HNO International, Inc. Annual Report: An Investor's Guide

This summary delves into HNO International, Inc.'s (Hydrogen and Oxygen) annual report, providing a clear understanding of the company's operations, progress, and implications for investors. We aim to clarify key information and highlight what the filing reveals.

1. Business Overview

HNO International, Inc. develops green hydrogen-based clean energy solutions, aiming to help businesses and communities reduce their carbon footprint. As engineers and innovators, they design, integrate, and develop products that utilize green hydrogen.

Their target markets include:

• Zero-emission vehicles and equipment: This includes hydrogen fuel cell cars, forklifts, heavy-duty trucks, and airport ground support equipment.
• Hydrogen gas markets: They supply hydrogen to industries such as ammonia, fertilizer, steel, mining, electronics, and semiconductors.
• Emissions reduction for existing engines: They offer solutions to make current gasoline and diesel engines cleaner and more efficient.

During the fiscal year ending October 31, 2025, HNO primarily focused on product development and preparing for future commercialization. The company actively develops and offers four main products:

• HyGrid™ System: A self-sufficient, solar and hydrogen-powered micro-grid for industrial or residential areas. HNO plans to build these systems (estimated $2.5 million each), retain ownership, and charge customers for power through service agreements.
• Compact Hydrogen Refueling Station (CHRS): Designed for affordable and rapid deployment, producing 50-200 kg of hydrogen daily for vehicles. Each station costs $375,000, with deliveries targeted for early 2026.
• Scalable Hydrogen Energy Platform (SHEP): This modular system produces, stores, and dispenses green hydrogen from water (100 kg to over 2,000 kg daily).
• Hydrogen Carbon Cleaner (HCC): This device cleans carbon deposits from internal combustion engines.

A significant project during the year was the hydrogen production facility in Katy, Texas, designed to produce up to 1,000 kg of hydrogen per day. HNO secured approximately $250,000 in 2025 to complete this project, anticipating full commercial production in early 2026.

The company operates within a market experiencing growing demand for green hydrogen, driven by global decarbonization efforts. Rising interest in micro-grids and increasing adoption of hydrogen fuel cell electric vehicles (FCEVs) also creates a need for hydrogen production and refueling infrastructure. Substantial investments from governments and private entities into hydrogen infrastructure further support this ecosystem. Regulatory support is expected to be a key driver for market growth.

2. Financial Performance

The financial information provided is primarily forward-looking:

• Future Revenue Potential: Once operational in early 2026, the Katy, Texas facility is projected to generate approximately $2,555,000 in revenue over its first 12 months. This estimate assumes production of 1,000 kg of hydrogen per day, sold at an average of $7.00 per kg.
• Market Value: As of April 30, 2025, common stock held by non-affiliates had a market value of approximately $24,419,192.

3. Risk Factors

Investors should consider the following key risks:

• Operational Delays: Further delays in the Katy, Texas facility's full operation could significantly impact revenue projections and investor confidence. As of October 31, 2025, the facility was not yet occupied or producing hydrogen due to ongoing landlord construction and a brief interruption.
• Funding for Growth and Operations: The company's stated "lack of capital" for expansion projects, such as the planned Lancaster, California facility, indicates a potential inability to fund future growth. An implicit risk also exists regarding securing sufficient capital for ongoing operations and working capital needs.
• Market Adoption and Infrastructure Challenges: Despite growing interest, the hydrogen market faces significant hurdles, including high infrastructure costs, slow build-out of refueling networks, and competition from other clean energy technologies. Slower-than-expected market adoption could depress demand for HNO's products.
• Reliance on Projections: The company's future outlook and revenue estimates (e.g., $2.55 million from Katy) are forward-looking and inherently speculative. There is no guarantee these projections will materialize.
• Intense Competition: The clean energy and hydrogen sectors are highly competitive, with established players and new entrants. HNO's ability to differentiate itself and capture market share is crucial.
• Technological Risks: As an innovator in a rapidly evolving field, HNO faces risks related to technological obsolescence, the need for continuous R&D, and successfully scaling new technologies.
• Regulatory and Permitting Risks: While regulatory support is anticipated, changes in environmental regulations, safety standards, or permitting processes could impact project timelines and costs.

4. Management Discussion & Analysis (MD&A) Highlights

Results of Operations: During the fiscal year ending October 31, 2025, HNO International, Inc. remained primarily in a product development and pre-commercialization phase. No sales or operational revenue were reported for this period. Major achievements included successfully developing and "offering" four commercial products: HyGrid™, CHRS, SHEP, and HCC. The company made progress on the hydrogen production facility in Katy, Texas, securing approximately $250,000 in funding to complete the project. Operational delays at the Katy facility, caused by ongoing landlord construction and a brief interruption, prevented it from becoming fully operational and revenue-generating by year-end.

Liquidity and Capital Resources: The company explicitly notes a "lack of capital" as a significant challenge, particularly for constructing a second planned hydrogen production site in Lancaster, California. This highlights a heavy reliance on external funding for growth initiatives. The need to secure $250,000 in 2025 to complete the Katy facility further underscores these capital constraints. Executing its growth strategy heavily depends on its capacity to raise additional funds.

Known Trends and Uncertainties: The company acknowledges that the broader hydrogen market faces challenges such as high infrastructure costs, lack of economies of scale, and insufficient production facilities, which could impact market penetration. Operational delays at the Katy facility represent a known uncertainty that could affect future revenue realization. The company anticipates continued growth in the hydrogen market, driven by technological advancements, infrastructure development, and government support.

5. Financial Health

Available information suggests HNO is capital-constrained and relies on external funding for its operations and growth. The "lack of capital" for the planned Lancaster, California facility and the need to secure $250,000 to complete the Katy facility underscore this point. The company's ability to execute its growth strategy heavily depends on its capacity to raise additional funds.

6. Future Outlook

HNO presents a clear, albeit forward-looking, vision for its future, heavily centered on the Katy, Texas facility. The company anticipates full commercial hydrogen production from this facility in early 2026, projecting approximately $2.55 million in revenue over the subsequent 12 months.

HNO is also actively marketing its Compact Hydrogen Refueling Station (CHRS) for deliveries starting in early 2026, indicating another planned revenue stream.

The company remains optimistic about the broader market, expecting continued growth in hydrogen refueling stations and Fuel Cell Electric Vehicle (FCEV) adoption, driven by technological advancements, infrastructure development, and government support. This trend is expected to create a favorable environment for HNO's products. While HNO plans for a second production facility in Lancaster, California, its development currently remains on hold due to funding needs.

This future outlook largely relies on projections and the successful execution of plans still in their early stages, contingent on securing necessary capital and avoiding further operational delays.

7. Competitive Position

HNO positions itself at the "forefront of developing innovative integrated products" in the green hydrogen sector, leveraging its management team's over 14 years of expertise.

The company aims to differentiate itself through:

• Cost-effective solutions: They claim their HyGrid™ System offers a cost-effective micro-grid solution and their Compact Hydrogen Refueling Station (CHRS) is more affordable and quicker to deploy than existing options.
• Integrated approach: They provide comprehensive systems engineering design and integration, rather than just individual components.

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This summary provides a snapshot of HNO International, Inc.'s current status and future plans based on the available filing. Investors should weigh the company's innovative product development and market potential against the significant capital constraints and operational risks highlighted.