NewHydrogen, Inc. - Quarter Report: 2008 June (Form 10-Q)

 

		(Unaudited)
		06/30/08				12/31/07
ASSETS
CURRENT ASSETS
Cash & cash equivalents		$	107,480			$	340,484
Certificates of deposits			466,071				653,867
Inventory, work in progress			60,078				-
Other receivable			11,207				-
Prepaid expenses			55,013				80,332
Total Current Assets			699,849				1,074,683
PROPERTY & EQUIPMENT
Machinery and equipment			49,130				-
Computer			1,978				1,978
Less: accumulated depreciation			(2,298	)			(1,029	)
Net Property and Equipment			48,810				949
OTHER ASSETS
Patents			18,760				7,265
Deposit			770				770
TOTAL OTHER ASSETS			19,530				8,035
TOTAL ASSETS		$	768,189			$	1,083,667
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable		$	19,195			$	-
Accrued expenses			5,807				9,611
Credit card payable			-				995
TOTAL CURRENT LIABILITIES			25,002				10,606
SHAREHOLDERS' EQUITY
Common stock, $0.0001 par value;
500,000,000 authorized common shares
132,226,777 and 131,706,777 shares issued and outstanding			13,222				13,170
Additional paid in capital			2,311,905				2,181,958
Deficit accumulated during the development stage			(1,581,940	)			(1,122,067	)
TOTAL SHAREHOLDERS' EQUITY			743,187				1,073,061
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	768,189			$	1,083,667

 

 

1.     Basis of Presentation

The accompanying unaudited 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 six month period ended June 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.  For further information refer to the financial statements and footnotes thereto included in the Company's Form 10-K for the year ended December 31, 2007.

 

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business.  The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.  The Company does not generate significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion.  As discussed in Note 3, the Company has obtained funds from its shareholders since its’ inception through June 30, 2008. It is Management's plan to generate additional working capital from investors, and then continue to pursue its business plan and purposes.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

This summary of significant accounting policies of Carbon Sciences, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

 

The Company is in its initial stages of formation and has insignificant revenues. FASB #7 defines a development stage activity as one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.

 

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. To date, the Company has had no revenues and is in the development stage.

 

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

 

Certificate of Deposits with banking institutions are short-term investments with initial maturities of more than 90 days. The carrying amount of these investments is a reasonable estimate of fair value due to their short-term nature.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

The Company adopted Statement of Financial Standards (“SFAS”) No. 128 for the calculation of “Loss per Share”.  SFAS No. 128 dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the period ended June 30, 2008 as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

 

The expenses for the six months ended June 30, 2007 were reclassified to conform with the expenses for the six months ended June 30, 2008.

3.     CAPITAL STOCK

 

During the six months ended June 30, 2008, the Company issued 520,000 shares of common stock at a purchase price of $0.25 per share pursuant to a private placement made pursuant to Rule 506 of Regulation D promulgated under section 4(2) of the Securities Act of 1933, as amended.

4.     INCOME TAXES

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 2004.

 

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007.  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 amounts when the realization is uncertain.

 

Included in the balance at June 30, 2008, are no tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

 

The Company's policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

5.     SUBSEQUENT EVENTS

During July 2008, the Company issued 440,000 shares of common stock for $0.25 per share in the amount of $110,000, pursuant to a private placement made pursuant to Rule 506 of Regulation D promulgated under section 4(2) of the Securities Act of 1933, as amended.