EDGAR 10-K Filing

Company CIK: 1676580
Filing Year: 2021
Filename: 1676580_10-K_2021_0001493152-21-005901.json

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ITEM 1. BUSINESS
ITEM 1 - BUSINESS
This Annual Report on Form 10-K (including the section regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Annual Report on Form 10-K. Additionally, statements concerning future matters are forward-looking statements.
Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our Management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Risks Factors” below, as well as those discussed elsewhere in this Annual Report on Form 10-K. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the Securities and Exchange Commission (“SEC”). You can read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.
We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
Overview
The 2020 year was challenging for us. Originally, we set out to provide hydrogen energy systems for residential users. The original business plan, established in April 2016, focused on developing the market for residential off grid hydrogen energy systems while simultaneously acquiring companies that possessed technicians who could be trained in the design and deployment of these hydrogen energy systems.
In February 2020, we decided to adopt another approach in market development, which was to pursue the one market that was establishing momentum, hydrogen production on a plant-size scale. In order to achieve our new strategic business model, we decided to sell both our subsidiaries because they were not producing enough profit and were not a strategic fit with our goal of developing the market for hydrogen energy systems. Further, the hydrogen energy market for residential users was not developing at all based on cost inefficiencies, and debt levels were beginning to impact us adversely.
Beginning in March 2020, the following steps were undertaken to implement the business transition plan:
● March 2020 - Commenced discussions with investor regarding financing options for our company and strategic acquisitions.
● April 20, 2020 - Concluded the disposition of the PVBJ subsidiary
● May 2020 - Commenced discussions and diligence for an investment in a hydrogen production project in the Netherlands, known as Volt H2
● May 18, 2020 - Concluded the disposition of The Pride Group subsidiary
● July 2020 - Concluded 2nd and 3rd tranches of debt financing with proceeds earmarked for an investment in Volt H2.
● August 12, 2020 - Concluded acquisition of an equity interest in Volt H2
● September 30, 2020 - Moved the Company’s headquarters from Dallas, Texas to Jersey City, New Jersey
● October 6, 2020 - Changed the company name to Vision Hydrogen Corporation and effected a twenty-for-one reverse stock split of our outstanding common stock
● January 2021 - Closed on the sale of 12,500,000 shares of common stock in a registered offering, resulting in gross proceeds of $2.5 million.
With the initial investment into the hydrogen production market via Volt H2, the first step in transitioning our hydrogen business focus has been completed. We now will continue to operate the business in a manner that is aligned with our primary hydrogen business strategy.
Recent Transactions
Sale of PVBJ
On April 21, 2020, we sold PVBJ back to PVBJ pursuant to the terms as follows: (a) Benis Holdings applied the $221,800 earn-out liability as consideration towards the purchase of PVBJ; (b) Paul Benis applied the remaining salary due to him, as prorated from the closing date to the expiration date of his employment agreement (January 31, 2021), to the purchase of PVBJ by Benis Holdings as additional consideration thereof, and as a result, we have no further salary obligation to Paul Benis, who resigned as our executive officer; and (c) as additional consideration for the purchase of PVBJ by Benis Holdings, PVBJ assumed responsibility for the line of credit agreement with Thermo.
Sale of Pride
On May 18, 2020, we executed the Agreement with Turquino providing for our sale of 100% of Pride’s outstanding stock Pride to Turquino in return for Turquino’s assumption of the $550,000 principal balance of Notes and the debt obligations and accrued interest related thereto. In conjunction therewith, Hidalgo and Doyle assigned the notes to Turquino, at which time Turquino became responsible for the debt obligations under the Notes and we had no further note obligations to Hidalgo or Doyle, and we reduced our debt by approximately $600,000, or 65% of the corporate debt obligations. The Agreement provided that the parties mutually release one another and discharge and release the other party (and their respective current and former officers, directors, employees, shareholders, note holders, attorneys, assigns, agents, representatives, predecessors and successors in interest), from any and all claims, demands, obligations, or causes of action.
Volt Investment
On August 12, 2020, pursuant to a Seed Capital Subscription Agreement, we made an equity investment into VoltH2 Holdings AG (“VoltH2”), a Swiss corporation developing scalable green hydrogen production projects primarily in Europe. VoltH2 is currently developing a 25MW green hydrogen production site near Vlissingen, Netherlands. The investment was for a total purchase price $175,000, and we received a 17.5% equity interest in VoltH2.
Name and Symbol Change and Reverse Stock Split
We filed a certificate of amendment with the Nevada Secretary of State, which as of effective October 6, 2020, changed our name from H/Cell Energy Corporation to Vision Hydrogen Corporation. In addition, pursuant to that amendment, we effectuated a twenty-for-one reverse stock split of our issued and outstanding common stock. We believe that the name change better represents our vision for the company and communicates our commitment to hydrogen energy. As well, our stock symbol changed from “HCCC” to “VIHD” effective November 2, 2020. All share and per share amounts in this annual report on Form 10-K reflect the reverse stock split.
Public Offering
In October 2020, we filed a registration statement on Form S-1 with the Securities and Exchange Commission, whereby we registered 12.5 million shares of our common stock for sale as a company offering. The registration statement was declared effective in October 2020. In January 2021, we sold all of the shares for gross proceeds of $2.5 million.
Market Potential
As the world’s fossil fuel supply continually diminishes while causing harm to the planet, we believe that climate hydrogen is the most reliable alternative to carbon fossil fuels, as it leaves zero greenhouse gas residues and can be used at any time of the day or night, as well as in any weather conditions, unlike renewable energy from solar and wind.
Hydrogen is fast becoming a significant factor in the planning of future energy production and is anticipated by energy analysts to become more widely competitive as an alternative energy source by as early as 2030 as economies of scale drive-down the cost of fuel cells and electrolysers with the addition of lower costs for wind and solar power. According to the Grand View Research report on future hydrogen growth, published in February 2020, the global hydrogen market is expected to reach $154 billion by 2027.
Technology Overview
There are great benefits to hydrogen energy. The use of hydrogen as a fuel produces no carbon dioxide or other greenhouse gases. Unlike fossil fuels, the sole emission from hydrogen fuel is chemically pure water. Hydrogen can be extracted from water using renewable energy from the sun and unlike batteries, hydrogen energy can be stored indefinitely. There is no drilling, fracking or mining required to produce hydrogen energy. We believe it is safe and efficient, and the cleanest energy source on the planet.
Hydrogen can be produced from a large number of primary energy sources and by various technical processes. Electrolysis is the cleanest option for hydrogen production from renewable resources. Electrolysis is the process of using electricity to split water into hydrogen and oxygen. Electrolysis occurs through the use of an electrolyzer, which can range in size from a small unit suited for low end hydrogen production to large-scale units for central production facilities that could be tied directly to renewable or other non-greenhouse, gas emitting forms of electricity production.
Developments in electrolyzer technology have allowed for a reduction in research and development requirements with a stable network of suppliers for turn-key equipment solutions. The key inputs to hydrogen production are water and electricity supply, as such, proximity to both is essential. Electrolyzers, and the various ancillary components can be purchased from various suppliers as pre-built packages. They will be assembled at our sites with the assistance of the suppliers, but will not require in-house technical knowledge for the assembly.
Growth Strategy
We intend to aggressively grow our business, through investments and acquisition of strategic target sites. Investment opportunities and target sites will be strategically positioned for power supply, storage, transportation, and fueling infrastructure in geographic regions that have customer and government support for hydrogen markets. Target customers will be industrial users, fleet operators, and various industries looking to replace and/or offset their current carbon-based energy consumption. Delivery and logistics will be unique to each site, but may involve pipeline, rail, and truck supplies.
Competition
Given the increasing focus on renewable energy, and hydrogen specifically, to offset the environmental problems caused by fossil fuels, the renewable energy industry is highly competitive, and rapidly evolving. Our major competitors include leading global companies, and other regional and local energy providers.
In the markets where we plan to conduct business, we will compete with many energy producers including electric utilities and large independent power producers. There is also competition from fossil fuel sources such as natural gas and coal, and other renewable energy sources such as solar and wind. The competition depends on the resources available within the specific markets. However, we believe that our target approach will allow us to compete favorably with traditional utilities and other renewable energy systems in the regions we service.
Although the cost to produce clean, reliable, renewable energy is becoming more competitive with traditional fossil fuel sources, it generally remains more expensive to produce, and the reliability of its supply is less consistent than traditional fossil fuel. Deregulation and consumer preference are becoming important factors in increasing the development of renewable energy projects.
However, as a company with only a short operating history, substantially all of our competitors have advantages over us in terms of greater operational, financial, technical, management or other resources in particular markets or in general.
Government Regulations; Regulatory Matters
Given the industrial nature of our planned operations, water access restrictions, and high level of electricity needs, we expect to operate in an area that is highly regulated by local and possibly national government bodies. We anticipate that our operations at will be subject to oversight and regulation at the federal, state and local level in accordance with statutes and ordinances relating to, among others, building codes, fire codes, public safety, electrical and gas pipeline connections and hydrogen siting. The level of regulation may depend, in part, upon where a system is located.
Other than these requirements, at this time we do not know what additional requirements, if any, each jurisdiction will impose on our operations. We also do not know the extent to which any new regulations may impact our ability to distribute, install and service our products. The federal, state, local or foreign government entities may seek to impose regulations or competitors may seek to influence regulations through lobbying efforts.
Government Incentives
We intend to focus on states on regions whose government supports a regulatory standard that promotes hydrogen production and consumption. These governments have established various incentives and financial mechanisms to accelerate and promote the use of hydrogen as renewable energy sources. These incentives may take the form of support for infrastructure and hydrogen transportation versus monetary incentives. For example, in June 2020, as part of its economic COVID-19 stimulus package, Germany announced €9.0 billion of funding earmarked for expansion of hydrogen production. Funding is still to be determined, but specific areas could include, infrastructure conversions and new pipeline development.
Employees
As of March 11, 2021, we had two full-time employees, which are our executive officers. We plan to hire employees on an as-needed basis. None of our employees are represented by a labor union, and we believe that our relations with our employees are good.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
Risks Related to Our Financial Position and Need for Additional Capital
We have a short operating history and have generated minimal revenue to date. This makes it difficult to evaluate our future prospects and increases the risk that we will not be successful.
We were incorporated in August 2015, have been operating for less than six years, and have recently sold off our operating subsidiaries as we look to pivot our business plan. Those operating subsidiaries generated all of our revenue, and we have never generated revenue from other sources. As a result, we have a very limited operating history for you to evaluate in assessing our future prospects. We are subject to all risks inherent in a developing business enterprise. Our likelihood of continued success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the services industry and the competitive and regulatory environment in which we operate. As a new industry, there are few established companies whose business models we can follow. Similarly, there is little information about comparable companies for potential investors to review in making a decision about whether to invest in the Company.
Potential investors should consider, among other factors, our prospects for success in light of the risks and uncertainties generally encountered by companies that, like us, are in their early stages. We may not successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business to the point of having to cease operations and could impair the value of our common stock to the point investors may lose their entire investment.
We expect to incur significant losses for the foreseeable future and may never achieve or maintain profitability.
Investment in our company is highly speculative because it entails substantial upfront capital expenditures and significant risk that, as a company in a new industry, we may never become commercially viable. We have sold off all of our operating subsidiaries that generated any revenues, and we cannot estimate with precision the extent of our future losses. For the years ended December 31, 2020 and 2019, our net losses were approximately $1,400,000 and $700,000, respectively. As of December 31, 2020, we had an accumulated deficit of $3.5 million. We expect to incur operating losses for the foreseeable future as we execute our plan to focus on acquiring or developing hydrogen production on a plant-size scale. As a result, we expect to continue to incur significant operating losses and negative cash flows for the foreseeable future. These losses have had and will continue to have an adverse effect on our financial position and working capital.
To become and remain profitable, we must develop or acquire hydrogen production on a plant-size scale with significant market potential. This will require us to be successful in a range of challenging activities, including identifying and acquiring target sites, developing the necessary infrastructure at sites for delivery and logistics, obtaining governmental approvals, acquiring customers and marketing our services. We may never succeed in these activities and, even if we succeed, we may never generate revenues that are significant enough to achieve profitability. In addition, as a young business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown challenges. Furthermore, because of the numerous risks and uncertainties associated with entering a nascent market, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis and we may continue to incur substantial development and other expenditures to acquire and build out additional sites. Our failure to become and remain profitable would decrease the value of the company and could impair our ability to raise capital, maintain our development efforts, expand our business or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.
To execute our overall business strategy, we will likely require additional working capital, which may not be available on terms favorable to us or at all. If additional capital is not available or is available at unattractive terms, we may be forced to delay, reduce the scope of or eliminate our operations.
We have an ambitious business plan for strong growth of our business, which will likely require us to raise additional financing to supplement our cash flows from operations to fully execute. We intend to use proceeds from our recent public offering to implement our business strategy. We expect that we will require additional financing to execute our business strategy. To the extent we raise additional capital through the sale of equity securities, the issuance of those securities could result in dilution to our shareholders. In addition, if we obtain debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for our business activities. If adequate funds are not available, we may be required to reduce our marketing and sales efforts or reduce or curtail our operations.
There can be no assurance that if we were to need additional funds to meet obligations we have incurred, or may incur in the future, that additional financing arrangements would be available in amounts or on terms acceptable to us, if at all. Furthermore, if adequate additional funds are not available, we may be required to delay, reduce the scope of, or eliminate material parts of the implementation of our business strategy.
Risks Related to Our Company and Our Business
If hydrogen energy technology is not suitable for widespread adoption at economically attractive rates of return or if sufficient additional demand for hydrogen energy systems does not develop or takes longer to develop than we anticipate, we may not achieve significant net sales and we may be unable to obtain or sustain profitability.
In comparison to fossil fuel-based electricity generation, the hydrogen energy market is at an early stage of development. If hydrogen technology proves unsuitable for widespread adoption at economically attractive rates of return or if additional demand for hydrogen energy systems fails to develop sufficiently or takes longer to develop than we anticipate, we may be unable to grow our business or generate sufficient net sales to obtain profitability. In addition, demand for hydrogen energy systems in our targeted markets may develop to a lesser extent than we anticipate. Many factors may affect the viability of widespread adoption of hydrogen energy technology and demand for hydrogen energy systems, including the following:
● cost-effectiveness of the electricity generated by hydrogen energy systems compared to conventional energy sources, such as natural gas and coal (which fuel sources may be subject to significant price fluctuations from time to time), and other non-solar renewable energy sources, such as solar or wind;
● performance, reliability, and availability of energy generated by hydrogen energy systems compared to conventional and other renewable energy sources and products, particularly conventional energy generation capable of providing 24-hour, non-intermittent baseload power;
● success of other renewable energy generation technologies, such as solar, hydroelectric, tidal, wind, geothermal, and biomass;
● fluctuations in economic and market conditions that affect the price of, and demand for, conventional and non-solar renewable energy sources, such as increases or decreases in the prices of natural gas, coal, oil, and other fossil fuels;
● fluctuations in capital expenditures by end-users of renewable energy systems, which tend to decrease when the economy slows and when interest rates increase; and
● availability, substance, and magnitude of support programs including government targets, subsidies, incentives, and renewable portfolio standards to accelerate the development of the hydrogen energy industry.
We have no experience manufacturing hydrogen fuel on a commercial basis.
To date, we have no experience manufacturing hydrogen fuel on a commercial basis and our experience has been limited to developing systems for residential hydrogen energy purposes. We cannot be sure that we will be able to develop efficient, low-cost, high-volume automated processes that will enable us to meet our development goals. Once operational, we cannot be sure that we will be able to achieve any planned increases in production capacity or that unforeseen problems relating to our manufacturing processes will not occur. Even if we are successful in developing high-volume automated processes and achieving planned increases in production capacity, we cannot be sure that we will do so in time to meet our product commercialization schedule or to satisfy customer demand. If our business does not grow as quickly as anticipated, our planned manufacturing facilities would, in part, represent excess capacity for which we may not recover the cost, in which case our revenues may be inadequate to support our committed costs and planned growth, and our gross margins and business strategy would be adversely affected. Any of these factors could have a material adverse effect on our business, results of operations and financial performance.
We may be unable to successfully identify, execute or effectively integrate acquisitions, or effectively disentangle divested businesses.
Our ability to generate revenue, earnings, and cash flow at anticipated rates depends in large part on our ability to identify, successfully acquire and integrate businesses and assets at appropriate prices, and realize expected growth, synergies, and operating efficiencies. We may not be able to complete transactions on favorable terms, on a timely basis or at all. In addition, our results of operations and cash flows may be adversely impacted by the failure of acquired businesses or assets to meet expected returns, the failure to integrate acquired businesses, and the discovery of unanticipated liabilities or other problems in acquired businesses or assets for which we lack adequate contractual protections or insurance. In addition, we may incur asset impairment charges related to acquisitions that do not meet expectations.
We continually assess the strategic fit of our existing businesses and may divest businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment. For example, earlier this year, we decided to sell both our subsidiaries because they were not producing enough profit and were not a strategic fit with our goal of developing the market for hydrogen energy systems. These transactions pose risks and challenges that could negatively impact our business and financial statements. For example, when we decide to sell or otherwise dispose of a business or assets, we may be unable to do so on satisfactory terms within our anticipated time frame or at all. In addition, divestitures or other dispositions may dilute our earnings per share, have other adverse financial and accounting impacts, distract management, and give rise to disputes with buyers. In addition, we have agreed, and may in the future agree, to indemnify buyers against known and unknown contingent liabilities. Our financial results could be impacted adversely by claims under these indemnities.
Delays in or not completing our product development goals may adversely affect our revenue and profitability.
If we experience delays in meeting our development goals, our products exhibit technical defects, or if we are unable to meet cost or performance goals, including power output, useful life and reliability, the profitable commercialization of our products will be delayed. In this event, potential purchasers of our products may choose alternative technologies and any delays could allow potential competitors to gain market advantages. We cannot assure that we will successfully meet our commercialization schedule in the future, or at all.
We currently do not have any commercially viable products or services at this time, and we do not know when or whether we will successfully complete research and development of a commercially viable product, which is critical to our future. If we are unable to develop commercially viable products, we will not be able to generate sufficient revenue to become profitable. The commercialization of our products requires achievement and verification of their overall reliability, efficiency and safety targets, and we cannot assure you that we will be able to develop, acquire or license the technology necessary to achieve these targets. We must undertake research and development in order to manufacture commercially viable products in commercial quantities.
We may not be able to sell our products on a commercially viable basis on the timetable we anticipate, or at all.
We cannot guarantee that we will be able to develop commercially viable hydrogen fuel production on a plant-size scale on the timetable we anticipate, or at all. We will need to acquire production facilities, develop and install the systems to produce and store hydrogen gas, and develop delivery systems on a commercial volume. It also depends upon our ability to reduce the costs of our products and services, since they are currently more expensive than products based on existing technologies, such as internal combustion engines and batteries. We may not be able to sufficiently reduce the cost of these products without reducing their performance, reliability and durability, which would adversely affect the willingness of consumers to buy our products. We cannot guarantee that we will be able to internally develop the facilities and systems to sell hydrogen fuel on a commercially viable basis.
A mass market for our products may never develop or may take longer to develop than we anticipate.
Hydrogen fuel production represents an emerging market, and we do not know whether there will be a sufficient number of end-users that will want to use it in commercial volumes. In such emerging markets, demand and market acceptance for recently introduced products and services are subject to a high level of uncertainty and risk. The development of a mass market for hydrogen fuel production may be affected by many factors, some of which are beyond our control, including the emergence of newer, more competitive technologies and products, the cost of fuels used by our customers, regulatory requirements, consumer perceptions of the safety of our products and related fuels, and end-user reluctance to buy a new product.
If a mass market fails to develop, or develops more slowly than we anticipate, we may never achieve profitability. In addition, we cannot guarantee that we will continue to develop, manufacture or market our products if sales levels do not support the continuation of the product.
The hydrogen energy industry competes with both conventional power industries and other renewable power industries.
The hydrogen energy industry faces intense competition from companies in the energy industry, such as nuclear, natural gas and fossil fuels as well as other renewable energy providers, including solar, biomass and wind. Other energy sources may benefit from innovations that reduce costs, increase safety or otherwise improve their competitiveness. New natural resources may be discovered, or global economic, business or political developments may disproportionately benefit conventional energy sources. Governments may support certain renewable energy sources and not support hydrogen energy. If we cannot compete with the providers of other energy sources, it may materially and adversely affect our business, results of operations and financial condition.
We face strong competition from other energy companies, including traditional and renewable providers.
The energy provider business is competitive. Our competitors range in size from small companies to large multinational corporations. Our main competitors vary by region and energy services offered. We compete against other renewable energy providers that offer solar and wind, as well as traditional electricity providers. Almost all of our competitors have greater financial and other resources than we do and may be able to grow more quickly or better respond to changing business and economic conditions. Many of our competitors also have greater access to capital and we may not be able to compete successfully with them.
The industry in which we operate has relatively low barriers to entry and increased competition could result in margin erosion, which would make profitability even more difficult to sustain.
Other than the technical skills required in our business, the barriers to entry in our business are relatively low. We do not have any intellectual property rights to protect our business methods and business start-up costs do not pose a significant barrier to entry. The success of our business is dependent on our employees, customer relations and the successful performance of our services. If we face increased competition as a result of new entrants in our markets, we could experience reduced operating margins and loss of market share and brand recognition.
Our lack of diversification will increase the risk of an investment in us, and our financial condition and results of operations may deteriorate if we fail to diversify.
Our current business focuses primarily on one area of the renewable energy space, the hydrogen energy sector. Larger companies have the ability to manage their risk by diversification. However, we currently lack diversification, specifically in terms of the nature of our business. As a result, we will likely be impacted more acutely by factors affecting our industry and sector in which we operate, than we would if our business were more diversified, enhancing our risk profile.
If we fail to successfully introduce new products or services, we may lose market position.
New products, product improvements, line extensions or new services will be an important factor in our sales growth. If we fail to identify emerging technological trends, to maintain and improve the competitiveness of our existing products and services or to successfully introduce new products or services on a timely basis, we may lose market position.
We are subject to operating and litigation risks that may not be covered by insurance.
Our business operations are subject to all of the operating hazards and risks normally incidental to the implementation of systems involving combustible products, such as liquefied petroleum gases, propane, natural gas and hydrogen gas, and the generation of electricity. Accidents involving our hydrogen energy systems, including leaks, ruptures, fires, explosions, sabotage and mechanical problems, could result in substantial losses due to personal injury and/or loss of life, and severe damage to and destruction of property and equipment arising from explosions and other catastrophic events. If such accidents were to occur, we could face lawsuits from our clients alleging that we were responsible for such accidents. There can be no assurance that our insurance will be adequate to protect us from all material expenses related to future claims or that such levels of insurance will be available in the future at economical prices.
Risks Related to Governmental Regulation
The reduction or elimination of government subsidies and economic incentives for alternative energy technologies, or the failure to renew such subsidies and incentives could reduce demand for our products, lead to a reduction in our revenues and adversely impact our operating results and liquidity.
We believe that the near-term growth of alternative energy technologies, including hydrogen energy, is affected by the availability and size of government and economic incentives. Many of these government incentives expire, phase out over time, may exhaust the allocated funding, or require renewal by the applicable authority. In addition, these incentive programs could be reduced or discontinued for other reasons. The reduction, elimination, or expiration of an investment tax credit or other government subsidies and economic incentives, or the failure to renew such tax credit, governmental subsidies, or economic incentives, may result in the diminished economic competitiveness of our planned products to our customers and could materially and adversely affect the growth of alternative energy technologies, including our planned products, as well as our future operating results and liquidity.
Our business may become subject to increased government regulation.
Our planned products are expected to be subject to certain federal, local, and non-U.S. laws and regulations, including, for example, state and local ordinances relating to building codes, public safety, electrical and gas pipeline connections, hydrogen transportation and siting and related matters. See “Business- Government Regulations; Regulatory Matters” for additional information. In certain jurisdictions, these regulatory requirements may be more stringent than those in the United States. Further, as products are introduced into the market commercially, governments may impose new regulations. We do not know the extent to which any such regulations may impact our ability to manufacture, distribute, install and service our products. Any regulation of our products, whether at the federal, state, local or foreign level, including any regulations relating to the production, operation, installation, and servicing of our products may increase our costs and the price of our products, and noncompliance with applicable laws and regulations could subject us to investigations, sanctions, enforcement actions, fines, damages, civil and criminal penalties or injunctions. If any governmental sanctions are imposed, our business, operating results, and financial condition could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results and financial condition.
For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.
In April 2012, the Jumpstart Our Business Startups Act, or the JOBS Act, was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for “emerging growth companies,” including certain requirements relating to accounting standards and compensation disclosure. We are classified as an emerging growth company. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (1) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes Oxley Act of 2002, (2) comply with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (3) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, (4) provide certain disclosure regarding executive compensation required of larger public companies or (5) hold unit holder advisory votes on executive compensation.
Risks Related to Employees, Managing Our Growth and Other Legal Matters
We are highly dependent on the services of our key personnel.
We are highly dependent on the services of our key personnel, Andrew Hidalgo, who serves as our Chief Executive Officer and Matthew Hidalgo, who serves as our Chief Financial Officer, both of whom are our only full-time employees. We no longer have agreements with them regarding their employment, and each of them may terminate their employment with us at any time, though we are not aware of any present intention of any of these individuals to leave us.
We expect to expand our development and operational capabilities and, as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
As of December 31, 2020, we had only two full-time employees. As we identify and develop site, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the area of sales and marketing. To manage our anticipated future growth, we must:
● identify, recruit integrate, maintain and motivate additional qualified personnel;
● identify and lease additional facilities;
● manage our development efforts effectively, including the identification, acquisition and development of hydrogen production on a plant-size scale; and
● improve our operational, financial and management controls, reporting systems and procedures.
Our future financial performance and our ability to identify, acquire and develop hydrogen production on a plant-size scale will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert financial and other resources, and a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time, to managing these growth activities. If we are not able to effectively expand our organization, we may not achieve our development goals.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
As of December 31, 2020, we had aggregate U.S. federal net operating loss, or NOL, carryforwards of approximately $1,327,000. Our U.S. federal NOLs generated in taxable years ending prior to 2018 could expire unused. Under the Tax Cuts and Jobs Act, as modified by the CARES Act, U.S. federal NOLs incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such U.S. federal NOLs in tax years beginning after December 31, 2017 is generally limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the Tax Cuts and Jobs Act or the CARES Act.
In addition, under Sections 382 and 383 of the Code and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. It is possible that we have experienced one or more ownership changes in the past. In addition, we may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership some of which may be outside of our control. As a result, if we earn net taxable income, our ability to use our pre-ownership change NOL carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.
Risks Related to Ownership of Our Common Stock
Our officers, directors and principal shareholders will own a controlling interest in our voting stock and investors will not have any voice in our management.
As of March 11, 2021, our officers, directors and principal shareholders, in the aggregate, beneficially own or control the votes of approximately 32.7% of our outstanding common stock. As a result, these stockholders, acting together, will have the ability to substantially influence all matters submitted to our stockholders for approval, including:
● election of our board of directors;
● removal of any of our directors;
● amendment of our articles of incorporation or bylaws; and
● adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.
As a result of their ownership and positions, our directors, executive officers and principal shareholders collectively are able to influence all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, sales of significant amounts of shares held by our directors, executive officers or principal shareholders, or the prospect of these sales, could adversely affect the market price of our common stock. Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
We may raise capital through the sale of our securities in either private placements or a public offering, which offerings would dilute the ownership of existing shareholders.
If our operations require additional capital in the future, we may sell additional share of our common stock and/or securities convertible into or exchangeable or exercisable for shares of our common stock. Such offerings may be in private placements or a public offering. If we conduct such additional offerings, existing stockholders would experience dilution of their ownership of the Company.
You may experience dilution of your ownership interests because of the future issuance of additional shares of our common or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock.
In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are authorized to issue an aggregate of 100,000,000 shares of common stock and 5,000,000 shares of “blank check” preferred stock. We may issue additional shares of our common stock or other securities that are convertible into or exercisable for our common stock in connection with hiring or retaining employees, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock may create downward pressure on the trading price of the common stock. We will likely need to raise additional capital in the near future to meet our working capital needs, and there can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with these capital raising efforts, including at a price (or exercise or conversion prices) that could be below the price an investor paid for stock.
There has been a limited trading market for our common stock and limited market activity to date.
Currently, our common stock is available for quotation on the OTCQB Market under the symbol “VIHD”. However, our stock only became eligible for quotation in November 2017 and prior to February 2017, there was no trading activity in our common stock and there has been limited trading activity to date.
You may have difficulty trading and obtaining quotations for our common stock.
Our common stock is not actively traded, and the bid and asked prices for our common stock on the OTCQB Market may fluctuate widely. It is anticipated that there will remain a limited trading market for the common stock on the OTCQB. The lack of an active market may impair your ability to obtain accurate quotations of the price of our common stock, or sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies by using common stock as consideration.
Our common stock is not currently traded at high volume, and you may be unable to sell at or near ask prices or at all if you need to sell or liquidate a substantial number of shares at one time.
Our common stock is currently traded, but with very low if any, volume, based on quotations on the OTCQB Market, meaning that the number of persons interested in purchasing our common stock at or near bid prices at any given time may be relatively small or non-existent. During the year ended December 31, 2020, there was an average of approximately 296 shares traded per trading day, with no trading on 108 of 253 trading days. This situation is attributable to a number of factors, including the fact that we are a small company which is still relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that trading levels will be sustained.
Shareholders should be aware that, according to Commission Release No. 34-29093, the market for “penny stocks” has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the future volatility of our share price.
We have implemented a reverse stock split, which will likely reduce our trading volume and may result in a decrease in our market capitalization.
Effective October 6, 2020, we implemented a one-for-twenty reverse stock split. This reverse stock split was implemented to increase the per share market price of our common stock to make it more attractive to potential investors.
We cannot guarantee that the price increase of our common stock price resulting from the reverse split will:
● be proportionate to the reverse split ratio;
● last in the marketplace for any length of time;
● maintain the total market capitalization of our common stock outstanding before the reverse split; or
● be sufficient to facilitate raising capital.
The market price of our common stock may, and is likely to continue to be, highly volatile and subject to wide fluctuations.
The market price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including:
● dilution caused by our issuance of additional shares of common stock and other forms of equity securities, which we expect to make in connection with future capital financings to fund our operations and growth, to attract and retain valuable personnel and in connection with future strategic partnerships or acquisitions of other companies;
● quarterly variations in our revenues and operating expenses;
● changes in the valuation of similarly situated companies, both in our industry and in other industries;
● changes in analysts’ estimates affecting our company, our competitors and/or our industry;
● changes in the accounting methods used in or otherwise affecting our industry;
● additions and departures of key personnel;
● announcements of technological innovations or new technologies or services available to the renewable energy industry;
● fluctuations in interest rates and the availability of capital in the capital markets; and
● significant sales of our common stock.
These and other factors are largely beyond our control, and the impact of these risks, singly or in the aggregate, may result in material adverse changes to the market price of our Common Stock and/or our results of operations and financial condition.
The rights of the holders of common stock may be impaired by the potential issuance of preferred stock.
Our articles of incorporation give our board of directors the right to create new series of preferred stock. As a result, the board of directors may, without stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights which could adversely affect the voting power and equity interest of the holders of common stock. Preferred stock, which could be issued with the right to more than one vote per share, could be utilized as a method of discouraging, delaying or preventing a change of control. The possible impact on takeover attempts could adversely affect the price of our common stock. Although we have no present intention to issue any shares of preferred stock or to create a series of preferred stock, we may issue such shares in the future.
Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.
If our stockholders sell substantial amounts of our common stock in the public market, including upon the expiration of any lockup periods or the statutory holding period under Rule 144, or issued upon the conversion of preferred stock, it could create a circumstance commonly referred to as an “overhang” and in anticipation of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.
Our common stock is subject to the “Penny Stock” rules of the SEC and the trading market in our securities will be limited, which makes transactions in our common stock cumbersome and may reduce the value of an investment in our common stock.
Rule 15g-9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
FINRA sales practice requirements may also limit a shareholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
General Risk Factors
Our business may be negatively affected by the ongoing COVID-19 pandemic and any future outbreaks of disease.
Our business, financial position, results of operations or cash flows may be affected by the ongoing global COVID-19 pandemic and the resulting volatility and uncertainty it has caused, and is likely to continue to cause, in the U.S. and international markets, including as a result of prolonged economic downturn or recession. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and recommended containment and mitigation measures worldwide. As a result, national, state and local authorities have recommended social distancing and imposed or are considering quarantine, shelter-in-place, curfew and similar isolation measures, including government orders and other restrictions on the conduct of business operations, which has resulted in significant unemployment levels, decreased productivity and decreases in certain non-COVID-19 activities. Such measures have had, and are likely to continue to have, adverse impacts on the U.S. economy of uncertain severity and duration and may negatively impact our ability to conduct operations.
As a result of the ongoing COVID-19 pandemic, we have transitioned our workforce to a remote working model, which may result in us experiencing lower work efficiency and productivity, which in turn may adversely affect our business. As our employees and our business partners’ employees work from home and access our systems remotely, we may be subject to heightened security and privacy risks, including the risks of cyberattacks and privacy incidents. Furthermore, the pandemic has caused and is expected to continue to cause significant disruption of global financial markets, which may reduce or impair our ability to access capital (or access capital on terms that would be consistent with our expectations).
Our market opportunity estimates and growth plans are subject to increased uncertainty and are based on assumptions and estimates regarding, among other things, the length and ultimate impacts of the COVID-19 pandemic, that may not prove to be accurate.
Any of the foregoing risks, or other unforeseen risks, may also adversely affect the businesses of our clients, suppliers or third-party business partners and vendors, which may in turn have a material adverse effect on our ability to conduct our business. For example, we may be unable to secure adequate personnel, obtain services, goods, technology, and governmental approvals, in each case on the timelines expected or at all. Due to the uncertain and rapidly evolving nature of current conditions in the United States and around the world, we cannot reasonably estimate the length or severity of the COVID-19 pandemic or the related response, including the length of time it may take for normal economic and operating conditions to resume or the extent to which the disruption may materially and adversely impact our business, financial position, results of operations or cash flows.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
We expect that our operations will be subject to numerous environmental, health and safety laws and regulations. Our operations are expected to involve the use of hazardous and flammable materials. Our operations may also produce hazardous waste products. We plan to contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. We could be held liable for any resulting damages in the event of contamination or injury resulting from the use of hazardous materials by us, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.
Although we expect to maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not expect to maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our development. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
Requirements associated with being a public company will increase our costs significantly, as well as divert significant company resources and management attention.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or the other rules and regulations of the SEC, or any securities exchange relating to public companies. The Sarbanes-Oxley Act of 2002, as amended, or Sarbanes-Oxley, as well as rules subsequently adopted by the SEC to implement provisions of Sarbanes-Oxley, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC has adopted additional rules and regulations in these areas, such as mandatory “say on pay” voting requirements that will apply to us when we cease to be an emerging growth company. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. Compliance with the various reporting and other requirements applicable to public companies requires considerable time and attention of management. We cannot assure you that we will satisfy our obligations as a public company on a timely basis.
We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products or services. In addition, as a public company, it may be more difficult or more costly for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified personnel to serve on our board of directors, our board committees or as executive officers.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.
Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
We are subject to the periodic reporting requirements of the Exchange Act. We designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.
We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make any related party transaction disclosures. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected. In addition, we do not have a risk management program or processes or procedures for identifying and addressing risks to our business in other areas.
Management has identified a material weakness in the design and effectiveness of our internal controls, which, if not remediated could affect the accuracy and timeliness of our financial reporting and result in misstatements in our financial statements.
In connection with the preparation of our annual report on Form 10-K for the fiscal year ended December 31, 2020, an evaluation was carried out by management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of December 31, 2020. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
During evaluation of disclosure controls and procedures as of December 31, 2020 conducted as part of our annual audit and preparation of our annual financial statements, management conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures and concluded that our disclosure controls and procedures were not effective. Management determined that at December 31, 2020, we had a material weakness that relates to the relatively small number of staff who have bookkeeping and accounting functions. In addition, we lacked sufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of U.S. GAAP and SEC disclosure requirements. This limited number of staff prevents us from segregating duties within our internal control system.
This material weakness could result in a misstatement to the accounts and disclosures that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected. If we do not remediate the material weakness or if other material weaknesses are identified in the future, we may be unable to report our financial results accurately or to report them on a timely basis, which could result in the loss of investor confidence and have a material adverse effect on our stock price as well as our ability to access capital and lending markets.
We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including:
● being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;
● not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;
● not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
● reduced disclosure obligations regarding executive compensation; and
● not being required to hold a non-binding advisory vote on executive compensation or obtain stockholder approval of any golden parachute payments not previously approved.
In addition, as an “emerging growth company” the JOBS Act allows us to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We have elected to use this extended transition period under the JOBS Act.
We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of our initial public offering (i.e. December 31, 2022), (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We have not paid cash dividends in the past and do not expect to pay cash dividends in the future. Any return on investment may be limited to the value of our common stock.
We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B - UNRESOLVED STAFF COMMENTS
Not required under Regulation S-K for “smaller reporting companies.”

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ITEM 2. PROPERTIES
ITEM 2 - PROPERTIES
We maintain our principal office at 95 Christopher Columbus Drive, 16th Floor Jersey City, NJ 07302. Our telephone number at that office is (551) 298-3600. Our office is in a shared office space provider, for which we entered into a lease in October 2020 at a cost of $99 per month and currently the lease is month-to-month.
We believe that our existing facilities are suitable and adequate to meet our current business requirements. We maintain various websites and the information contained on those websites is not deemed to be a part of this annual report.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3 - LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is available for quotation on the OTCQB under the symbol “VIHD”. Previously, our common stock was available for quotation on the OTCQB under the symbol “HCCC”. The OTCQB is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (“OTC”) equity securities. An OTCQB equity security generally is any equity that is not listed or traded on a national securities exchange. Our stock is thinly traded, and a robust, active trading market may never develop. The market for the Company’s common stock has been limited, volatile, and sporadic.
Price Range of Common Stock
The following table shows, for the periods indicated, the high and low closing prices per share of our common stock as reported by the OTCQB quotation service.
Closing Price
High Low
Year Ended December 31, 2019
First Quarter $ 23.00 $ 11.22
Second Quarter $ 20.00 $ 13.60
Third Quarter $ 30.00 $ 8.00
Fourth Quarter $ 15.00 $ 6.00
Year Ended December 31, 2020
First Quarter $ 16.80 $ 3.22
Second Quarter $ 9.20 $ 3.44
Third Quarter $ 6.60 $ 2.35
Fourth Quarter $ 31.00 $ 3.00
On March 11, 2021, the closing sale price of our common stock, as reported by the OTC Markets, was $13.00 per share. On March 11, 2021, there were 83 holders of record of our common stock. Because certain of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Dividend Policy
We have never paid any cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain future earnings to fund ongoing operations and future capital requirements of our business. Any future determination to pay cash dividends will be at the discretion of the Board and will be dependent upon our financial condition, results of operations, capital requirements and such other factors as the Board deems relevant.
Equity Compensation Information
There was no equity compensation or outstanding equity compensation plans for the year ended December 31, 2020.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our registered securities during the period covered by this Annual Report.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6 - SELECTED FINANCIAL DATA
Not required under Regulation S-K for “smaller reporting companies.”

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management’s current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of our management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.
Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for materials, and competition.
Business Overview
The 2020 year was challenging for us. Originally, we set out to provide hydrogen energy systems for residential users. The original business plan, established in April 2016, focused on developing the market for residential off grid hydrogen energy systems while simultaneously acquiring companies that possessed technicians who could be trained in the design and deployment of these hydrogen energy systems.
In February 2020, we decided to adopt another approach in market development, which was to pursue the one market that was establishing momentum, hydrogen production on a plant-size scale. In order to achieve our new strategic business model, we decided to sell both our subsidiaries because they were not producing enough profit and were not a strategic fit with our goal of developing the market for hydrogen energy systems. Further, the hydrogen energy market for residential users was not developing at all based on cost inefficiencies, and debt levels were beginning to impact us adversely.
Beginning in March 2020, the following steps were undertaken to implement the business transition plan:
● March 2020 - Commenced discussions with investor regarding financing options for our company and strategic acquisitions.
● April 21, 2020 - Concluded the disposition of the PVBJ subsidiary
● May 2020 - Commenced discussions and diligence for an investment in a hydrogen production project in the Netherlands, known as Volt H2
● May 18, 2020 - Concluded the disposition of The Pride Group subsidiary
● July 2020 - Concluded 2nd and 3rd tranches of debt financing with proceeds earmarked for an investment in Volt H2.
● August 12, 2020 - Concluded acquisition of an equity interest in Volt H2
● September 30, 2020 - Moved the Company’s headquarters from Dallas, Texas to Jersey City, New Jersey
● October 6, 2020 - Changed the company name to Vision Hydrogen Corporation and effected a twenty-for-one reverse stock split of our outstanding common stock
● January 2021 - Closed on the sale of 12,500,000 shares of common stock in a registered offering, resulting in gross proceeds of $2.5 million.
With the initial investment into the hydrogen production market via Volt H2, the first step in transitioning our hydrogen business focus has been completed. We now will continue to operate the business in a manner that is aligned with our primary hydrogen business strategy.
Discontinued Operations
On April 21, 2020, our Board of Directors authorized our resale of PVBJ back to PVBJ pursuant to the terms as follows: (a) Benis Holdings LLC applied the $221,800 earn-out liability as consideration towards the purchase of PVBJ; (b) Paul Benis applied the remaining salary due to him, as prorated from the Closing Date to the expiration date of the Employment Agreement (January 31, 2021), to the purchase of PVBJ by Benis Holdings LLC as additional consideration thereof, and we have no further salary obligation to Paul Benis, who resigned as our executive officer; and (c) as additional consideration for the purchase of PVBJ by Benis Holdings LLC, PVBJ continues to be responsible for the line of credit (refer to note 15).
On May 18, 2020, in accordance to Nevada Statute 78.565, we completed and executed the May 18, 2020 Purchase and Sale Agreement between us and Turquino providing for our sale of 100% of Pride’s outstanding stock Pride to Turquino in return for Turquino’s assumption of the Hidalgo Notes and the Doyle Notes and the debt obligations and accrued interest related thereto (the “Agreement”). In conjunction therewith, Hidalgo and Doyle assigned the Notes to Turquino, at which time Turquino became responsible for the debt obligations upon the Notes, we have no further note obligations to Hidalgo or Doyle, and we reduced our debt by approximately $600,000 or 65% of the corporate debt obligations. Pursuant to Nevada Statute Section 78.565, approval of the Agreement only required the approval of the board of directors and did not require shareholder approval. The Agreement provides that the Parties mutually release one another and discharge and release the other party (and their respective current and former officers, directors, employees, shareholders, note holders, attorneys, assigns, agents, representatives, predecessors and successors in interest), from any and all claims, demands, obligations, or causes of action. Hidalgo, our Chief Executive Officer, and a managing member of Turquino, are related parties in connection with the Exchange Agreement, the Notes, and the Agreement.
December 31,
PVBJ
Proceeds on sale (earn-out payable exchange) $ 214,074
Less: net asset value (1,383,440 )
Loss on disposal of assets $ (1,169,366 )
Pride
Proceeds on sale (debt forgiveness) $ 500,321
Less net asset value (120,380 )
Gain on disposal of assets $ 379,941
Results of Operations
For the years ended December 31, 2020 and 2019
Revenue and Cost of Revenue
We had no revenue or cost of revenue for the years ended December 31, 2020 and 2019.
General and Administrative Expenses
During the year ended December 31, 2020, our total operating expenses were $311,228. This was comprised of $100,300 of accounting fees related to audit, consulting and tax costs, $97,500 in management disbursements, $62,500 for gross payroll, $41,706 of legal fees, $33,213 of dues and subscription fees, which pertained to transfer agent, press release, EDGAR fees and OTC Market annual listing fees, $18,820 of directors and officers insurance liability, $10,000 in director fees, $9,193 in miscellaneous expenses, $7,993 of stock-based compensation, $5,721 of amortization and $4,782 of payroll taxes, offset by a credit of $80,500 for write-offs due to settlements.
During the year ended December 31, 2019, our total operating expenses were $528,283. This was comprised of $150,000 for gross payroll, $98,451 of accounting fees related to audit, consulting and tax costs, $80,500 in management disbursements, $58,000 of legal fees, $25,669 of dues and subscription fees, which pertained to transfer agent, press release, EDGAR fees and OTC Market annual listing fees, $23,089 of stock-based compensation, $21,084 of amortization, $16,138 of directors and officers insurance liability, $10,916 of travel and meals, $10,457 of payroll taxes, $9,313 of investor relations, $8,000 of investment banking fees, $7,846 in automobile expense and $8,820 of miscellaneous expenses.
We incurred other expenses totaling $155,503 for the year ended December 31, 2020, including $129,180 for cancellation of equity line of credit, $59,298 of interest expense - related party, $43,353 of interest expense and $4,875 of change in fair value earn-out, offset by a gain of $81,203 for notes payable cancellation.
We incurred other expenses totaling $251,808 for the year ended December 31, 2019, including $233,345 of interest expense - related party, $42,897 of interest expense and $18,463 change in fair value earn-out.
As a result of the foregoing, we had net losses of $1,411,562 and $712,441 for the years ended December 31, 2020 and 2019, respectively.
For discontinued operations please refer to note 15.
Liquidity and Capital Resources
As of December 31, 2020, we had a working capital deficit of $600,416, comprised of $580,232 of loan payable - related party, $69,521 of accounts payable and accrued expenses, $20,000 in loan payable and $16,515 in accrued interest, which made up current liabilities at December 31, 2020, offset by $70,000 in other current asset, $8,750 of prepaid expenses and $7,102 of cash.
At December 31, 2020, non-current assets included $175,000 investment in Volt.
For the year ended December 31, 2020, we used $412,583 of cash in operating activities, which represented our net loss from continuing operations of $466,731, $94,180 in other assets, $50,462 in depreciation and amortization, $7,993 in stock-based compensation and $4,875 in change in fair value, offset by $98,691 in accounts payable and $4,671 in prepaid expenses.
For the year ended December 31, 2019, we used $575,635 of cash in operating activities, which represented our net loss from continuing operations of $780,091, $140,571 in accounts payable, $23,089 in stock-based compensation, $18,463 in change in fair value, $14,403 in amortization and $7,750 in prepaid expenses. and.
For the year ended December 31, 2020, we used $497,101 in cash in investing activities due to the cash disposed of in the disposition of the two subsidiaries, Pride and PVBJ, and $175,000 in the investment in Volt.
There was no cash used or provided by from investing activities for the year ended December 31, 2019.
For the year ended December 31, 2020, we generated $611,252 in financing activities, which represented $580,232 in proceeds from related party debt, $75,000 in proceeds from the issuance of convertible debt, $26,020 in proceeds from equity financing and $20,000 in proceeds from PPP notes payable, offset by $90,000 in convertible debt repayment.
For the year ended December 31, 2019, we generated $42,622 of cash from financing activities, which represented $92,500 proceeds from issuance of convertible debt and $40,122 in equity financing, offset by $90,000 in legal fees associated with financing.
In the future we expect to incur expenses related to compliance for being a public company. We expect that our general and administrative expenses will increase as we expand our business development, add infrastructure, and incur additional costs related to being a public company, including incremental audit fees, investor relations programs and increased professional services.
In October 2020, we filed a registration statement on Form S-1 with the Securities and Exchange Commission, whereby we registered 12.5 million shares of our common stock for sale as a company offering. The registration statement was declared effective in October 2020. In January 2021, we sold all of the shares for gross proceeds of $2.5 million.
Our future capital requirements will depend on a number of factors, including the progress of our sales and marketing of our services, the timing and outcome of potential acquisitions, the costs involved in operating as a public reporting company, the status of competitive services, the availability of financing and our success in developing markets for our services. We believe our existing cash will be sufficient to fund our operating expenses and capital equipment requirements for at least the next 12 months.
Critical Accounting Policies
Please refer to Note 2 in the accompanying financial statements for our policies.
Recent Accounting Pronouncements
Please refer to Note 14 in the accompanying financial statements.
Management does not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required under Regulation S-K for “smaller reporting companies.”

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
VISION HYDROGEN CORPORATION
Report of Independent Registered Public Accounting Firm
Balance sheets as of December 31, 2020 and 2019
Statements of operations - for the years ended December 31, 2020 and December 31, 2019
Statements of stockholders’ equity for the years ended December 31, 2020 and December 31, 2019
Statements of cash flows for the years ended December 31, 2020 and December 31, 2019
Notes to financial statements
-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Vision Hydrogen Corporation, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Vision Hydrogen Corporation as of December 31, 2020 and 2019, and the related statements of operations, stockholders’ equity, and cash flows for each of the years in the two year period ended December 31, 2020, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Rosenberg Rich Baker Berman, P.A.
We have served as the Company’s auditor since 2015.
Somerset, New Jersey
March 12, 2021
VISION HYDROGEN CORPORATION
BALANCE SHEETS
December 31, 2020 December 31, 2019
ASSETS
Current assets
Cash and cash equivalents $ 7,102 $ 25,059
Prepaid expenses 8,750 4,079
Other current assets 70,000 -
Current assets held for sale - 1,093,444
Total current assets
85,852 1,122,582
Security deposits and other non-current assets -
Deferred offering cost - 130,072
Investment in Volt 175,000 -
Non-current assets held for sale - 2,215,177
Total non-current assets 175,000 2,345,849
Total assets $ 260,852 $ 3,468,431
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses $ 69,521 $ 157,484
Sales and withholding tax payable - 2,552
Current convertible note payable - 80,500
Loan payable 20,000 -
Loan payable - related party 580,232 -
Accrued interest - related party 16,515 -
Current liabilities held for sale - 1,131,193
Total current liabilities 686,268 1,371,729
Noncurrent liabilities
Non-current liabilities held for sale - 1,199,984
Total noncurrent liabilities - 1,199,984
Total liabilities 686,268 2,571,713
Commitments and contingencies
Stockholders’ equity (deficit)
Preferred stock - $0.0001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding - -
Common stock - $0.0001 par value; 100,000,000 shares authorized; 397,867 and 386,276 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively
Additional paid-in capital 3,059,846 2,970,419
Accumulated deficit (3,485,302 ) (2,073,740 )
Total stockholders’ equity (deficit) (425,416 ) 896,718
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY $ 260,852 $ 3,468,431
The accompanying notes are an integral part of these consolidated financial statements.
VISION HYDROGEN CORPORATION
STATEMENT OF OPERATIONS
For the Years Ended December 31,
Revenue
Sales
$ -
$ -
Total revenue
-
-
Cost of goods sold
Direct costs
-
-
Total cost of goods sold
-
-
Gross profit
-
-
Operating expenses
General and administrative expenses
213,728
447,783
Management fees - related party
97,500
80,500
Total operating expenses
311,228
528,283
Loss from operations
(311,228 )
(528,283 )
Other expenses
Interest expense
43,353
-
Interest expense - related party
59,298
233,345
Equity line write off
129,180
-
Gain on notes payable cancellation
(81,203 )
-
Change in fair value earn-out
4,875
18,463
Total other expenses
155,503
251,808
Net loss from continuing operations
$ (466,731 )
$ (780,091 )
Net income (loss) from discontinued operations (including loss on disposal of $789,425)
(944,831 )
67,650
Net loss
$ (1,411,562 )
$ (712,441 )
Loss per share (continuing operations)
Basic
$ (1.18 )
$ (2.04 )
Diluted
$ (1.18 )
$ (2.04 )
Net income (loss) per share (discontinued operations)
Basic
$ (2.40 )
$ 0.18
Diluted
$ (2.40 )
$ 0.18
Weighted average common shares outstanding
Basic
394,197
382,233
Diluted
394,197
382,233
The accompanying notes are an integral part of these consolidated financial statements.
VISION HYDROGEN CORPORATION
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE YEAR ENDED DECEMBER 31, 2019
Common Stock Preferred Stock Additional
Total
Number of Shares Amount Number of shares Amount Paid-In Capital Accumulated
(Deficit) Stockholders’ Equity
Beginning January 1, 2019 379,302 $ 38 - $ - $ 2,984,196 $ (1,361,299 ) $ 1,622,935
Commitment shares 1,500 - - - 45,000 - 45,000
Stock-based compensation expense - - - - 23,089 - 23,089
Beneficial conversion feature - related party - - - - 97,500 - 97,500
Debt extinguishment - related party - - - - (216,460 ) - (216,460 )
Equity financing 5,474 - - 37,094 - 37,095
Net loss - - - - - (712,441 ) (712,441 )
Ending, December 31, 2019 386,276 $ 39 - $ - $ 2,970,419 $ (2,073,740 ) $ 896,718
The accompanying notes are an integral part of these consolidated financial statements.
VISION HYDROGEN CORPORATION
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE YEAR ENDED DECEMBER, 31 2020
Common Stock Preferred Stock Additional
Total Stockholders’
Number of
Shares Amount Number of
shares Amount Paid-In
Capital Accumulated (Deficit) Equity (Deficit)
Beginning January 1, 2020 386,276 $ 39 - $ - $ 2,970,419 $ (2,073,740 ) $ 896,718
Stock-based compensation - - - - 7,993 - 7,993
Equity financing 6,302 - - - 26,020 - 26,020
Conversion of first fire convertible notes 5,000 - - 15,460 - 15,461
Debt extinguishment - related party - - - - 39,954 - 39,954
Share issuance - - - - - -
Net loss - - - - - (1,411,562 ) (1,411,562 )
Ending December 31, 2020 397,867 $ 40 - $ - $ 3,059,846 $ (3,485,302 ) $ (425,416 )
The accompanying notes are an integral part of these consolidated financial statements.
VISION HYDROGEN CORPORATION
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations $ (466,731 ) $ (780,091 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 50,462 14,403
Stock-based compensation 7,993 23,089
Change in fair value contingent consideration 4,875 18,643
Change in operating assets and liabilities:
Other long-term asset 94,180 -
Prepaid expenses and other costs (4,671 ) 7,750
Accounts payable and accrued expenses (98,691 ) 140,571
Net cash used in in operating activities - continuing operations (412,583 ) (575,635 )
Net cash provided by operating activities - discontinued operations 86,425 (163,439 )
Net cash used in operating activities (326,158 ) (412,196 )
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in Volt H2 (175,000 ) -
Cash disposed of in disposition of subsidiaries (322,101 ) -
Net cash used in investing activities - continuing operations (497,101 ) -
Net cash used in investing activities - discontinued operations (21,031 ) (6,587 )
Net cash used in investing activities (518,132 ) (6,587 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from PPP notes payable 20,000 -
Proceeds from related party debt 580,232 -
Proceeds from issuance of convertible debt 75,000 92,500
Legal fees associated with financing - (90,000 )
Repayment of convertible debt (90,000 ) -
Proceeds from equity financing 26,020 40,122
Net cash provided by financing activities - continuing operations 611,252 42,622
Net cash provided by (used in) financing activities - discontinued operations (22,243 ) 289,363
Net cash provided by financing activities 589,009 331,985
Net decrease in cash and cash equivalents (255,581 ) (86,798 )
Effect of foreign currency translation on cash (15,237 ) 5,284
Cash and cash equivalents - beginning of period 277,620 359,134
Cash and cash equivalents - end of period $ 7,102 $ 277,620
Supplemental disclosure of non-cash investing and financing activities
Beneficial conversion feature $ - $ 190,000
Conversion of First Fire convertible notes $ 15,460 $ -
The accompanying notes are an integral part of these consolidated financial statements.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
1. ORGANIZATION AND LINE OF BUSINESS
Vision Hydrogen Corporation (the “Company”) was incorporated in the state of Nevada on August 17, 2015 as H/Cell Energy Corporation and is based in Jersey City, New Jersey. The Company changed its name to Vision Hydrogen Corporation in October 2020.
During the year ended December 31, 2020, the Company took significant steps to transition its hydrogen energy business to focus on hydrogen production on a scaled production plant model. During the period, the Company disposed of its interests in both PVBJ and Pride (See Note 15 “Discontinued Operations”) in order to facilitate this transition. As part of the disposition the Company provided certain post-closing support to both PVBJ and Pride through Q3 2020. On August 12, 2020, pursuant to a Seed Capital Subscription Agreement, the Company made an equity investment into VoltH2 Holdings AG (“VoltH2”), a Swiss corporation developing scalable green hydrogen production projects primarily in Europe. VoltH2 is currently planning to develop a 25MW green hydrogen production site near Vlissingen, Netherlands. The investment was for a total purchase price $175,000, representing a 17.5% equity interest in VoltH2.
Effective September 30, 2020 the Company moved its principal office from Dallas, Texas to Jersey City, New Jersey.
On September 29, 2020, the Company filed an amendment to and restatement of its Articles of Incorporation with the Secretary of State of the State of Nevada. Pursuant to the Amendment, the Company (i) changed its name from H/Cell Energy Corporation to Vision Hydrogen Corporation (ii) effectuated a one-for-twenty (1:20) reverse split of the issued and outstanding shares of common stock of the Company without changing the par value of the stock and (iii) increased its authorized shares of common stock from 25,000,000 to 100,000,000. The Amendment took effect on October 6, 2020.
On October 14, 2020, the Company filed an S-1 registration statement offering up to a maximum of 12,500,000 shares of its common stock for gross proceeds of $2,500,000, before deduction of commissions and offering expenses. The registration statement was declared effective on October 23, 2020. As of the date of this filing, the Company has sold all shares under the registration statement.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All inter-company transactions and balances have been eliminated upon consolidation.
On October 6, 2020, the Company effectuated a one-for-twenty (1:20) reverse split of the issued and outstanding shares of common stock of the Company without changing the par value of the stock and increased its authorized shares of common stock from 25,000,000 to 100,000,000 which is presented on the current period financial statements. All per share amounts have been adjusted for the impact of the reverse stock split.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Reclassification
Certain prior period amounts have been reclassified to conform to current period presentation specifically as it relates to the reclassification of assets, liabilities, operating results, cash flows and the accumulated comprehensive loss as a result of the Company’s disposition of interests in our PVBJ and Pride subsidiaries.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
Accounts Receivable
Accounts receivable are recorded when invoices are issued and are presented in the balance sheet net of the allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company’s historical losses, the existing economic conditions in the construction industry, and the financial stability of its customers. Accounts are written off as uncollectible after collection efforts have failed. In addition, the Company does not generally charge interest on past-due accounts or require collateral. As of December 31, 2020 and 2019, there was no allowance for doubtful accounts required.
Goodwill and Finite-Lived Intangible Assets
Goodwill represents the excess of the aggregate of the following (1) consideration transferred, (2) the fair value of any non-controlling interest in the acquiree, and (3) if the business combination is achieved in stages, the acquisition-date fair value of our previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Identifiable intangible assets consist primarily of customer lists and relationships, non-compete agreements and technology-based intangibles and other contractual agreements. The Company amortizes finite lived identifiable intangible assets over five years, on a straight-line basis to their estimated residual values and periodically reviews them for impairment. Total goodwill and identifiable intangible assets comprised 0% of the Company’s consolidated total assets as of December 31, 2020 and 41% as of December 31, 2019 which is included on the balance sheet in non-current assets held for sale.
The Company uses the acquisition method of accounting for all business combinations and does not amortize goodwill. Goodwill is tested for possible impairment annually during the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. If the Company can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would not need to perform the two-step impairment test for that reporting unit. If the Company cannot support such a conclusion or the Company does not elect to perform the qualitative assessment, then the first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying amount, its goodwill is not impaired, and the second step of the impairment test is not necessary. If the carrying amount of the reporting unit exceeds its estimated fair value, then the second step of the goodwill impairment test must be performed. The second step of the goodwill impairment test compares the implied fair value of the reporting unit goodwill with its carrying amount to measure the amount of impairment, if any. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment is recognized in an amount equal to that excess.
As of December 31, 2020, the Company had no goodwill and has included the write-off of goodwill in the calculation of the loss on disposal of PVBJ (See Note 15 “Discontinued Operations”).
Comprehensive Loss
Comprehensive loss consists of two components, net loss and other comprehensive loss. The Company’s other comprehensive loss is comprised of foreign currency translation adjustments. The balance of accumulated other comprehensive loss is zero as of December 31, 2020 due to the disposition of Pride on May 18, 2020. Comprehensive loss is included in discontinued operations on the income statement for the year ended December 31, 2019.
Currency Translation
The Company translates its foreign subsidiary’s assets and liabilities denominated in foreign currencies into U.S. dollars at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in accumulated other comprehensive income. The Company records gains and losses from changes in exchange rates on transactions denominated in currencies other than each reporting location’s functional currency in net income (loss) for each period. Items included in the financial statements of each entity in the group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”).
The functional and reporting currency of the Company is the United States Dollar (“U.S. Dollar”).
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
For the year ended December 31, 2020, the Company recorded no other comprehensive loss. The balance of comprehensive loss and accumulated comprehensive loss has been reclassified to discontinued operations as of December 31, 2020 due to the disposition of Pride on May 18, 2020. For the year ended December 31, 2019, the Company recorded other comprehensive gain of $11,952, which has been reclassified to discontinued operations on the statement of operations.
Investments
The Company follows Accounting Standards Codification (“ASC”) 321-10-35-2 “Equity Securities without Readily Determinable Fair Values, to account for its ownership interest in noncontrolled entities. Under this guidance, equity securities that do not have readily determinable fair values (i.e., non-marketable equity securities and do not qualify for the practical expedient to determine the fair value at net asset value (“NAV”) are not required to be accounted for under the equity method are typically carried at cost (i.e., cost method investments) less accumulated impairment. Investments of this nature are initially recorded at cost. Income is recorded for dividends received that are distributed from net accumulated earnings of the noncontrolled entity subsequent to the date of investment. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions in the cost of the investment. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.
Revenue Recognition
The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 - Revenue from Contracts (“ASC 606”).
Under ASC 606 requirements, the Company recognizes revenue from the installation or construction of projects and service or short-term projects over time using the cost-based input method. The Company accounts for a contract when: (i) it has approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, and (v) collectability of consideration is probable. The Company considers the start of a project to be when the above criteria have been met and the Company either has written authorization from the customer to proceed or an executed contract. A detailed breakdown of the five-step process is as follows:
Identify the Contract with a Customer
The Company used to receive almost all of its contracts from only two sources, referrals, or government bids. In a referral, a client that the Company has an ongoing business relationship with refers the Company to perform services. In a government bid, the Company applies to perform services for public projects. The contracts have a pattern of being stand-alone contracts.
Identify the Performance Obligations in the Contract
The performance obligation of the Company is to perform a contractually agreed upon task for the customer. If the contract is stated to provide only contractual services, then the services are considered the only performance obligation. If the contractual services include design and or engineering in addition to the contract, it is considered a single performance obligation.
Determine the Transaction Price
The nature of the industry involves a number of uncertainties that can affect the current state of the contract. Variable considerations are the estimates made due to a contract modification in the contractual service. Change orders, claims, extras, or back charges are common in contractual services activity as a form of variable consideration. If there is going to be a contract modification, judgment by management will need to be made to determine if the variable consideration is enforceable. The following factors are considered in determining if the variable consideration is enforceable:
1. The customer’s written approval of the scope of the change order;
2. Current contract language that indicates clear and enforceable entitlement relating to the change order;
3. Separate documentation for the change order costs that are identifiable and reasonable; and
4. The Company’s favorable experience in negotiating change orders, especially as it relates to the specific type of contract and change order being evaluated
Once the Company receives a contract, it generates a budget of projected costs for the contract based on the contract price. If the scope of the contract during the contractual period needs to be modified, the Company typically files a change order. The Company does not continue to perform services until the change modification is agreed upon with documentation by both the Company and the customer. There are few times that claims, extras, or back charges are included in the contract.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
Allocate the Transaction Price to the Performance Obligations in the Contract
If there are multiple performance obligations to the contract, the costs must be allocated appropriately and consistently to each performance obligation. In the Company’s experience, usually only one performance obligation is stated per contract. If there are multiple services provided for one customer, the Company has a policy of splitting out the services over multiple contracts.
Recognize Revenue When (or As) the Entity Satisfies a Performance Obligations
The Company uses the total costs incurred on the project relative to the total expected costs to satisfy the performance obligation. The input method involves measuring the resources consumed, labor hours expended, costs incurred, time lapsed, or machine hours used relative to the total expected inputs to the satisfaction of the performance obligation. Costs incurred prior to actual contract (i.e. design, engineering, procurement of material, etc.) should not be recognized as the client does not have control of the good/service provided. When the estimate on a contract indicates a loss or claims against costs incurred reduce the likelihood of recoverability of such costs, the Company records the entire estimated loss in the period the loss becomes known. Project contracts typically provide for a schedule of billings or invoices to the customer based on the Company’s job to date percentage of completion of specific tasks inherent in the fulfillment of its performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statement of operations can and usually does differ from amounts that can be billed or invoiced to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings and unbilled receivables to the customer under the contract are reflected as a current asset in the Company’s balance sheet under the captions “Costs and estimated earnings in excess of billings” and “Unbilled accounts receivable.” Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract are reflected as a current liability in the Company’s balance sheet under the caption “Billings in excess of costs and estimated earnings.”
Cash and Cash Equivalents
Cash and cash equivalents include cash in bank and money market funds as well as other highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents as of December 31, 2020 or 2019.
Stock-Based Compensation
The Company recognizes expense for its stock-based compensation based on the fair value of the awards at the time they are granted. We estimate the value of stock option awards on the date of grant using the Black-Scholes model. The determination of the fair value of stock-based payment awards on the date of grant is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, expected term, risk-free interest rate and expected dividends. The impact of forfeitures are recorded in the period in which they occur. There are no outstanding awards as of December 31, 2020,
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:
● Level 1-quoted prices in active markets for identical assets and liabilities;
● Level 2-observable market-based inputs or unobservable inputs that are corroborated by market data; and
●
Level 3-significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
There were no fair value measurements as of December 31, 2020.
Net Income (Loss) Per Common Share
The Company computes basic net income (loss) per share by dividing net income (loss) per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “if converted” method as applicable. The computation of diluted loss per share excludes dilutive securities because their inclusion would be anti-dilutive. Dilutive securities for the periods presented are as follows:
Years Ended
December 31, 2020 December 31, 2019
Options to purchase common stock 21,250
Convertible debt 55,000
Totals 76,250
Please refer to Note 10 for a discussion of the decrease for the twelve months ended December 31, 2020 compared to December 31, 2019.
3. RELATED PARTY TRANSACTIONS
The Company has entered into agreements to indemnify its directors and executive officers, in addition to the indemnification provided for in the Company’s articles of incorporation and bylaws. These agreements, among other things, provide for indemnification of the Company’s directors and executive officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of the Company, arising out of such person’s services as a director or executive officer of the Company, any subsidiary of the Company or any other company or enterprise to which the person provided services at the Company’s request. The Company believes that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers.
There was $97,500 of management fees expensed for the year ended December 31, 2020 and $80,500 for the year ended December 31, 2019 to Turquino Equity LLC (“Turquino”), a former significant shareholder owned by our Chief Executive Officer and Chief Financial Officer. Services provided were continuing the management positions of the Company.
On January 2, 2018 and February 8, 2019, the Company and Andrew Hidalgo (“Hidalgo”), completed a Convertible Debenture Agreement whereby Hidalgo, the Company’s Chief Executive Officer, lent us an aggregate of $275,000 (the “Hidalgo Notes”). On January 2, 2018 and February 8, 2019, the Company and Michael Doyle (“Doyle”), a then director of the Company, completed a Convertible Debenture Agreement whereby Doyle lent the Company an aggregate of $275,000 (the “Doyle Notes”).
The Company recorded a $395,000 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note using the effective interest method, or until the note is converted or repaid. On January 3, 2020, the Company entered into an amendment agreement (the “Amendment”) with two of its directors (the “Holders”) to convertible notes issued by the Company to the Holders in January 2018 (the “2018 Notes”). Pursuant to the Amendment, which was effective as of January 2, 2020, the maturity date of the 2018 Notes was amended from January 2, 2020 to February 8, 2021, and the Holders waived any defaults that might have occurred prior to the date of the Amendment.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
As a result of these changes, management determined debt extinguishment which was applied and the new notes were recorded at their fair value resulting in a discount of approximately $40,000 and a gain on extinguishment of this amount recorded to additional paid in capital.
May 18, 2020 Purchase and Sale Agreement
On May 18, 2020, the Company’s Board of Directors authorized the Company, in accordance with Nevada Statute 78.565, to complete and execute the May 18, 2020 Purchase and Sale Agreement between the Company and Turquino providing for the Company’s sale of 100% of Pride’s outstanding stock Pride to Turquino in return for Turquino’s assumption of the Hidalgo Notes and the Doyle Notes and the debt obligations and accrued interest related thereto (the “Agreement”). In conjunction therewith, Hidalgo and Doyle assigned the Notes to Turquino, at which time Turquino became responsible for the debt obligations upon the Notes. The Company has no further note obligations to Hidalgo or Doyle, and it reduced its debt by approximately $600,000 or 65% of the corporate debt obligations. Pursuant to Nevada Statute Section 78.565, approval of the Agreement only required the approval of the board of directors and did not require shareholder approval. The Agreement provides that the Parties mutually release one another and discharge and release the other party (and their respective current and former officers, directors, employees, shareholders, note holders, attorneys, assigns, agents, representatives, predecessors and successors in interest), from any and all claims, demands, obligations, or causes of action. Hidalgo, our Chief Executive Officer, and a managing member of Turquino, is a related party in connection with the Exchange Agreement, the Notes, and the Agreement.
On June 19, 2020, the Company entered into a Promissory Note with Judd Brammah, a director of the Company, for a principal amount up to $230,332 bearing interest with interest at 6% per annum. The entire principal and interest upon the Promissory Note are due on June 19, 2021. The proceeds from the note was used to pay accrued expenses of the Company.
Effective July 17, 2020, Judd Brammah lent the Company $50,000 at 6% per annum payable on the due date, June 19, 2021. Effective July 22, 2020, Judd Brammah lent the Company $299,900 at 6% per annum payable on the due date of June 19, 2021.
The Company accrued and expensed $16,515 in interest on these notes in 2020.
4. SIGNIFICANT CONCENTRATIONS OF CREDIT RISK
Cash is maintained at an authorized deposit-taking institution (bank) incorporated in both the United States and Australia and is insured by the U.S. Federal Deposit Insurance Corporation and Australian Securities & Investments Commission up to $250,000 and approximately $186,000 in total, respectively. As of December 31, 2020 and December 31, 2019, the balance was fully covered under the $250,000 threshold in the United States. In Australia, the balance was $10,563 in excess of the insured limit at December 31, 2019 which is included in current assets held for sale on the balance sheet.
Credit risk for trade accounts is concentrated as well because substantially all of the balances are receivable from entities located within certain geographic regions. To reduce credit risk, the Company performs ongoing credit evaluations of its customers’ financial conditions but does not generally require collateral. There were no accounts receivable as of December 31, 2020. As of December 31, 2019, one of the Company’s accounts receivable was due from one customer at approximately 13%, which is included in current assets held for sale on the balance sheet.
5. MAJOR CUSTOMERS
Due to the sale of Pride and PVBJ the Company had no major customers for the year ended December 31, 2020. During the year ended December 31, 2019, there was one customer with a concentration of 10% or higher of the Company’s revenue, at 14%, which is included in discontinued operations on the income statement.
6. UNCOMPLETED CONTRACTS
Costs, estimated earnings, and billings on uncompleted contracts are summarized as follows as of December 31, 2020 and 2019, which are included in current assets and liabilities held for sale on the balance sheet.
December 31, 2020 December 31, 2019
Costs incurred on uncompleted contracts $ - $ 465,686
Estimated earnings - 454,132
Costs and estimated earnings earned on uncompleted contracts - 919,818
Billings to date - 750,769
Costs and estimated earnings in excess of billings on uncompleted contracts - 169,049
Costs and earnings in excess of billings on completed contracts - (190,102 )
$ - $ (21,053 )
Costs in excess of billings $ - $ 26,045
Billings in excess of cost - (47,098 )
$ - $ (21,053 )
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
7. LEASES
Operating Leases
The Company maintains its principal office at 95 Christopher Columbus Drive, 16th Floor Jersey City, NJ 07302. The Company moved in October 2020 and it’s office is in a shared office space provider, at a cost of $99 per month and currently the lease is month-to-month.
As of December 31, 2020, the Company had no operating leases except as noted above. As of December 31, 2019, the Company had $87,897 in current operating lease liability and $137,071 in non-current operating lease liability, which have been re-classed to current and non-current assets held for sale on the balance sheet.
Finance Leases
As of December 31, 2020, the Company had no finance leases. As of December 31, 2019, the Company had $75,743 in current finance leases and $307,804 in non-current finance leases which have been re-classed to current and non-current assets held for sale on the balance sheet.
8. CONTRACT BACKLOG
As of December 31, 2020, the Company had no contract backlog. As of December 31, 2019, the Company had a contract backlog approximating $551,850, with anticipated direct costs to completion approximating $454,132, which is included in current assets and liabilities held for sale on the balance sheet and discontinued operations on the balance sheet.
9. GOODWILL AND OTHER INTANGIBLES
The Company has no goodwill or other intangibles as of December 31, 2020. As of December 31, 2019, the Company had $1,373,621 in goodwill and $63,161 in other intangibles which has been re-classed to non-current assets held for sale on the balance sheet.
10.
STOCK OPTIONS AWARDS AND GRANTS
A summary of the stock option activity and related information for the 2016 Incentive Stock Option Plan from December 31, 2019 to December 31, 2020 is as follows:
Shares Weighted-
Average
Exercise Price Weighted-Average
Remaining
Contractual Term Aggregate
Intrinsic Value
Outstanding at December 31, 2019 34,925 $ 6.20 2.40 $ 216,535
Grants - - - -
Exercised - - - -
Canceled (34,925 ) (6.20 ) (2.40 ) -
Outstanding at December 31, 2020 - $ 0.00 - -
Exercisable at December 31, 2020 - $ 0.00 - -
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s weighted average grant date stock price of $6.20 per share, which would have been received by the option holders had those option holders exercised their options as of that date.
Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from an index of historical stock prices of comparable entities until sufficient data exists to estimate the volatility using the Company’s own historical stock prices. Management determined this assumption to be a more accurate indicator of value.
The Company accounts for the expected life of options based on the contractual life of options for non-employees. For incentive options granted to employees, the Company accounts for the expected life in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. The fair value of stock-based payment awards was estimated using the Black-Scholes pricing model.
As of December 31, 2020, there was no unrecognized compensation expense as all option holders had their options forfeited through the sale of Pride and PVBJ. As of December 31, 2019, there was $32,642 of unrecognized compensation expense.
11. SEGMENT INFORMATION
Prior to the disposition of Pride and PVBJ, the Company’s business was organized into two reportable segments: renewable systems integration revenue and non-renewable systems integration revenue. Due to the sale of both Pride and PVBJ (See Note 15 “Discontinued Operations”) the Company operates in only one reportable segment. Please refer to Note 15 and Management’s Discussion and Analysis for further detail.
12. NOTES PAYABLE
QRIDA Loan
On May 6, 2020, the Company entered into a loan for $160,410 with the Queensland Rural and Industry Development Authority. (“QRIDA”) The interest rate was 2.5% with a term of ten years and the first year being interest free. Through the disposition of Pride, the Company no longer has this loan as a liability on its balance sheet as of December 31, 2020.
Convertible Note Financing
On October 17, 2019, the Company entered into a securities purchase agreement with FirstFire Global Opportunities Fund LLC (“FirstFire”), an unrelated third party, pursuant to which it issued a $110,000 convertible note (the “2019 Note”) to FirstFire for gross proceeds of $100,000, with an original discount issuance of $10,000. The transaction closed on October 23, 2019 upon receipt of the funds from FirstFire. The Company incurred $5,000 of legal fees for the transaction. Both the legal fees and original issue discount are amortized over the life of the agreement.
On May 18, 2020, FirstFire converted $15,450 of the balance due for 5,000 shares at $0.16 per share. The unpaid principal was $75,000 before the conversion and $59,550 after.
Convertible Note Financing
On January 15, 2020, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with FirstFire, pursuant to which the Company issued a $85,250 principal amount convertible note (the “2020 Note”) for gross proceeds of $77,500, with an original discount issuance of $7,750. The transaction closed on January 16, 2020. The Company incurred $2,500 of legal fees for this transaction.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
On June 18, 2020, the Company and FirstFire entered into a settlement agreement whereby both the 2019 Note and 2020 Note were cancelled and all remaining amounts due under the above notes were settled for $90,000. The Company has no further obligations with respect to any of the notes under terms of the First Fire Note settlement.
The Company incurred $2,289 of interest expense in 2019 and $7,438 in 2020 which both amounts were accrued on the balance sheet. There was an early termination penalty of $19,953. The unamortized discount of the notes was $171,203 on the cancellation date of May 20, 2020.
The Notes were cancelled, and all remaining contractual obligations there under were extinguished under terms of a Settlement and Release Agreement which resulted in a gain on the statement of operations of $81,203 for the year ended December 31, 2020.
Paycheck Protection Program Loan
On May 5, 2020, the Company entered into a term note with Comerica Bank, with a principal amount of $20,000 pursuant to the Paycheck Protection Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan is evidenced by a promissory note. The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first six months of interest deferred. Beginning in November 2022, the Company will make 18 equal monthly payments of principal and interest with the final payment due in April 2022. The PPP Term Note may be accelerated upon the occurrence of an event of default.
The PPP Term Note is unsecured and guaranteed by the United States Small Business Administration. The Company may apply to Comerica Bank for forgiveness of the PPP Term Note, with the amount which may be forgiven equal to the sum of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by the Company during the eight-week period beginning upon receipt of PPP Term Note funds, calculated in accordance with the terms of the CARES Act. The full loan amount of $20,000 is estimated to be forgiven.
Director Related Party Note
On June 19, 2020, the Company entered into a promissory note with Judd Brammah, a director of the Company, for the principal amount up to $230,332 bearing interest at 6% per annum. The entire principal and interest upon the promissory note are due on June 19, 2021. As of December 31, 2020, $230,332 is due on this promissory note. The promissory note incurred interest expense of $7,328 for the year ended December 31, 2020, which remains outstanding at December 31, 2020.
Effective July 17, 2020, Judd Brammah lent the Company $50,000 at 6% per annum payable on the due date, June 19, 2021. The Company incurred interest expense of $628 for year ended December 31, 2020. Effective July 22, 2020, Judd Brammah lent the Company $299,900 at 6% per annum payable on the due date of June 19, 2021. The Company incurred interest expense of $7,059 for the year ended December 31, 2020, which remains outstanding at December 31, 2020.
13. EQUITY PURCHASE AGREEMENT
On March 12, 2019, the Company entered into an equity purchase agreement (the “Equity Purchase Agreement”) and a registration rights agreement with an accredited investor (the “Investor”), pursuant to which the Investor has agreed to purchase from the Company up to $450,000 in shares (the “Shares”) of the Company’s common stock, subject to certain limitations and conditions set forth in the Equity Purchase Agreement. Additionally, on March 12, 2019, the Company agreed to donate 1,750 shares of common stock to the manager of the Investor. The Company recorded value of these shares at the market price on the grant date and is included in general and administrative expenses.
On June 24, 2019, the Company provided written notice to the Investor that the Company elected to terminate the Equity Agreement, effective immediately. No Shares were sold pursuant to the Equity Purchase Agreement. On August 30, 2019, the 1,750 donation shares were returned to the Company and canceled.
On July 9, 2019, the Company entered into an equity financing agreement with GHS Investments LLC (the “GHS Financing Agreement”); in connection therewith, the Company filed a Form S-1 Registration Statement (the “S-1”) registering up to 1,750 Common Stock Shares, which S-1 was declared effective on July 31, 2019. On May 19, 2020, the Company filed a Post-Effective Amendment No. 1 on Form S-1 amending the S-1 to deregister all securities registered pursuant to said S-1, which as of the date of such Amendment, 22,513 Common Stock Shares were unissued (the “Post Effective S-1”). The Post Effective S-1 was declared effective on May 21, 2020, at which time the Offering described in the S-1 was terminated, as well as the contractual obligations under the GHS Financing Agreement. The Company incurred $135,000 of costs associated with the financing, which were subsequently amortized with the issue of shares and the remainder written off in the second quarter of 2020.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
In October 2020, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission, whereby the Company registered 12.5 million shares of its common stock for sale as a company offering. The registration statement was declared effective in October 2020. The Company incurred $70,000 of costs associated with the financing, which are deferred until the proceeds are received at which point they are netted against the proceeds.
14. RECENT ACCOUNTING PRONOUNCEMENTS
In August 2018, the FASB issue ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The new standard became effective for the Company January 1, 2020, with early adoption permitted. The Company has adopted this standard and has no impact on its consolidated financial statements and disclosures.
In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815), which clarifies the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The guidance clarifies how to account for the transition into and out of the equity method of accounting when considering observable transactions under the measurement alternative. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2021 and interim periods within those annual periods and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.
15.
DISCONTINUED OPERATIONS
Sale of PVBJ
On April 21, 2020, the Company’s Board of Directors authorized its resale of PVBJ pursuant to the following terms: (a) the outstanding $221,800 earn-out liability that was used as consideration towards the purchase of PVBJ; (b) Paul Benis agreed to apply the remaining salary due to him, as prorated from the Closing Date to the expiration date of the Employment Agreement (January 31, 2021), to the purchase of PVBJ by Benis Holdings LLC as additional consideration thereof and (c) as additional consideration for the purchase of PVBJ by Benis Holdings LLC, PVBJ shall continue to be responsible for the line of credit (see below).
Sale of Pride
On May 18, 2020, the Company executed a Purchase and Sale Agreement with Turquino providing for its sale of 100% of Pride’s outstanding stock Pride to Turquino in return for Turquino’s assumption of the Hidalgo Notes and the Doyle Notes and the debt obligations and accrued interest related thereto (the “Agreement”). In conjunction therewith, Hidalgo and Doyle assigned the Notes to Turquino, at which time Turquino became responsible for the debt obligations upon the Notes. The Company has no further note obligations to Hidalgo or Doyle, and it reduced its debt by approximately $600,000 or 65% of the corporate debt obligations.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
The gain/loss on discontinued operations consists of the following:
December 31, 2020
PVBJ
Proceeds on sale (earn-out payable exchange) $ 214,074
Less: net asset value (1,383,440 )
Loss on sale of assets $ (1,169,366 )
Pride
Proceeds on sale (assumption of debt) $ 500,321
Less net asset value (120,380 )
Gain on sale of assets $ 379,941
The results of discontinued operations are as follows:
Year ended December 31, 2020 Year ended December 31, 2019
PVBJ
Revenue
Sales $ 722,786 $ 2,873,796
Total revenue 722,786 2,873,796
Cost of goods sold
Direct costs 560,328 2,152,120
Total cost of goods sold $ 560,328 $ 2,152,120
Selling, general and administrative 230,807 665,507
Net income (loss) for period $ (68,349 ) $ 56,169
Year ended December 31, 2020 Year ended December 31, 2019
Pride
Revenue
Sales $ 1,474,460 $ 3,943,528
Total revenue 1,474,460 3,943,528
Cost of goods sold
Direct costs 1,121,121 2,702,758
Total cost of goods sold $ 1,121,121 $ 2,702,758
Selling, general and administrative 440,396 1,229,289
Net income (loss) for period $ (87,057 ) $ 11,481
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
Gain (loss) from discontinued operations:
Results from discontinued operations $ (155,406 ) $ 67,650
Loss on disposal of assets (789,425 ) -
Loss from discontinued operations $ (944,831 ) $ 67,650
The discontinued operations of the balance sheet as of December 31, 2019 are as follows:
Pride PVBJ
ASSETS
Current assets
Cash and cash equivalents $ 196,705 $ 55,856
Accounts receivable 449,530 354,129
Prepaid expenses 2,108 9,071
Costs and earnings in excess of billings 26,045 -
Total current assets
674,388 419,056
Property and equipment, net 90,847 387,391
Security deposits and other non-current assets 31,633 -
Deferred tax asset 46,000 -
Customer lists, net - 63,161
Right of use asset 222,524 -
Goodwill - 1,373,621
Total assets $ 1,065,392 $ 2,243,229
LIABILITIES
Current liabilities
Accounts payable and accrued expenses $ 450,545 $ 94,104
Billings in excess of costs and earnings 47,098 -
Sales and withholding tax payable 37,199 -
Current operating lease liability 87,897 -
Current equipment notes payable 17,782 9,653
Current line of credit - 269,746
Current finance lease payable - 75,743
Income tax payable 41,426 -
Total current liabilities 681,947 449,246
Noncurrent liabilities
Earn-out payable - 209,199
Lease operating liability 137,071 -
Finance leases - 307,804
Equipment notes payable 33,227 38,913
Convertible notes payable - related party, net of discounts 473,770 -
Total noncurrent liabilities 644,068 555,916
Total liabilities 1,326,015 1,005,162
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
December 31, 2019
Pride current assets $ 674,388
PVBJ current assets 419,056
Current assets of discontinued operations $ 1,093,444
Pride non-current assets $ 391,004
PVBJ non-current assets 1,824,173
Non-current assets of discontinued operations $ 2,215,177
December 31, 2019
Pride current liabilities $ 681,947
PVBJ current liabilities 449,246
Current liabilities of discontinued operations $ 1,131,193
Pride non-current liabilities $ 644,068
PVBJ non-current liabilities 555,916
Non-current liabilities of discontinued operations $ 1,199,984
16.
GOING CONCERN
At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should the Company be unable to continue as a going concern.
On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19), a global pandemic and recommended containment and mitigation measures worldwide. As of the date of this filing, the Company has sold its office in the U.S and Australia. The Company will continue to monitor the situation closely and it is possible that it will implement further measures. In light of the uncertainty as to the severity and duration of the pandemic, the impact on the Company’s revenues, profitability and financial position is uncertain at this time.
As reflected in the yearly financial statements, the Company has a net loss of $1,411,562 and net operating cash in continuing operations used of $412,528 for the year ended December 31, 2020. In addition, the Company is a start up in the renewable energy space and has generated no revenues to date.
Due to the sale of PVBJ and Pride, the Company has extinguished liabilities on its balance sheet such as the line of credit that was due in August 2020, earn out payable, and other notes and finance leases payables relating to vehicles. The Company also generated proceeds of $580,232 from a related party note in 2020 along with $2,500,000 from the public sale of common stock in the first quarter of 2021. The related party note has been further converted into equity therefore not having to be repaid. Management has evaluated the significance of these conditions and under these circumstances expects that its current cash resources, operating cash flows and ability to secure financing would be sufficient to sustain operations for a period greater than one year from the annual report issuance date. Therefore, the conditions identified above have been alleviated.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
17. INVESTMENTS
On August 12, 2020, pursuant to a Seed Capital Subscription Agreement, the Company made an equity investment of 175,000 shares into VoltH2 Holdings AG (“VoltH2”), a Swiss corporation developing scalable green hydrogen production projects primarily in Europe. VoltH2 is currently developing a 25MW green hydrogen production site near Vlissingen, Netherlands. The investment was for a total purchase price of $175,000, representing a 17.5% equity interest in VoltH2. Due to the lack of readily determinable fair value of VoltH2, and because this investment does not qualify for the practical expedient to determine fair value using NAV, this investment has been recorded at cost. The Company will continually evaluate the treatment of this investment each reporting period to determine if a fair value can be determined, and if so will reassess the accounting for this investment.
18. INCOME TAXES
The Company uses the asset and liability method of accounting for income taxes pursuant to Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the financial statements as appropriate. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense.
The Company recognizes and measures its unrecognized tax benefits in accordance with ASC 740. Under that guidance, management assesses the likelihood that tax positions will be sustained upon examination based on the facts, circumstances and information, including the technical merits of those positions, available at the end of each period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change.
The Company did not identify any material uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits.
The federal income tax returns of the Company are subject to examination by the IRS, generally for the three years after they are filed. The Company’s 2019, 2018 and 2017 income tax returns are still open for examination by the taxing authorities.
The components of income tax expense (benefit) from continuing operations are as follows:
Year Ended December 31,
Current
U.S. Federal $ - $ -
U.S. State and local - -
Australia - -
Total current tax expense - -
Year Ended December 31,
Deferred
U.S. Federal $ - $ -
U.S. State and local - -
Australia - -
Total deferred - -
Total deferred income tax expense - -
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
At December 31, 2020 and 2019, the Company had deferred tax assets from continuing operations of $1,050,000 and $530,000, respectively, against which a valuation allowance of $1,050,000 and $530,000, respectively, had been recorded. The change in the valuation allowance for the year ended December 31, 2020 was an increase of $520,000. The increase in the valuation allowance for the year ended December 31, 2020 was mainly attributable to an increase in the capital loss carryforward, which resulted in an increase in the Company’s deferred tax asset. The Company periodically assesses the likelihood that it will be able to recover the deferred tax asset. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income.
Significant components of deferred tax assets from continuing operations at December 31, 2020 and 2019 were as follows:
December 31,
Deferred tax assets:
Net operating loss carryforward 373,000 371,000
Capital loss carryforward 677,000 -0 -
Share-based compensation 159,000
Gross deferred tax asset 1,050,000 530,000
Less: valuation allowance (1,050,000 ) (530,000 )
Net deferred tax assets -- --
A reconciliation of the federal statutory tax rate and the effective tax rates from continuing operations for the years ended December 31, 2020 and 2019 were as follows:
For the Year Ended
December 31,
U.S. federal statutory tax rate 21.0 % 21.0 %
State income taxes, net of federal benefit (13.5 ) (7.1 )
Non-deductible expenses (2.2 ) -0 -
Deferred tax asset write-down (38.2 ) -0 -
Change in valuation allowance 32.9 (28.1 )
Effective tax rate 0.0 % 0.0 %
The Company had approximately $1,327,000 and $1,236,000 of gross net operating loss (“NOL”) carryforwards (U.S. federal and state) as of December 31, 2020 and 2019, respectively, of which approximately $241,000 expires in 2035 through and 2037 for U.S. federal purposes, and the remaining NOL does not expire for U.S. federal purposes. The total NOL expires between 2035 and 2040 for U.S. state purposes. The Company also had approximately $2,407,000 of capital loss carryforwards that expires in 2025 for U.S. federal and state purposes. Sections 382 and 383 of the Internal Revenue Code, and similar state regulations, contain provisions that may limit the NOL carryforwards available to be used to offset income in any given year upon the occurrence of certain events, including changes in the ownership interests of significant stockholders. In the event of a cumulative change in ownership in excess of 50% over a three-year period, the utilization of the NOL carryforwards may be limited.
VISION HYDROGEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020 AND 2019
19.
LOSS PER SHARE
The following table sets forth the information needed to compute basic and diluted loss per share:
Continuing Operations:
Year Ended
December 31, 2020 Year Ended
December 31, 2019
Net loss from continuing operations $ (461,731 ) $ (780,091 )
Weighted average common shares outstanding 394,197 382,233
Basic net loss per share $ (1.18 ) $ (2.04 )
Diluted net loss per share $ (1.18 ) $ (2.04 )
Discontinued Operations:
Year Ended
December 31, 2020 Year Ended
December 31, 2019
Net loss $ (944,381 ) $ 67,650
Weighted average common shares outstanding 394,197 382,233
Basic net loss per share $ (2.40 ) $ 0.18
Diluted net loss per share $ (2.40 ) $ 0.18
20.
SUBSEQUENT EVENTS
On January 21, 2021, the PPP Term Note was forgiven.
On January 29, 2021, Judd Brammah, a Director of the Company, converted his note and interest payable totaling $596,747, together with an additional cash payment of $3,253 for a total of $600,000 into 3,000,000 shares of the Company pursuant to the Company public offering of common stock on the Form S-1 registration statement.
As of January 31, 2021, the Company sold 12,500,000 shares of its common stock for gross proceeds of $2,5000,000 pursuant to the Company public offering of common stock on the Form S-1 registration statement. The proceeds will be used for general working capital.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A - CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of the material weaknesses described below, our disclosure controls and procedures are not designed at a reasonable assurance level and are ineffective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. The material weaknesses, which relate to internal control over financial reporting, that were identified are:
a) Due to our small size, we did not have sufficient personnel in our accounting and financial reporting functions. As a result, we were not able to achieve adequate segregation of duties and were not able to provide for adequate review of the financial statements. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the consolidated financial statements will not be prevented or detected on a timely basis; and
b) We lacked sufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of U.S. GAAP and SEC disclosure requirements.
We intend to create written policies and procedures for accounting and financial reporting with respect to the requirements and application of U.S. GAAP and SEC disclosure requirements in the future.
We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Changes in internal control over financial reporting.
There were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management’s report on internal control over financial reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, a company’s principal executive and principal financial officer and effected by the our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible enhancements to controls and procedures.
We conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our principal executive officer and principal financial officer conclude that, at December 31, 2020, our internal control over financial reporting was not effective for the reason discussed above.
This annual report does not include an attestation report by Rosenberg Rich Baker Berman, P.A., our independent registered public accounting firm regarding internal control over financial reporting. As a smaller reporting company, our management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

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ITEM 9B. OTHER INFORMATION
ITEM 9B - OTHER INFORMATION
None.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The names of our executive officers and directors and their age, title, and biography as of March 11, 2021 are set forth below:
Name
Age
Position Held with our Company
Date First Elected
or Appointed
Andrew Hidalgo
Chief Executive Officer, President, Chairman of the Board and Director
August 17, 2015
Matthew Hidalgo
Chief Financial Officer, Treasurer and Secretary
August 17, 2015
Judd Brammah
Director
June 26, 2020
Business Experience
The following is a brief account of the education and business experience of each director and executive officer of our Company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Andrew Hidalgo - Chief Executive Officer, President, Chairman of the Board and Director.
Andy is responsible for strategic direction, business development and investor relations. Andy has over 25 years of experience in business planning, operations, mergers, acquisitions, financing, corporate governance and SEC compliance. Andy has been a Managing Partner at Turquino Equity LLC (“Turquino”) since its formation in August 2013. Turquino is a global investment firm that focuses on private equity investments, mergers and acquisitions. Andy founded WPCS International Incorporated (“WPCS”), a NASDAQ-listed, design-build engineering services company, and served as Chairman, CEO and President between November 2001 and July 2013. WPCS raised over $40 million of equity financing and acquired 19 companies on three continents during Andy’s tenure. Andy also has prior experience included operational and business development roles with 3M, Schlumberger and General Electric, where he was also a member of the corporate business development committee. Andy’s significant executive leadership experience was instrumental in his selection as a member of the board of directors.
Matthew Hidalgo - Chief Financial Officer, Treasurer and Secretary.
Matt is responsible for financial management and operations. Matt has over 10 years of experience in finance, accounting, operations, restructuring and the integration of acquisitions. Matt has been a Managing Partner at Turquino since its formation in August 2013. Between February 2010 and December 2013, he was the controller and operations manager for WPCS International - Trenton, Inc., WPCS’ largest subsidiary, managing over $30 million in annual revenue. Between February 2008 and February 2010, Matt managed accounting functions for several Australian subsidiaries of WPCS. After graduating Pennsylvania State University with a B.S. in Accounting, he began his career as an accountant for PriceWaterhouse Coopers LLP, where he focused on preparing financial statements and partnership allocations for hedge funds and private equity firms.
Judd Brammah - Director
Mr. Brammah was appointed as a director on June 26, 2020. Since 2011, he has been the Chief Executive Officer of Synergy Medical Technologies, a United Kingdom based company that focuses on orthopedic medical devices and technologies used by healthcare professionals. Mr. Brammah received a Bachelor of Science degree in engineering from London South Bank University. After graduation, he worked for Xerox Corporation and then entered into the medical devices field with Howmedica, Stryker Corporation, and Wright Medical Technologies. Mr. Brammah has extensive experience in research and consulting for multi-national medical device companies, which led to his founding of Synergy Medical Technologies.
Family Relationships
Matthew Hidalgo is the son of Andrew Hidalgo.
Board Independence and Committees
We are not required to have any independent members of the Board of Directors. The board of directors has determined that each of Andrew Hidalgo and Judd Brammah has a relationship with the company which, in the opinion of the board of directors, would not allow him to be considered as an “independent director” as defined in the Marketplace Rules of The NASDAQ Stock Market.
As of the date of this annual report, we do not have any active Board committees and the Board as a whole carries out the functions of audit, nominating and compensation committees. We expect our Board of Directors, in the future, to appoint an audit committee, nominating committee and compensation committee, and to adopt charters relative to each such committee. We intend to appoint such persons to committees of the Board of Directors as are expected to be required to meet the corporate governance requirements imposed by a national securities exchange, although we are not required to comply with such requirements until we elect to seek a listing on a national securities exchange. In addition, we intend that a majority of our directors will be independent directors, of which at least one director will qualify as an “audit committee financial expert,” within the meaning of Item 407(d)(5) of Regulation S-K, as promulgated by the SEC. We do not currently have an “audit committee financial expert” since we currently do not have an audit committee in place.
Except as may be provided in our bylaws, we do not currently have specified procedures in place pursuant to which whereby security holders may recommend nominees to the Board of Directors.
Code of Ethics
We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees. A copy of the Code of Business Conduct and Ethics is incorporated by reference as an exhibit.
Involvement in Certain Legal Proceedings
Our Directors and Executive Officers have not been involved in any of the following events during the past ten years:
1. any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;
4. being found by a court of competent jurisdiction in a civil action, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
5. being subject of, or a party to, any federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
6. being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11 - EXECUTIVE COMPENSATION
Executive Officer Compensation
The following table provides certain summary information concerning compensation awarded to, earned by or paid to our Chief Executive Officer and one other highest paid individual whose total annual salary and bonus exceeded $100,000 for fiscal years 2020 and 2019.
Name & Principal
Position Year Salary
($) Bonus
($) Stock
Awards
($) Option
Awards
($) Other
($) Total ($)
Andrew Hidalgo - - - - 97,500 (1) 97,500
Chief Executive Officer - - - - 80,500 (1) 80,500
Matthew Hidalgo
Chief Financial Officer 150,000 - - - - 150,000
(1) Represents management fees paid to Turquino Equity LLC, of which Mr. Hidalgo is a managing partner.
Option/SAR Grants in Fiscal Year Ended December 31, 2020
None.
Outstanding Equity Awards at Fiscal Year-End Table
None.
Employment Contracts and Termination of Employment and Change-In-Control Arrangements
None.
Director Compensation
We pay Judd Brammah a fee of $5,000 per quarter to serve on our board of directors.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information regarding beneficial ownership of our common stock as of March 11, 2021:
● by each person who is known by us to beneficially own more than 5% of our common stock;
● by each of our officers and directors; and
● by all of our officers and directors as a group.
Unless otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power and that person’s address is c/o Vision Hydrogen Corporation, 95 Christopher Columbus Drive, 16th Floor, Jersey City, NJ 07302.
NAME OF OWNER TITLE OF
CLASS NUMBER OF
SHARES OWNED (1) PERCENTAGE OF
COMMON STOCK (2)
Andrew Hidalgo Common Stock 0 %
Matthew Hidalgo Common Stock 0 %
Judd Brammah Common Stock 3,213,928 24.92 %
Officers and Directors as a Group (3 persons) Common Stock 3,213,928 24.92 %
First Finance Limited (3) Common Stock 1,000,000 (3) 7.75 %
(1) Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of March 11, 2021 are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.
(2) Percentage based upon 12,897,867 shares of common stock issued and outstanding as of March 11, 2021.
(3) The mailing address for this shareholder is 1615-200 Burrard Street, Vancouver, BC V6C 3L6 Canada. Information is based on a Schedule 13G filed with the Securities and Exchange Commission on February 9, 2021.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Other than as disclosed below, during the last two fiscal years, there have been no transactions, or proposed transactions, in which our company was or is to be a participant where the amount involved exceeds the lesser of $120,000 or one percent of the average of our company’s total assets at year-end and in which any director, executive officer or beneficial holder of more than 5% of the outstanding Common Stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest. We have no policy regarding entering into transactions with affiliated parties.
On January 31, 2017, we entered into a share exchange agreement (the “Exchange Agreement”) by and among us, Pride, Turquino and Stephen Paul Mullane and Marie Louise Mullane as Trustees of the Mullane Family Trust (the “Mullane Trust” and together with Turquino, the “Pride Shareholders”). Andrew Hidalgo and Matthew Hidalgo, our Chief Executive Officer and Chief Financial Officer, respectively, are each a managing partner of Turquino. During 2017, Turquino had an arrangement with Pride for a monthly management fee of AUD $20,000. Effective January 2018, Turquino amended its arrangement with Pride to pay the management fee directly to us, from which we pay Turquino $6,500 USD per month (from which Mr. Andrew Hidalgo continues to receive compensation), and Mr. Matthew Hidalgo started to receive salary directly from us. The obligation to pay Turquino was terminated in connection with the sale of Pride to Turquino in May 2020.
On February 8, 2019, the Company entered into a securities purchase agreement with the Holders, pursuant to which the Company sold an aggregate principal amount of $150,000 in 10% Convertible Debentures (“2019 Debentures”). The 2019 Debentures, together with any accrued and unpaid interest, is due and payable on February 8, 2021 (the “2021 Maturity Date”). Interest on the 2019 Debentures accrues at the rate of 10% per annum, payable monthly in cash, beginning on March 1, 2019 and through the 2021 Maturity Date. The 2019 Debentures are convertible into Common Stock at a conversion price of $0.50 per share at the discretion of the Holder, with special provisions applying to any holder whose conversion would result in the Holder beneficially owning more than 4.99% of the Common Stock. The obligation to pay the 2019 Debentures was assumed by Turquino Equity in connection with the sale of Pride in May 2020.
On April 21, 2020, the Company sold its wholly-owned subsidiary PVBJ Inc. (“PVBJ”) back to Benis Holdings LLC (“Benis Holdings”), from which the Company previously bought PVBJ, pursuant to the following terms (a) the outstanding $221,800 earn-out liability was used as consideration towards the purchase of PVBJ; (b) Paul Benis agreed to apply the remaining salary due to him by the Company, as prorated from the closing date to the expiration date of the employment agreement (January 31, 2021), to the purchase of PVBJ by Benis Holdings as additional consideration thereof and (c) as additional consideration for the purchase of PVBJ by Benis Holdings LLC, PVBJ shall continue to be responsible for the line of credit with Thermo Communications Funding, LLC. Paul Benis, the control person of Benis Holdings, was our Executive Vice President at that time, and he resigned in connection with the sale of PVBJ to Benis Holdings.
On May 18, 2020, the Company’s Board authorized the Company, in accordance with Section 78.565 of the Nevada Revised Statutes, to complete and execute a Purchase and Sale Agreement between the Company and Turquino (the “Purchase and Sale Agreement”) pursuant to which the Company sold 100% of Pride’s outstanding stock to Turquino in exchange for Turquino’s assumption of the 2018 Debentures and 2019 Debentures (collectively, the “Debentures”). In conjunction therewith, the Holders of the Debentures assigned the Debentures to Turquino, at which time Turquino became responsible for the debt obligations thereunder. The Company has no further note obligations to the Holders, and it reduced its debt by approximately $600,000 or 65% of the corporate debt obligations.
On June 19, 2020, the Company entered into a promissory note (the “Promissory Note”) with Judd Brammah, a director of the Company, for a principal amount up to $230,332 bearing interest with interest at 6% per annum. The entire principal and interest upon the Promissory Note are due on June 19, 2021. The proceeds from the note was used to pay accrued expenses of the Company.
On July 17, 2020 the Company entered into a promissory note (the “Promissory Note”) with Judd Brammah, a director of the Company, for a principal amount up to $50,000 bearing interest with interest at 6% per annum. The entire principal and interest upon the Promissory Note are due on June 19, 2021. The proceeds from the note was used to pay accrued expenses of the Company.
On July 22, 2020 the Company entered into a promissory note (the “Promissory Note”) with Judd Brammah, a director of the Company, for a principal amount up to $299,900 bearing interest with interest at 6% per annum. The entire principal and interest upon the Promissory Note are due on June 19, 2021. The proceeds from the note was used to pay accrued expenses of the Company.
The Company agreed to pay Judd Brammah a fee of $5,000 per quarter to serve on the board of directors.
We have entered into agreements to indemnify our directors and executive officers, in addition to the indemnification provided for in our articles of incorporation and bylaws. These agreements, among other things, provide for indemnification of our directors and executive officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of our company, arising out of such person’s services as a director or executive officer of ours, any subsidiary of ours or any other company or enterprise to which the person provided services at our request. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14 - PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees. The aggregate fees billed by our independent auditors, for professional services rendered for the audit of our annual financial statements for the years ended December 31, 2020 and 2019, and for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q during the fiscal years were $63,000 and $52,400, respectively.
Audit Related Fees. We incurred $13,300 for audit related fees and other services during the fiscal year ended December 31, 2020 and $46,051 during year ended December 31, 2019.
Tax and Other Fees. We did not incur any fees from our independent auditors for tax or other services during the fiscal years ended December 31, 2020 and 2019.
The Board of Directors has considered whether the provision of non-audit services is compatible with maintaining the principal accountant’s independence.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) List of Documents Filed as a Part of This Report:
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Balance sheets as of December 31, 2020 and 2019
Statements of operations - other comprehensive income for the years ended December 31, 2020 and December 31, 2019
Statements of stockholders’ equity the years ended December 31, 2020 and 2019
Statements of cash flows for the years ended December 31, 2020 and 2019
Notes to financial statements
(b) Index to Financial Statement Schedules:
All schedules have been omitted because the required information is included in the consolidated financial statements or the notes thereto, or is not applicable or required.
(c) Index to Exhibits
The Exhibits listed below are identified by numbers corresponding to the Exhibit Table of Item 601 of Regulation S-K. The Exhibits designated by an asterisk (*) are management contracts or compensatory plans or arrangements required to be filed pursuant to Item 15.
Exhibit No.
Description
3.01
Articles of Incorporation of the Company, filed with the Nevada Secretary of State on August 17, 2015, filed as an exhibit to the Registration Statement on Form S-1, filed with the Securities and Exchange Commission (the “Commission”) on June 29, 2016 and incorporated herein by reference.
3.02
Certificate of Correction to the Articles of Incorporation of the Company, filed with the Nevada Secretary of State on August 18, 2015, filed with the Nevada Secretary of State on August 18, 2015, filed as an exhibit to the Registration Statement on Form S-1, filed with the Commission on June 29, 2016 and incorporated herein by reference.
3.03
Bylaws of the Company, filed as an exhibit to the Registration Statement on Form S-1, filed with the Commission on June 29, 2016 and incorporated herein by reference.
3.04
Form of Articles of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on September 29, 2020, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on October 5, 2020 and incorporated herein by reference.
10.01
Form of Indemnification Agreement, filed as an exhibit to the Registration Statement on Form S-1, filed with the Commission on June 29, 2016 and incorporated herein by reference.
10.02*
2016 Incentive Stock Option Plan, filed as an exhibit to the Registration Statement on Form S-1, filed with the Commission on June 29, 2016 and incorporated herein by reference.
10.03
Form of Securities Purchase Agreement, dated February 8, 2019, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on February 11, 2019 and incorporated herein by reference.
10.04
Form of 10% Convertible Debenture, dated February 8, 2019, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on February 11, 2019 and incorporated herein by reference.
10.05
Form of amendment, dated February 8, 2019, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on February 11, 2019 and incorporated herein by reference.
10.06
Equity Purchase Agreement, by and between the Company and Triton Funds, LLC, dated March 12, 2019, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on March 15, 2019 and incorporated herein by reference.
10.07
Registration Rights Agreement, by and between the Company and Triton Funds, LLC, dated March 12, 2019, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on March 15, 2019 and incorporated herein by reference.
10.08
Equity Financing Agreement, by and between the Company and GHS Investments LLC, dated July 9, 2019, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on July 15, 2019 and incorporated herein by reference.
10.09
Registration Rights Agreement, by and between the Company and GHS Investments LLC, dated July 9, 2019, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on July 15, 2019 and incorporated herein by reference.
10.10
Securities Purchase Agreement, by and between the Company and FirstFire Global Opportunities Fund LLC, dated October 17, 2019, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on October 23, 2019 and incorporated herein by reference.
10.11
Convertible Promissory Note, issued by the Company to FirstFire Global Opportunities Fund LLC, dated October 17, 2019, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on October 23, 2019 and incorporated herein by reference.
10.12
Form of Amendment, dated January 3, 2020 but effective as of January 2, 2020, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on January 8, 2020 and incorporated herein by reference.
10.13
Securities Purchase Agreement, by and between the Company and FirstFire Global Opportunities Fund LLC, dated January 15, 2020, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on January 17, 2020 and incorporated herein by reference.
10.14
Convertible Promissory Note, issued by the Company to FirstFire Global Opportunities Fund LLC, dated January 15, 2020, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on January 17, 2020 and incorporated herein by reference.
10.15
Amendment to Loan Agreement, dated March 10, 2020, filed as an exhibit to the Annual Report on Form 10-K, filed with the Commission on March 26, 2020 and incorporated herein by reference.
10.16
Form of promissory note, dated March 10, 2020, filed as an exhibit to the Annual Report on Form 10-K, filed with the Commission on March 25, 2020 and incorporated herein by reference.
10.17
Resale agreement, dated April 21, 2020, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on April 21, 2020 and incorporated herein by reference.
10.18
Purchase and sale agreement, dated May 18, 2020, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on May 18, 2020 and incorporated herein by reference.
10.19
Seed capital subscription agreement, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on August 14, 2020 and incorporated herein by reference.
10.20
Form of Subscription Agreement, filed as an exhibit to the Registration Statement on Form S-1, filed with the Commission on October 14, 2020 and incorporated herein by reference.
14.01
Code of Business Conduct and Ethics for Employees, Executive Officers and Directors, filed as an exhibit to the Annual Report on Form 10-K, filed with the Commission on March 24, 2017 and incorporated herein by reference.
31.01
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
The following materials from Vision Hydrogen Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Loss, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.