Financial Analysis

10. COMMITMENTS AND CONTINGENCIES Effective October 1, 2025, the Company extended its research agreement with the University of Iowa through September 30, 2026. As consideration under the research agreement, the University of Iowa will receive a maximum of $300,000 from the Company in four equal installments of $75,000. The agreement can be terminated by either party upon sixty (60) days prior written notice to the other. As of June 30, 2026, there is a balance due of $150,000 per the agreement. Effective August 4, 2025, the Company extended its research agreement with the University of Michigan through September 30, 2026. As consideration under the research agreement, the University of Michigan will receive a maximum of $101,888 from the Company. In the event of early termination by the Company, the Company will pay all costs accrued by the University as of the date of termination, including non-cancellable obligations. As of June 30, 2026, we owed the University of Michigan $22,419 under the agreement. Effective June 1, 2025, the Company entered into a research agreement with the University of Texas at Austin through June 30, 2026. As consideration under the research agreement, the University of Texas at Austin will receive a maximum of $429,930 from the Company. In the event of early termination by the Company, the Company will pay all costs accrued by the University as of the date of termination, including non-cancellable obligations. As of June 30, 2026, we owed the Univ …

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7. STOCK OPTIONS AND WARRANTS Options Transactions involving our options are summarized as follows: Year Ended June 30, 2026 Weighted Average Weighted Grant-Date Number of Average Per Share Options Exercise Price Fair Value Options outstanding at June 30, 2025 435,894,499 $ 0.013 $ 0.012 Granted 45,000,000 $ 0.022 $ 0.014 Canceled/Expired (3,000,000 ) $ 0.016 $ 0.013 Exercised - $ 0.000 $ 0.000 Options outstanding at June 30, 2026 477,894,499 $ 0.014 $ 0.012 Year Ended June 30, 2025 Weighted Average Weighted Grant-Date Number of Average Per Share Options Exercise Price Fair Value Options outstanding at June 30, 2024 266,894,499 $ 0.011 $ 0.011 Granted 275,000,000 $ 0.017 $ 0.013 Canceled/Expired (102,666,667 ) $ 0.016 $ 0.013 Exercised (3,333,333 ) $ 0.016 $ 0.013 Options outstanding at June 30, 2025 435,894,499 $ 0.013 $ 0.012 Details of our options outstanding as of June 30, 2026, is as follows: Options Exercisable Weighted Average Exercise Price of Options Exercisable Weighted Average Contractual Life of Options Exercisable (Years) Weighted Average Contractual Life of Options Outstanding (Years) 342,894,499 0.012 3.87 3.95 Details of our options outstanding as of June 30, 2025, is as follows: Options Exercisable Weighted Average Exercise Price of Options Exercisable Weighted Average Contractual Life of Options Exercisable (Years) Weighted Average Contractual Life of Options Outstanding (Years) 259,894,499 0.011 1.31 3.87 Grant date fair value of the stock options was calcu …

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12. DEFERRED TAX BENEFIT The Company files income tax returns in the U.S. Federal jurisdiction, and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2022. Deferred income taxes have been provided by temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. To the extent allowed by GAAP, we provide valuation allowances against the deferred tax assets for amount when the realization is uncertain. Included in the balance at June 30, 2026 and 2024, are no tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. The Companys policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the year ended June 30, 2026 and 2025, the Company did not recognize interest or penalties. At June 30, 2026, the Company had net operating loss carry-forward of approximately $14,525,770, which expires in future years. No tax benefit has been re …

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12. OPERATING LEASE In May 2026, the Company entered into a twenty-four month operating lease, which provides for approximately 2,255 square feet of rentable area for lab and office space, that commenced on June 1, 2026. The lease requires monthly payments of $2,630.83 per month plus $11.82 per square foot as a pro-rata share of maintenance expenses, insurance, and real estate taxes for the property. The Company or landlord may terminate the lease at the expiration date or by giving the other party written notice. In accordance with ASC 842 a right-of-use asset and lease liability was recorded for $106,023 at commencement. Operating lease expense was $4,852 for the year ended June 30, 2026. Operating cash flows during the year ended June 30, 2026 were $4,852. As of June 30, 2026, the weighted average remaining lease term was 1.84 years. At June 30, 2026 At June 30, 2025 Operating leases Remaining right-of-use assets $ 102,014 $ - Short-term operating lease liabilities $ 58,224 $ - Long-term operating lease liabilities $ 43,790 $ - Total operating lease liabilities $ 102,014 $ - Maturities of the Companys undiscounted lease liabilities are as follows: Year Ending Operating Leases 2026 (remaining) $ 29,112 2027 58,224 2028 29,112 Total lease payments 116,448 Less: Imputed interest/present value discount (14,434 ) Present value of lease liabilities $ 102,014 …

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Recently Adopted Accounting Pronouncements Management believes that no recently issued accounting standards, which are not yet effective, would have a material impact on the accompanying unaudited financial statements as of June 30, 2026, if adopted at this time.

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13. RELATED PARTY Shareholders Loan During the period ended December 31, 2022, the Company entered into a $211,750 loan with the Companys CEO for the repayment of accrued salary expense. The loan bore interest of five percent (5%) per year and was to be repaid with monthly payments of $9,290, including interest and principal over a two-year period. As of June 30, 2026 and June 30, 2025, the principal balance remaining on the loan was $0 and $0, respectively and interest paid during the year ended June 30, 2026 and 2025 was $0 and $620, respectively. Other Related Party Activity See Note 8 for related party transactions with respect to TECO 2030 A.S.A. and Newco. …

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation This summary of significant accounting policies of SunHydrogen, Inc. is presented to assist in understanding the Companys financial statements. The financial statements and notes are representations of the Companys management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principals generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. The accompanying consolidated financial statements include the accounts of its 100% owned subsidiaries, SunHydrogen GmbH and SunHydrogen Japan GK. All significant intercompany transactions and balances have been eliminated upon consolidation. Foreign Currency Translation and Transaction The Companys functional currency was the United States dollar. SunHydrogen GmbH maintains its accounting records in its local currency, the Euro and SunHydrogen Japan GK maintains its accounting records in its local currency, the Yen. Foreign exchange gains and losses on the settlement of foreign currency transactions are included in general and administration expenses. Except for translations of intercompany balances, all translations of monetary balances to the functional currency at the year-end exchange rate are included in the foreign exchange expense. The translations of intercompany balances to the functional currency at the year-end exchange rate are …

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5. COMMON STOCK Year Ended June 30, 2026 During the year ended June 30, 2026, the Company issued 58,119,322 shares of common stock for cash proceeds of $1,168,953 and the Company issued 252,631,579 shares of common stock, upon conversion of 2,400 shares of preferred stock with a stated value of $240,000 at a conversion price of $0.00095. Year Ended June 30, 2025 On November 11, 2022, the Company entered into a purchase agreement with an investor for the sale of up to $45,000,000 of shares of common stock. For the year ended June 30, 2025, the Company issued 118,513,734 shares of common stock for $2,250,000 under the purchase agreement at prices of $0.0156 - $0.02024, pursuant to purchase notices received from the investor. The finance cost of $48,075 was deducted from the gross proceeds, leaving net proceeds of $2,201,925. On November 22, 2024, the Company issued 231,578,947 shares of common stock, upon conversion of 2,200 shares of preferred stock with a stated value of $220,000 at a conversion price of $0.00095.

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14. SUBSEQUENT EVENTS Management evaluated subsequent events as of the date of the financial statements pursuant to ASC TOPIC 855 and notes the following subsequent events: On July 14, 2026, the Company entered into a cost-share agreement with CTF Solar GmbH for manufacturing costs associated with 120 prototype PV modules for EUR 45,119, which was approximately $51,525 on that date. On September 23, 2026, the Company and Honda R&D Co., Ltd. extended their joint development agreement to March 31, 2028. Honda has served as our housing unit and balance of system partner and has performed third-party validation testing of our hydrogen modules.

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