2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

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 three and nine months ended September 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for December 31, 2025.

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.

Cash and Cash Equivalent

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Concentration Risk

Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Corporation (FDIC) limits. At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of September 30, 2026, the cash balance in excess of the FDIC limits was $51,508. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts.

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 and the fair value of stock options. Actual results could differ from those estimates.

Offering Costs

The Company pays commitment fees related to equity financing agreements (see Note 7). Commitment fees are costs directly related to an equity financing agreement and are accounted for as deferred offering costs. Deferred offering costs are initially recorded on the balance sheet and will be recognized as a reduction of additional paid-in capital on a pro-rata basis as the Company utilizes the financing facility. Should the financing facility not be utilized, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. As of September 30, 2026 and December 31, 2025 deferred offering costs totaled $16,476 and $0, respectively. During the nine months ended September 30, 2026 and 2025, $0 and $30,000 in deferred costs were amortized to additional paid-in capital, respectively.

The company also incurs finance fees each time they request a put through their equity financing agreements (see Note 7). Finance fees are accounted for as an offering cost and are recognized as a reduction to additional paid- in capital. During the nine months ended September 30, 2026 and 2025 clearing fees totaled $7,776 and $23,582, respectively.

Property and Equipment

Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives:

   SCHEDULE OF PROPERTY AND EQUIPMENT

Depreciation expense for the nine months ended September 30, 2026 and 2025 was $195 and $195, respectively. Depreciation expense for the three months ended September 30, 2026 and 2025 was $65 and $65, respectively.

Intangible Assets

The Company has patent applications to protect the inventions and processes behind its proprietary thermochemical water splitting technology and 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.

   SCHEDULE OF INTANGIBLE ASSETS AMORTIZED OVER THEIR USEFUL LIVES

   SCHEDULE OF PATENT AMORTIZATION

Amortization expense for the nine months ended September 30, 2026 and 2025 was $2,267 and $2,267, respectively. Amortization expense for the three months ended September 30, 2026 and 2025 was $756 and $756, respectively.

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).

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 a binomial lattice valuation model to value its stock option awards which incorporated the Company’s stock price, volatility, U.S. risk-free rate, dividend rate, and estimated life.

Research and Development

Research and development costs are expensed as incurred. Total research and development costs were $1,033,604 and $354,074 for the nine months ended September 30, 2026 and 2025, respectively and $359,217 and $104,689 for the three months ended September 30, 2026 and 2025, respectively.

Advertising and Marketing

The Company expenses the cost of advertising and promotional materials when incurred. The advertising and marketing costs were $276,901 and $296,034 for the nine months ended September 30, 2026 and 2025, respectively and $73,454 and $95,463 for the three months ended September 30, 2026 and 2025, respectively.

Segment Reporting

NewHydrogen, Inc. operates as a single operating segment, focusing on developing clean energy technology.

The accounting policies of the operating segment are the same as those described in the summary of significant accounting policies. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer and Acting Chief Financial Officer. The CODM assesses performance for the segment and decides how to allocate resources based on net income (loss) that is reported on the income statement. The measure of segment assets is reported on the balance sheet as total assets.

As the Company did not generate revenues in the current period, the CODM assessed Company performance through the achievement of target identification goals. In addition to the Company’s Statement of Operations, the CODM regularly works to develop budgeted and forecasted expense information which is used to determine the Company’s liquidity needs and cash allocation.

Net Earnings (Loss) per Share Calculations

We follow ASC Subtopic 260-10, Earnings per Share, which specifies the computation, presentation, and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Diluted income (loss) per share reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.

Due to the net loss for the three and nine months ended September 30, 2026 and 2025, basic and diluted income per share were the same, as all securities had an anti-dilutive effect. The following table presents potentially dilutive securities that were not included in the computation of diluted net income per share for the three months ended September 30, 2026 and 2025, as their inclusion would be anti-dilutive.

SCHEDULE OF NET EARNINGS PER SHARE 

The following table presents potentially dilutive securities that were not included in the computation of diluted net income per share for the nine months ended September 30, 2026 and 2025, as their inclusion would be 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, 2026, the amounts reported for cash, 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:

We measure certain financial instruments at fair value on a recurring basis. As of September 30, 2026, there were no financial instruments to report.

Recently Issued Accounting Pronouncements

The Company considers all new pronouncements and management has determined that there have been no recently adopted or issued accounting standards that had or will have a material impact on its financial statements.