-cost method to potentially produce environmentally friendly
renewable hydrogen.

In parallel, we are developing a new methodology that utilizes commercially
available, mass-produced thin-film solar cells and modules, which are re-engineered with our proprietary hydrogen module design to enhance
fault tolerance and increase hydrogen production efficiency. While this approach is based on principles similar to our nanoparticle technology,
it leverages a mature manufacturing platform, enabling a potentially faster market entry.

We believe renewable hydrogen has already proven itself to be a key
solution in helping the world meet climate targets, and we believe our technology potentially offers solutions to the challenges that
the hydrogen future presents, including cost of production and transportation.

Because our process only requires
sunlight and water, our technology can be installed near the point of hydrogen use. This eliminates the need for pipelines and trucks
that result in high carbon emissions and high capital investment. Additionally, because our process directly uses the electrical charges
created by sunlight to generate hydrogen, our nanoparticle technology does not rely on grid power or require the costly power electronics
that conventional electrolyzers do. Lastly, our planned scalable system configuration of many individual hydrogen-generating panels ensures
redundancy, security and stability.

With a target cost of $2.50/kg.,
we aspire for our technology to be cost-competitive with brown hydrogen and below the cost of clean hydrogen competitors. We believe our
solution has the potential to clear a path for renewable hydrogen to compete with natural gas hydrogen and gain mass market acceptance
as a true replacement for fossil fuels.

Our technology is primarily
developed at three laboratories - our independent laboratory in Coralville, Iowa, the SunHydrogen laboratory at the University of Iowa,
and the Singh laboratory at University of Michigan.

16

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