SunHydrogen (HYSR) Risk Analysis
Risk Overview Q1, 2025
Source: the company's latest filing for the period ended Mar 31, 2025, filed May 09, 2025
Risk Change Over Time
- Natural and Human Disruptions - Risk 1The COVID-19 pandemic may negatively affect our operations.
The COVID-19 pandemic has had widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. The continuing impacts of COVID-19 are highly unpredictable and could be significant, and may have an adverse effect on our business, operations and our future financial performance. The impact of the pandemic on our business, operations and future financial performance could include, but is not limited to, that: - We may experience delays in our product development;- The rapid and broad-based shift to a remote working environment creates inherent productivity, connectivity, and oversight challenges; and - Volatility in the equity markets could affect the value of our equity to shareholders and have an impact on our ability to raise capital.
Risk Highlights Q1, 2025
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 18
- Share Price & Shareholder Rights - Risk 1Additional stock offerings in the future may dilute then-existing shareholders' percentage ownership of the Company.
Given our plans and expectations that we will need additional capital, we anticipate that we will need to issue additional shares of common stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, convertible notes, stock options or warrants. We anticipate that our issuance of additional common stock or securities convertible into or exercisable into common stock in the future will dilute the percentage ownership of then current stockholders.
- Share Price & Shareholder Rights - Risk 2Our articles of incorporation allow for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock.
Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors has the authority to issue up to 5,000,000 shares of our preferred stock without further stockholder approval. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders of preferred stock the right to our assets upon liquidation, or the right to receive dividend payments before dividends are distributed to the holders of common stock. In addition, our board of directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.
- Share Price & Shareholder Rights - Risk 3Our common stock is subject to the SEC's penny stock rules.
Unless our common stock is listed on a national securities exchange, including the Nasdaq Capital Market, or we have stockholders' equity of $5,000,000 or less and our common stock has a market price per share of less than $5.00, transactions in our common stock will be subject to the SEC's "penny stock" rules. If our common stock remains subject to the "penny stock" rules promulgated under the Securities Exchange Act of 1934, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our securities may be adversely affected. In accordance with these rules, broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document that describes the risks associated with such stocks, the broker-dealer's duties in selling the stock, the customer's rights and remedies and certain market and other information. Furthermore, the broker-dealer must make a suitability determination approving the customer for low-priced stock transactions based on the customer's financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing to the customer, obtain specific written consent from the customer, and provide monthly account statements to the customer. The effect of these restrictions will probably decrease the willingness of broker-dealers to make a market in our common stock, decrease liquidity of our common stock and increase transaction costs for sales and purchases of our common stock as compared to other securities. Our management is aware of the abuses that have occurred historically in the penny stock market. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
- Share Price & Shareholder Rights - Risk 4We anticipate that our issuance of common stock upon conversion of Series C Preferred Shares will result in dilution to our stockholders.
As of June 30, 2024, we have outstanding shares of redeemable Series C Preferred Stock with an aggregate stated value of $885,100 that are convertible into common stock at a fixed conversion price of $0.00095 (see Note 3 to the financial statements included in this report). We anticipate that our issuance of common stock upon conversion of outstanding preferred shares will result in dilution to holders of our common stock, which may have a negative effect on the price of our common stock. In addition, as of June 30, 2024, we have outstanding warrants to purchase 78,095,239 shares of common stock and options to purchase 266,894,499 shares of common stock, and our issuance of shares of common stock upon exercise of outstanding warrants or options may result in additional dilution to our stockholders.
- Share Price & Shareholder Rights - Risk 5Our common stock could be subject to extreme volatility.
The trading price of our common stock may be affected by a number of factors, including events described in the risk factors set forth in this report, as well as our operating results, financial condition and other events or factors. In addition to the uncertainties relating to future operating performance and the profitability of operations, factors such as variations in interim financial results or various, as yet unpredictable, factors, many of which are beyond our control, may have a negative effect on the market price of our common stock. In recent years, broad stock market indices, in general, and smaller capitalization companies, in particular, have experienced substantial price fluctuations. In a volatile market, we may experience wide fluctuations in the market price of our common stock and wide bid-ask spreads. These fluctuations may have a negative effect on the market price of our common stock. In addition, the securities market has, from time to time, experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
- Share Price & Shareholder Rights - Risk 6There is a limited trading market for our common stock.
Our common stock is not listed on any national securities exchange. Accordingly, investors may find it more difficult to buy and sell our shares than if our common stock was traded on an exchange. Although our common stock is quoted on the OTCQB, it is an unorganized, inter-dealer, over-the-counter market which provides significantly less liquidity than the Nasdaq Capital Market or other national securities exchange. Further, there is limited trading in our common stock. These factors may have an adverse impact on the trading and price of our common stock.
- Share Price & Shareholder Rights - Risk 7Our limited operating history does not afford investors a sufficient history on which to base an investment decision.
We were formed in February 2009 and are currently developing a new technology that has not yet gained market acceptance. There can be no assurance that we will ever operate profitably or that we will have adequate working capital to meet our obligations as they become due. Investors must consider the risks and difficulties frequently encountered by early-stage companies, particularly in rapidly evolving markets. Such risks include the following: - competition; - need for acceptance of products; - ability to continue to develop and extend brand identity; - ability to anticipate and adapt to a competitive market; - ability to effectively manage rapidly expanding operations; - amount and timing of operating costs and capital expenditures relating to expansion of our business, operations, and infrastructure; and - dependence upon key personnel. We cannot be certain that our business strategy will be successful or that we will successfully address these risks. In the event that we do not successfully address these risks, our business, prospects, financial condition, and results of operations could be materially and adversely affected, and we may have to curtail our business.
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