UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



Form 10-Q



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2007



OR



TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934



For the transition period fromto



Commission file number 000-12374





---



Hydrogen Power, Inc.

(Exact name of Registrant as specified in its charter)



|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 84-0905189
(I.R.S. EmployerIdentification No.)
|----------------------------------------------------------------------- |  | ----------------------------------------------
|                                                                        |  |                                               

201 Elliott Avenue, Suite 400

Seattle, Washington 98112

(206) 223-0506

(Address, including zip code, and telephone number,

including area code, of Registrants principal executive office)



Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days: Yes    No



Indicate by check mark  whether the  registrant  is a large  accelerated  filer,
accelerated filer, or non-accelerated filer. See definition of accelerated
filer  and  large  accelerated  filer  in  Rule  12b-2  of the
Exchange Act:

| | Large Accelerated Filer |  | Accelerated Filer |  | Non-Accelerated Filer
| | ----------------------- |  | ----------------- |  | ---------------------



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

| | Yes                                                                           |  | No | 
| | ----------------------------------------------------------------------------- |  | -- | 
| | Number of shares of common stock outstanding at November 12, 2007: 29,357,444
| |                                                                               |  |    | 







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HYDROGEN POWER, INC.
AND SUBSIDIARIES (FORMERLY KNOWN AS
EQUITEX, INC.)



|PART I | FINANCIAL INFORMATION | Page
|------ | --------------------- | ----



| | Item 1. | Financial statements:
| | ------- | ---------------------



Condensed consolidated balance sheets 

| | September 30, 2007 (unaudited) and December 31, 2006 | 1
| | ---------------------------------------------------- | -



Condensed consolidated statements of operations-

| | three and nine months ended September 30, 2007 and 2006 (unaudited) | 2
| | ------------------------------------------------------------------- | -



Condensed consolidated statement of changes in

stockholders equity (deficiency) - nine months ended

| | September 30, 2007 (unaudited) | 3
| | ------------------------------ | -



Condensed consolidated statements of cash flows 

| | nine months ended September 30, 2007 and 2006 (unaudited) | 4  5
| | --------------------------------------------------------- | -----



| | Notes to condensed consolidated financial statements (unaudited) | 6  15
| | ---------------------------------------------------------------- | ------



| | Item 2. | Managements discussion and analysis of financial condition andresults of operations | 16
| | ------- | ------------------------------------------------------------------------------------ | --



| | Item 3. | Quantitative and qualitative disclosures of market risk | 20
| | ------- | ------------------------------------------------------- | --



| | Item 4. | Disclosure controls and procedures | 21
| | ------- | ---------------------------------- | --



|PART II | OTHER INFORMATION
|------- | -----------------



| | Item 1. | Legal proceedings | 22
| | ------- | ----------------- | --



| | Item 2. | Changes in securities and use of proceeds | 22
| | ------- | ----------------------------------------- | --



| | Item 3. | Defaults upon senior securities | 22
| | ------- | ------------------------------- | --



| | Item 4. | Submission of matters to a vote of security holders | 23
| | ------- | --------------------------------------------------- | --



| | Item 5. | Other information | 23
| | ------- | ----------------- | --



| | Item 6. | Exhibits | 23
| | ------- | -------- | --



| | Signatures | 24
| | ---------- | --

i

---

HYDROGEN POWER, INC. AND SUBSIDIARIES
(FORMERLY KNOWN AS EQUITEX, INC.)CONDENSED CONSOLIDATED BALANCE SHEET

|                                                                         | (unaudited)
September 30,
2007 | December 31,
2006
|------------------------------------------------------------------------ | ------------------------------ | -----------------
|                                                                         |                                |                  
|ASSETS                                                                   |                                |                  
|Current assets:                                                          |                                |                  
|Cash and cash equivalents                                                |                                |                  
|Cash held in trust                                                       |                                |                  
|Receivables, net                                                         |                                |                  
|Prepaid expenses and other                                               |                                |                  
|Assets of discontinued operations                                        |                                |                  
|                                                                         |                                |                  
|Total current assets                                                     |                                |                  
|Notes and interest receivable, net                                       |                                |                  
|Property, equipment and leaseholds, net                                  |                                |                  
|Investment in equity-method investee                                     |                                |                  
|Goodwill                                                                 |                                |                  
|Other assets                                                             |                                |                  
|                                                                         |                                |                  
|Total long-term assets                                                   |                                |                  
|                                                                         |                                |                  
|                                                                         |                                |                  
|                                                                         |                                |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)                        |                                |                  
|Current liabilities:                                                     |                                |                  
|Accounts payable                                                         |                                |                  
|Current portion of sub-license fee payable to related party              |                                |                  
|Accrued expenses and other liabilities, including related                |                                |                  
|party accruals of $19,516 (2007) and $56,422 (2006)                      |                                |                  
|Notes payable to related parties                                         |                                |                  
|Current portion of long-term debt                                        |                                |                  
|Liabilities of discontinued operations                                   |                                |                  
|Derivative liabilities                                                   |                                |                  
|                                                                         |                                |                  
|Total current liabilities                                                |                                |                  
|                                                                         |                                |                  
|Sub-license fee payable to related party, net of current portion         |                                |                  
|Long-term debt, net of current portion                                   |                                |                  
|                                                                         |                                |                  
|Total long-term liabilities                                              |                                |                  
|                                                                         |                                |                  
|                                                                         |                                |                  
|                                                                         |                                |                  
|Commitments and contingencies                                            |                                |                  
|Redeemable preferred stock                                               |                                |                  
|Series K convertible, 6% stated value $1,000 per share; $0.01 par value; |                                |                  
|3,100 shares Authorized; 0 shares (2007) and 445 shares (2006)           |                                |                  
|issued and outstanding, net of Discount of $278,700 (2006)               |                                |                  
|Stockholders' equity (deficiency):                                       |                                |                  
|Preferred stock, Series L convertible; $0.01 par value; 300,000          |                                |                  
|shares authorized; issued and outstanding 100,000 (2007) and             |                                |                  
|300,000 (2006); liquidation preference $1,000 (2007) and $3,000 (2006)   |                                |                  
|Common stock, $0.01 par value; 50,000,000 shares authorized;             |                                |                  
|29,363,002 shares (2007) and 16,262,571 shares (2006) issued; 29,357,444 |                                |                  
|shares (2007) and 14,710,976 shares (2006) outstanding                   |                                |                  
|Note receivable                                                          |                                |                  
|Additional paid-in capital                                               |                                |                  
|Accumulated deficit                                                      |                                |                  
|Common treasury stock at cost; 5,558 shares (2007) and 1,551,595         |                                |                  
|shares (2006)                                                            |                                |                  
|                                                                         |                                |                  
|Total stockholders' equity (deficiency)                                  |                                |                  
|                                                                         |                                |                  
|                                                                         |                                |                  
|                                                                         |                                |                  

See notes to condensed consolidated
financial statements.





1





---

HYDROGEN POWER, INC. AND SUBSIDIARIES 
(FORMERLY KNOWN AS EQUITEX, INC.)CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

|                                              | Three months ended
September 30, | Nine months ended
September 30,
|--------------------------------------------- | -------------------------------- | -------------------------------
|
|                                              |                                  |                                
|Cost incurred related to acquired             |                                  |                                
|technology, trade name and sub-license        |                                  |                                
|agreement                                     |                                  |                                
|Corporate selling, general and administrative |                                  |                                
|Research and development costs                |                                  |                                
|                                              |                                  |                                
|                                              |                                  |                                
|                                              |                                  |                                
|Other income (expense):                       |                                  |                                
|Interest income                               |                                  |                                
|Interest expense, including related party     |                                  |                                
|interest for the three months of $41,132      |                                  |                                
|(2007) and $369 (2006) and $71,132 (2007)     |                                  |                                
|and $9,861 (2006) for the nine months         |                                  |                                
|Loss on disposal of subsidiaries              |                                  |                                
|Equity in loss of equity method investee      |                                  |                                
|                                              |                                  |                                
|                                              |                                  |                                
|                                              |                                  |                                
|Loss from continuing operations before        |                                  |                                
|income taxes                                  |                                  |                                
|Income tax expense                            |                                  |                                
|                                              |                                  |                                
|Loss from continuing operations               |                                  |                                
|(Loss) income from discontinued               |                                  |                                
|operations, net of income taxes               |                                  |                                
|                                              |                                  |                                
|Net loss                                      |                                  |                                
|Accretion of preferred stock                  |                                  |                                
|Deemed preferred stock dividends              |                                  |                                
|                                              |                                  |                                
|Net loss applicable to common                 |                                  |                                
|stockholders                                  |                                  |                                
|                                              |                                  |                                
|Basic and diluted net (loss) income           |                                  |                                
|per common share:                             |                                  |                                
|Loss from continuing operations               |                                  |                                
|(Loss) income from discontinued               |                                  |                                
|operations                                    |                                  |                                
|                                              |                                  |                                
|Basic and diluted net loss per share          |                                  |                                
|                                              |                                  |                                
|Weighted average number of common             |                                  |                                
|shares outstanding:                           |                                  |                                
|Basic and diluted                             |                                  |                                
|                                              |                                  |                                

See notes to condensed consolidated
financial statements.





2

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HYDROGEN POWER, INC.
AND SUBSIDIARIES
(FORMERLY KNOWN AS EQUITEX, INC.)

CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIENCY)
NINE MONTHS ENDED SEPTEMBER
30, 2007 (UNAUDITED)

|                                                                                                                    |  | Series L Preferred
Stock |  | Common stock |  | Additional
paid-in
capital |  | Common Treasury
stock |  | Note
receivable |  | Accumulated
deficit |  | Total
stockholders'
Equity
(deficiency)
|------------------------------------------------------------------------------------------------------------------- |  | ------------------------ |  | ------------ |  | -------------------------- |  | --------------------- |  | --------------- |  | ------------------- |  | ---------------------------------------
|                                                                                                                    |  | Shares                   |  | Amount       |  | Shares                     |  | Amount                |  |                 |  |                     | 
|Balances, January 1, 2007                                                                                           |  | 300,000                  |  | $  3,000     |  | 16,262,571                 |  | $162,626              |  | $59,738,043     |  | $(6,915,241)        |  | $(454,966)                             
|                                                                                                                    |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|Issuance of common stock and options to Shareholders of old HPI in conversion of Series L-1 and L-2 Preferred Stock |  | (200,000)                |  | (2,000)      |  | 12,594,622                 |  | 125,946               |  | 19,304,361      |  |                     |  |                                        
|                                                                                                                    |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|Issuance of common stock in satisfaction of long-term debt and accrued interest                                     |  |                          |  |              |  | 22,556                     |  | 226                   |  | 26,390          |  |                     |  |                                        
|                                                                                                                    |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|Stock-based compensation arising from issuance and modification of warrants and options                             |  |                          |  |              |  |                            |  |                       |  | 430,879         |  |                     |  |                                        
|                                                                                                                    |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|Beneficial converson feature on convertible debt issued                                                             |  |                          |  |              |  |                            |  |                       |  | 166,514         |  |                     |  |                                        
|                                                                                                                    |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|Conversion of Series K preferred stock and unpaid dividends to common stock                                         |  |                          |  |              |  | 483,253                    |  | 4,833                 |  | 440,167         |  |                     |  |                                        
|                                                                                                                    |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|Accretion of Series K preferred stock                                                                               |  |                          |  |              |  |                            |  |                       |  | (278,700)       |  |                     |  |                                        
|                                                                                                                    |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|Disposition of subsidiary common stock ownership to FFFC                                                            |  |                          |  |              |  |                            |  |                       |  |                 |  | 6,801,204           |  | 454,966                                
|                                                                                                                    |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|Net loss                                                                                                            |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|                                                                                                                    |  |                          |  |              |  |                            |  |                       |  |                 |  |                     |  |                                        
|Balances, September 30, 2007                                                                                        |  | 100,000                  |  | $  1,000     |  | 29,363,002                 |  | $293,631              |  | $79,827,654     |  | $   (114,037)       |  | $              -                       



See notes to condensed
consolidated financial statements.

3

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HYDROGEN POWER, INC.
AND SUBSIDIARIES
(FORMERLY KNOWN AS EQUITEX, INC.)

CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2007 AND
2006 (UNAUDITED)

|                                                                                            | 2007            | 2006           
|------------------------------------------------------------------------------------------- | --------------- | ---------------
|Cash flow from operating activities:                                                        |                 |                
|Net loss                                                                                    | $  (19,229,746) | $   (6,211,204)
|Adjustments to reconcile net loss to net cash used in operating activities:                 |                 |                
|Expenses incurred related to acquired technology, trade name and sublicense       agreement | 12,779,926      | -              
|Provision for losses on notes and interest receivable, including bad debt expense           | -               | 518,392        
|Loss on disposal of subsidiaries                                                            | 2,516,157       | -              
|Equity in loss of equity-method investee                                                    | 871,495         | -              
|Gain on sale of assets                                                                      | -               | (4,145,835)    
|Depreciation and amortization                                                               | 109,219         | 1,287,685      
|Amortization of discounts related to warrants attached to notes payable                     | 111,897         | 352,724        
|Expense incurred upon issuance or modification of stock, options and warrants               | 366,845         | 2,054,915      
|Beneficial conversion feature on convertible debt issued                                    | 166,514         | -              
|Deferred income taxes                                                                       | -               | 1,333,000      
|Non-cash compensation expense                                                               | 353,438         | 167,200        
|Stock based compensation                                                                    | -               | 693,588        
|Changes in assets and liabilities, net of effects of business acquisition                   |                 |                
|and asset sale:                                                                             |                 |                
|Decrease in accounts receivable                                                             | 512             | 163,044        
|Decrease in other receivables                                                               | 28,462          | 13,226         
|Decrease (increase) in interest receivable and other assets                                 | (240,801)       | 341,515        
|Decrease in due to credit card holders                                                      | -               | (16,574)       
|Decrease in accounts payable and accrued liabilities                                        | (392,506)       | (1,710,440)    
|Total adjustments                                                                           | 16,671,158      | 1,052,440      
|Net cash used in operating activities                                                       | (2,558,588)     | (5,158,764)    
|Cash flows from investing activities:                                                       |                 |                
|Cash acquired in business acquisition of HPI                                                | -               | 2,203,121      
|Cash and cash equivalents disposed of pursuant to redemption agreement                      | (55,553)        | -              
|Purchase of furniture, fixtures and equipment                                               | (10,293)        | -              
|Issuances of notes receivable                                                               | -               | (35,695)       
|Repayments of notes receivable, other                                                       | -               | 232,265        
|Proceeds received from FFFC asset sale, net of costs                                        | -               | 12,712,784     
|Net cash (used in) provided by investing activities                                         | (65,846)        | 15,112,475     
|Cash flows from financing activities:                                                       |                 |                
|Decrease in checks issued in excess of cash in bank                                         | -               | (1,015,823)    
|Proceeds from private placement                                                             | -               | 240,000        
|Purchase of treasury stock                                                                  | -               | (192,299)      
|Proceeds from the exercise of warrants and options                                          | -               | 105,000        
|Payment on sub-license agreement fee payable                                                | (91,871)        | -              
|Borrowings of notes payable, related parties and other                                      | 250,000         | 695,000        
|Repayments of notes payable, related parties and other                                      | (1,028,785)     | (10,734,983)   
|Net cash used in financing activities                                                       | (870,656)       | (10,903,105)   
|Decrease in cash and cash equivalents                                                       | (3,495,090)     | (949,394)      



4

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HYDROGEN POWER, INC.
AND SUBSIDIARIES
(FORMERLY KNOWN AS EQUITEX, INC.)

CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2007 AND
2006 (UNAUDITED) (CONTINUED)

|                                                                                                                                   | 2007                | 2006                
|---------------------------------------------------------------------------------------------------------------------------------- | ------------------- | --------------------
|Cash and cash equivalents, beginning of year, including cash and cash equivalents included in assets held for sale (2006)          | 3,579,000           | 8,406,794           
|Cash and cash equivalents, end of period, including cash and cash equivalents included in assets of discontinued operations (2006) | $            83,910 | $          7,457,400
|Supplemental disclosure of cash flow information:                                                                                  |                     |                     
|Cash paid for interest                                                                                                             | 155,442             | 1,473,586           
|Cash paid for income taxes                                                                                                         | -                   | 3,838               
|Non-cash investing and financing activities:                                                                                       |                     |                     
|Issuance of common stock in satisfaction of note payable, long-term debt, accounts payable and accrued interest                    | 26,616              | 1,662,413           
|Issuance of note as partial payment of sub-license agreement                                                                       | 237,903             | -                   
|Issuance of common stock in satisfaction of subsidiary liabilities                                                                 | -                   | 730,862             
|Conversion of Series K preferred stock to common stock                                                                             | 445,000             | 1,400,000           
|Issuance of common stock to subsidiary in satisfaction of amounts owed                                                             | -                   | 6,144,000           



See notes to condensed
consolidated financial statements.

5

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HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

1. Organization and basis of presentation and managements plans:

Organization and basis of presentation:

Hydrogen Power, Inc. (formerly Equitex, Inc.), (the Company), a Delaware corporation, was formed in 1983 as a business development company (BDC). In April 1998, the Companys stockholders authorized a change in the nature of its business and withdrew its election as a BDC, which became effective in January 1999. On February 28, 2006, the Companys (then known as Equitex, Inc.) shareholders authorized the acquisition (the Acquisition) of Hydrogen Power, Inc. (Old HPI). Effective March 14, 2006, pursuant to an Agreement and Plan of Merger and Reorganization as amended (the Merger Agreement) and through a series of other transactions whereby the result was Old HPI merged with and into the Company, with the Company remaining as the surviving corporation to the merger. In connection with that merger, and as set forth in the
Certificate of Ownership, the Company changed its corporate name to Hydrogen Power, Inc. Old HPI, a Seattle based company, performs hydrogen-related testing, research and engineering, and has developed a patented system (Hydrogen NowTM) that creates pure hydrogen from aluminum and water. The patented technology allows hydrogen gas to be generated on-site and on-demand, and is designed to directly power any fuel cell, internal combustion engine application or other power conversion module. The Hydrogen Now process can supply hydrogen at customized rates and pressures, and may provide safe, cost-effective and stand-alone hydrogen solutions for small scale portable and stationary applications.

Old HPI in 2004 entered into a sub-license agreement with Global Hydrofuel Technologies, Inc. (GHTI), its former parent company and a shareholder of the Company, which gave Old HPI exclusive rights to use the Hydrogen Now technology developed by the University of British Columbia (UBC) and any improvements and to market, manufacture and distribute products using the technology in the United States, Mexico and Central and South America. The agreement also gave Old HPI non-exclusive rights to market and distribute products using the technology and any improvements in Canada and to use any trademarks, service marks, or logos associated with the technology in the United States, Canada, Mexico and Central and South America. The sub-license agreement is effective, with certain provisions for early termination, for as long as the underlying license agreement between its parent and UBC is in
effect. The underlying license agreement is effective through the latest expiration date of the patents that are the subject of the licensed technology. At present, the latest patent expiration date is February 2021.

Old HPI has not generated any significant revenues since its formation in December 2003.

Prior to the acquisition of Old HPI, the Company was a holding company, and through January 31, 2006, operated primarily through its majority-owned subsidiary FastFunds Financial Corporation (FFFC). As of September 30, 2007, the Company owned approximately 48% of FFFCs outstanding common stock. FFFCs wholly-owned subsidiary Chex Services, Inc. (Chex), a Minnesota corporation, provided financial services prior to the sale of substantially all of Chexs assets, which primarily consisted of check cashing, automated tell machine (ATM) access, and credit card advances to customers primarily at Native American owned casinos and gaming establishments (the Asset Sale).

Basis of presentation:

The condensed consolidated interim financial statements of the Company as of September 30, 2007, and for the three and nine months ended September 30, 2007 and 2006, have been prepared by the Company without audit by the Companys independent auditors. In the opinion of the Companys management, all adjustments necessary to present fairly the financial position, results of operations, and cash flows of the Company as of September 30, 2007, and for the periods ended September 30, 2007 and 2006, have been made. Those adjustments consist only of normal and recurring adjustments.

Certain information and note disclosures normally included in the Companys annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with a reading of the consolidated financial statements and notes thereto included in the Companys Form 10-K annual report filed with the Securities and Exchange Commission (SEC) on May 18, 2007. The results of operations for the three and nine months ended September 30, 2007, are not necessarily indicative of the results to be expected for the full year.

The interim condensed consolidated financial statements presented herein include
the financial  statements of the Company as of and for the three and nine months
ended  September  30, 2007.  For the three and nine months ended  September  30,
2006,  the  financial  statements  included  herein are of the  Company and also
include Old HPI effective March 14, 2006 (the date of the acquisition).     As a result of the Redemption Agreement (defined and
described   below),   the  operating   results  of  FFFC  and  its  wholly-owned
subsidiaries,  Key Financial  Systems,  Inc.  (Key),  Nova Financial
Systems,  Inc.  (Nova)  and its majority-owned  subsidiary,  Denaris
Corporation  (Denaris) are not consolidated as of September 30, 2007
and  for the  three  and  nine  months  ending  September  30,  2006  have  been
retroactively  restated  and are  included in income  (loss)  from  discontinued
operations on the  consolidated  statements of  operations.  As of September 30,
2007,  the Company is  accounting  for its 48%  ownership  of FFFC on the equity
method  as  a  one-line   presentation  on  the  balance  sheet  (investment  in
equity-method  investee) and on the consolidated statement of operations (equity
in loss of equity-method  investee).  All significant  intercompany accounts and
transactions have been eliminated in consolidation.

Return of subsidiary common stock:

On January 2, 2007, pursuant to the terms of a Redemption, Stock Sale and Release Agreement (the Redemption Agreement) by and between the Company and FFFC, FFFC (i) redeemed 8,917,344 shares of its common stock held by the Company, (ii) acquired from the Company 5,000,000 shares of common stock of Denaris, (iii) acquired from the Company 1,000 shares of common stock of Key, and (iv) acquired from the Company 1,000 shares of common stock of Nova. Denaris was a majority owned subsidiary of the Company, and Key and Nova were wholly owned subsidiaries of the Company. Each of Denaris, Nova and Key are inactive entities with no operating or intellectual property assets. The shares of common stock of each entity transferred by the Company pursuant to the Redemption Agreement constituted all of the Companys holdings in each entity. In consideration of the redemption and acquisition of the shares of
Denaris, Key and Nova, FFFC released the Company from all outstanding payment obligations of the Company to FFFC, including obligations for a $5 million note dated March 14, 2006 in favor of FFFC. The outstanding balance on the note, including principal and interest accrued, as of the date of the Redemption Agreement was $5,402,398. The Company recognized a loss of $2,516,157 on the Redemption Agreement due to losses of FFFC based on the Companys ownership percentages being applied to reducing the Companys investment account.

6

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HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

|1.Organization and basis of presentation and managements plans (continued):
|----------------------------------------------------------------------------

Basis of presentation (continued):

Return of subsidiary common stock (continued):

Subsequent to FFFC redeeming its shares of common stock pursuant to the Redemption Agreement, the Company owned 3,500,000 shares of common stock of FFFC. As of September 30, 2007, this represents approximately 48% of the outstanding common stock of FFFC. So long as the Company holds 10% or more of the outstanding equity or voting interest in FFFC, it has agreed to vote its shares of capital stock of FFFC in the same manner and proportion as other stockholders of FFFC vote their shares (the Voting Arrangement). Due to the ownership percentage being below 50% and pursuant to the terms of the Voting Arrangement in the Redemption Agreement, management of the Company has determined that they do not have any significant control of FFFC. Accordingly, the Company is no longer consolidating FFFC and its subsidiaries (Key, Nova and Denaris) in its financial statements, and is now accounting for its 48%
ownership of FFFC on the equity method as described above in basis of presentation.

The summarized financial results of FFFC and its subsidiaries for the three and nine months ended September 30, 2007 were as follows:

|              |           |            
|------------- | --------- | -----------
|              |           |            
|              | 3 months  | 9 months   
|Revenues, net | $  21,103 | $    69,373
|Gross margin  | 3,243     | 16,586     
|Net loss      | 665,945   | 1,746,554  
|              |           |            

Acquisition of Old HPI:

Pursuant to the Merger  Agreement the Company,  in March 2006,  acquired 100% of
Old  HPI.  The  initial  consideration  consisted  of  3,038,990  shares  of the
Companys common stock, 132,122 shares of our common stock reserved for the
exercise of options to  purchase  1,550,000  shares of Old HPI common  stock and
warrants issued to purchase up to 1,600,000 shares of the Companys  common
stock,  the initial  terms of which  included an exercise  price of $3.00 and an
expiration  date of February 2007. The total value of the initial  consideration
was  $16,729,864 and the total  initially  allocated to identifiable  intangible
assets was $19,316,074.  In February 2007, the Company modified the terms of the
warrants by reducing the exercise  price to $2.00 and extending  the  expiration
date to August 2007. As a result of these modifications, the Company recognized an additional expense of $99,200 based upon the Black-Scholes  option
pricing  model and such  expense is included in corporate  selling,  general and
administrative  expense in the consolidated statement of operations for the nine
months ending September 30, 2007.

The Company also issued to the stockholders of Old HPI 300,000 shares of its Series L Preferred Stock (the Preferred Stock). The Preferred Stock, issued in three equal amounts (referred to as the L-1, L-2 and L-3 Preferred Stock, respectively), whereby each amount is convertible into 40% of the Companys common stock on the 180th, 270thand 360thday following closing of the merger, respectively. The conversion of the Preferred Stock is subject to the achievement by Old HPI of certain performance benchmarks as defined in the Certificate of Designation of Series L Preferred Stock, the satisfaction of which is to be determined by the Board of Directors of the Company in its sole discretion. The benchmarks include HPIs use of its hydrogen technology to develop prototype generators for various micro and portable power applications and for various macro power
applications such as fuel cells and internal combustion engines (the Benchmarks). Based on the achievement of the benchmarks, on January 3, 2007, the Company issued, upon the conversion of the L-1 and L-2 preferred stock, an aggregate of 12,594,622 shares of the its common stock, and an additional 711,431 shares of its common stock have been reserved for issuance upon the exercise of Old HPI outstanding options. The Company has valued the 12,594,622 shares (the Additional Shares) of its common stock at $18,640,041 (based on the market price of the common stock on the date the Company issued the shares). The value of the 711,431 shares of common stock reserved for issuance upon the exercise of Old HPI options was $788,266 based on the Black Scholes option pricing model. Accordingly, $19,428,307 was added to the purchase price allocation in January 2007. Immediately following the conversion of the Series L-1 and L-2 Preferred Stock into common stock on January 3,
2007, the former shareholders of Old HPI held an aggregate of 15,633,612 shares of the Companys common stock, constituting approximately 54.1% of the Companys outstanding stock. The former majority shareholder of Old HPI, GHTI, holds approximately 49.3% of the Companys outstanding common stock. Additionally, former option holders of Old HPI hold options to purchase an aggregate of 843,553 shares of the Companys common stock.

Coinciding with the issuance of the Series L-1 and L-2 Preferred Stock, on January 2, 2007, the Company appointed four new directors to the Company and the prior directors of the Company contemporaneously resigned their positions.

During the nine months ended September 30, 2007, based on the additional consideration of $19,428,307 the Company recorded an expense of $12,779,926 and goodwill of $6,648,381. The goodwill recorded is a result of the total amount to be allocated of $38,744,381 exceeding the identifiable intangible assets acquired of $32,096,000 (as determined in a valuation report by an independent third party). The following table represents the purchase price allocation as of September 30, 2007:

7

---

HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

|1.Organization and basis of presentation and managements plans (continued):
|----------------------------------------------------------------------------

Basis of presentation (continued):

Acquisition of Old HPI (continued):

|                                      |              
|------------------------------------- | -------------
|                                      |              
|Cash and cash equivalents             | $   2,203,121
|Interest receivable                   | 38,339       
|Prepaid expenses                      | 85,681       
|Vehicle                               | 14,906       
|Technology and sub-license agreement  | 28,894,926   
|Trade name                            | 3,201,074    
|Goodwill                              | 6,648,381    
|Accounts payable and accrued expenses | (197,190)    
|Note payable                          | (3,000,000)  
|License fee payable                   | (1,731,067)  
|                                      |              
|                                      | $ 36,158,171 



| | 
| | 

In conjunction  with the issuance of the  Additional  Shares of its common stock
and change in control  described  above,  the new management of the Company,  in
completing an updated  analysis of the underlying  assumptions and  calculations
used  in  the  above  allocation,   determined  that  the  additional  costs  of
$12,779,926 related to the acquired technology, trade name and sub-license  agreement  should  be  expensed  in  the  first  quarter  of  2007.
Managements  analysis  included  the  determination  that the most  viable
potential market applications for the licensed technology are a different subset
than those originally being pursued by Old HPI, and accordingly,  the additional
costs related to the acquired technology and potential applications thereon have
been expensed in the first quarter of 2007.

Based on the terms and conditions of the Benchmarks in the Certificate of Designation of the Series L Preferred Stock, the conversion of the Series L-3 did not occur and would not be convertible unless extended or amended by the Company, which requires the approval of the majority shareholder (the Majority Holder). Management believes that the eventual conversion of Series L-3 may occur under the original terms (40% of the Companys common stock outstanding) or other terms which would be satisfactory to the Company and the Majority Holder. If the Series L-3 is converted to common stock and additional shares of common stock are reserved for issuance upon the exercise of Old HPI options, the purchase price of Old HPI and goodwill will increase by the aggregate market value of the common stock issued and the Black-Scholes option pricing model on the common stock reserved, respectively.

Pro forma information:

The following pro forma information has been prepared assuming the Acquisition of Old HPI had taken place at the beginning of each of the periods presented. The pro forma information includes the full period results of the Company and Old HPI and assumes that total costs of $32.1 million related to acquiring its technology, trade name and sub-license agreement are expensed in each of the periods presented.

The pro forma information is not necessarily indicative of the results of operations as they would have been had the transactions been consummated on the assumed date.

|                                                 |                             |                            |                    |                   
|------------------------------------------------ | --------------------------- | -------------------------- | ------------------ | ------------------
|                                                 |                             |                            |                    |                   
|                                                 | Three months ended Sept 30, | Nine months ended Sept 30,
|                                                 | 2007                        | 2006                       | 2007               | 2006              
|Revenues                                         | $               --          | $               --         | $               -- | $               --
|Net loss from continuing operations before other |                             |                            |                    |                   
|expense and income taxes                         | (32,960,136)                | (34,193,286)               | (34,761,618)       | (36,891,038)      
|Net loss                                         | (33,590,043)                | (35,019,840)               | (38,545,746)       | (38,631,666)      
|Net loss applicable to common stockholders       | (33,590,043)                | (35,882,840)               | (38,824,446)       | (40,419,666)      
|Basic and diluted loss per common share          | (1.14)                      | (1.41)                     | (1.32)             | (1.64)            
|Weighted average shares used in loss per share   |                             |                            |                    |                   
|calculation                                      | 29,357,444                  | 25,372,270                 | 29,323,862         | 24,623,881        
|                                                 |                             |                            |                    |                   



8





---

HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

|1.Organization and basis of presentation and managements plans (continued):
|----------------------------------------------------------------------------

Going concern and managements plans:

In the  Companys  Annual  Report on Form 10-K for the  fiscal  year  ended
December 31, 2006, the Report of the Independent  Registered  Public  Accounting
Firm included an explanatory  paragraph that described  substantial  doubt about
the  Companys  ability to continue as a going concern.  The Companys
interim  financial  statements for the three and nine months ended September 30,
2007 have  been  prepared  on a going  concern  basis,  which  contemplates  the
realization of assets and the settlement of liabilities  and  commitments in the
normal course of business.  The Company incurred a net loss of $19,230,000,  for
the nine months ended  September  30, 2007,  and incurred  previous  significant
losses of  $27,239,000  and $8,842,000 for the years ended December 31, 2006 and
2005,  respectively.  Additionally,  the Company has used cash in  operations of
approximately  $2,559,000  for the nine  months  ended  September  30, 2007 and,
$5,799,000  for the year  ended  December  31,  2006.  Although  the net  losses
included certain non-cash  expenses for the nine months ended September 30, 2007
of  approximately  $17,275,000  and  $21,000,000 for the year ended December 31,
2006,  the Company also  incurred  research  and  development  costs  related to
expenses in  continuing  to develop a  commercial  application  of its  licensed
technology  and in the design and  engineering  of  prototypes  in  addition  to
corporate,  selling,  general  and  administrative  expenses.  Additionally,  at
September 30, 2007, the Company has a working capital  deficit of  approximately
$1,738,000 and an accumulated deficit of approximately $74,197,000. Based on the
losses that were being incurred at FFFC, it was becoming increasingly  difficult
to continue to fund its operations.  Additionally, due to intense competition in
the market and the lack of assurance that FFFC would be able to obtain  renewals
of its existing casino  contracts or to obtain  contracts with new customers and
difficulty  in  attracting  and  retaining  experienced  employees,  the Company
decided to complete the Asset Sale.  Presently,  the Company has no revenues and
limited resources.

On August 6, 2007, the company received a notice of default from two of its lenders demanding immediate payment of all monies due including costs incurred in collection. (See Note 4).

These factors raise substantial doubt about the Companys ability to continue as a going concern. There can be no assurance that the Company will have adequate resources to fund future operations, if any, or that funds will be available to the Company when needed, or if available, will be available on favorable terms or in amounts required by the Company. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Companys objective is to continue to develop and eventually market its licensed proprietary hydrogen production process for use in commercial applications the require hydrogen, but where hydrogen storage and/or distribution is too costly or not feasible. Our management believes based on their product and market review that our hydrogen production process may be a commercially viable process. The Company plans on continuing its testing and evaluation of the commercial application of the licensed technology and the design and engineering of prototypes. The Companys planned path to commercialization and market entry is to leverage its AlumiFuel cartridge-based technology through partnership arrangements with major players in each target applications area.

The Company will need additional funds to continue the aforementioned work as well as to meet its existing obligations as they become due. Sources of cash that may be available to the Company include the sale of equity securities through private placements of our common stock and/or preferred stock, as well as the exercise of stock options and/or warrants, all of which may cause dilution to our shareholders. We may also be able to borrow funds from related and/or third parties. Currently, the Company does not have a revolving loan agreement with any financial institution, nor can the Company provide any assurance it will be able to enter into any such agreement in the future, or be able to raise funds through further issuance of debt or equity in the Company.

2.Summary of significant accounting policies:

Goodwill:

Goodwill represents the excess of the purchase price over the estimated fair value of the net identified tangible and intangible assets of the acquired business. In accordance with Statement of Financial Accounting Standards (FAS) No. 142,Goodwill and Other Intangible Assets,the Company tests goodwill for impairment on an annual basis, or if indicators of potential impairment exist, using a fair-value based approach. The Company currently has one operating segment and reporting unit. As such, the Company evaluates impairment based on certain external factors, such as its market capitalization. No impairment of goodwill has been identified during any of the periods presented.

Reclassifications:

In addition to retroactively restating FFFC, Nova and Denaris as discontinued operations, certain minor reclassifications of amounts reported in the 2006 consolidated financial statements have been made to conform to the 2007 presentation.

9

---

HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

2. Summary of significant accounting policies (continued):

Recently issued accounting pronouncements:

In June 2007, the Emerging Issues Task Force of the Financial Accounting Standards Board issued EITF Issue No. 07-3,Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research and Development Activities, (EITF 07-3) which is effective for fiscal years beginning after December 15, 2007. EITF 07-3 requires that nonrefundable advance payments for future research and development activities be deferred and capitalized. Such amounts will be recognized as an expense as the goods are delivered or the related services are performed. The Company does not expect the adoption of EITF 07-3 to have a material impact on the financial results of the Company.

3. Discontinued operations:

Income from discontinued operations for the three and nine months ended September 30, 2006 of FFFC, Key, Nova and Denaris were as follows:

|                                  | Three months        | Nine months              
|--------------------------------- | ------------------- | -------------------------
|                                  | ended Sept 30,      | ended Sept 30,           
|                                  | 2006                | 2006                     
|Revenues                          | $            30,363 | $              2,290,113 
|Operating expenses                | (482,039)           | (4,376,378)              
|                                  |                     |                          
|Loss from operations              | (451,676)           | (2,086,265)              
|Gain on sale of assets            | 0                   | 4,145,835                
|Other expenses                    | (113,328)           | (1,548,551)              
|                                  |                     |                          
|Income (loss) before income taxes | (565,004)           | 511,019                  
|Income tax expense (benefit)      | (238,327)           | 365,673                  
|                                  |                     |                          
|                                  |                     |                          
|Net income (loss)                 | $       (326,677)   | $                 145,346

4.Convertible and other promissory notes and long-term debt:

Convertible and other promissory notes and long-term debt at September 30, 2007 and December 31, 2006, consist of the following:

|                                                                                                                                                                                                                      | September 30,2007 |  | December 31,2006
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- |  | ----------------
|                                                                                                                                                                                                                      |                   |  |                 
|Notes payable to individual investors (due February 2008)                                                                                                                                                             |                   |  | $ 2,108,000     
|Note payable to a former director (due December 31, 2007)                                                                                                                                                             | $37,500           |  | 37,500          
|Convertible promissory notes; interest at 10% per annum; collateralized by all assets of Chex and the Companys stock ownership in FFFC; due December 2007; net of discount of $21,079 (2007) and $115,921 (2006) [A] | 618,751           |  | 1,577,713       
|Convertible debentures; due in full December 2009; unsecured; net of discount of $20,419                                                                                                                              |                   |  | 29,581          
|Note payable to related party (GHTI); due in full on December 15, 2007 and bears interest at 10%                                                                                                                      | 237,903           |  | -               
|Convertible promissory notes to related parties;interest at 10% per annum; net of discount
of $47,678; due on February 10, 2008; unsecured [B]                                                                        | 202,322           |  | -               
|                                                                                                                                                                                                                      |                   |  |                 
|                                                                                                                                                                                                                      |                   |  |                 
|                                                                                                                                                                                                                      | 1,096,476-        |  | 3,752,794       
|Less amounts included in liabilities of discontinued operations (2006)                                                                                                                                                | -                 |  | (2,108,000)     
|Less current maturities                                                                                                                                                                                               | (1,096,476)       |  | (1,615,213)     
|                                                                                                                                                                                                                      |                   |  |                 
|Long-term debt, net of current portion                                                                                                                                                                                | $               - |  | $     29,581    
|                                                                                                                                                                                                                      |                   |  |                 

10

---

HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

|4.Convertible and other promissory notes and long-term debt (continued):
|------------------------------------------------------------------------

[A]In March 2004, the Company closed on $5,000,000 of convertible promissory notes (the Notes) with two financial institutions (the Lenders). The Notes carried a stated interest rate of 7% per annum and have a 45-month term. Interest only payments were due April 2004 through June 2004. Beginning in July 2004, principal and interest payments amortize over the remaining 42-month period. The Notes are senior to all other debt of the Company and are collateralized by all assets of Chex as defined in the security agreement. The Notes require the Company to maintain cash balances of 140% of the outstanding principal balance. The Company is currently not in compliance with this requirement.

In contemplation of the Redemption Agreement (Note 1), on December 29, 2006, the Company obtained the consent of the Lenders to complete the transactions contemplated by the Redemption Agreement. Contemporaneously with receipt of the consent, the Company entered into a Note and Security Amendment Agreement (the Amended Note) dated December 29, 2006 with the Lenders, pursuant to which the Company agreed to amend certain terms of the Notes, including increasing the interest rate applicable to the Notes from 7% per annum to 10% per annum, resulting in an increase to the monthly payment amount of approximately $14,300. Additionally, the default interest rate increased from 10% to 13%.

The Notes are convertible into common stock of the Company at $6.885 reduced to $5.50 on September 15, 2005 per share up to an amount equal to 4.99% of the Companys outstanding common stock. The Company has the right to make any monthly payment of principal and interest in shares of its common stock. If the Company exercises its rights, the common stock is to be issued based on 80% of the average bid price for the lower of the three or twenty days prior to the payment due date. The maximum number of shares that can be delivered as payment is to be equal to 10% of the average monthly trading volume for the month prior to the payment due date. The Company may also issue common shares each month in an amount not to exceed 10% of the prior months total share volume as payment, to be applied to the outstanding principal balance up to a value of $100,000. For the nine months ending September 30,
2007, the Company issued 22,556 shares of its common stock valued at $26,616 as partial payment for principal and interest to the Lenders, with additional principal amounts paid in cash to the Lenders.

On August 6, 2007, the Company received a notice of default from Pandora Select Partners L.P. (Pandora) and Whitebox Hedged High Yield Partners L.P. (Whitebox together with Pandora Lenders)  demanding immediate
payment of all monies due under the convertible promissory notes due to multiple events of default, including failure to make payments when due. Pursuant to the declaration of an event of default, the Lenders declared the entire outstanding and unpaid principal amount of the Notes, together with the accrued and unpaid interest immediately due and payable. As of August 3, 2007, the total amount due to the Lenders was $913,092. The Company did not have the financial resources to pay the amounts due under the Notes. The Lenders also demanded delivery of the original stock certificate for 3.5 million shares of common stock of FastFunds Financial Corporation pursuant to the terms
of a Stock Pledge Agreement dated September 15, 2005. As of September 30, 2007, the Company owns approximately 48% of the outstanding common stock of FastFunds Financial Corporation. The Notes are collateralized by all of the assets of the Company. On August 16, 2007, the Company entered into a forbearance agreement with Pandora Select Partners L.P. (Pandora) and Whitebox Hedged High Yield Partners, LP (Whitebox). The agreement provided that Whitebox and Pandora would forbear from execution upon any judgement entered and further collection of the $946,982 owed them under notes due from the Company in exchange for the following:

| | a. |  | The Company making a payment of $300,000 on August 14, 2007,
| | -- |  | ------------------------------------------------------------



| | b. |  | the Company making a final payment of $646,982 on or before October 15, 2007,
| | -- |  | -----------------------------------------------------------------------------



| | c. |  | the delivery of an original stock certificate for 3,500,000 shares of common stock of FastFunds Financial Corporation pledged as collateral,
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------



| | d. |  | the delivery of a Personal Guaranty and Confession of Judgment of Henry Fong.
| | -- |  | -----------------------------------------------------------------------------



The Company made the payment of $300,000 due on August 14, 2007 by making a payment of $50,000 from its funds and borrowing $250,000 from related parties in exchange for convertible notes that are due on the earlier of an equity investment in the Company or 180 days from the date of issue and bear interest at the rate of 10% per annum.

The Company did not make the final payment of $646,982 by October 15, 2007 as required by the forbearance agreement and is currently in default of its obligations. The Company is in negotiations with the Lenders with respect to an extension of the forbearance agreement, however, there can be no assurance that such negotiations will be successful or if Lenders will continue to forbear from execution upon any judgment entered and further collection of the $646,982 during such negotiations. The Company does not have the financial resources to pay the amounts due under the Notes without obtaining additional financing.

11





---

HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

4.Convertible and other promissory notes and long-term debt (continued):

The Notes contain certain standard anti-dilution provisions requiring the Company to pay the Lenders as collateral, the pro-rata number of shares the Lenders would receive in any spin-off or dividend from the Company as if the remaining principal balance under the Note was fully converted at $6.885 per share. The Lenders also received warrants to acquire up to 133,334 shares of the Companys common stock at an exercise price of $9.00 per share. The warrants are exercisable for a period of five years, and include a cashless exercise provision. These warrants were valued at $358,400 based upon the Black-Scholes option-pricing model, and therefore $358,400 of the total costs was allocated to the warrants, resulting in an imputed interest rate of 7.5%. In June 2004, the Company reduced the exercise price of these warrants to $7.65 per share. In August 2004, the Company reduced the exercise price of these
warrants to $4.26 per share. As a result of the additional allocation resulting from these reductions in exercise price, the Company allocated an additional $102,800 to these warrants. The Company reduced the carrying value of the Notes by this amount and is amortizing the discount to interest expense over the 45-month term of the Notes. Accordingly, $31,614 has been recorded as interest expense in the consolidated condensed statements of operations during the three months ended September 30, 2007 and 2006, and $94,842 was recorded as interest expense for the nine months ended September 30, 2007 and 2006. In addition, warrants to acquire up to 50,000 shares of common stock of the Company, exercisable at $6.00 per share for a period of two years, were issued to an advisory firm in connection with the transaction. These warrants were valued at $164,700 based upon the Black-Scholes option-pricing model. The Company also paid cash of $320,000 for legal services and finders fees in
connection with the transaction. The Company recorded the value of these warrants and the cash paid as deferred loan costs and is amortizing these costs over the 45-month term of the Notes. Accordingly, $32,313 and $96,939 is included in corporate selling general and administrative expense in the consolidated condensed statements of operations during the three and nine months ended September 30, 2007 and 2006, respectively. At September 30, 2007 and December 31, 2006, deferred loan costs were $32,313 and $129,252, respectively, which are included in prepaid expenses and other on the Condensed Consolidated Balance Sheets.

[B] In August 2007 the Company issued  convertible  notes to related  parties in
the amount of $250,000 that mature on February 14, 2008.  The convertible  notes
bear  interest  at 10%  per  annum  payable  in  full  at  maturity.  Notes  are
convertible into that number of shares of the  Companys  common stock at a
conversion  price equal to 75% of the average closing price per share during the
10  trading  days  immediately  prior to the  conversion  date.  The  beneficial
conversion  feature of the note was  valued at $166,514  and  resulted in a
charge to interest  expense of $166,514 at the issuance date of the notes as the
notes were immediately convertible,  with a corresponding increase in Additional
Paid in Capital.  The Company also issued warrants to purchase 250,000 shares of
common stock at an exercise  price of $0.50 per share.  The  warrants  expire on
August 14, 2010 and were  recorded  based on the relative fair value as compared
to the fair value of the debt at issuance.  The relative fair value was recorded
as  Additional  Paid in  Capital,  estimated  at $64,034 and a discount to notes
payable.  Total discount against the notes was $230,548, resulting in a
carrying value of $19,452 at the commitment date.  The discount to notes  payable
arising from the warrants will be amortized to interest  expense
over the life of the note using the effective  interest method and resulted in a
charge of $16,356 in the  quarter  ended September 30, 2007.  The fair value of the  warrants  were
determined  using  an  option  pricing  model  with the  following  assumptions:
expected  life of 1.5 years,  risk free  interest  rate of 4,42%,  volatility of
118%, and a zero dividend yield.

5.Commitments and contingencies:

Sub-license agreement:

As discussed in Note 1, Old HPI entered into a sub-license agreement (the SL Agreement) with GHTI (a related party) in 2004. The SL Agreement included substantially all the rights of the original underlying license agreement between GHTI and UBC. The SL Agreement gives the Company exclusive rights to use the Hydrogen Now technology developed by UBC and any improvements and to market, manufacture and distribute products using the technology in the United States, Mexico, and Central and South America. The SL Agreement also gives the Company non-exclusive rights to market and distribute products using the technology and any improvements in Canada and to use any trademarks, service marks, or logos associated with the technology in the United States, Canada, Mexico and Central and South America.

The SL Agreement is effective, with certain provisions for early termination, for as long as the underlying license agreement is in effect. The underlying license agreement is effective through the latest expiration date of the patents that are the subject of the licensed technology. At present, the latest patent expiration date is February 2021. GHTI acquired the license with UBC under a royalty arrangement and is not currently in default under its license agreement with UBC.

Amounts owed under the SL Agreement with GHTI are non-interest bearing. The obligation was originally stated at its net present value of $2,615,200 using an effective interest rate of 6%. Remaining minimum payments required under the SL Agreement are due as follows:

|               |  |          |  |                            |  |                      | 
|-------------- |  | -------- |  | -------------------------- |  | -------------------- | 
|               |  | Total    |  | Amountrepresentinginterest |  | Principal amount due | 
|               |  |          |  |                            |  |                      | 
|March 15, 2008 |  | $666,667 |  | $53,987                    |  | $612,680             | 



Included in interest expense for the nine months ended September 30, 2007 and 2006 (from March 14, 2006, the date of acquisition of Old HPI) in the consolidated condensed statements of operations is $67,270 and $36,253, respectively, related to this obligation.





12

---

HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

5. Commitments and contingencies (continued):

Sub-license agreement (continued):

In August 2007, the Company paid its obligations that were originally due on March 15, 2007 of $388,000 for fees due under the sub-license agreement with GHTI for $150,000 in cash and a promissory note for approximately $238,000. The promissory note was dated August 8, 2007 and is due on December 15, 2007 and bears interest at 10% per annum. Interest is payable on a monthly basis.

Litigation:

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse impact either individually or in the aggregate on consolidated results of operations, financial position or cash flows of the Company.

Other transactions with officers and directors:

On December 29, 2006, the Company entered into a consulting agreement (the Consulting Agreement) with HF Services, LLC (HF Services). HF Services is owned by Henry Fong, who at the time of the Consulting Agreement was entered into, was a director of the Company. Pursuant to the Consulting Agreement, HF Services will assist the Company in securities matter and compliance with applicable securities rules and regulations. The Consulting Agreement has a one-year term and provides for a $20,000 per month fee. Accordingly, $60,000 and $180,000 is included in selling, general and administrative expense for the three and nine months ended September 30, 2007 in the consolidated condensed statement of operations.

6.Redeemable preferred stock:

Series K convertible preferred stock:

In August 2005, the Company issued 3,055 shares of 6% Series K convertible preferred stock (the Series K Preferred Stock) along with warrants to purchase 175,000 shares of common stock in exchange for all outstanding shares of Series G and I preferred stock (Note 12). The Company reduced the carrying value of the Series K preferred stock by the relative fair value of the warrants ($355,000), which was based on the Black-Scholes option-pricing model, with an offset to additional paid-in capital. The Series K Preferred Stock is convertible at the holders option at any time through June 2009 into shares of the Companys common stock at a conversion price equal to the lesser of (i) $2.75 per share and (ii) 65% of the 5 day average closing bid price of the Companys common stock as specified in the agreement, provided that the percentage of the 5 day average closing bid price shall
increase to 75% upon the occurrence of certain events. The holder of each share of the Series K preferred stock is entitled to cumulative dividends at 6% per annum, payable quarterly, with an 18% dividend default rate. Dividends are payable in cash or shares (at market value) of the Companys common stock. The beneficial conversion feature was valued at $2,277,000 using the effective conversion price. As a result, the Company reduced the carrying value of the Series K Preferred Stock for this amount with an offset to additional paid-in capital. The warrants and beneficial conversion feature are being accreted over the four-year term of the Series K Preferred Stock, and as a result, loss applicable to common stockholders was increased by $852,000 and $164,500 respectively for the three and nine months ended September 30, 2006. In January 2007, based on the conversion of the remaining 445 shares of Series K, the Company accreted $278,700, with an offset to additional paid-in
capital. In January 2007 the remaining 445 shares of Series K Preferred Stock, plus the unpaid dividends, were converted to an aggregate of 483,253 shares of common stock of the Company, at a conversion price of $0.97 for the 445 shares of Series K Preferred Stock and cumulative unpaid dividends of $36,490 (accrued at December 31, 2006) were converted at $1.49 per share.

7.Stockholders equity (deficiency):

The Company accounts for its share-based compensation under the provisions of FASB Statement No. 123 (R),Share-Based Payment,(FAS 123R).

In determining the fair value of stock options and warrants, the Company uses the Black-Scholes option pricing model. Key assumptions for the three and nine months ended September 30, 2007 based on the 1.5 and 2.5 year expected life of the grants:

|Expected life                                                                                          | 1.5 years | 2.5 years
|------------------------------------------------------------------------------------------------------ | --------- | ---------
|Risk-free interest rate                                                                                | 4.42%     | 4.31%    
|Expected dividend yield                                                                                | 0.00%     | 0.00%    
|Volatility                                                                                             | 118%      | 101%     
|Weighted average fair value of options and warrants    granted as determined under Black-Scholes model | $0.33     | $0.24    

The risk-free  interest rate is based on the U.S. Treasury yield curve in effect
at the time of the grant. The Company does not anticipate declaring dividends in
the foreseeable future. Volatility is based on the historical data. The expected
term of an option or warrant is based on the  assumption  that option or warrant
will be exercised,  on average, half way between the grant and expiration dates.
FAS 123R also requires that the Company recognize  compensation expense for only
the portion of option or warrants  that are  expected to vest.  The company does
not expect any options or warrants to be forfeited prior to vesting and recorded
a charge during the three and nine months ending  September 30, 2007 of $267,645
for options and warrants granted in 2007 thus far.



13





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HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

7. Stockholders equity (deficiency) (continued):

Options (continued):

A summary of the status of stock options outstanding and exercisable and weighted average exercise prices at September 30, 2007 and December 31, 2006 are as follows:



1,082,466  options  outstanding at September 30, 2007 are exercisable and expire
from May 2009  through  August  2012.  Of the 150,000  options  unvested at
September  30, 2007,  75,000  become  exercisable  on November 30, 2007 with the
remaining 75,000 options vesting March 31, 2008.

The exercise prices of all options  outstanding at September 30, 2007 were equal
to or in excess of the market price of the  Companys  common stock at that
date and thus there is no intrinsic value.

The following table sets forth the
exercise price range, number of shares, weighted average exercise price and remaining
contractual lives by groups of options as of September 30, 2007.

|Exercise Price Range | Number of Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Life
|-------------------- | ----------------------------- | ------------------------------- | -------------------------------
|$0.40                | 300,000                       | $0.40                           | 4.90                           
|$1.60 - $2.00        | 447,500                       | 1.64                            | 4.23                           
|$4.08 - $6.18        | 484,966                       | 5.23                            | 1.70                           
|                     | 1,232,466                     | $2.75                           | 3.40                           

Warrants:

A summary of the status of common stock warrant transactions for the nine months ended September 30, 2007 are as follows:

|                                  |             |  |                              
|--------------------------------- | ----------- |  | -----------------------------
|                                  |             |  |                              
|                                  | Shares      |  | WeightedAverageexercise price
|                                  |             |  |                              
|Outstanding at January 1, 2007    | 2,982,775   |  | $      3.14                  
|Granted                           | 1,285,000   |  | 0.47                         
|Exercised                         |             |  |                              
|Expired                           | (1,783,209) |  | (2.19)                       
|                                  |             |  |                              
|                                  |             |  |                              
|Outstanding at September 30, 2007 | 2,484,566   |  | $      1.80                  
|                                  |             |  |                              

Of the 2,484,566 warrants outstanding, 175,000 were unvested as of September 30, 2007, but are expected to become exercisable by December 31, 2007.

The following table sets forth the exercise price range, number of shares, weighted average exercise price and remaining contractual lives by groups of warrants as of September 30, 2007.

|                    |  |                              |  |                               |  |                              
|------------------- |  | ---------------------------- |  | ----------------------------- |  | -----------------------------
|                    |  |                              |  |                               |  |                              
|Exerciseprice range |  | Numberof warrantsOutstanding |  | WeightedAverageexercise price |  | Weightedaverageremaining life
|                    |  |                              |  |                               |  |                              
|                    |  |                              |  |                               |  |                              
|$0.40 - $0.60       |  | 1,285,000                    |  | $     0.47                    |  | 4.00                         
|$1.50 - $3.00       |  | 738,833                      |  | $     1.95                    |  | 2.55                         
|$4.50 - $6.00       |  | 460,733                      |  | $     5.26                    |  | 0.92                         
|                    |  |                              |  |                               |  |                              
|                    |  |                              |  |                               |  |                              
|                    |  | 2,484,566                    |  | $     1.80                    |  | 3.00                         
|                    |  |                              |  |                               |  |                              



14

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HYDROGEN POWER, INC.

(FORMERLY KNOWN AS EQUITEX, INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)

|8. |  | Income
Taxes:
|-- |  | -------------

Income tax expense for the three and
nine months ended September 30, 2006 was $237,000 and $974,000, respectively. This amount
is primarily related to income taxes as a result of the Asset Sale in January 2006. In
addition, the Company has not recognized a tax benefit related to the net operating
losses generated during the three and nine months ended September 30, 2007, as
realization of the deferred tax asset is not considered more likely than not and
therefore an allowance has been applied against this amount.

15

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ITEM 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THIS REPORT MAY CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS AS SUCH TERM IS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 OR BY THE SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH REPRESENT THE COMPANYS EXPECTATIONS OR BELIEFS, INCLUDING BUT NOT LIMITED TO, STATEMENTS CONCERNING THE COMPANYS OPERATIONS, ECONOMIC PERFORMANCE, FINANCIAL CONDITION, GROWTH AND ACQUISITION STRATEGIES, INVESTMENTS AND FUTURE OPERATIONAL PLANS, FOR THIS PURPOSE, ANY STATEMENTS CONTAINED HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, WORDS SUCH AS MAY, WILL, EXPECT, BELIEVE, ANTICIPATE, INTENT, COULD, ESTIMATE, MIGHT, OR CONTINUE OR THE
NEGATIVE OR OTHER VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE COMPANYS CONTROL, AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON THE VARIETY OF IMPORTANT FACTORS, INCLUDING UNCERTAINTY RELATED TO THE COMPANYS OPERATIONS, MERGERS OR ACQUISITIONS, GOVERNMENTAL REGULATION, THE VALUE OF THE COMPANYS ASSETS AND ANY OTHER FACTORS DISCUSSED IN THIS AND OTHER COMPANY FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.

GENERAL

Hydrogen Power, Inc. (formerly Equitex, Inc.) (the Company) through January 31, 2006, operated primarily through its then majority-owned subsidiary FastFunds Financial Corporation (FFFC). As disclosed in the December 31, 2006 Form 10-K, the Company and FFFC also have several other non-operating wholly-owned subsidiaries. As of September 30, 2007, the Company owns approximately 48% of FFFCs outstanding common stock.

FFFCs wholly-owned subsidiary Chex Services, Inc. (Chex), a Minnesota corporation, provided financial services prior to the sale of substantially all of Chexs assets, which primarily consisted of check cashing, automated teller machine (ATM) access, and credit card advances to customers primarily at Native American owned casinos and gaming establishments (the Asset Sale).

The Asset Sale is discussed below. As a result of the Asset Sale, the 2006 operations of FFFC are presented as discontinued operations, and as of December 31, 2006, all of its operating assets, including liabilities, are presented as assets and liabilities of discontinued operations.

On March 14, 2006, the Company acquired Hydrogen Power, Inc. (Old HPI). This acquisition, which the Company accounted for as a purchase, is described below.

OVERVIEW

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto for the years ended December 31, 2006, 2005 and 2004. The financial results for the three and nine months ended September 30, 2006 and 2007 are those of the Company and since March 14, 2006, Old HPI. Pursuant to the terms of a Redemption, Stock Sale and Release Agreement (the Redemption Agreement), FFFC, Denaris, Key and Novas results for 2006 are presented in a one-line presentation and are included in the results in income (loss) from discontinued operations.

BUSINESS ACQUISITION:

Acquisition of Old HPI

Pursuant to an Agreement and Plan of Merger and Reorganization, as amended, (the Merger Agreement) the Company, in March 2006, acquired 100% of Old HPI. The initial consideration consisted of 3,038,990 shares of our common stock, 132,122 shares of our common stock reserved for the exercise of options to purchase 1,550,000 shares of Old HPI common stock and warrants issued to purchase up to 1,600,000 shares of our common stock, the initial terms of which included an exercise price of $3.00 and an expiration date of February 2007. The total value of the initial consideration was $16,729,864 and the total initially allocated to identifiable intangible assets was $19,316,074. In February 2007, the Company modified the terms of the warrants by reducing the exercise price to $2.00 and extending the expiration date to August 2007. As a result of these modifications, the Company recognized an additional
expense of $99,200 based upon the Black-Scholes option pricing model and such expense is included in selling, general and administrative expense in the condensed consolidated statement of operations for the nine months ending September 30, 2007.

16

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The Company also issued to the stockholders of Old HPI 300,000 shares of its Series L Preferred Stock (the Preferred Stock). The Preferred Stock, issued in three equal amounts (referred to as the L-1, L-2 and L-3 Preferred Stock, respectively), whereby each amount is convertible into 40% of the Companys common stock on the 180th, 270thand 360thday following closing of the merger, respectively. The conversion of the Preferred Stock is subject to the achievement by Old HPI of certain performance benchmarks as defined in the Certificate of Designation of Series L Preferred Stock, the satisfaction of which is to be determined by the Board of Directors of the Company in its sole discretion. The benchmarks include HPIs use of its hydrogen technology to develop prototype generators for various micro and portable power applications and for various macro power
applications such as fuel cells and internal combustion engines (the Benchmarks). Based on the achievement of the benchmarks, on January 3, 2007, the Company issued, upon the conversion of the L-1 and L-2 preferred stock, an aggregate of 12,594,622 shares of the its common stock, and an additional 711,431 shares of its common stock have been reserved for issuance upon the exercise of Old HPI outstanding options. The Company has valued the 12,594,622 shares (the Additional Shares) of its common stock at $18,640,041 (based on the market price of the common stock on the date the Company issued the shares). The value of the 711,431 shares of common stock reserved for issuance upon the exercise of Old HPI options was $788,266 based on the Black-Scholes option pricing model. Accordingly, $19,428,307 has been added to the purchase price allocation during the three months ending March 31, 2007. Immediately following the conversion of the Series L-1 and L-2 Preferred
Stock into common stock on January 3, 2007, the former shareholders of Old HPI held an aggregate of 15,633,612 shares of the Companys common stock, constituting approximately 54.1% of the Companys outstanding stock. The former majority shareholder of Old HPI, GHTI, holds approximately 49.3% of the Companys outstanding common stock. Additionally, former option holders of Old HPI hold options to purchase an aggregate of 843,553 shares of the Companys common stock.

The Company, currently based in Seattle, Washington, performs hydrogen-related testing, research and engineering, and has developed a patented system (Hydrogen NowTM) that creates pure hydrogen from the reaction of aluminum and water. The patented technology allows hydrogen gas to be generated on-site and on-demand, without electricity, thus offering the potential to overcome transportation and storage problems. This process has the potential to supply hydrogen at customized rates and pressures.

Our objective is to develop and market our licensed proprietary hydrogen production process for use in commercial applications that require hydrogen, but where hydrogen storage and/or distribution is too costly or not feasible. Our management believes, based on their product and market review, that our hydrogen production process and AlumiFuel cartridge-based delivery system may be a commercially technology for: (1) small volume hydrogen production for various military and industrial applications; and (2) fuel cell and other power conversion module applications where on-demand hydrogen is required or is an advantage such as for selected portable power, stationary and mobile back-up generator power, and small scale transportation applications. Our Chief Executive Officer continues to assess, with his advisors, the technology and possible applications thereof. Thus, possible application areas, and any
others contained in this document should be considered tentative.

Our functional technology development laboratory is equipped to carry out hydrogen-related testing, research and engineering. We have working arrangements with two university laboratories - the Department of Metals and Materials Engineering at the University of British Columbia, Canada and the Department of Metals at the University of Washington, Seattle - to make use of the larger, more sophisticated pieces of equipment already available at those facilities. We are at the early stage of testing and evaluating the commercial application of the licensed technology and the design and engineering of prototypes.

Return of subsidiary common stock

On January 2, 2007, pursuant to the terms of a Redemption Agreement by and between the Company and FFFC, FFFC (i) redeemed 8,917,344 shares of its common stock held by the Company, (ii) acquired from the Company 5,000,000 shares of common stock of Denaris, (iii) acquired from the Company 1,000 shares of common stock of Key, and (iv) acquired from the Company 1,000 shares of common stock of Nova. Denaris was a majority owned subsidiary of the Company, and Key and Nova were wholly owned subsidiaries of the Company. Each of Denaris, Nova and Key are inactive entities with no operating or intellectual property assets. The shares of common stock of each entity transferred by the Company pursuant to the Redemption Agreement constituted all of the Companys holdings in each entity. In consideration of the redemption and acquisition of the shares of Denaris, Key and Nova, FFFC released the Company from all
outstanding payment obligations of the Company to FFFC, including obligations for a $5 million note dated March 14, 2006 in favor of FFFC. The outstanding balance on the note, including principal and interest accrued, as of the date of the Redemption Agreement was $5,402,398.

Subsequent to FFFC redeeming its shares of common stock pursuant to the Redemption Agreement, the Company owned 3,500,000 shares of common stock of FFFC. As of September 30, 2007, this represents approximately 48% of the outstanding common stock of FFFC. So long as the Company holds 10% or more of the outstanding equity or voting interest in FFFC, it has agreed to vote its shares of capital stock of FFFC in the same manner and proportion as other stockholders of FFFC vote their shares (the Voting Arrangement). Due to the ownership percentage being below 50% and pursuant to the terms of the Voting Arrangement in the Redemption Agreement, management of the Company has determined that they do not have any significant control of FFFC. Accordingly, the Company is no longer consolidating FFFC and its subsidiaries (Key, Nova and Denaris) in its financial statements.

SALE OF FFFC ASSETS

On December 22, 2005, FFFC and Chex entered into an Asset Purchase Agreement (the APA) with Game Financial Corporation (Game), pursuant to which FFFC and Chex agreed to sell substantially all of its cash access contracts and certain related assets, which represented substantially all the assets of Chex and FFFC.

17

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On January 31, 2006, FFFC and Chex completed the Asset Sale for $14 million pursuant to the APA and received cash proceeds of $12,642,784 and realized a pre-tax book gain of $4,145,835.

In connection with the Asset Sale, FFFC and Chex entered into a Transition Services Agreement (the TSA) with Game pursuant to which FFFC and Chex agreed to provide certain transitional services to Game for the cash-access financial services business. Pursuant to the TSA, FFFC and Chex provided the necessary services for approximately three months and Game paid FFFC $150,000 per month. The TSA terminated May 19, 2006 and FFFC received $300,000 for the three months ended March 31, 2006 pursuant to the terms of the TSA.

LIQUIDITY AND CAPITAL RESOURCES

For the nine  months  ended  September  30,  2007,  net cash  used in  operating
activities  was  $2,559,000  compared to  $5,159,000  for the nine months  ended
September  30, 2006.  The net loss for the nine months ended  September 30, 2007
increased to $19,230,000 from $6,211,000 for the nine months ended September 30,
2006. The increase in net loss of $13,019,000 was primarily  attributable  to costs of  $12,780,000  incurred in acquiring the
technology, trade name and sub-license agreement (Acquisition Costs)
of Old HPI and our loss of $2,516,000 from the transactions  provided for in the
Redemption  Agreement and a equity method loss of $871,000 on our  investment in
FFFC.  The results for the nine months ended  September  30, 2006  included gain
from  discontinued  operations  of $145,000,  which was comprised of gain on the
Asset Sale of $4,146,000,  offset by operating  losses of FFFC of  approximately
$4,001,000  and a decrease in deferred  income  taxes of  $1,333,000  (including
$366,000 in discontinued  operations).  Non-cash  adjustments to the nine months
ending September 30, 2007 included non-cash items of approximately  $17,275,000,
significantly  comprised of $12,780,000 of Acquisition Costs, $2,516,000 loss on
disposal of subsidiaries,  $871,000 loss in equity method investee,  $720,000 of
non-cash compensation expense and issuance and modification of warrants, options
and stock, and $109,000 of depreciation and  amortization.  The 2006 adjustments
for the same  comparable  period were  approximately  $2,262,000,  significantly
comprised of  $2,054,000  of expenses  related to stock and  warrants  issued or
modified,  $1,333,000 of deferred income taxes,  $1,288,000 for depreciation and
amortization,  $518,000  provision  for bad debt, $694,000 stock based compensation,  $353,000  amortization of
discounts  related  to  notes  payable  and  $4,146,000  gain  on  the  sale  of
assets.

Net cash used in investing  activities  for the nine months ended  September 30,
2007 was  $66,000  compared  to net cash  provided by  investing  activities  of
$15,112,000  for the nine months ended  September 30, 2006. Net cash provided in
2006  investing  activities  was primarily  attributable  to the net proceeds of
$12,713,000  from the Asset Sale and  $2,203,000 of cash acquired in the Old HPI
acquisition.

Net cash used in financing activities for the nine months ended September 30, 2007 was $871,000 compared to $10,903,000 for the nine months ended September 30, 2006. The activity for the nine months ended September 30, 2007 was the repayment of notes payable of $1,029,000, payments on sub-license agreement of $92,000, offset by borrowings of notes payable issued in the third quarter of 2007 of $250,000. The 2006 significant activity included the receipt of $695,000 from the borrowings of notes payable, $240,000 received from a private placement and $105,000 from the exercise of warrants. In addition, the Company repaid $10,735,000 of notes payable and $1,016,000 of checks issued in excess of cash in bank from the proceeds of the Asset Sale.

For the nine months ended September 30, 2007, net cash decreased by $3,495,000 compared to $949,000 for the nine months ended September 30, 2006. Ending cash at September 30, 2007, was $84,000 compared to $7,457,400 at September 30, 2006. The 2006 cash balance includes cash included in discontinued operations of $1,934,000.

The Company received an extension on its Note Payable to a related party of $37,500 until December 31, 2007. No other terms and conditions of the note changed.

On August 6, 2007, the Company received a notice of default from Pandora Select Partners L.P. (Pandora) and Whitebox Hedged High Yield Partners L.P. (Whitebox together with Pandora Lenders) demanding immediate payment of all monies due under the convertible promissory notes due to multiple events of default, including failure to make payments when due. Pursuant to the declaration of an event of default, the Lenders declared the entire outstanding and unpaid principal amount of the Notes, together with the accrued and unpaid interest immediately due and payable. As of August 3, 2007, the total amount due to the Lenders was $913,092.41 The Company did not have the financial resources to pay the amounts due under the Notes. The Lenders also demanded delivery of the original stock certificate for 3.5 million shares of common stock of FastFunds Financial Corporation pursuant to
the terms of a Stock Pledge Agreement dated September 15, 2005. As of September 30, 2007, the Company owns approximately 48% of the outstanding common stock of FastFunds Financial Corporation. The Notes are collateralized by all of the assets of the Company. On August 16, 2007, the Company entered into a forbearance agreement with Pandora Select Partners L.P. (Pandora) and Whitebox Hedged High Yield Partners, LP (Whitebox). The agreement provided that Whitebox and Pandora would forbear from execution upon any judgement entered and further collection of the $946,982 owed them under notes due from the Company in exchange for the following:

| | a. |  | The Company making a payment of $300,000 on August 14, 2007,
| | -- |  | ------------------------------------------------------------



| | b. |  | the Company making a final payment of $646,982 on or before October 15, 2007,
| | -- |  | -----------------------------------------------------------------------------



| | c. |  | the delivery of an original stock certificate for 3,500,000 shares of common stock of FastFunds Financial Corporation pledged as collateral,
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------



| | d. |  | the delivery of a Personal Guaranty and Confession of Judgment of Henry Fong.
| | -- |  | -----------------------------------------------------------------------------





18

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The Company made the payment of $300,000 due on August 14, 2007 by making a payment of $50,000 from its funds and borrowing $250,000 from related parties in exchange for convertible notes that are due on the earlier of a equity investment in the Company or 180 days from the date of issue and bear interest at the rate of 10% per annum.

The Company did not make the final payment of $646,982 by October 15, 2007 as required by the forbearance agreement and is currently in default of its obligations. The Company is in negotiations with the Lenders with respect to an extension of the forbearance agreement, however, there can be no assurance that such negotiations will be successful or if Lenders will continue to forbear from execution upon any judgment entered and further collection of the $646,982 during such negotiations. The Company does not have the financial resources to pay the amounts due under the Notes without obtaining additional financing.

In August 2007, the Company paid its obligations that were originally due March 15, 2007 of $388,000 for fees due under the sub-license agreement with GHTI for $150,000 in cash and a promissory note for approximately $238,000. The promissory note was dated August 8, 2007 and is due on December 15, 2007 and bears interest at 10% per annum. Interest is payable on a monthly basis.

The Company currently does not have adequate assets to satisfy its obligations and must either a waiver from its Lenders and raise additional funds to pay its Lenders and for general working capital in the very near future. The can be no assurance that the Company will be able to raise funds on favorable terms, or at all. Failure to raise funds in the near term will significantly impact its ability to continue as a going concern and may result in the Company ceasing operations and could possibly result in the need to file for bankruptcy.

RESULTS OF OPERATIONS

Financial statements for the three and nine months ended September 30, 2006 have been retroactively reclassified to include Nova and Denaris in the previously reported discontinued operations of FFFC and Key.

CORPORATE SELLING, GENERAL AND ADMINISTRATIVE

For the three and nine months ended September 30, 2007, corporate expenses include those of the Company and for the three and nine months ended September 30, 2006 are those of the Company and from March 14, 2006 Old HPI (the date of the acquisition). Corporate Selling General and administrative costs for the three months ended September 30, 2007 were $645,000, a decrease of $1,198,000 from the same period last year. This was primarily due to the elimination of expenses associated with the Equitex offices in Colorado. For the nine months ended September 30, 2007 these expenses were $1,949,000 a decrease of approximately $2,004,000 from the same period last year. This is primarily associated with the elimination of expenses associated with the Equitex offices as described above.

RESEARCH AND DEVELOPMENT COSTS

For the three months ended September 30, 2007, Research and Development costs were $215,000 a decrease of approximately $35,000 when compared to the same period last year. This is primarily due to the reduction in supplies and services due to the tight cash situation. For the nine months ended September 30, 2007 these expenses were $716,000 or $191,000 higher than last year. The increase is primarily due to $100,000 in costs incurred under a contract with the University of Washington for certain development activities and no expenses being recognized in the first quarter of 2006 as the acquisition of Old HPI was not effective until March 14, 2006.

OTHER INCOME (EXPENSE):

Consolidated net other expenses for the three and nine months ended September 30, 2007 were $630,000 and $3,784,000, respectively, compared to $263,000 and $905,000 for the same three and nine month periods in 2006. During the nine months ended September 30, 2007, pursuant to transactions described in the Redemption Agreement, the Company recognized an expense of $2,516,000 related to the partial disposition of its investments in FFFC, and the disposition of Key, Nova and Denaris. For the three and nine month periods ending September 30, 2007, the company recorded a loss on its investment in FFFC of $308,000 and $871,000 respectively. Interest expense increased by $12,000 in the three months ended September 30, 2007 compared to the same period in 2006 and decreased $552,000 for the nine month period ended September 30, 2007 when compared to the same period in 2006. The decrease for the nine month period was
primarily attributable to non-cash interest expense of approximately $630,000 related to the settlement of various obligations to note holders for the nine months ended September 30, 2006. Interest income for the three and nine months ending September 30, 2007 declined by $47,000 and $44,000 respectively due to lower cash balances.

INCOME TAX EXPENSE

Income tax expense for the three and nine months ended September 30, 2006 were $237,000 and $974,000 respectively and is primarily related to the income taxes as a result of the Asset Sale in January 2006. In addition, the Company has not recognized a tax benefit related to net operating losses generated during the three and nine months ended September 30, 2007, as realization of the deferred tax asset is not considered more likely than not and therefore an allowance has been applied against this amount.

CONTRACTUAL OBLIGATIONS

Other than the Notes and Convertible Notes Payable mentioned above, there were no new material contractual obligations during the quarter ended September 30, 2007.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

None

19

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and a decline in the stock market. The Company does not enter into derivatives or other financial instruments for trading or speculative purposes. The Company has limited exposure to market risk related to changes in interest rates. The Company does not currently invest in equity instruments of public or private companies for business or strategic purposes.

The principal risks of loss arising from adverse changes in market rates and prices to which the Company and its subsidiaries are exposed relate to interest rates on debt. The Company has only fixed rate debt, as follows:





|                                 | Sept 30           |  | Dec 31,        |  |                 
|-------------------------------- | ----------------- |  | -------------- |  | ----------------
|Contractual obligation           | 2007              |  | 2006           |  | Interest rate   
|                                 |                   |  |                |  |                 
|Notes payable                    | $         525,403 |  | $    2,145,500 |  | Fixed 10% to 15%
|Long-term debt - Current Portion | 639,830           |  | 1,693,634      |  | Fixed 13%       
|Operating Lease obligations      | 188,000           |  | 224,000        |  | Fixed 10%       
|                                 |                   |  |                |  |                 
|Debt outstanding, before note    |                   |  |                |  |                 
|discounts (1)                    | $      1,353,233  |  | $    4,063,134 |  |                 

|(1) | Excludes discount of $68,757 (2007) and $115,921 (2006) to the carrying value of the notes that are included in the Companys balance sheet as of September 30, 2007 and December 31, 2006.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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ITEM 4.

DISCLOSURE CONTROLS AND PROCEDURES

A review and evaluation was performed by the Companys management, including the Companys Chief Executive Officer and Treasurer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of the end of the last day of the period of the accompanying financial statements. Based on that review and evaluation, management has concluded that the Companys current disclosure controls and procedures, as designed and implemented, were not effective at ensuring that the material information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported as required in applicable SEC rules and forms. There have been no changes in the Companys internal controls over financial reporting that have
materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial reporting.

In connection with the 2006 audit, our independent registered public accounting firm has advised us and our Board of Directors that there are material weaknesses in our internal controls and procedures. The identified material weaknesses primarily relate to the limited number of Company employees engaged in the authorization, recording, processing and reporting of transactions, as well as the overall financial reporting process. These material weaknesses have caused significant delays in our financial reporting process. In addition, during the 2006 audit, we were not able to timely produce adequate documentation supporting all transactions underlying the financial statements. We are currently considering taking certain steps to correct the material weaknesses by enhancing our reporting process in future. Enhancing our internal controls to correct the material weaknesses will result in increased costs to us.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings

On October 26, 2007 Hydrogen Power Inc. (the Company or Equitex Inc.) was served with a complaint from Colin P. Markey, Kathy Moore, Paul A. Moore, Theodore H. Swindells, and Sherie Swiontek (collectively the Shareholders). The Shareholders seek damages in the amount of $420,000 plus interest and costs, and all other relief to which they are entitled.

Effective May 10, 2006, Equitex, entered into a Settlement Agreement with FastFunds Financial Corporation, a Nevada corporation and majority owned subsidiary of the Company, and the holders of certain promissory notes, including the Shareholders, issued by FastFunds Financial Corporation and dated as of April 14, 2004 (the Settlement Agreement). Under the Settlement Agreement, the noteholders agreed to receive an aggregate of 180,000 shares of Equitex common stock in lieu of payment of certain amounts of principal and interest under the promissory notes. All parties to the Settlement Agreement granted the others general releases from claims, with certain limited exceptions. The settlement terms stipulate a price protection clause whereby FastFunds Financial Corporation, under certain circumstances, must reimburse the former debt holders if the market price of the Company common stock issued to them
in the settlement is below $4.00 per share at the time they sell the stock. The Shareholders claim that the stock was sold at less than $4.00 and claim the difference between the sale price and $4.00. The Shareholders claim the Company has breached the Settlement Agreement by failing to issue and deliver common stock at the price agreed to in the Settlement Agreement, and that the Shareholders are owed in excess of $320,000, plus interests and costs.

In connection with the Settlement Agreement, Equitex also entered into a Stock Sale and Lock Up Agreement, Registration Agreement and an Escrow Agreement with the recipients of Equitex common stock, including the Shareholders, under the Settlement Agreement.

Under the Registration Agreement, Equitex agreed to prepare and file a registration statement covering the resale of the shares of common stock issued to the noteholders, and use its best efforts to cause the same to be declared effective on or prior to June 26, 2006. In the event the Company fails to file the registration statement on or prior to May 15, 2006, or fails to obtain effectiveness on or prior to June 26, 2006, the Company may incur per-day penalties equal to two percent, three percent, and four percent of one-thirtieth of the aggregate principal amount of that portion of the promissory notes converted into Equitex common stock, for the respective first, second and third 30-day periods of any such failure. The Shareholders claim the Company has breached the Registration Agreement by failing to use its best efforts to obtain effectiveness of the registration statement by June 26, 2006 causing the
Shareholders to be unable to sell their stock at a higher market price, and accordingly, the Shareholders are owed in excess of $100,000, plus interests and costs.

The company believes the claims to be without merit and intends to vigorously defend the action.

On October 15, 2007, Hydrogen Power, Inc. (the Company) became aware of a complaint from Certegy Gaming Services, Inc. (f/k/a/ Game Financial Corporation) (Certegy). FastFunds Financial Corporation (FastFunds), and its wholly-owned subsidiary Chex Services, Inc. (Chex) are also named in the complaint. Certegy seeks damages of $318,241.29 plus prejudgement interest, costs, attorneys fees, and all other relief to which it is entitled.

On December 22, 2005, FastFunds and Chex entered into an Asset Purchase Agreement (the APA) with Certegy, pursuant to which FastFunds and Chex agreed to sell substantially all of its cash access contracts and certain related assets, which represented substantially all the assets of Chex and FastFunds. Certegy claims it is owed $318,241.29 due to a downward adjustment of the purchase price under the APA.

The Company entered into a Guaranty Agreement with Certegy unconditionally guaranteeing the performance of FastFundss and Chexs obligations under the Asset Purchase Agreement.

FastFunds has indemnified the Company with respect to these claims.



Item 2.Unregistered Sales of Securities



None



Item 3.Defaults upon Senior Securities

None.

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Item 4.Submission of Matters to a Vote of Security Holders

SUBMISSION OF STOCKHOLDER PROPOSALS FOR 2008 ANNUAL MEETING

The Company anticipates holding its 2008 Annual Meeting of Stockholders on June 5, 2008.

Any  stockholder  proposals  submitted  pursuant to Exchange  Act Rule 14a-8 and
intended to be  presented  at the 2008 Annual  Meeting of  Stockholders  must be
received  by the  Company on or before  January 7,  2008,  to be  eligible  for
inclusion  in the  Companys  proxy  statement  and  form  of  proxy  to be
distributed by the Board of Directors in connection with that meeting.  Any such
proposal  should be mailed to:  Corporate  Secretary,  Hydrogen  Power Inc., 201
Elliott Avenue Suite 400, Seattle, WA 98112. Such proposal must also comply with
the  requirements  as to form and  substance  established  by the SEC for such a
proposal to be included in the proxy statement and form of proxy.

SEC rules establish a deadline for submission of shareholder proposals that are not intended to be
included in  the Company.s proxy statement with respect to discretionary voting (the Discretionary Vote
Deadline.) The Discretionary Vote Deadline for the 2008 Annual Meeting is March 20, 2008. If a shareholder
gives notice of such a proposal after the Discretionary Vote Deadline, the Companys proxy holders will
be allowed to use their discretionary voting authority to vote against the shareholder proposal when and
if the proposal is raised at the 2008 Annual Meeting.

.

Item 5.Other Information

None.

Item 6.Exhibits

Exhibits

|31.1  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                  
|----- | -----------------------------------------------------------------------------------------
|      |                                                                                          
|32.1  | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                  
|      |                                                                                          
|10.57 | Promissory note payable dated August 8, 2007 issued to Global Hdydrofuel Technology, Inc.
|      |                                                                                          
|10.58 | Convertible note dated August, 13, 2007 issued to Dil Gujral                             
|      |                                                                                          
|10.59 | Convertible noted dated August 13, 2007 issued to Pyramid Partners                       
|      |                                                                                          
|10.60 | Convertible noted dated August 13, 2007 issued to Gulfstream Financial Corp, LLC.        





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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                         | Hydrogen Power, Inc.        
|------------------------ | ----------------------------
|                         | (Registrant)                
|                         |                             
|Date: November  19, 2007 | By:/s/ David J. Cade        
|                         | David J. Cade               
|                         | Chief Executive Officer and 
|                         | Principal Accounting Officer

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