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NewHydrogen, Inc. - Quarter Report: 2009 July (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

(Mark One)

 

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009

 

o TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO __________

 

COMMISSION FILE NUMBER: 333-138910

 

BIOSOLAR, INC.

(Name of registrant in its charter)

 

Nevada

 

20-4754291  

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

27936 Lost Canyon Road, Suite 202 , Santa Clarita, CA 91387

(Address of principal executive offices) (Zip Code)

 

Issuer’s telephone Number: (661) 251-0001

 

WITH COPIES TO:

 

Gregory Sichenzia, Esq.

Marcelle S. Balcombe, Esq.

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32 nd Flr.

New York, New York 10006

(212) 930-9700

 

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x No  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

Smaller reporting company x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o No  x

 

The number of shares of registrant’s common stock outstanding, as of July27, 2009 was 133,366,777.

 

 

BIOSLAR, INC. INDEX

 

 

PART I: FINANCIAL INFORMATION    

 

ITEM 1:

FINANCIAL STATEMENTS (Unaudited)

3

 

Balance Sheets

4

 

Statements of Operations

5

 

Statement of Shareholders' Equity

6

 

Statements of Cash Flows

7

 

Notes to the Financial Statements

8

ITEM 2:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

10

ITEM 3 :

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

13

ITEM 4:

CONTROLS AND PROCEDURES

13

PART II: OTHER INFORMATION    

 

Item 1

LEGAL PROCEEDINGS

13

ITEM 1A :

RISK FACTORS

13

ITEM 2

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

13

ITEM 3

DEFAULTS UPON SENIOR SECURITIES

14

ITEM 4

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

14

ITEM 5

OTHER INFORMATION

14

ITEM 6:

EXHIBITS

14

SIGNATURES

 

15

 

 

PART I  – FINANCIAL INFORMATION  

 

ITEM 1. FINANCIAL STATEMENTS

 

BIOSOLAR, INC.

(A Development Stage Company)

FINANCIAL STATEMENTS

June 30, 2009

 

BIOSOLAR, INC.
(A Development Stage Company)
BALANCE SHEETS

 

 

 

 

(Unaudited)
June 30, 2009

 

December 31, 2008

 

 

 

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

Cash & cash equivalents

$                  122,863

 

$                    33,391

Certificates of deposits

146,373

 

372,112

Inventory, raw materials

20,338

 

24,770

Prepaid expenses

15,901

 

8,738

 

 

 

 

Total Current Assets

305,475

 

439,011

 

 

 

 

PROPERTY & EQUIPMENT

 

 

 

Machinery and equipment

49,130

 

49,130

Computer

1,978

 

1,978

Total Property and Equipment

51,108

 

51,108

 

 

 

 

Less: accumulated depreciation

(7,217)

 

(4,647)

 

 

 

 

Net Property and Equipment

43,891

 

46,461

 

 

 

 

OTHER ASSETS

 

 

 

Patents, net of amortization of $40

82,895

 

74,972

Deposit

770

 

770

 

 

 

 

TOTAL OTHER ASSETS

83,665

 

75,742

 

 

 

 

TOTAL ASSETS

$                  433,031

 

$                  561,214

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS'  EQUITY

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

Accounts payable

$                              -

 

$                    20,800

Credit card payable

3,006

 

-

 

 

 

 

TOTAL CURRENT LIABILITIES

3,006

 

20,800

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

Common stock, $0.0001 par value;

 

 

 

500,000,000 authorized common shares

 

 

 

133,366,777 shares issued and outstanding

13,336

 

13,336

Additional paid in capital

2,596,791

 

2,596,791

Common stock subscription payable

203,000

 

-

Deficit accumulated during the development stage

(2,383,102)

 

(2,069,713)

 

 

 

 

TOTAL SHAREHOLDERS' EQUITY

430,025

 

540,414

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$                  433,031

 

$                  561,214

 

 

 

 

 

The accompanying notes are an integral part of these financial statements

 

2

BIOSOLAR, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From Inception

 

 

 

 

 

 

 

 

 

 

April 24, 2006

 

 

For the Three Months Ended

 

For the Six Months Ended

 

through

 

 

June 30, 2009

 

June 30, 2008

 

June 30, 2009

 

June 30, 2008

 

June 30, 2009

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

$                               -

 

$                              -

 

$                              -

 

$                              -

 

$                             -

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

27,760

 

110,333

 

55,333

 

158,511

 

667,292

General and administrative expenses

 

113,395

 

125,600

 

231,572

 

250,945

 

1,364,801

Research and development

 

10,940

 

28,523

 

25,641

 

62,151

 

426,305

Depreciation and amortization

 

1,285

 

1,174

 

2,570

 

1,269

 

7,257

 

 

 

 

 

 

 

 

 

 

 

TOTAL OPERATING EXPENSES

 

153,380

 

265,630

 

315,116

 

472,876

 

2,465,655

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS BEFORE OTHER INCOME

 

(153,380)

 

(265,630)

 

(315,116)

 

(472,876)

 

(2,465,655)

 

 

 

 

 

 

 

 

 

 

 

TOTAL OTHER INCOME

 

 

 

 

 

 

 

 

 

 

Interest income

 

1,027

 

5,411

 

2,527

 

13,803

 

84,953

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE PROVISION FOR TAXES

 

(152,353)

 

(260,219)

 

(312,589)

 

(459,073)

 

(2,380,702)

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

-

 

(800)

 

(800)

 

(800)

 

(2,400)

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$                (152,353)

 

$                (261,019)

 

$                (313,389)

 

$                (459,873)

 

$            (2,383,102)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED LOSS PER SHARE

 

$                      (0.00)

 

$                      (0.00)

 

$                      (0.00)

 

$                      (0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

133,366,777

 

131,750,733

 

133,366,777

 

131,728,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements

 

3

BIOSOLAR, INC.
(A Development Stage Company)
STATEMENTS OF SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Additional

 

 

 

during the

 

 

 

Common stock

 

Paid-in

 

Subscription

 

Development

 

 

 

Shares

 

Amount

 

Capital

 

Payable

 

Stage

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2008

133,366,777

 

$          13,336

 

$    2,596,791

 

$                  -

 

$ (2,069,713)

 

$      540,414

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subscription payable (unaudited)

-

 

-

 

-

 

203,000.00

 

-

 

203,000.00

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss for the six months ended June 30, 2009 (unaudited)

-

 

-

 

-

 

 

 

(313,389)

 

(313,389)

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2009 (unaudited)

133,366,777

 

$          13,336

 

$    2,596,791

 

$       203,000

 

$ (2,383,102)

 

$      430,025

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements

 

3

BIOSOLAR, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)

 

 

 

 

 

From Inception

 

 

 

 

 

April 24, 2006

 

For the Six Months Ended

 

through

 

June 30, 2009

 

June 30, 2008

 

June 30, 2009

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net loss

$                 (313,389)

 

$                 (459,873)

 

$                (2,383,102)

Adjustment to reconcile net loss to net cash

 

 

 

 

 

used in operating activities

 

 

 

 

 

Depreciation expense

2,570

 

1,269

 

7,257

Issuance of stock for services

-

 

-

 

237,260

Changes in Assets and Liabilities

 

 

 

 

 

(Increase) Decrease in:

 

 

 

 

 

Other receivable

-

 

(11,207)

 

-

Inventory

4,432

 

(60,078)

 

(20,338)

Prepaid expenses

(7,163)

 

25,319

 

(15,901)

Deposits

-

 

-

 

(770)

Increase (Decrease) in:

 

 

 

 

 

Accounts Payable

(20,800)

 

19,195

 

-

Accrued Expenses

-

 

(3,805)

 

-

Credit Card Payable

3,006

 

(995)

 

3,006

 

 

 

 

 

 

NET CASH USED IN OPERATING ACTIVITIES

(331,344)

 

(490,175)

 

(2,172,588)

 

 

 

 

 

 

NET CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Purchase of Equipment

-

 

(49,130)

 

(51,108)

Patent expenditures

(7,923)

 

(11,495)

 

(82,935)

Proceeds from /(investments in) Certificate of Deposits

225,739

 

187,796

 

(146,373)

 

 

 

 

 

 

NET CASH (USED)/PROVIDED BY INVESTING ACTIVITIES

217,816

 

127,171

 

(280,416)

 

 

 

 

 

 

NET CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds from common stock subcription payable

203,000

 

-

 

203,000

Proceeds from issuance of common stock

-

 

130,000

 

2,372,867

 

 

 

 

 

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

203,000

 

130,000

 

2,575,867

 

 

 

 

 

 

NET INCREASE/(DECREASE) IN CASH

89,472

 

(233,004)

 

122,863

 

 

 

 

 

 

CASH, BEGINNING OF PERIOD

33,391

 

340,484

 

-

 

 

 

 

 

 

CASH, END OF PERIOD

122,863

 

107,480

 

122,863

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 

 

 

 

 

Interest paid

$                               -

 

$                               -

 

$                                 -

Taxes paid

$                          800

 

$                          800

 

$                          2,400

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements

 

4

BIOSOLAR, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

JUNE 30, 2009

 

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 months ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. 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, 2008.

 

Going Concern

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. The Company has obtained funds from its shareholders since its inception. 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 Biosolar, 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.

 

Development Stage Activities and Operations

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.

 

 

Revenue Recognition

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.

 

Cash and Cash Equivalent  

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

 

Investments

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.

 

 

BIOSOLAR, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

JUNE 30, 2009

 

 

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

 

Loss per Share Calculations

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 six months ended June 30, 2009 as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

 

Recently Issued Accounting Pronouncements  

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165"), which establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. SFAS 165 is for interim or annual periods ending after June 15, 2009. The adoption of SFAS 165 did not have a material effect on the Company's financial statements.

 

3.

CAPITAL STOCK

 

During the six months ended June 30, 2009, the Company issued no shares of common stock.

 

During the six months ended June 30, 2009, the Company received stock subscriptions totaling $203,000 to purchase 4,060,000 shares of restricted common stock at a price of $0.05 per share. As of June 30, 2009, the Company had not issued the common stock shares related to these subscriptions. The Company has recorded the $203,000 in cash received, as a stock subscription payable in Shareholders’ Equity at June 30, 2009.

 

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, 2009, 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 EVENT

 

 

BIOSOLAR, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

JUNE 30, 2009

 

In accordance with the recently issued Statement of Financial Accounting Standards No. 165 “Subsequent Events” (SFAS 165), the company evaluated subsequent events after the balance sheet date of June 30, 2009 through July 23, 2009.

 

During the period from July 1, 2009 through July 23, 2009, the Company sold 8,690,000 restricted common shares of stock (the “Shares”) for total proceeds of $434,500 at a price of $.05 per share. As of July 23, 2009, the company had not issued the common stock shares related to these subscriptions. The Company relied on an exemption pursuant to Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended in connection with the sale of the Shares

 

 

ITEM 2:  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Special Note on Forward-Looking Statements.

 

Certain statements in “Management’s Discussion and Analysis or Plan of Operation” below, and elsewhere in this annual report, are not related to historical results, and are forward-looking statements. Forward-looking statements present our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements frequently are accompanied by such words such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms or other words and terms of similar meaning. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or timeliness of such results. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this annual report. Subsequent written and oral forward looking statements attributable to us or to persons acting in our behalf are expressly qualified in their entirety by the cautionary statements and risk factors set forth below and elsewhere in this annual report, and in other reports filed by us with the SEC.

 

You should read the following description of our financial condition and results of operations in conjunction with the financial statements and accompanying notes included in this report beginning on page F-1.

 

Overview

 

We are developing an innovative technology to produce bio-based materials from renewable plant sources that will reduce the cost per watt of Photovoltaic solar cells.  Most of the solar industry is focused on photovoltaic efficiency to reduce cost, but we are introducing a new dimension of cost reduction by replacing petroleum-based plastic solar cell components with durable bio-based components.  The process for producing electricity from sunlight is known as Photovoltaics. Photovoltaic ("PV") is the science of capturing and converting sun light into electricity.

 

We are focusing our research and product development efforts on producing bio-based components that meet the thermal and durability requirements of current solar cell manufacturing processes for conventional crystalline cell designs as well as thin film PV devices in an effort to capitalize on what we perceive as cost advantages to current petroleum based plastic solar module components.

 

We are focusing our research and product development efforts on bio-based backsheets, substrates,  superstrates, module, and panel components.

 

We were incorporated in the State of Nevada on April 24, 2006, as BioSolar Labs, Inc. Our name was changed to BioSolar, Inc. on June 8, 2006. Our principal executive offices are located at 27936 Lost Canyon Road, Suite 202, Santa Clarita, California 91387, and our telephone number is (661) 251-0001. Our fiscal year end is December 31.

 

Application of Critical Accounting Policies

 

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using the Black Scholes option pricing model. We base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.

 

 

Use of Estimates

 

In accordance with accounting principles generally accepted in the United States, management utilizes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions relate to recording net revenue, collectibility of accounts receivable, useful lives and impairment of tangible and intangible assets, accruals, income taxes, inventory realization, stock-based compensation expense and other factors. Management believes it has exercised reasonable judgment in deriving these estimates. Consequently, a change in conditions could affect these estimates.

 

Fair Value of Financial Instruments

 

Our cash, cash equivalents, investments, accounts receivable and accounts payable are stated at cost which approximates fair value due to the short-term nature of these instruments.

 

Recently Issued Accounting Pronouncements

 

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165"), which establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. SFAS 165 is for interim or annual periods ending after June 15, 2009. The adoption of SFAS 165 did not have a material effect on the Company's financial statements.

 

RESULTS OF OPERATIONS – THREE AND SIX MONTHS ENDED JUNE 30, 2009 COMPARED TO THE THREE AND SIX MONTHS ENDED JUNE 30, 2008

 

OPERATING EXPENSES

 

Selling and Marketing Expenses

 

Selling and marketing ("S&M") expenses decreased by $82,573 or 74.84%, to $27,760 for the three months ended June 30, 2009 compared to the prior period. S&M expenses decreased by $103,178 or 65.09%, to $55,333 for the six months ended June 30, 2009, compared to the prior period. S&M expenses decreased due to a decrease in consulting and marketing fees.

 

General and Administrative Expenses

 

General and administrative (“G&A”) expenses decreased by $12,205 or 9.72%, to $113,395 for the three months ended June 30, 2009, compared to the prior period. G&A expenses decreased by $19,373 or 7.72%, to $231,572 for the six months ended June 30, 2009, compared to the prior period. This decrease in G&A expenses was the result of a decrease in professional fees.

 

 

Research and Development

 

Research and Development (“R&D”) expenses decreased by $17,583 or 61.64%, to $10,940 for the three months ended June 30, 2009, compared to the prior period. R&D expenses decreased by $36,510 or 58.74%, to $25,641 for the six months ended June 30, 2009, compared to the prior period. This decrease in R&D expenses was the result of a decrease in fees paid to consultants.

 

Net Loss

 

Our Net Loss decreased by $108,666 to $152,353 for the three months ended June 30, 2009, compared to the prior period. Net loss decreased by $146,484 to $313,389 for the six months ended June 30, 2009, compared to the prior period. The decrease in Net Loss was due to a reduction of the operating expenses. Currently the Company is in its development stage and had no revenues..

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of June 30, 2009, we had $302,469 of working capital as compared to $674,847 for the prior year. This decrease of $372,378 was due primarily to use of funds for operating expenses.

 

 

During the six months ended June 30, 2009, the Company used $331,344 of cash for operating activities, as compared to $490,175 for the prior period. The decrease in the use of cash for operating activities was a result of a decrease in general and administrative expenses, and research and development.

 

Cash provided by investing activities for the six months ended June 30, 2009 was $217,816, as compared to cash used of $127,171 for the prior period. The increase of cash provided by investing activities was primarily due to proceeds from investing in certificate of deposits.

 

Cash provided from financing activities for the six months ended June 30, 2009 was $203,000, as compared to $130,000 for the prior period. Our capital needs have primarily been met from the proceeds of private placements, as we are currently in the development stage and had no revenues.

 

Our financial statements as of June 30, 2009 have been prepared under the assumption that we will continue as a going concern from inception (April 24, 2006) through June 30, 2009. Our independent registered public accounting firm has issued their report dated March 16, 2009 that included an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern ultimately is dependent on our ability to generate a profit which is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, to achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

PLAN OF OPERATION AND FINANCING NEEDS

 

We are engaged in the development of an innovative technology to produce bio-based materials from renewable plant sources that will reduce the cost per watt of Photovoltaic solar cells.  We plan to develop our products and thereafter focus our efforts on establishing markets in related sectors by 2010.

 

Our plan of operation within the next twelve months is to utilize our cash balances to commercialize our bio-based backsheet component (BioBacksheetTM) to replace the petroleum based backsheet in crystalline photovoltaic modules. In addition, we intend to further enhance test programs to determine the physical properties and characteristics that will be most suitable for the further development of biobased solar cell components, and build solar cells, as we attempt to validate the commercial viability of our product. We believe that our current cash and investment balances will be sufficient to support development activity and general and administrative expenses for the next six months. Management estimates that it will require additional cash resources during 2009, based upon its current operating plan and condition. We will be investigating additional financing alternatives, including equity and/or debt financing. There is no assurance that capital in any form would be available to us, and if available, on terms and conditions that are acceptable. If we are unable to obtain sufficient funds during the next fifteen months, we may be forced to reduce the size of our organization, which could have a material adverse impact on, or cause us to curtail and/or cease, the development of our products.

 

Off-Balance Sheet Arrangements

 

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  

 

n/a

 

ITEM 4T. CONTROLS AND PROCEDURES

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (1) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure; and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. There was no change to our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

 

None.

 

ITEM 1A. RISK FACTORS  

 

There are no material changes from the risk factors previously disclosed in the Registrant’s Form 10-K filed on March 27, 2009.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the period from April 2009 through May 12, 2009, the Company sold 4,060,000 shares of common stock (the “Shares”) for total proceeds of $203,000 at a price of $.05 per share. The Company relied on an exemption pursuant to Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended in connection with the sale of the Shares.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

None

 

ITEM 6. EXHIBITS  

 

Exhibit No.

 

Description

 

 

 

3.1

 

Articles of Incorporation of Biosolar Labs, Inc. filed with the Nevada Secretary of State on April 24, 2006. ( Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the SEC on November 22, 2006)

 

 

 

3.2

 

Articles of Amendment of Articles of Incorporation of Biosolar Labs, Inc. filed with the Nevada Secretary of State on May 25, 2006.( Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the SEC on November 22, 2006)

 

 

 

3.3

 

Articles of Amendment of Articles of Incorporation of Biosolar Labs, Inc. filed with the Nevada Secretary of State on June 8, 2006. ( Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the SEC on November 22, 2006)

 

 

 

3.4

 

Bylaws of Biosolar, Inc.( Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the SEC on November 22, 2006)

   

MATERIAL CONTRACTS

10.1

 

Form of Subscription Agreement dated as of May 26, 2006. ( Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the SEC on November 22, 2006)

 

 

 

10.2

 

Form of Subscription Agreement dated as of July 17, 2006. ( Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the SEC on November 22, 2006)

 

 

 

10.3

 

Form of Subscription Agreement dated as of October 11, 2006. ( Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the SEC on November 22, 2006)

 

 

 

14.1

 

Code of Ethics ( Incorporated by reference to the Company’s annual report on Form 10-K filed with the SEC on March 25, 2008)

 

 

 

31.1

 

Certification by Chief Executive Officer and Acting Chief Financial Officer pursuant to Sarbanes-Oxley Section 302 (filed herewith).

 

 

 

32.1

 

Certification by Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (filed herewith).

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on July 28, 2009.

 

 

BIOSOLAR

 

 

By:

/s/ David Lee  

 

Chief Executive Officer (Principal Executive

Officer ) and Acting Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)