UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
FOR
THE QUARTERLY PERIOD ENDED
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION
FILE NUMBER:
(Name of registrant in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
Issuer’s
telephone Number: (
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | None | None |
Indicate
by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
reporting company | ||
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
The number of shares of registrant’s common stock issued and outstanding as of November 5, 2021 was .
NEWHYDROGEN, INC.
INDEX
| i |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
CONDENSED BALANCE SHEET
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
(Unaudited)
| September 30, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| PROPERTY AND EQUIPMENT | ||||||||
| Machinery and equipment | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| NET PROPERTY AND EQUIPMENT | ||||||||
| OTHER ASSETS | ||||||||
| Patents, net of amortization of $ | ||||||||
| Deposit | ||||||||
| TOTAL OTHER ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | - | |||||||
| Derivative liability | - | |||||||
| Convertible promissory notes net of debt discount of $ | - | |||||||
| TOTAL CURRENT LIABILITIES | - | |||||||
| LONG TERM LIABILITIES | ||||||||
| Convertible promissory notes net of debt discount of $ | - | |||||||
| TOTAL LONG TERM LIABILITIES | - | |||||||
| TOTAL LIABILITIES | - | |||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Preferred stock, $ par value; authorized shares; shares of Preferred Series C shares issued and outstanding | - | |||||||
| Common stock, $ par value; authorized shares and shares issued and outstanding, respectively | ||||||||
| Preferred treasury stock, and shares outstanding, respectively | - | - | ||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY (DEFICIT) | ( | ) | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 1 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||||||
| REVENUE | $ | $ | $ | $ | ||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Research and development | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| TOTAL OPERATING EXPENSES | ||||||||||||||||
| LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSES) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME/(EXPENSES) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Gain on settlement of debt and derivative | ||||||||||||||||
| Gain (Loss) on change in derivative liability | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| TOTAL OTHER INCOME (EXPENSES) | ( | ) | ( | ) | ||||||||||||
| NET INCOME (LOSS) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| BASIC EARNINGS (LOSS) PER SHARE | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| DILUTED EARNING (LOSS) PER SHARE | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||
| BASIC | ||||||||||||||||
| DILUTED | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 2 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
CONDENSED STATEMENT OF SHAREHOLDERS’ DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
(Unaudited)
| NINE MONTHS ENDED SEPTEMBER 30, 2020 | ||||||||||||||||||||||||||||
| Additional | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance at December 31, 2019 | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest | - | |||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at September 30, 2020 (unaudited) | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| NINE MONTHS ENDED SEPTEMBER 30, 2021 | ||||||||||||||||||||||||||||
| Additional | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance at December 31, 2020 | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of common shares for cash | - | |||||||||||||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest | - | |||||||||||||||||||||||||||
| Issuance of commons shares for services | - | |||||||||||||||||||||||||||
| Issuance of preferred shares in exchange for fair value of convertible notes | - | |||||||||||||||||||||||||||
| Issuance of common shares for conversion of preferred stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Stock compensation cost | - | - | ||||||||||||||||||||||||||
| Issuance of common stock warrants deemed dividends | - | - | ( | ) | ||||||||||||||||||||||||
| Net Income | - | - | ||||||||||||||||||||||||||
| Balance at September 30, 2021 (unaudited) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 3 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
(Unaudited)
| Nine Months Ended | ||||||||
| September 30, 2021 | September 30, 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income (Loss) | $ | $ | ( | ) | ||||
| Adjustment to reconcile net income(loss) to net cash (used in) provided by operating activities | ||||||||
| Depreciation and amortization expense | ||||||||
| Common stock issued for services | ||||||||
| Stock compensation expense | ||||||||
| (Gain) Loss on net change in derivative liability | ||||||||
| Amortization of debt discount recognized as interest expense | ||||||||
| Gain on settlement of debt and derivative | ( | ) | ||||||
| (Increase) Decrease in Changes in Assets | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Increase (Decrease) in Changes in Liabilities | ||||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | - | - | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds for the sale of common stock for cash | ||||||||
| Principal payments on convertible debt | ( | ) | ||||||
| Net proceeds from convertible promissory notes | ||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| NET INCREASE IN CASH | ( | ) | ||||||
| CASH, BEGINNING OF PERIOD | ||||||||
| CASH, END OF PERIOD | $ | $ | ( | ) | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Interest paid | $ | $ | ||||||
| Taxes paid | $ | $ | ||||||
| SUPPLEMENTAL SCHEDULE OF NON-CASH TRANSACTIONS | ||||||||
| Common stock issued for convertible notes and accrued interest | $ | $ | ||||||
| Fair value of initial derivative | $ | $ | ||||||
| Fair value of convertible notes exchanged for preferred stock | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 4 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 1. | Basis of Presentation |
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the December 31, 2020.
Going Concern
The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions. During the nine months ended September 30, 2021, the Company obtained funds from the sale of shares of common stock, and from the issuance of a convertible note agreement. Management believes this funding will continue from its current investors and from new investors. Management believes the existing shareholders, and the prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the development of its core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing.
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
Revenue Recognition
The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. The Company adopted Accounting Standards Codification (“ASC”) 606, whereby revenue will be recognized as performance obligations are satisfied and customers obtain control of goods or services. However, in the event of a loss on a sale is foreseen, the Company will recognize the loss as it is determined. To date, the Company has not had significant revenues and is in the development stage.
Cash and Cash Equivalent
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
| 5 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, derivative liabilities and the fair value of stock options. Actual results could differ from those estimates.
Property and Equipment
Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives:
| Computer equipment | ||||
| Machinery and equipment |
Depreciation
expense for the nine months ended September 30, 2021 and 2020 was $
Intangible Assets
The Company has patent applications to protect the inventions and processes behind its proprietary bio-based back-sheet, a protective covering for the back of photovoltaic solar modules traditionally made from petroleum-based film. Intangible assets that have finite useful lives continue to be amortized over their useful lives.
| Useful Lives | 9/30/2021 | 12/31/2020 | ||||||||||
| Patents | $ | $ | ||||||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||||||
| $ | $ | |||||||||||
Amortization
expense for the nine months ended September 30, 2021 and the year ended December 31, 2020 was $
The Company measures the cost of employee services received in exchange for an equity award based on the grant-date fair value of the award. All grants under our stock-based compensation programs are accounted for at fair value and that cost is recognized over the period during which an employee, consultant, or director are required to provide service in exchange for the award (the vesting period). Compensation expense for options granted to employees and non-employees is determined in accordance with the standard as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Compensation expense for awards granted is re-measured each period.
On March 24, 2015 and September 2, 2015, the Company granted stock options to its employees and stock options to its directors for services.
On February 18, 2021, the Company granted stock options to its employees for services at an exercise price of $. On September 29, 2021, the Company amended the exercise price to $ per share. Half of the options vest immediately, and the remaining half of the option to purchase shares of the Company’s common stock shall become exercisable in equal amounts over a twenty-four () month period during the term of the optionee’s employment, with the first installment of shares vesting on March 18, 2021. The options are exercisable in equal amounts over a thirty-six () month period during the term of the optionee’s employment, with the first installment of shares vesting on March 18, 2021.
| 6 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Stock-Based Compensation (Continued)
Determining the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based payment and stock price volatility. The Company used Black Scholes to value its stock option awards which incorporated the Company’s stock price, volatility, U.S. risk-free rate, dividend rate, and estimated life. The stock options terminate seven (7) years from the date of grant or upon termination of employment. As of September 30, 2021, stock options were outstanding.
Research and Development
Research
and development costs are expensed as incurred. Total research and development costs were $
Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of stock options and stock-based awards (Note 4), plus the assumed conversion of convertible debt (Note 5).
The
Company has included shares issuable from convertible debt of $
For
the nine months ended September 30, 2020, the Company’s diluted loss per share is the same as the basic loss per share, and the
inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. The Company has excluded
stock options, and the shares issuable from convertible debt of $
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2021 | 2020 | |||||||
| Income (Loss) to common shareholders (Numerator) | $ | $ | ( | ) | ||||
| Basic weighted average number of common shares outstanding (Denominator) | ||||||||
| Diluted weighted average number of common shares outstanding (Denominator) | ||||||||
Fair Value of Financial Instruments
Fair Value of Financial Instruments requires disclosure of the fair value information, whether recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2021, the amounts reported for cash, inventory, prepaid expenses, accounts payable, and accrued expenses, approximate the fair value because of their short maturities.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
| 7 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Fair Value of Financial Instruments (Continued)
| ● | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows as of September 30, 2021:
| Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Assets: | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Derivative Liability at fair value as of September 30, 2021 | $ | $ | $ | $ | ||||||||||||
The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:
| Balance as of January 31, 2021 | $ | |||
| Fair value of derivative liabilities issued | ||||
| Derecognition of derivative liability | ( | ) | ||
| Loss on change in derivative liability | ||||
| Balance as of September 30, 2021 | $ |
Accounting for Derivatives
The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average series Binomial lattice formula pricing models to value the derivative instruments at inception and on subsequent valuation dates.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.
| 8 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Recently Issued Accounting Pronouncements
In May 2021, the FASB issued an amendment to accounting standards ASU 2021-04, (Subtopic 470-50) – Debt Modifications and Extinguishments”, which requires that an entity apply the new guidance to a modification or an exchange of a freestanding equity-classified written call option that is a part of or directly related to a modification or an exchange of an existing debt. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for all entities. The Company has evaluated the impact of the adoption of ASU 2021-04, which has no effect on the Company’s financial statements.
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.
| 3. | CAPITAL STOCK |
Preferred Stock
On
January 14, 2021,
On
March 26, 2021, the Company entered into an agreement with an investor for an exchange of convertible debt to equity. The investor exchanged
convertible notes in the amount of $
| Per Valuation | ||||
| Preferred shares issued | ||||
| Stated value of debt and interest | $ | |||
| Calculated fair value of preferred shares | $ | |||
| Fair value of derivative liability removed | $ | |||
| Gain | $ | |||
The
Company recognized a gain on settlement of $
On April 14, 2021, the Board of Directors of the Company authorized the issuance of shares of Series D Preferred Stock, par value $ per share, to David Lee, Chief Executive Officer, Chairman of the Board, President and acting Chief Financial Officer. The Series D Preferred Stock total purchase price is $ for shares of Series D Preferred Stock. The Series D Preferred stock were redeemed by the Company on May 29, 2021. As of September 30, 2021, there were shares of Series D Preferred Stock outstanding.
Common Stock
On June 10, 2021, the Company filed an amendment to its Articles of Incorporation to effect an increase in the authorized number of shares of common stock of the Corporation from shares of common stock, par value $ per share to shares of common stock, par value $ per share.
| 9 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 3. | CAPITAL STOCK (Continued) |
During
the nine months ended September 30, 2021, the Company issued an aggregate of shares of common stock and separate pre-funded
warrants to purchase up to shares of common stock, plus warrants to purchase up to
During the nine months ended September 30, 2021, the Company issued shares of common stock and separate pre-funded warrants to purchase up to shares of common stock, plus warrants to purchase up to at an exercise price of $ per share.
During
the nine months ended September 30, 2021, the Company issued shares of common stock upon conversion of convertible promissory
notes in the principal amount of $
During the nine months ended September 30, 2021, the Company issued shares of common stock for services at fair value.
During the nine months ended September 30, 2021, the Company issued shares of common stock upon conversion of shares of preferred stock.
| 4. | STOCK OPTIONS |
Stock Options
During the nine months ended September 30, 2021, the Company granted stock options to its CEO and stock options to an employee of the Company (Please see Note 2).
| 9/30/2021 | 9/30/2020 | |||||||||||||||
| Number of Options | Weighted average exercise price | Number of Options | Weighted average exercise price | |||||||||||||
| Outstanding as of the beginning of the periods | $ | $ | ||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ||||||||||||||||
| Expired | ||||||||||||||||
| Outstanding as of the end of the periods | $ | $ | ||||||||||||||
| Exercisable as of the end of the periods | $ | $ | ||||||||||||||
| 9/30/2021 | 9/30/2020 | |||||||||||||||||||||||||||||
| Exercisable Price | Stock Options Outstanding | Stock Options Exercisable | Weighted Average Remaining Contractual Life (years) | Exercisable Price | Stock Options Outstanding | Stock Options Exercisable | Weighted Average Remaining Contractual Life (years) | |||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||||||
| $ | - | |||||||||||||||||||||||||||||
The stock-based compensation expense recognized in the statement of operations during the nine months ended September 30, 2021 and 2020, related to the granting of these options was $ and $, respectively.
As of September 30, 2021 and 2020, respectively, there was intrinsic value with regards to the outstanding options.
| 10 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 5. | CONVERTIBLE PROMISSORY NOTES |
The
Company issued an unsecured convertible promissory note (the May 2014 Note”), in the amount of $
The
Company issued various unsecured convertible promissory notes (the 2015-2018 Notes”) in the aggregate amount of $
| 11 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 5. | CONVERTIBLE PROMISSORY NOTES (Continued) |
The
Company issued various unsecured convertible promissory notes (the Feb 18 Note”) in the aggregate amount of $
The
Company issued an unsecured convertible promissory note on August 8, 2019 (the “August 2019 Note”), in the aggregate principal
amount of $
The
Company issued an unsecured convertible promissory note on February 13, 2020 (the “Feb 2020 Note”), in the aggregate principal
amount of $
| 12 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 5. | CONVERTIBLE PROMISSORY NOTES (Continued) |
The
Company issued an unsecured convertible promissory note on July 6, 2020 (the Jul 2020 Note), in the aggregate principal amount of
$
The
Company issued an unsecured convertible promissory note on August 4, 2020 (the Aug 2020 Note), in the aggregate principal amount of $
The
Company issued an unsecured convertible promissory note on August 17, 2020 (the “Aug 2020 Note”), in the aggregate principal
amount of $
| 13 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 5. | CONVERTIBLE PROMISSORY NOTES (Continued) |
The
Company issued an unsecured convertible promissory note on September 14, 2020 (the Sep 2020 Note), in the aggregate principal amount
of $
The
Company issued an unsecured convertible promissory note on November 2, 2020 (the Nov 2020 Note), in the aggregate principal amount of
$
The
Company issued an unsecured convertible promissory note on December 2, 2020 (the Dec 2020 Note), in the aggregate principal amount of
$
The
conversion feature of the Dec 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset
conversion features of the Dec 2020 Note. The fair value of the Dec 2020 Note has been determined by using the Binomial lattice formula
from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in
the amount of $
| 14 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 5. | CONVERTIBLE PROMISSORY NOTES (Continued) |
The
Company issued an unsecured convertible promissory note on January 4, 2021 (the Jan 4, 2021 Note), in the aggregate principal amount
of $
The
Company issued an unsecured convertible promissory note on January 14, 2021 (the Jan 14 2021 Note), in the aggregate principal amount
of $
During
the nine months ended September 30, 2021, the Company exchanged convertible notes in the amount of $
In
addition, the Company repaid convertible notes in the amount of $
As of September 30, 2021, the Company had no outstanding convertible promissory notes.
We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable, so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically per the stock price fluctuations.
| 6. | DERIVATIVE LIABILITIES |
We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable, so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically per the stock price fluctuations.
| 15 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 6. | DERIVATIVE LIABILITIES (Continued) |
The convertible notes issued and described in Note 5 do not have fixed settlement provisions because their conversion prices are not fixed. The conversion feature has been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.
During
the nine months ended September 30, 2021, as a result of the convertible notes (“Notes”) issued that were accounted for as
derivative liabilities, we determined that the fair value of the conversion feature of the convertible notes at issuance was $
During
the nine months ended September 30, 2021, the Company converted $
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry-forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry-forwards may be limited as to use in future years.
| 7. | RELATED PARTY TRANSACTION |
On January 14, 2021, the Company issued shares of Series B Preferred Stock to David Lee. As of September 30, 2021, there were Series B Preferred Stock outstanding. The total purchase price is $ for shares of Series B Preferred Stock. The Series B Preferred stock were redeemed by the Company on January 29, 2021. As of September 30, 2021, there were shares of Series B Preferred Stock outstanding.
On April 14, 2021, the Company issued shares of Series D Preferred Stock to David Lee. The total purchase price is $ for shares of Series D Preferred Stock. The Series D Preferred stock were redeemed by the Company on May 29, 2021. As of September 30, 2021, there were shares of Series D Preferred Stock outstanding.
| 8. | SECURITIES PURCHASE AGREEMENT |
On
January 27, 2021, the Company entered into a securities purchase agreement with an investor to sell through a private placement an aggregate
of shares of common stock and separate pre-funded warrants to purchase up to shares of common stock, plus warrants
to purchase up to
| 16 |
NEWHYDROGEN, INC.
(FORMERLY BIOSOLAR, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
| 8. | SECURITIES PURCHASE AGREEMENT (Continued) |
In
connection with the closing, the Company issued an additional
On
April 4, 2021, the Company entered into a securities purchase agreement with an investor to sell through a direct registered offering
an aggregate of shares of common stock and separate pre-funded warrants to purchase up to shares of common stock,
plus warrants to purchase up to
In
connection with the closing, the Company issued an additional
| 9/30/2021 | ||||||||
Number of Warrants | Weighted average exercise price | |||||||
| Outstanding as of the beginning of the periods | ||||||||
| Issued | $ | |||||||
| Purchased | ||||||||
| Expired | ||||||||
| Outstanding as of the end of the periods | $ | |||||||
| Exercisable as of the end of the periods | $ | |||||||
The weighted average remaining contractual life of the warrants outstanding as of September 30, 2021 was as follows:
| 9/30/2021 | ||||||||||||||
| Exercisable Price | Stock Warrants Outstanding | Stock Warrants Exercisable | Weighted Average Remaining Contractual Life (years) | |||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| 9. | COMMITMENTS AND CONTINGENCIES |
The
Company rents office space on a yearly basis with a monthly rent payment in the amount of $
In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position or results of operations.
As of September 30, 2021, there were no legal proceedings against the Company.
| 10. | SUBSEQUENT EVENT |
Management has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has determined that there are no subsequent events to report.
| 17 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Special Note on Forward-Looking Statements.
Certain statements in “Management’s Discussion and Analysis and Results of Operations” below, and elsewhere in this quarterly report, are not related to historical results, and are forward-looking statements. Forward-looking statements present our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements frequently are accompanied by such words such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms or other words and terms of similar meaning. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or timeliness of such results. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this quarterly report. Subsequent written and oral forward looking statements attributable to us or to persons acting in our behalf are expressly qualified in their entirety by the cautionary statements and risk factors set forth in our annual report on Form 10-K filed with the SEC on February 16, 2021, and in other reports filed by us with the SEC.
You should read the following description of our financial condition and results of operations in conjunction with the financial statements and accompanying notes included in this report.
Overview
We are a developer of clean energy technologies. Our current focus is on developing an electrolyzer technology to lower the cost of Green Hydrogen production. Green Hydrogen is the term used to refer to Hydrogen fuel that is created using renewable energy instead of fossil fuels.
Hydrogen is the cleanest and most abundant fuel in the universe. It is zero-emission and only produces water vapor when used. However, hydrogen does not exist in its pure form on Earth so it must be extracted. For centuries, scientists have known how to use electricity to split water into hydrogen and oxygen using a device called an electrolyzer. Electrolyzers installed behind a solar farm or wind farm can use renewable electricity to split water, thereby producing Green Hydrogen. However, modern electrolyzers still cost too much. The chemical catalysts that enable the water-splitting reactions are currently made from platinum and iridium – both are very expensive precious metals. These catalysts account for nearly 50% of the cost of the electrolyzer.
We are developing technologies to significantly reduce or replace rare earth materials with inexpensive earth abundant materials in electrolyzers to help usher in a Green Hydrogen economy.
As of April 30, 2021, we changed our name from BioSolar, Inc. to NewHydrogen, Inc.
Recent Transactions
None.
Application of Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using a Binomial lattice valuation model. We base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.
| 18 |
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, derivative liabilities and the fair value of stock options. Actual results could differ from those estimates.
Fair Value of Financial Instruments
Our cash, cash equivalents, investments, inventory, prepaid expenses, and accounts payable are stated at cost which approximates fair value due to the short-term nature of these instruments.
Recently Issued Accounting Pronouncements
Management reviewed currently issued pronouncements during the three months ended September 30, 2021, and does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed unaudited financial statements.
Results of Operations – Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020.
OPERATING EXPENSES
General and Administrative Expenses
General and administrative (“G&A”) expenses increased by $2,399,249 to $2,521,726 for the three months ended September 30, 2021, compared to $122,477 for the prior period ended September 30, 2020. The primary increase in G&A expenses was the result of an increase in fair value of non-cash stock compensation of $2,312,480, an increase in professional fees in the amount of $24,192, and an increase in salaries of $55,750, and an overall increase in expenses of $6,827.
Research and Development
Research and Development (“R&D”) expenses increased by $213,824 to $248,574 for the three months ended September 30, 2021, compared to $34,750 for the prior period ended September 30, 2020. This overall increase in R&D expenses was the result of an increase in outside research fees.
Depreciation
Depreciation expense for the three months ended September 30, 2021 and 2020 was $1,092 and $1092, respectively.
Other Income/(Expenses)
Other income and (expenses) decreased by $15,968,250 to $64,443 for the three months ended September 30, 2021, compared to $15,903,807 for the prior period ended September 30, 2020. The decrease in other income and (expenses) was the result of a decrease in non-cash loss on change in fair value of the derivative instruments of $15,768,505, an increase in interest income of $1,600, with a decrease in interest expense of $198,145, which includes non-cash expense of amortization of debt discount in the amount of $134,211. The decrease in other income and (expenses) was primarily due to the net change in the fair value of the derivative instruments.
| 19 |
Net Income (Loss)
Our net loss for the three months ended September 30, 2021 was $2,706,949, compared to a net loss of $16,062,126 for the prior period ended September 30, 2020. The decrease in net loss was due to a decrease in non-cash other income (expenses) associated with the net change in derivative instruments estimated each period. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material. The Company has not generated any revenues.
Results of Operations – Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020.
OPERATING EXPENSES
General and Administrative Expenses
G&A expenses increased by $20,619,020 to $20,960,556 for the nine months ended September 30, 2021, compared to $341,536 for the prior period ended September 30, 2020. The primary increase in G&A expenses was the result of an increase in fair value of non-cash stock compensation of $20,126,314, an increase in professional fees in the amount of $302,204, and an increase in salaries and payroll tax expenses of $178,133, with an overall increase in expenses of $12,369.
Research and Development
R&D expenses increased by $638,432 to $757,014 for the nine months ended September 30, 2021, compared to $118,582 for the prior period ended September 30, 2020. This overall increase in R&D expenses was the result of an increase in outside research fees.
Depreciation
Depreciation and amortization expense for the nine months ended September 30, 2021 and 2020 was $3,274 and $3,274, respectively.
Other Income/(Expenses)
Other income and (expenses) increased by $82,658,621 to $66,128,628 for the nine months ended September 30, 2021, compared to $16,529,993 for the prior period ended September 30, 2020. The increase in other income and (expenses) was the result of a increase in non-cash loss on change in fair value of the derivative instruments of $14,101,963, an increase in gain on extinguishment of convertible debt for equity of $96,666,293, an increase in interest income of $2,873, and a decrease in interest expense of $91,418, which includes non-cash expense of amortization of debt discount in the amount of $5,892. The increase in other income and (expenses) was primarily due to the net change in the fair value of the derivative instruments.
Net Income (Loss)
Our net income for the nine months ended September 30, 2021 was $44,407,784, compared to a net loss of $16,993,385 for the prior period ended September 30, 2020. The increase in net income was due to an increase in non-cash other income (expenses) associated with the net change in derivative instruments estimated each period. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material. The Company has not generated any revenues.
| 20 |
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.
The unaudited condensed financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying unaudited condensed financial statements do not reflect any adjustments that might result if we are unable to continue as a going concern. During the nine months ended September 30, 2021, we did not generate any revenues, and recognized net income of $44,407,784, due to an overall change in non-cash derivative liability, and used cash of $1,720,030 in operations. As of September 30, 2021, we had working capital of $7,281,967 and a shareholders’ equity of $7,314,889.
In the nine months ended September 30, 2021, we obtained funding through the sale of shares of our common stock and convertible debt. Management believes that we will be able to continue to raise funds through the sale of our securities to existing and new investors. Management believes that funding from existing and prospective new investors and future revenue will provide the additional cash needed to meet our obligations as they become due and will allow the development of our core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing.
As of September 30, 2021, we had working capital of $7,281,967 compared to a working capital deficit of $150,532,859 for the year ended December 31, 2020. This increase in working capital was due primarily to an increase in cash, and prepaid expenses, with a decrease in accrued expenses, convertible debt and derivative liability associated with our outstanding notes.
During the nine months ended September 30, 2021, we used $1,720,030 of cash for operating activities, as compared to $16,326,644 for the year ended December 31, 2020. The increase in the use of cash for operating activities for the current period was a result of an increase in prepaid expense.
Net cash provided from equity financing activities was $8,666,700 for the nine months ended September 30, 2021, as compared to $265,500 for the prior period ended September 30, 2020. The increase was due to equity financing during the current period. Our capital needs have primarily been met from the proceeds of the sale of our securities, as we currently have not generated any revenues.
Our independent auditors, in their report on our audited financial statements for the year ended December 31, 2020, expressed substantial doubt about our ability to continue as a going concern. Our financial statements as of September 30, 2021 have been prepared under the assumption that we will continue as a going concern. Our ability to continue as a going concern ultimately is dependent upon our ability to generate revenue, which is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, to achieve profitable operations. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
PLAN OF OPERATION AND FINANCING NEEDS
We are engaged in the development of innovative technologies to significantly reduce or replace catalysts made from rare earth materials with catalysts made from inexpensive earth abundant materials in electrolyzers to lower the cost of producing Green Hydrogen.
| 21 |
Our plan of operation within the next three months is to utilize our cash balances to work on developing catalyst technologies for producing Green Hydrogen. We believe that our current cash and investment balances will be sufficient to support development activity and general and administrative expenses for the next thirty-six months. Management estimates that it will require additional cash resources during 2024, based upon its current operating plan and condition. We do not expect increased expenses during the fourth quarter of 2021. There is no assurance that capital in any form would be available to us, and if available, on terms and conditions that are acceptable. If we are unable to obtain sufficient funds during the next thirty-six months, we may be forced to reduce the size of our organization, which could have a material adverse impact on, or cause us to curtail and/or cease the development of our products
Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any off- balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, result of operations, liquidity or capital expenditures.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, as that term is defined in Item 10(f)(1) of Regulation S-K, we are not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and chief financial officer concluded as of September 30, 2021, that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change to our internal control over financial reporting that occurred during our third fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 22 |
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of the date of this report, we are not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of our business. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.
ITEM 1A. RISK FACTORS
There are no material changes from the risk factors previously disclosed in the Registrant’s annual report on Form 10-K filed on February 16, 2021.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
| Exhibit No. | Description | |
| 31.1 | Certification by Chief Executive Officer and Acting Chief Financial Officer pursuant to Sarbanes-Oxley Section 302 (filed herewith). | |
| 32.1 | Certification by Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (filed herewith). | |
| EX-101.INS | XBRL Instance Document | |
| EX-101.SCH | XBRL Taxonomy Extension Schema Document | |
| EX-101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
| EX-101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
| EX-101.LAB | XBRL Taxonomy Extension Labels Linkbase | |
| EX-101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
| 23 |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on November 8, 2021.
| NEWHYDROGEN, INC. | ||
| By: | /s/ David Lee | |
Chief
Executive Officer (Principal
Financial Officer and | ||
| 24 |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a) OR RULE 15d-14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
I, David Lee, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of NewHydrogen, Inc. for the quarter ended September 30, 2021; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, 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; | |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 8, 2021 | |
| /s/ David Lee | |
| David Lee | |
| Chief Executive Officer and | |
| Acting Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of NewHydrogen, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Lee, Chief Executive Officer and Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| Date: November 8, 2021 | |
| /s/ David Lee | |
| David Lee | |
| Chief Executive Officer and | |
| Acting
Chief Financial Officer (Principal Executive Officer and Acting Principal Financial and Accounting Officer) |
Condensed Balance Sheet (Unaudited) (Parenthetical) - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Patents, net of amortization | $ 17,379 | $ 15,112 |
| Convertible promissory notes net of debt discount, current | 0 | 219,850 |
| Convertible promissory notes net of debt discount, non current | $ 0 | $ 0 |
| Preferred stock par value | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
| Preferred stock, shares issued | 34,461 | 34,461 |
| Preferred stock, shares outstanding | 34,461 | 34,461 |
| Common stock par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 3,000,000,000 | 3,000,000,000 |
| Common stock, shares issued | 685,496,051 | 456,198,529 |
| Common stock, shares outstanding | 685,496,051 | 456,198,529 |
| Treasury stock, shares outstanding | 0 | 1,000 |
Condensed Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Income Statement [Abstract] | ||||
| REVENUE | ||||
| OPERATING EXPENSES | ||||
| General and administrative expenses | 2,521,726 | 122,477 | 20,960,556 | 341,536 |
| Research and development | 248,574 | 34,750 | 757,014 | 118,582 |
| Depreciation and amortization | 1,092 | 1,092 | 3,274 | 3,274 |
| TOTAL OPERATING EXPENSES | 2,771,392 | 158,319 | 21,720,844 | 463,392 |
| LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSES) | (2,771,392) | (158,319) | (21,720,844) | (463,392) |
| OTHER INCOME/(EXPENSES) | ||||
| Interest income | 1,657 | 57 | 2,942 | 69 |
| Gain on settlement of debt and derivative | 96,666,293 | |||
| Gain (Loss) on change in derivative liability | 73,396 | (15,695,109) | (29,966,083) | (15,864,120) |
| Interest expense | (10,610) | (208,755) | (574,524) | (665,942) |
| TOTAL OTHER INCOME (EXPENSES) | 64,443 | (15,903,807) | 66,128,628 | (16,529,993) |
| NET INCOME (LOSS) | $ (2,706,949) | $ (16,062,126) | $ 44,407,784 | $ (16,993,385) |
| BASIC EARNINGS (LOSS) PER SHARE | $ (0.00) | $ (0.06) | $ 0.14 | $ (0.07) |
| DILUTED EARNING (LOSS) PER SHARE | $ (0.00) | $ (0.06) | $ 0.06 | $ (0.07) |
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||
| BASIC | 708,648,225 | 283,566,685 | 307,746,182 | 237,924,548 |
| DILUTED | 708,648,225 | 283,566,685 | 773,696,182 | 237,924,548 |
Basis of Presentation |
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| Accounting Policies [Abstract] | |||
| Basis of Presentation |
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the December 31, 2020.
Going Concern
The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions. During the nine months ended September 30, 2021, the Company obtained funds from the sale of shares of common stock, and from the issuance of a convertible note agreement. Management believes this funding will continue from its current investors and from new investors. Management believes the existing shareholders, and the prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the development of its core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
Revenue Recognition
The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. The Company adopted Accounting Standards Codification (“ASC”) 606, whereby revenue will be recognized as performance obligations are satisfied and customers obtain control of goods or services. However, in the event of a loss on a sale is foreseen, the Company will recognize the loss as it is determined. To date, the Company has not had significant revenues and is in the development stage.
Cash and Cash Equivalent
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, derivative liabilities and the fair value of stock options. Actual results could differ from those estimates.
Property and Equipment
Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives:
Depreciation expense for the nine months ended September 30, 2021 and 2020 was $1,007 and $1,343, respectively.
Intangible Assets
The Company has patent applications to protect the inventions and processes behind its proprietary bio-based back-sheet, a protective covering for the back of photovoltaic solar modules traditionally made from petroleum-based film. Intangible assets that have finite useful lives continue to be amortized over their useful lives.
Amortization expense for the nine months ended September 30, 2021 and the year ended December 31, 2020 was $2,267 and $3,022, respectively.
The Company measures the cost of employee services received in exchange for an equity award based on the grant-date fair value of the award. All grants under our stock-based compensation programs are accounted for at fair value and that cost is recognized over the period during which an employee, consultant, or director are required to provide service in exchange for the award (the vesting period). Compensation expense for options granted to employees and non-employees is determined in accordance with the standard as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Compensation expense for awards granted is re-measured each period.
On March 24, 2015 and September 2, 2015, the Company granted stock options to its employees and stock options to its directors for services.
On February 18, 2021, the Company granted stock options to its employees for services at an exercise price of $. On September 29, 2021, the Company amended the exercise price to $ per share. Half of the options vest immediately, and the remaining half of the option to purchase shares of the Company’s common stock shall become exercisable in equal amounts over a twenty-four () month period during the term of the optionee’s employment, with the first installment of shares vesting on March 18, 2021. The options are exercisable in equal amounts over a thirty-six () month period during the term of the optionee’s employment, with the first installment of shares vesting on March 18, 2021.
(FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
Stock-Based Compensation (Continued)
Determining the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based payment and stock price volatility. The Company used Black Scholes to value its stock option awards which incorporated the Company’s stock price, volatility, U.S. risk-free rate, dividend rate, and estimated life. The stock options terminate seven (7) years from the date of grant or upon termination of employment. As of September 30, 2021, stock options were outstanding.
Research and Development
Research and development costs are expensed as incurred. Total research and development costs were $ 1,005,588 and $118,582 for the nine months ended September 30, 2021 and 2020, respectively.
Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of stock options and stock-based awards (Note 4), plus the assumed conversion of convertible debt (Note 5).
The Company has included shares issuable from convertible debt of $107,000 and stock options for the nine months ended September 30, 2021, because their impact on the income per share is dilutive.
For the nine months ended September 30, 2020, the Company’s diluted loss per share is the same as the basic loss per share, and the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. The Company has excluded stock options, and the shares issuable from convertible debt of $2,739,790, because their impact was anti-dilutive.
Fair Value of Financial Instruments
Fair Value of Financial Instruments requires disclosure of the fair value information, whether recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2021, the amounts reported for cash, inventory, prepaid expenses, accounts payable, and accrued expenses, approximate the fair value because of their short maturities.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
Fair Value of Financial Instruments (Continued)
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows as of September 30, 2021:
The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:
Accounting for Derivatives
The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average series Binomial lattice formula pricing models to value the derivative instruments at inception and on subsequent valuation dates.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
Recently Issued Accounting Pronouncements
In May 2021, the FASB issued an amendment to accounting standards ASU 2021-04, (Subtopic 470-50) – Debt Modifications and Extinguishments”, which requires that an entity apply the new guidance to a modification or an exchange of a freestanding equity-classified written call option that is a part of or directly related to a modification or an exchange of an existing debt. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for all entities. The Company has evaluated the impact of the adoption of ASU 2021-04, which has no effect on the Company’s financial statements.
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. |
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CAPITAL STOCK |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||
| CAPITAL STOCK |
Preferred Stock
On January 14, 2021, the Board of Directors adopted a certificate of designation establishing the rights, preferences, privileges and other terms of 1,000 Series B Preferred Stock, par value $0.0001 per share, providing for supermajority voting rights to holders of the Series B Preferred Stock. The shares of the Series B Preferred Stock were issued to David Lee, Chief Executive Officer, Chairman of the Board, President and acting Chief Financial Officer. The Series B Preferred Stock total purchase price is $ for shares of Series B Preferred Stock. The Series B Preferred stock were redeemed by the Company on February 28, 2021. As of September 30, 2021, there were no shares of Series B Preferred Stock outstanding.
On March 26, 2021, the Company entered into an agreement with an investor for an exchange of convertible debt to equity. The investor exchanged convertible notes in the amount of $2,462,060, plus interest in the amount of $1,023,253 for an aggregate total of $3,485,313 in exchange for shares of the Company’s Series C Preferred Stock. The extinguishment of the convertible debt was recognized in the Company’s financials as a gain on settlement of convertible notes and derivative. A valuation was prepared based on a stock price of $, with a volatility of 206.03%, based on an estimated term of 5 years.
The Company recognized a gain on settlement of $96,394,494 for the extinguishment of convertible debt, plus derivative liability for the period ended September 30, 2021.
On April 14, 2021, the Board of Directors of the Company authorized the issuance of shares of Series D Preferred Stock, par value $ per share, to David Lee, Chief Executive Officer, Chairman of the Board, President and acting Chief Financial Officer. The Series D Preferred Stock total purchase price is $ for shares of Series D Preferred Stock. The Series D Preferred stock were redeemed by the Company on May 29, 2021. As of September 30, 2021, there were shares of Series D Preferred Stock outstanding.
Common Stock
On June 10, 2021, the Company filed an amendment to its Articles of Incorporation to effect an increase in the authorized number of shares of common stock of the Corporation from shares of common stock, par value $ per share to shares of common stock, par value $ per share.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
During the nine months ended September 30, 2021, the Company issued an aggregate of shares of common stock and separate pre-funded warrants to purchase up to shares of common stock, plus warrants to purchase up to 83,333,334 at an exercise price of $ per share.
During the nine months ended September 30, 2021, the Company issued shares of common stock and separate pre-funded warrants to purchase up to shares of common stock, plus warrants to purchase up to at an exercise price of $ per share.
During the nine months ended September 30, 2021, the Company issued shares of common stock upon conversion of convertible promissory notes in the principal amount of $184,124, plus accrued interest of $20,851, and other fees of $1,000 at prices ranging from $0.0014 - $0.0641.
During the nine months ended September 30, 2021, the Company issued shares of common stock for services at fair value.
During the nine months ended September 30, 2021, the Company issued shares of common stock upon conversion of shares of preferred stock. |
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STOCK OPTIONS |
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| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCK OPTIONS |
Stock Options
During the nine months ended September 30, 2021, the Company granted stock options to its CEO and stock options to an employee of the Company (Please see Note 2).
The stock-based compensation expense recognized in the statement of operations during the nine months ended September 30, 2021 and 2020, related to the granting of these options was $ and $, respectively.
As of September 30, 2021 and 2020, respectively, there was intrinsic value with regards to the outstanding options.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 |
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CONVERTIBLE PROMISSORY NOTES |
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| Debt Disclosure [Abstract] | |||||||||||
| CONVERTIBLE PROMISSORY NOTES |
The Company issued an unsecured convertible promissory note (the May 2014 Note”), in the amount of $500,000 on May 2, 2014. The May Note matured on September 18, 2019, and was extended to May 2, 2022 on December 26, 2019. The May 2014 Note bears interest at 10% per annum. The May 2014 Note is convertible into shares of the Company’s common stock at a conversion price of a) the lesser of $0.25 per share of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the average three (3) lowest trading prices of three (3) separate trading days recorded after the effective date, or c) the lowest effective price granted to any person or entity after the effective date to acquire common stock. If the Borrower fails to deliver shares in accordance with the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower. In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the May 2014 Note has been determined by using the Binomial lattice formula from the effective date of each tranche. During the nine months ended September 30, 2021, the Company exchanged principal of $1,560, plus accrued interest of $970 for preferred stock. The May 2014 Note, as of September 30, 2021, was fully converted.
The Company issued various unsecured convertible promissory notes (the 2015-2018 Notes”) in the aggregate amount of $2,145,000 on various dates of January 30, 2015 through February 9, 2018. The 2015-2018 Notes mature on January 30, 2023. The 2015-2018 Notes bears interest at 10% per annum. The 2015-2018 Notes are convertible into shares of the Company’s common stock at conversion prices ranging from the a) the lesser of $0.03 to $0.25 per share of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the lowest trade price recorded since the original effective date, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Borrower fails to deliver shares in accordance within the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower. In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the 2015-2018 Notes have been determined by using the Binomial lattice formula from the effective date of each tranche. During the nine months ended September 30, 2021, the Company exchanged the Note for Preferred Stock for principal in the amount of $1,960,500, plus accrued interest of $923,717. The 2015-2018 Notes, as of September 30, 2021, was fully converted.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
The Company issued various unsecured convertible promissory notes (the Feb 18 Note”) in the aggregate amount of $430,000 on various dates from February 26, 2018 through December 22, 2018. On January 13, 2021 and February 23, 2021, the Company received additional tranches in the amount of $70,000, associated with the Feb 2018 Note for a total aggregate of $500,000. The maturity date of the Feb 18 Note was extended, and as a result matures on February 18, 2023. The Feb 18 Note bears interest at 10% per annum. The Feb 18 Note is convertible into shares of the Company’s common stock at conversion prices ranging from the a) the lesser of $0.03 per share of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the lowest trade price recorded since the original effective date, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Borrower fails to deliver shares in accordance with-in the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower. In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the Feb 18 Note was determined by using the Binomial lattice formula from the effective date of each tranche. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $126,134 during the nine months ended September 30, 2021. During the three months ended March 31 2021, the Company exchanged the Note for Preferred Stock for principal in the amount of $500,000, plus accrued interest of $98,566. The Feb 18 Note, as of September 30, 2021, was fully converted.
The Company issued an unsecured convertible promissory note on August 8, 2019 (the “August 2019 Note”), in the aggregate principal amount of $53,500. The Company paid an original issue discount of $2,000 and received funds in the amount of $51,500. The August 2019 Note shall mature on February 14, 2021. The August 2019 Note bears interest at 10% per annum. The August 2019 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date. The parties agree that if shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the August 2019 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the August 2019 Note. The fair value of the August 2019 Notes has been determined by using the Binomial lattice formula from the effective date of the notes. The Company issued shares of common stock upon conversion of principal in the amount of $40,676, plus other fees of $3,000. The August 2019 Note was converted based on the terms of the agreement and the Company did not recognize a gain or loss on conversion in the financials. During the nine months ended September 30, 2021, the Company issued shares of common stock for principal in the amount of $12,824, plus accrued interest of $5,564 and other fees of $1,000. The August 2019 Note as of September 30, 2021, was fully converted.
The Company issued an unsecured convertible promissory note on February 13, 2020 (the “Feb 2020 Note”), in the aggregate principal amount of $53,500. The Company paid an original issue discount of $2,000 and received funds in the amount of $51,500. The Feb 2020 Note matures on February 13, 2021. The Feb 2020 Note bears interest at 10% per annum. The Feb 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date. The parties agree that if the shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Feb 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Feb 2020 Note. The fair value of the Feb 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. During the period ended September 30, 2021, the Company issued shares of common stock for principal in the amount of $53,500, plus accrued interest of $8,018. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $6,578 during the nine months ended September 30, 2021. The Feb 2020 Note as of September 30, 2021, was fully converted.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
The Company issued an unsecured convertible promissory note on July 6, 2020 (the Jul 2020 Note), in the aggregate principal amount of $53,000. The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000. The Jul 2020 Note matures on July 6, 2021. The Jul 2020 Note bears interest at 10% per annum. The Jul 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Jul 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jul 2020 Note. The fair value of the Jul 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $27,153 during the three months ended September 30, 2021. The Company issued shares of common stock upon conversion of principal in the amount of $53,000, plus accrued interest of $2,650. The Jul 2020 Note as of September 30, 2021, was fully converted.
The Company issued an unsecured convertible promissory note on August 4, 2020 (the Aug 2020 Note), in the aggregate principal amount of $53,000. The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000. The August 4, 2020 Note matures on August 4, 2021. The Aug 2020 Note bears interest at 10% per annum. The Aug 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Aug 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Aug 2020 Note. The fair value of the Aug 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $31,219 during the nine months ended September 30, 2021. The Company issued shares of common stock upon conversion of principal in the amount of $53,000, plus accrued interest of $2,650. The Aug 2020 Note as of March 31, 2020, was fully converted.
The Company issued an unsecured convertible promissory note on August 17, 2020 (the “Aug 2020 Note”), in the aggregate principal amount of $53,500. The Company paid an original issue discount of $2,000 and received funds in the amount of $51,500. The Aug 2020 Note matures on August 17, 2021. The Aug 2020 Note bears interest at 10% per annum. The Aug 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date. The parties agree that if the shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Aug 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Aug 2020 Note. The fair value of the Aug 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. During the period the Company issued shares of common stock upon conversion of principal in the amount of $53,500, plus accrued interest of $5,350. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $33,566 during the nine months ended September 30, 2021. The Aug 2020 Note as of September 30, 2021, was fully converted.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
The Company issued an unsecured convertible promissory note on September 14, 2020 (the Sep 2020 Note), in the aggregate principal amount of $53,000. The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000. The September 14, 2020 Note matures on September 14, 2021. The Sep 2020 Note bears interest at 10% per annum. The Sep 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Sep 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Sep 2020 Note. The fair value of the Sep 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $37,318 during the nine months ended September 30, 2021. The Company issued shares of common stock upon conversion of principal in the amount of $53,000, plus accrued interest of $2,650. The Sep 2020 Note as of September 30, 2021, was fully converted.
The Company issued an unsecured convertible promissory note on November 2, 2020 (the Nov 2020 Note), in the aggregate principal amount of $53,000. The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000. The November 2, 2020 Note matures on November 2, 2021. The Nov 2020 Note bears interest at 10% per annum. The Nov 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Nov 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Nov 2020 Note. The fair value of the Nov 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $44,433 during the September 30, 2021. The Note was paid off in cash for principal and interest. Company issued The Nov 2020 Note as of September 30, 2021, was fully converted.
The Company issued an unsecured convertible promissory note on December 2, 2020 (the Dec 2020 Note), in the aggregate principal amount of $53,000. The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000. The December 2, 2020 Note matures on December 2, 2021. The Dec 2020 Note bears interest at 10% per annum. The Dec 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Dec 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Dec 2020 Note. The fair value of the Dec 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $3,416 during the September 30, 2021. The Note was paid off in cash for principal and interest. The Dec 2020 Note as of September 30, 2021, was fully converted.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
The Company issued an unsecured convertible promissory note on January 4, 2021 (the Jan 4, 2021 Note), in the aggregate principal amount of $53,500. The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000. The January 4, 2021 Note matures on March 4, 2021. The Jan 2021 Note bears interest at 10% per annum. The Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Jan 4 2021 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jan 4 2021 Note. The fair value of the Jan 4 2021 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $53,500 during the nine months ended September 30, 2021. The Note was paid off in cash for principal and interest. The Jan 4 2021 Note as of September 30, 2021, was fully converted.
The Company issued an unsecured convertible promissory note on January 14, 2021 (the Jan 14 2021 Note), in the aggregate principal amount of $53,500. The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000. The Jan 14 2021 Note matures on January 14, 2021. The Jan 14 2021 Note bears interest at 10% per annum. The Jan 14 2021 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Jan 14 2021 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jan 14 2021 Note. The fair value of the Jan 14 2021 Note has been determined by using the Binomial lattice formula from the effective date of the notes. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $53,500 during the September 30, 2021. The Note was paid off in cash for principal and interest. The Jan 14 2021 Note as of September 30, 2021, was fully converted.
During the nine months ended September 30, 2021, the Company exchanged convertible notes in the amount of $2,462,060 in principal, plus accrued interest of $1,023,253 for shares of Series C Preferred Shares.
In addition, the Company repaid convertible notes in the amount of $203,000 in principal, plus accrued interest of $52,780.
As of September 30, 2021, the Company had no outstanding convertible promissory notes.
We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable, so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically per the stock price fluctuations. |
DERIVATIVE LIABILITIES |
9 Months Ended | ||||
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Sep. 30, 2021 | |||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
| DERIVATIVE LIABILITIES |
We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable, so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically per the stock price fluctuations.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
The convertible notes issued and described in Note 5 do not have fixed settlement provisions because their conversion prices are not fixed. The conversion feature has been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.
During the nine months ended September 30, 2021, as a result of the convertible notes (“Notes”) issued that were accounted for as derivative liabilities, we determined that the fair value of the conversion feature of the convertible notes at issuance was $180,004, based upon a Binomial-Model calculation. We recorded the full value of the derivative as a liability at issuance with an offset to valuation discount, which will be amortized over the life of the Notes.
During the nine months ended September 30, 2021, the Company converted $184,124 in principal of convertible notes, plus accrued interest of $20,851, and other fees of $1,000. The convertible notes were valued using the binomial lattice valuation model showing an increase in fair value of the derivatives issued by $638,936 and the loss on the change in derivatives by $29,966,083. As of September 30, 2021, all derivatives were fully converted or paid off.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry-forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry-forwards may be limited as to use in future years. |
RELATED PARTY TRANSACTION |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2021 | |||
| Related Party Transactions [Abstract] | |||
| RELATED PARTY TRANSACTION |
On January 14, 2021, the Company issued shares of Series B Preferred Stock to David Lee. As of September 30, 2021, there were Series B Preferred Stock outstanding. The total purchase price is $ for shares of Series B Preferred Stock. The Series B Preferred stock were redeemed by the Company on January 29, 2021. As of September 30, 2021, there were shares of Series B Preferred Stock outstanding.
On April 14, 2021, the Company issued shares of Series D Preferred Stock to David Lee. The total purchase price is $ for shares of Series D Preferred Stock. The Series D Preferred stock were redeemed by the Company on May 29, 2021. As of September 30, 2021, there were shares of Series D Preferred Stock outstanding. |
SECURITIES PURCHASE AGREEMENT |
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| Securities Purchase Agreement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SECURITIES PURCHASE AGREEMENT |
On January 27, 2021, the Company entered into a securities purchase agreement with an investor to sell through a private placement an aggregate of shares of common stock and separate pre-funded warrants to purchase up to shares of common stock, plus warrants to purchase up to 83,333,334 at an exercise price of $ per share. In addition, the combined purchase price of $0.06 per one (1) share of common stock and associated warrant had a purchase price of $0.0599 per one (1) pre-funded and associated warrant for aggregate gross proceeds of $4,996,866 ( assuming full exercise of the pre-funded warrants) for gross proceeds to the Company of approximately $5,000,000. After closing cost, the Company received net funds of $4,406,217, plus pre-funded proceeds of $3,133 for total cash received of $4,409,350.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
In connection with the closing, the Company issued an additional 6,250,000 shares of warrants to purchase common stock with an exercise price of $ and a termination date of July 27, 2026.
On April 4, 2021, the Company entered into a securities purchase agreement with an investor to sell through a direct registered offering an aggregate of shares of common stock and separate pre-funded warrants to purchase up to shares of common stock, plus warrants to purchase up to 125,000,000 at an exercise price of $ per shares. In addition, the combined purchase price of $0.04 per one (1) share of common stock and associated warrant had a purchase price of $0.0399 per one (1) pre-funded and associated warrant for aggregate gross proceeds of $4,994,000 ( assuming full exercise of the pre-funded warrants) for gross proceeds to the Company of approximately $5,000,000. After closing cost, the Company received net funds of $4,369,350, plus pre-funded proceeds of $6,000 for total cash received of $4,375,350.
In connection with the closing, the Company issued an additional 9,375,000 shares of warrants to purchase common stock with an exercise price of $ and a termination date of April 4, 2026.
The weighted average remaining contractual life of the warrants outstanding as of September 30, 2021 was as follows:
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended | ||
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Sep. 30, 2021 | |||
| Commitments and Contingencies Disclosure [Abstract] | |||
| COMMITMENTS AND CONTINGENCIES |
The Company rents office space on a yearly basis with a monthly rent payment in the amount of $550.
In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position or results of operations.
As of September 30, 2021, there were no legal proceedings against the Company. |
SUBSEQUENT EVENT |
9 Months Ended | ||
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Sep. 30, 2021 | |||
| Subsequent Events [Abstract] | |||
| SUBSEQUENT EVENT |
Management has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has determined that there are no subsequent events to report. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue Recognition | Revenue Recognition
The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. The Company adopted Accounting Standards Codification (“ASC”) 606, whereby revenue will be recognized as performance obligations are satisfied and customers obtain control of goods or services. However, in the event of a loss on a sale is foreseen, the Company will recognize the loss as it is determined. To date, the Company has not had significant revenues and is in the development stage.
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| Cash and Cash Equivalent | Cash and Cash Equivalent
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
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| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, derivative liabilities and the fair value of stock options. Actual results could differ from those estimates.
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| Property and Equipment | Property and Equipment
Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives:
Depreciation expense for the nine months ended September 30, 2021 and 2020 was $1,007 and $1,343, respectively.
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| Intangible Assets | Intangible Assets
The Company has patent applications to protect the inventions and processes behind its proprietary bio-based back-sheet, a protective covering for the back of photovoltaic solar modules traditionally made from petroleum-based film. Intangible assets that have finite useful lives continue to be amortized over their useful lives.
Amortization expense for the nine months ended September 30, 2021 and the year ended December 31, 2020 was $2,267 and $3,022, respectively.
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| Stock-Based Compensation |
The Company measures the cost of employee services received in exchange for an equity award based on the grant-date fair value of the award. All grants under our stock-based compensation programs are accounted for at fair value and that cost is recognized over the period during which an employee, consultant, or director are required to provide service in exchange for the award (the vesting period). Compensation expense for options granted to employees and non-employees is determined in accordance with the standard as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Compensation expense for awards granted is re-measured each period.
On March 24, 2015 and September 2, 2015, the Company granted stock options to its employees and stock options to its directors for services.
On February 18, 2021, the Company granted stock options to its employees for services at an exercise price of $. On September 29, 2021, the Company amended the exercise price to $ per share. Half of the options vest immediately, and the remaining half of the option to purchase shares of the Company’s common stock shall become exercisable in equal amounts over a twenty-four () month period during the term of the optionee’s employment, with the first installment of shares vesting on March 18, 2021. The options are exercisable in equal amounts over a thirty-six () month period during the term of the optionee’s employment, with the first installment of shares vesting on March 18, 2021.
(FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
Stock-Based Compensation (Continued)
Determining the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based payment and stock price volatility. The Company used Black Scholes to value its stock option awards which incorporated the Company’s stock price, volatility, U.S. risk-free rate, dividend rate, and estimated life. The stock options terminate seven (7) years from the date of grant or upon termination of employment. As of September 30, 2021, stock options were outstanding.
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| Research and Development | Research and Development
Research and development costs are expensed as incurred. Total research and development costs were $ 1,005,588 and $118,582 for the nine months ended September 30, 2021 and 2020, respectively.
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| Net Earnings (Loss) per Share Calculations |
Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of stock options and stock-based awards (Note 4), plus the assumed conversion of convertible debt (Note 5).
The Company has included shares issuable from convertible debt of $107,000 and stock options for the nine months ended September 30, 2021, because their impact on the income per share is dilutive.
For the nine months ended September 30, 2020, the Company’s diluted loss per share is the same as the basic loss per share, and the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. The Company has excluded stock options, and the shares issuable from convertible debt of $2,739,790, because their impact was anti-dilutive.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments
Fair Value of Financial Instruments requires disclosure of the fair value information, whether recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2021, the amounts reported for cash, inventory, prepaid expenses, accounts payable, and accrued expenses, approximate the fair value because of their short maturities.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
Fair Value of Financial Instruments (Continued)
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows as of September 30, 2021:
The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:
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| Accounting for Derivatives | Accounting for Derivatives
The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average series Binomial lattice formula pricing models to value the derivative instruments at inception and on subsequent valuation dates.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.
NEWHYDROGEN, INC. (FORMERLY BIOSOLAR, INC.) NOTES TO CONDENSED FINANCIAL STATEMENTS – UNAUDITED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
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| Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements
In May 2021, the FASB issued an amendment to accounting standards ASU 2021-04, (Subtopic 470-50) – Debt Modifications and Extinguishments”, which requires that an entity apply the new guidance to a modification or an exchange of a freestanding equity-classified written call option that is a part of or directly related to a modification or an exchange of an existing debt. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for all entities. The Company has evaluated the impact of the adoption of ASU 2021-04, which has no effect on the Company’s financial statements.
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives:
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| SCHEDULE OF INTANGIBLE ASSETS AMORTIZED OVER THEIR USEFUL LIVES |
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| SCHEDULE OF NET EARNINGS PER SHARE |
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| SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS | We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows as of September 30, 2021:
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| SCHEDULE OF RECONCILIATION OF DERIVATIVE LIABILITY FOR LEVEL 3 INPUTS | The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:
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CAPITAL STOCK (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||
| SCHEDULE OF EXTINGUISHMENT OF DEBT |
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STOCK OPTIONS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF STOCK OPTIONS |
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| SCHEDULE OF WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF OPTIONS OUTSTANDING |
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SECURITIES PURCHASE AGREEMENT (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities Purchase Agreement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF WARRANTS ACITIVITY |
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| SCHEDULE OF WARRANTS OUTSTANDING | The weighted average remaining contractual life of the warrants outstanding as of September 30, 2021 was as follows:
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SCHEDULE OF PROPERTY AND EQUIPMENT (Details) |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Computer Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, useful lives | 5 years |
| Machinery and Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, useful lives | 10 years |
SCHEDULE OF INTANGIBLE ASSETS AMORTIZED OVER THEIR USEFUL LIVES (Details) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
| Accounting Policies [Abstract] | ||
| Patents | $ 45,336 | $ 45,336 |
| Less accumulated amortization | $ (17,379) | (15,112) |
| Intangible assets, useful lives | 15 years | |
| Intangible assets | $ 27,957 | $ 30,224 |
SCHEDULE OF NET EARNINGS PER SHARE (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Accounting Policies [Abstract] | ||||
| Income (Loss) to common shareholders (Numerator) | $ 44,159,210 | $ (16,993,385) | ||
| Basic weighted average number of common shares outstanding (Denominator) | 708,648,225 | 283,566,685 | 307,746,182 | 237,924,548 |
| Diluted weighted average number of common shares outstanding (Denominator) | 708,648,225 | 283,566,685 | 773,696,182 | 237,924,548 |
SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS (Details) |
Sep. 30, 2021
USD ($)
|
|---|---|
| Defined Benefit Plan Disclosure [Line Items] | |
| Assets | |
| Derivative Liability at fair value | |
| Fair Value, Inputs, Level 1 [Member] | |
| Defined Benefit Plan Disclosure [Line Items] | |
| Assets | |
| Derivative Liability at fair value | |
| Fair Value, Inputs, Level 2 [Member] | |
| Defined Benefit Plan Disclosure [Line Items] | |
| Assets | |
| Derivative Liability at fair value | |
| Fair Value, Inputs, Level 3 [Member] | |
| Defined Benefit Plan Disclosure [Line Items] | |
| Assets | |
| Derivative Liability at fair value |
SCHEDULE OF RECONCILIATION OF DERIVATIVE LIABILITY FOR LEVEL 3 INPUTS (Details) |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
USD ($)
| |
| Accounting Policies [Abstract] | |
| Beginning Balance | $ 148,590,100 |
| Fair value of derivative liabilities issued | 180,004 |
| Derecognition Of Derivative Liability | (178,736,187) |
| Loss on change in derivative liability | 29,966,083 |
| Ending Balance |
SCHEDULE OF EXTINGUISHMENT OF DEBT (Details) - USD ($) |
9 Months Ended | |
|---|---|---|
Mar. 26, 2021 |
Sep. 30, 2021 |
|
| Equity [Abstract] | ||
| Preferred shares issued | 34,853 | |
| Stated value of debt and interest | $ 3,485,313 | |
| Calculated fair value of preferred shares | 85,555,204 | |
| Fair value of derivative liability removed | 178,464,388 | $ 638,936 |
| Gain on settlement | $ 96,394,494 | $ 96,394,494 |
SCHEDULE OF STOCK OPTIONS (Details) - $ / shares |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Share-based Payment Arrangement [Abstract] | ||
| Number of Options, Outstanding, Beginning Balance | 15,950,000 | 15,950,000 |
| Weighted average exercise price, Outstanding, Beginning Balance | $ 0.23 | $ 0.23 |
| Number of Options, Granted | 450,000,000 | |
| Weighted average exercise price, Granted | $ 0.028 | |
| Number of Options, Exercised | ||
| Weighted average exercise price, Exercised | ||
| Number of Options, Expired | ||
| Weighted average exercise price, Expired | ||
| Number of Options, Outstanding, End Balance | 465,950,000 | 15,950,000 |
| Weighted average exercise price, Outstanding, End Balance | $ 0.035 | $ 0.23 |
| Number of Options, Exercisable, End Balance | 254,838,889 | 15,950,000 |
| Weighted average exercise price, Exercisable, End Balance | $ 0.041 | $ 0.23 |
STOCK OPTIONS (Details Narrative) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Stock options, granted | 450,000,000 | |
| Stock-based compensation expense | $ 20,126,314 | |
| Outstanding options, intrinsic value | 0 | 0 |
| Options Held [Member] | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Stock-based compensation expense | $ 17,813,834 | $ 0 |
| Share-based Payment Arrangement, Employee [Member] | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Stock options, granted | 50,000,000 | |
| Chief Executive Officer [Member] | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Stock options, granted | 400,000,000 | |
CONVERTIBLE PROMISSORY NOTES (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | 36 Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 26, 2021 |
Jan. 14, 2021 |
Jan. 04, 2021 |
Dec. 02, 2020 |
Nov. 02, 2020 |
Sep. 14, 2020 |
Aug. 17, 2020 |
Aug. 04, 2020 |
Jul. 06, 2020 |
Feb. 13, 2020 |
Aug. 08, 2019 |
May 02, 2014 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Feb. 09, 2018 |
Feb. 23, 2021 |
Dec. 31, 2020 |
Dec. 22, 2018 |
|
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 184,124 | $ 184,124 | ||||||||||||||||||
| Principal amount converted | 205,975 | $ 638,194 | ||||||||||||||||||
| Accrued interest | 20,851 | |||||||||||||||||||
| Convertible promissory notes debt discount | 0 | 0 | $ 219,850 | |||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest, shares | 34,853 | |||||||||||||||||||
| Other fees | 1,000 | |||||||||||||||||||
| Interest expense | 10,610 | $ 208,755 | $ 574,524 | $ 665,942 | ||||||||||||||||
| Series C Preferred Stock [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest, shares | 34,853 | |||||||||||||||||||
| Debt Conversion Shares Amount | 34,853 | |||||||||||||||||||
| May 2014 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 500,000 | |||||||||||||||||||
| Debt instrument maturity date | Sep. 18, 2019 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | |||||||||||||||||||
| Debt instrument conversion price description | The May 2014 Note is convertible into shares of the Company’s common stock at a conversion price of a) the lesser of $0.25 per share of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the average three (3) lowest trading prices of three (3) separate trading days recorded after the effective date, or c) the lowest effective price granted to any person or entity after the effective date to acquire common stock. If the Borrower fails to deliver shares in accordance with the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower. In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered | |||||||||||||||||||
| Principal amount converted | $ 1,560 | |||||||||||||||||||
| Accrued interest | 970 | |||||||||||||||||||
| 2015-2018 Notes [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 2,145,000 | |||||||||||||||||||
| Debt instrument maturity date | Jan. 30, 2023 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | |||||||||||||||||||
| Debt instrument conversion price description | The 2015-2018 Notes are convertible into shares of the Company’s common stock at conversion prices ranging from the a) the lesser of $0.03 to $0.25 per share of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the lowest trade price recorded since the original effective date, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Borrower fails to deliver shares in accordance within the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower. In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered | |||||||||||||||||||
| Principal amount converted | 1,960,500 | |||||||||||||||||||
| Accrued interest | 923,717 | |||||||||||||||||||
| February 18 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 500,000 | $ 500,000 | $ 70,000 | $ 430,000 | ||||||||||||||||
| Debt instrument maturity date | Feb. 18, 2023 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | 10.00% | ||||||||||||||||||
| Debt instrument conversion price description | The Feb 18 Note is convertible into shares of the Company’s common stock at conversion prices ranging from the a) the lesser of $0.03 per share of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the lowest trade price recorded since the original effective date, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Borrower fails to deliver shares in accordance with-in the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower. In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered | |||||||||||||||||||
| Principal amount converted | $ 500,000 | |||||||||||||||||||
| Accrued interest | 98,566 | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 126,134 | 126,134 | ||||||||||||||||||
| August 2019 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,500 | |||||||||||||||||||
| Debt instrument maturity date | Feb. 14, 2021 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | |||||||||||||||||||
| Debt instrument conversion price description | The August 2019 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date. The parties agree that if shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the August 2019 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the August 2019 Note. The fair value of the August 2019 Notes has been determined by using the Binomial lattice formula from the effective date of the notes | |||||||||||||||||||
| Principal amount converted | $ 40,676 | 12,824 | ||||||||||||||||||
| Accrued interest | $ 5,564 | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 2,000 | |||||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest, shares | 21,000,000 | 908,119 | ||||||||||||||||||
| Other fees | $ 3,000 | $ 1,000 | ||||||||||||||||||
| Feb 2020 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,500 | |||||||||||||||||||
| Debt instrument maturity date | Feb. 13, 2021 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | |||||||||||||||||||
| Debt instrument conversion price description | The Feb 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date. The parties agree that if the shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Feb 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Feb 2020 Note | |||||||||||||||||||
| Principal amount converted | 53,500 | |||||||||||||||||||
| Accrued interest | $ 6,578 | |||||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest, shares | 6,479,947 | |||||||||||||||||||
| Received additional amount | $ 51,500 | |||||||||||||||||||
| Interest expense | $ 8,018 | |||||||||||||||||||
| Jul 2020 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,000 | |||||||||||||||||||
| Debt instrument maturity date | Jul. 06, 2021 | |||||||||||||||||||
| Debt instrument interest rate | 1000.00% | |||||||||||||||||||
| Debt instrument conversion price description | The Jul 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Jul 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jul 2020 Note. The fair value of the Jul 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes | |||||||||||||||||||
| Principal amount converted | 53,000 | |||||||||||||||||||
| Accrued interest | 2,650 | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 3,000 | 27,153 | $ 27,153 | |||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest, shares | 4,062,044 | |||||||||||||||||||
| Received additional amount | $ 50,000 | |||||||||||||||||||
| Aug 2020 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,000 | |||||||||||||||||||
| Debt instrument maturity date | Aug. 04, 2021 | |||||||||||||||||||
| Debt instrument interest rate | 1000.00% | |||||||||||||||||||
| Debt instrument conversion price description | The Aug 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Aug 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Aug 2020 Note. The fair value of the Aug 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes | |||||||||||||||||||
| Principal amount converted | $ 53,000 | |||||||||||||||||||
| Accrued interest | 2,650 | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 3,000 | 31,219 | $ 31,219 | |||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest, shares | 868,175 | |||||||||||||||||||
| Unsecured Convertible Promissory Note One [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,500 | |||||||||||||||||||
| Debt instrument maturity date | Aug. 17, 2021 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | |||||||||||||||||||
| Debt instrument conversion price description | The Aug 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date. The parties agree that if the shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Aug 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Aug 2020 Note. The fair value of the Aug 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes. | |||||||||||||||||||
| Principal amount converted | $ 53,500 | |||||||||||||||||||
| Accrued interest | 5,350 | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 2,000 | 33,566 | $ 33,566 | |||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest, shares | 6,440,677 | |||||||||||||||||||
| Received additional amount | $ 51,500 | |||||||||||||||||||
| Sep 2020 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,000 | |||||||||||||||||||
| Debt instrument maturity date | Sep. 14, 2021 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | |||||||||||||||||||
| Debt instrument conversion price description | The Sep 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Sep 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Sep 2020 Note. The fair value of the Sep 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes | |||||||||||||||||||
| Principal amount converted | $ 53,000 | |||||||||||||||||||
| Accrued interest | 2,650 | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 3,000 | 37,318 | $ 37,318 | |||||||||||||||||
| Issuance of common shares for converted promissory notes and accrued interest, shares | 2,100,000 | |||||||||||||||||||
| Received additional amount | $ 50,000 | |||||||||||||||||||
| Nov 2020 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,000 | |||||||||||||||||||
| Debt instrument maturity date | Nov. 02, 2021 | |||||||||||||||||||
| Debt instrument interest rate | 1000.00% | |||||||||||||||||||
| Debt instrument conversion price description | The Nov 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Nov 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Nov 2020 Note. The fair value of the Nov 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 3,000 | 44,433 | $ 44,433 | |||||||||||||||||
| Dec 2020 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,000 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | |||||||||||||||||||
| Debt instrument conversion price description | The Dec 2020 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 3,000 | 3,416 | 3,416 | |||||||||||||||||
| Jan 2021 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,500 | |||||||||||||||||||
| Debt instrument maturity date | Mar. 04, 2021 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | |||||||||||||||||||
| Debt instrument conversion price description | The Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Jan 4 2021 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jan 4 2021 Note. The fair value of the Jan 4 2021 Note has been determined by using the Binomial lattice formula from the effective date of the notes | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 3,000 | 53,500 | 53,500 | |||||||||||||||||
| Received additional amount | $ 50,000 | |||||||||||||||||||
| Jan 14, 21 Note [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Debt instrument face amount | $ 53,500 | |||||||||||||||||||
| Debt instrument maturity date | Jan. 14, 2021 | |||||||||||||||||||
| Debt instrument interest rate | 10.00% | |||||||||||||||||||
| Debt instrument conversion price description | The Jan 14 2021 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date. The parties agree that if delivery of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock. The conversion feature of the Jan 14 2021 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Jan 14 2021 Note. The fair value of the Jan 14 2021 Note has been determined by using the Binomial lattice formula from the effective date of the notes | |||||||||||||||||||
| Convertible promissory notes debt discount | $ 3,000 | $ 53,500 | 53,500 | |||||||||||||||||
| Received additional amount | $ 50,000 | |||||||||||||||||||
| Convertible Notes [Member] | ||||||||||||||||||||
| Short-term Debt [Line Items] | ||||||||||||||||||||
| Principal amount converted | 2,462,060 | |||||||||||||||||||
| Accrued interest | 1,023,253 | |||||||||||||||||||
| Paid off principal | 203,000 | |||||||||||||||||||
| Paid off interest | $ 52,780 | |||||||||||||||||||
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Mar. 26, 2021 |
|
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
| Fair value of the conversion feature | $ 180,004 | |
| Debt instrument face amount | 184,124 | |
| Accrued interest | 20,851 | |
| Other fees | 1,000 | |
| Fair value of the derivatives issued | 638,936 | $ 178,464,388 |
| Loss on the change in derivatives | $ 29,966,083 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
USD ($)
| |
| Commitments and Contingencies Disclosure [Abstract] | |
| Monthly rent payment | $ 550 |