NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021 AND 2020 (UNAUDITED)
1. ORGANIZATION AND LINE OF BUSINESS
Vision
Hydrogen Corporation (the “Company”) was incorporated in the state of Nevada on August 17, 2015 as H/Cell Energy Corporation
and is based in Jersey City, New Jersey. The Company changed its name to Vision Hydrogen Corporation in October 2020.
During
the year ended December 31, 2020, the Company took significant steps to transition its hydrogen energy business to focus on hydrogen
production on a scaled production plant model. During the period, the Company disposed of its interests in both PVBJ Inc. (“PVBJ”) and The Pride Group
(QLD) Pty Ltd, an Australian company (“Pride”) (See Note 12 “Discontinued Operations”) in order to facilitate
this transition. As part of the disposition the Company provided certain post-closing support to both PVBJ and Pride through Q3 2020. On
August 12, 2020, pursuant to a Seed Capital Subscription Agreement, the Company made an equity investment into VoltH2 Holdings AG (“VoltH2”),
a Swiss corporation developing scalable green hydrogen production projects primarily in Europe. VoltH2 is currently planning to develop
a 25MW green hydrogen production site near Vlissingen, Netherlands. The investment was for a total purchase price $175,000, representing
a 16% equity interest in VoltH2.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission (“SEC”)
for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by
U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company’s
annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments,
which are necessary for a fair statement of the Company’s financial information. These interim results are not necessarily indicative
of the results to be expected for the year ending December 31, 2021 or any other interim period or for any other future year. These unaudited
condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements
and the notes thereto for the year ended December 31, 2020, included in the Company’s 2020 Annual Report on Form 10-K filed with
the SEC. The balance sheet as of December 30, 2020 has been derived from audited financial statements at that date but does not include
all of the information required by U.S. GAAP for complete financial statements.
On
October 6, 2020, the Company effectuated a one-for-twenty (1:20) reverse split of the issued and outstanding shares of common stock of
the Company without changing the par value of the stock and increased its authorized shares of common stock from 25,000,000 to 100,000,000
which is presented on the current period financial statements. All per share amounts have been adjusted for the impact of the reverse
stock split.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The Company bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under
different assumptions or conditions.
Reclassification
Certain
prior period amounts have been reclassified to conform to current period presentation specifically as it relates to the reclassification
of assets, liabilities, operating results, cash flows and the accumulated comprehensive loss as a result of the Company’s disposition
of interests in our PVBJ and Pride subsidiaries.
VISION
HYDROGEN CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021 AND 2020 (UNAUDITED)
Accounts
Receivable
Accounts
receivable are recorded when invoices are issued and are presented in the balance sheet net of the allowance for doubtful accounts. The
allowance for doubtful accounts is estimated based on the Company’s historical losses, the existing economic conditions in the
construction industry, and the financial stability of its customers. Accounts are written off as uncollectible after collection efforts
have failed. In addition, the Company does not generally charge interest on past-due accounts or require collateral. As of September
30, 2021 and December 31, 2020, there was no allowance for doubtful accounts required.
Goodwill
and Finite-Lived Intangible Assets
Goodwill
represents the excess of the aggregate of the following (1) consideration transferred, (2) the fair value of any non-controlling interest
in the acquiree, and (3) if the business combination is achieved in stages, the acquisition-date fair value of our previously held equity
interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
Identifiable intangible assets consist primarily of customer lists and relationships, non-compete agreements and technology-based intangibles
and other contractual agreements. The Company amortizes finite lived identifiable intangible assets over five years, on a straight-line
basis to their estimated residual values and periodically reviews them for impairment. Total goodwill and identifiable intangible assets
comprised 0% of the Company’s consolidated total assets as of September 30, 2021 and December 31, 2020.
The Company uses the acquisition method
of accounting for all business combinations and does not amortize goodwill. Goodwill is tested for possible impairment annually during
the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired.
The Company has the option to perform a qualitative assessment to determine if an impairment is more
likely than not to have occurred. In the qualitative assessment, the Company must evaluate the totality of qualitative factors, including
any recent fair value measurements, that impact whether an indefinite-lived intangible asset other than goodwill has a carrying amount
that more likely than not exceeds its fair value. The Company must proceed to conducting a quantitative analysis if the Company (i) determines
that such an impairment is more likely than not to exist, or (ii) foregoes the qualitative assessment entirely. Under the quantitative
assessment, the impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the
estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its
fair value, then an impairment loss is recognized in an amount equal to that excess. The Company generally determines the fair
value of an indefinite-lived intangible asset using an income approach, such as the relief from royalty method, in instances when it
does not perform the qualitative assessment of the intangible asset.
As
of September 30, 2021, the Company had no goodwill and has included the write-off of goodwill in the calculation of the loss on disposal
of PVBJ for the three and nine months ended September 30, 2020. (See Note 12 “Discontinued Operations”).
Comprehensive
Loss
Comprehensive
loss consists of two components, net loss and other comprehensive loss. The Company’s other comprehensive loss is comprised of
foreign currency translation adjustments. The balance of accumulated other comprehensive loss is zero as of September 30, 2021 and December
31, 2020 due to the disposition of Pride on May 18, 2020. Comprehensive loss is included in discontinued operations on the statement
of operations for the three and nine months ended September 30, 2020.
The
functional and reporting currency of the Company is the United States Dollar (“U.S. Dollar”).
For
the three and nine months ended September 30, 2021, the Company recorded no other comprehensive loss. The balance of comprehensive loss
and accumulated comprehensive loss has been reclassified to discontinued operations as of December 31, 2020 due to the disposition of
Pride on May 18, 2020. For the three and nine months ended September 30, 2020, the Company recorded other comprehensive loss of $13,100,
which has been included in net loss from discontinued operations on the condensed consolidated statement of operations.
VISION
HYDROGEN CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021 AND 2020 (UNAUDITED)
Investments
The
Company follows Accounting Standards Codification (“ASC”) 321-10-35-2 “Equity Securities without Readily Determinable
Fair Values”, to account for its ownership interest in non-controlled entities. Under this guidance, equity securities that do
not have readily determinable fair values (i.e., non-marketable equity securities and do not qualify for the practical expedient to determine
the fair value at net asset value (“NAV”)) are not required to be accounted for under the equity method and carried at cost
(i.e., cost method investments) less accumulated impairment. Investments of this nature are initially recorded at cost. Income is recorded
for dividends received that are distributed from net accumulated earnings of the non-controlled entity subsequent to the date of investment.
Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded
as reductions in the cost of the investment. Investments are written down only when there is clear evidence that a decline in value that
is other than temporary has occurred.
Cash
and Cash Equivalents
Cash
and cash equivalents include cash in bank and money market funds as well as other highly liquid investments with an original maturity
of three months or less. The Company had no cash equivalents as of September 30, 2021 or December 31, 2020.
Stock-Based
Compensation
The
Company recognizes expense for its stock-based compensation based on the fair value of the awards at the time they are granted. We estimate
the value of stock option awards on the date of grant using the Black-Scholes model. The determination of the fair value of stock-based
payment awards on the date of grant is affected by our stock price as well as assumptions regarding a number of complex and subjective
variables. These variables include our expected stock price volatility over the term of the awards, expected term, risk-free interest
rate and expected dividends. The impact of forfeitures are recorded in the period in which they occur. There were no outstanding awards
as of September 30, 2021.
Fair
Value of Financial Instruments
The
carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the
balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets,
financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with
other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable
the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information
pertinent to fair value has been disclosed. The Company classifies and discloses assets and liabilities carried at fair value in one
of the following three categories:
|
☐
|
Level
1—quoted prices in active markets for identical assets and liabilities;
|
|
|
|
|
☐
|
Level
2—observable market-based inputs or unobservable inputs that are corroborated by market data; and
|
|
|
|
|
☐
|
Level
3—significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own
assumptions.
|
There
were no fair value measurements of financial instruments as of September 30, 2021 or December 31, 2020.
Net
Income (Loss) Per Common Share
The
Company computes basic net income (loss) per share by dividing net income (loss) per share available to common stockholders by the weighted
average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings
per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities
into common stock using the “if converted” method as applicable. The computation of diluted loss per share excludes dilutive
securities because their inclusion would be anti-dilutive. There were no potentially dilutive securities as of September 30, 2021.
VISION
HYDROGEN CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021 AND 2020 (UNAUDITED)
3. RELATED PARTY TRANSACTIONS
The
Company has entered into agreements to indemnify its directors and executive officers, in addition to the indemnification provided for
in the Company’s articles of incorporation and bylaws. These agreements, among other things, provide for indemnification of the
Company’s directors and executive officers for certain expenses (including attorneys’ fees), judgments, fines and settlement
amounts incurred by any such person in any action or proceeding, including any action by or in the right of the Company, arising out
of such person’s services as a director or executive officer of the Company, any subsidiary of the Company or any other company
or enterprise to which the person provided services at the Company’s request. The Company believes that these provisions and agreements
are necessary to attract and retain qualified persons as directors and executive officers.
There
was $33,750 and $101,250 of management fees expensed for the three and nine months ended September 30, 2021 and $33,750 for the three
months ended September 30, 2020 and $63,750 for the nine months ended September 30, 2020 to Turquino Equity LLC (“Turquino”),
a former significant shareholder owned by our Chief Executive Officer and Chief Financial Officer. Services provided were continuing
the management positions of the Company.
On
January 2, 2018 and February 8, 2019, the Company and Andrew Hidalgo (“Hidalgo”), completed a Convertible Debenture Agreement
whereby Hidalgo, the Company’s Chief Executive Officer, lent us an aggregate of $275,000 (the “Hidalgo Notes”). On
January 2, 2018 and February 8, 2019, the Company and Michael Doyle (“Doyle”), a then director of the Company, completed
a Convertible Debenture Agreement whereby Doyle lent the Company an aggregate of $275,000 (the “Doyle Notes”).
The
Company recorded a $395,000 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life
of the note using the effective interest method, or until the note is converted or repaid. On January 3, 2020, the Company entered into
an amendment agreement (the “Amendment”) with two of its directors (the “Holders”) to convertible notes issued
by the Company to the Holders in January 2018 (the “2018 Notes”). Pursuant to the Amendment, which was effective as of January
2, 2020, the maturity date of the 2018 Notes was amended from January 2, 2020 to February 8, 2021, and the Holders waived any defaults
that might have occurred prior to the date of the Amendment.
As
a result of these changes, management determined debt extinguishment which was applied and the new notes were recorded at their fair
value resulting in a discount of approximately $40,000 and a gain on extinguishment of this amount recorded to additional paid in capital.
May
18, 2020 Purchase and Sale Agreement
On
May 18, 2020, the Company’s Board of Directors authorized the Company, in accordance with Nevada Statute 78.565, to complete and
execute the May 18, 2020 Purchase and Sale Agreement between the Company and Turquino providing for the Company’s sale of 100%
of Pride’s outstanding stock Pride to Turquino in return for Turquino’s assumption of the Hidalgo Notes and the Doyle Notes
and the debt obligations and accrued interest related thereto (the “Agreement”). In conjunction therewith, Hidalgo and Doyle
assigned the Notes to Turquino, at which time Turquino became responsible for the debt obligations upon the Notes. The Company has no
further note obligations to Hidalgo or Doyle, and it reduced its debt by approximately $600,000 or 65% of the corporate debt obligations.
Pursuant to Nevada Statute Section 78.565, approval of the Agreement only required the approval of the board of directors and did not
require shareholder approval. The Company obtained a valuation of the fair market value of Pride from an independent third party which
valued Pride at $425,000. The Agreement provides that the Parties mutually release one another and discharge and release the other party
(and their respective current and former officers, directors, employees, shareholders, note holders, attorneys, assigns, agents, representatives,
predecessors and successors in interest), from any and all claims, demands, obligations, or causes of action. Hidalgo, our Chief Executive
Officer, and a managing member of Turquino, is a related party in connection with the Exchange Agreement, the Notes, and the Agreement.
On
June 19, 2020, the Company entered into a Promissory Note with Judd Brammah, a director of the Company, for a principal amount up to
$230,332 bearing interest with interest at 6% per annum. The entire principal and interest of the Promissory Note are due on June 19,
2021. The proceeds from the note was used to pay accrued expenses of the Company.
Effective
July 17, 2020, Judd Brammah lent the Company $50,000 at 6% per annum payable on the due date, June 19, 2021.
VISION
HYDROGEN CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021 AND 2020 (UNAUDITED)
Effective
July 22, 2020, Judd Brammah lent the Company $299,900 at 6% per annum payable on the due date of June 19, 2021. The Company accrued and
expensed $16,515 in interest on these notes in 2020 and no interest in 2021.
On
January 29, 2021, Judd Brammah converted his note and interest payable totaling $596,747, together with an additional cash payment of
$3,253 for a total of $600,000 into 3,000,000 shares of the Company pursuant to the Company public offering of common stock on the Form
S-1 registration statement.
4. SIGNIFICANT CONCENTRATIONS OF CREDIT RISK
Cash
is maintained at an authorized deposit taking institution (bank) incorporated in the United States and is insured by the U.S.
Federal Deposit Insurance Corporation up to $250,000.
As of September 30, 2021 the balance was $140,054
over this threshold and as of December 31, 2020 the balance was fully covered.
5. MAJOR CUSTOMERS
Due
to the sale of Pride and PVBJ, the Company had no major customers for the three and nine months ended September 30, 2021 or September
30, 2020.
6. LEASES
Operating
Leases
The
Company maintains its principal office at 95 Christopher Columbus Drive, 16th Floor Jersey City, NJ 07302. The Company moved
in October 2020 and its office is in a shared office space provider, at a cost of $114 per month and currently the lease is month-to-month.
As
of September 30, 2021 and December 31, 2020, the Company had no operating leases except as noted above.
Finance
Leases
As
of September 30, 2021 and December 31, 2020, the Company had no finance leases.
7. STOCK OPTIONS AWARDS AND GRANTS
On
May 12, 2021 directors Michael Doyle and Charles Benton were each awarded 2,500 shares each.
As
of September 30, 2021, there was no unrecognized compensation expense as all option holders had their options forfeited through the sale
of Pride and PVBJ.
8. SEGMENT INFORMATION
Prior
to the disposition of Pride and PVBJ, the Company’s business was organized into two reportable segments: renewable systems integration
revenue and non-renewable systems integration revenue. Due to the sale of both Pride and PVBJ, the Company operates in only one reportable
segment. Please refer to Note 12 and Management’s Discussion and Analysis for further detail.
9. NOTES PAYABLE
QRIDA
Loan
On
May 6, 2020, the Company entered into a loan for $160,410 with the Queensland Rural and Industry Development Authority. (“QRIDA”)
The interest rate was 2.5% with a term of ten years and the first year being interest free. Through the disposition of Pride, the Company
no longer has this loan as a liability on its balance sheet as of September 30, 2021.
VISION
HYDROGEN CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021 AND 2020 (UNAUDITED)
2020
Convertible Note Financing
On
January 15, 2020, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with FirstFire, pursuant
to which the Company issued a $85,250 principal amount convertible note (the “2020 Note”) for gross proceeds of $77,500,
with an original discount issuance of $7,750. The transaction closed on January 16, 2020. The Company
incurred $2,500 of legal fees for this transaction.
On
June 18, 2020, the Company and FirstFire entered into a settlement agreement whereby both the 2019 Note and 2020 Note were cancelled
and all remaining amounts due under the above notes were settled for $90,000. The Company has no further obligations with respect to
any of the notes under terms of the First Fire Note settlement.
The
Company incurred $2,289 of interest expense in 2019 and $7,438 in 2020 which both amounts were accrued on the balance sheet. There was
an early termination penalty of $19,953. The unamortized discount of the notes was $171,203 on the cancellation date of May 20, 2020.
The
Notes were cancelled, and all remaining contractual obligations there under were extinguished under terms of a Settlement and Release
Agreement which resulted in a gain on the statement of operations of $81,203 for the year ended December 31, 2020.
Paycheck
Protection Program Loan
On
May 5, 2020, the Company entered into a term note with Comerica Bank, with a principal amount of $20,000 pursuant to the Paycheck Protection
Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The
PPP Loan is evidenced by a promissory note. The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first six months
of interest deferred. Beginning in November 2022, the Company will make 18 equal monthly payments of principal and interest with the
final payment due in April 2022. The PPP Term Note may be accelerated upon the occurrence of an event of default.
The
PPP Term Note is unsecured and guaranteed by the United States Small Business Administration. On January 21, 2021, the PPP Term Note
was fully forgiven and as a result, the Company recorded a gain on the forgiveness in accordance with ASC-470.
Director
Related Party Note
On
June 19, 2020, the Company entered into a promissory note with Judd Brammah, a director of the Company, for the principal amount up to
$230,332 bearing interest at 6% per annum. The entire principal and interest upon the promissory note are due on June 19, 2021.
Effective
July 17, 2020, Judd Brammah lent the Company $50,000 at 6% per annum payable on the due date, June 19, 2021. The Company incurred interest
expense of $628 for year ended December 31, 2020. Effective July 22, 2020, Judd Brammah lent the Company $299,900 at 6% per annum payable
on the due date of June 19, 2021.
On
January 29, 2021, Judd Brammah converted his note and interest payable totaling $596,747, together with an additional cash payment of
$3,253 for a total of $600,000 into 3,000,000 shares of the Company pursuant to the Company public offering of common stock on the Form
S-1 registration statement.
10. CAPITAL RAISE
On
July 9, 2019, the Company entered into an equity financing agreement with GHS Investments LLC (the “GHS Financing Agreement”);
in connection therewith, the Company filed a Form S-1 Registration Statement (the “S-1”) registering up to 1,750 Common Stock
Shares, which S-1 was declared effective on July 31, 2019. On May 21, 2020, the offering was terminated.
In
October 2020, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission, whereby the Company
registered 12,500,000 shares of its common stock for sale as a company offering. The registration statement was declared effective in
October 2020. The Company sold a total of 12,500,000 shares of Common Stock in January 2021 for total consideration of $2,500,000. The
consideration consisted of $596,747 of debt converted to equity (see Note 9) and gross cash proceeds of $1,903,253. The Company incurred
$70,000 of legal fees and a $51,000 consulting fee in connection with the capital raise.
VISION
HYDROGEN CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021 AND 2020 (UNAUDITED)
11. RECENT ACCOUNTING PRONOUNCEMENTS
In January 2017, the FASB issued ASU
2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates the requirement to
calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment
charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair
value (i.e., measure the charge based on the current Step 1). The updated guidance, which became effective for fiscal years beginning
after December 15, 2019, did not have a material impact on the Company’s consolidated financial statements.
In
January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures
(Topic 323), and Derivative and Hedging (Topic 815), which clarifies the interaction of rules for equity securities, the equity method
of accounting, and forward contracts and purchase options on certain types of securities. The guidance clarifies how to account for the
transition into and out of the equity method of accounting when considering observable transactions under the measurement alternative.
The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those
annual periods, with early adoption permitted. The Company has adopted this standard and there is no impact on the current financial
statements.
In
August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts
in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.
This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity,
and also improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after
December 15, 2021 and interim periods within those annual periods and early adoption is permitted. The Company has not yet adopted this
standard and there is no impact expected on the current financial statements.
12. DISCONTINUED OPERATIONS
Sale
of PVBJ
On
April 21, 2020, the Company’s Board of Directors authorized its resale of PVBJ pursuant to the following terms: (a) the outstanding
$221,800 earn-out liability that was used as consideration towards the purchase of PVBJ; (b) Paul Benis agreed to apply the remaining
salary due to him, as prorated from the Closing Date to the expiration date of the Employment Agreement (January 31, 2021), to the purchase
of PVBJ by Benis Holdings LLC as additional consideration thereof and (c) as additional consideration for the purchase of PVBJ by Benis
Holdings LLC, PVBJ shall continue to be responsible for the line of credit (see below).
Sale
of Pride
On
May 18, 2020, the Company executed a Purchase and Sale Agreement with Turquino providing for its sale of 100% of Pride’s outstanding
stock Pride to Turquino in return for Turquino’s assumption of the Hidalgo Notes and the Doyle Notes and the debt obligations and
accrued interest related thereto (the “Agreement”). In conjunction therewith, Hidalgo and Doyle assigned the Notes to Turquino,
at which time Turquino became responsible for the debt obligations upon the Notes. The Company has no further note obligations to Hidalgo
or Doyle, and it reduced its debt by approximately $600,000 or 65% of the corporate debt obligations.
There
were no discontinued operations for the three months ended September 30, 2021 or 2020 as well as the nine months ended September 30,
2021. The results of discontinued operations for nine months ended September 30, 2020 are as follows:
SCHEDULE OF DISCONTINUED OPERATIONS
|
|
Nine months ended September 30, 2020
|
|
PVBJ
|
|
|
|
|
Revenue
|
|
|
|
|
Sales
|
|
$
|
722,786
|
|
Total revenue
|
|
|
722,786
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
|
|
Direct costs
|
|
|
560,328
|
|
Total cost of goods sold
|
|
$
|
560,328
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
230,807
|
|
|
|
|
|
|
Net income (loss) for period
|
|
$
|
(68,349
|
)
|
VISION
HYDROGEN CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021 AND 2020 (UNAUDITED)
|
|
Nine months ended September 30, 2020
|
|
Pride
|
|
|
|
|
Revenue
|
|
|
|
|
Sales
|
|
$
|
1,474,460
|
|
Total revenue
|
|
|
1,474,460
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
|
|
Direct costs
|
|
|
1,121,121
|
|
Total cost of goods sold
|
|
$
|
1,121,121
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
440,396
|
|
|
|
|
|
|
Net income (loss) for period
|
|
$
|
(87,057
|
)
|
Gain (loss) from discontinued operations:
SCHEDULE OF
GAIN/LOSS ON DISCONTINUED OPERATIONS
Results from discontinued operations
|
|
$
|
(155,406
|
)
|
Loss on disposal of assets
|
|
|
(789,425
|
)
|
Loss from discontinued operations
|
|
$
|
(944,831
|
)
|
13. INVESTMENTS
On
August 12, 2020, pursuant to a Seed Capital Subscription Agreement, the Company made an equity investment of 175,000
shares into VoltH2 a Swiss corporation developing
scalable green hydrogen production projects primarily in Europe. VoltH2 is currently developing a 25MW green hydrogen production site
near Vlissingen, Netherlands. The investment was for a total purchase price of $175,000,
representing a 16%
equity interest in VoltH2. Due to the lack of readily determinable fair value of VoltH2, and because this investment does not qualify
for the practical expedient to determine fair value using NAV, this investment has been recorded at cost. The Company will continually
evaluate the treatment of this investment each reporting period to determine if a fair value can be determined, and if so will reassess
the accounting for this investment. The Company considers whether the fair value of its investment has declined below its carrying
value whenever adverse events or changes in circumstances indicate that the recorded value may not be recoverable. The Company reviews
its investments for other-than-temporary impairment whenever events or changes in business circumstances indicate that the
carrying value of the investment may not be fully recoverable. Investments identified as having an indication of impairment are subject
to further analysis to determine if the impairment is other-than-temporary and this analysis requires estimating the fair value
of the investment. The determination of fair value of the investment involves considering factors such as current economic and market
conditions, the operating performance of the entities including current earnings trends and forecasted cash flows, and other company
and industry specific information. If the Company considers any decline to be other than temporary (based on various
factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated
fair value.
14. NOTES RECEIVABLE
Effective
June 7, 2021, we loaned VoltH2 $100,000, payable on September 1, 2021. The loan is non-interest bearing and evidenced by a promissory
note issued to us by VoltH2 (the “Note”). VoltH2 may prepay the Note in whole or in part at any time or from time to time
without penalty or premium. We currently own approximately 16% of VoltH2. Our Board of Directors approved the foregoing transaction.
Effective
June 28, 2021, we loaned VoltH2 $500,000, payable on September 1, 2021. The loan is non-interest bearing and evidenced by a promissory
note issued to us by VoltH2 (the “Note”). VoltH2 may prepay the Note in whole or in part at any time or from time to time
without penalty or premium. We currently own approximately 16% of VoltH2. Our Board of Directors approved the foregoing transaction.
Effective
August 25, 2021, we loaned VoltH2 $500,000, payable on November 1, 2021. The loan is non-interest bearing and evidenced by a promissory
note issued to us by VoltH2 (the “Note”). VoltH2 may prepay the Note in whole or in part at any time or from time to time
without penalty or premium. Our Board of Directors approved the foregoing transaction.
Effective
August 25, 2021, we entered into an amendment (the “June 7 Amendment”) to a promissory note issued to VoltH2 on June 7, 2021
(The “June 7 Note”), pursuant to which the Payment Date (as defined in the June 7 Note) was changed from September 1, 2021
to November 1, 2021. Our Board of Directors approved the foregoing amendment.
Effective
August 25, 2021, we entered into an amendment (the “June 28 Amendment”) to a promissory note issued to VoltH2 on June 28,
2021 (The “June 28 Note”), pursuant to which the Payment Date (as defined in the June 28 Note) was changed from September
1, 2021 to November 1, 2021. Our Board of Directors approved the foregoing amendment.