NewHydrogen, Inc. - Quarter Report: 2010 September (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 SEPTEMBER 30, 2010
¨ 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 ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ¨ No ¨
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 ¨
|
Accelerated
filer ¨
|
|
Non-accelerated
filer ¨
|
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 ¨ No x
The
number of shares of registrant’s common stock outstanding, as of
November 4, 2010 was 153,566,777.
BIOSLAR, INC.
INDEX
|
PART
I: FINANCIAL INFORMATION
|
||
|
ITEM
1:
|
FINANCIAL
STATEMENTS (Unaudited)
|
3
|
|
Balance
Sheets
|
3
|
|
|
Statements
of Operations
|
4
|
|
|
Statement
of Shareholders' Equity
|
5
|
|
|
Statements
of Cash Flows
|
6
|
|
|
Notes
to the Financial Statements
|
7
|
|
|
ITEM
2:
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
9
|
|
ITEM
3 :
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
11
|
|
ITEM
4:
|
CONTROLS
AND PROCEDURES
|
11
|
|
PART
II: OTHER INFORMATION
|
||
|
Item
1
|
LEGAL
PROCEEDINGS
|
12
|
|
ITEM
1A :
|
RISK
FACTORS
|
12
|
|
ITEM
2
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
12
|
|
ITEM
3
|
DEFAULTS
UPON SENIOR SECURITIES
|
12
|
|
ITEM
4
|
REMOVED
AND RESERVED
|
12
|
|
ITEM
5
|
OTHER
INFORMATION
|
12
|
|
ITEM
6:
|
EXHIBITS
|
12
|
|
SIGNATURES
|
14
|
|
2
PART I
– FINANCIAL
INFORMATION
ITEM
1. FINANCIAL STATEMENTS
BIOSOLAR,
INC.
(A
Development Stage Company)
BALANCE
SHEETS
|
September 30, 2010
|
December 31, 2009
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
CURRENT
ASSETS
|
||||||||
|
Cash
& cash equivalents
|
$ | 166,847 | $ | 289,229 | ||||
|
Certificates
of deposits
|
- | 147,288 | ||||||
|
Inventory,
raw materials
|
18,704 | 17,076 | ||||||
|
Prepaid
expenses
|
40,700 | 12,416 | ||||||
|
TOTAL
CURRENT ASSETS
|
226,251 | 466,009 | ||||||
|
PROPERTY
AND EQUIPMENT
|
||||||||
|
Machinery
and equipment
|
76,281 | 74,643 | ||||||
|
Computer
|
2,927 | 1,978 | ||||||
| 79,208 | 76,621 | |||||||
|
Less
accumulated depreciation
|
(16,582 | ) | (10,638 | ) | ||||
|
NET
PROPERTY AND EQUIPMENT
|
62,626 | 65,983 | ||||||
|
OTHER
ASSETS
|
||||||||
|
Patents,
net of amortization of $40
|
120,986 | 86,334 | ||||||
|
Deposit
|
770 | 770 | ||||||
|
TOTAL
OTHER ASSETS
|
121,756 | 87,104 | ||||||
|
TOTAL
ASSETS
|
$ | 410,633 | $ | 619,096 | ||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
|
CURRENT
LIABILITIES
|
||||||||
|
Accounts
payable
|
$ | 8,385 | $ | 2,533 | ||||
|
Credit
card payable
|
87 | - | ||||||
|
Accrued
expense
|
- | 750 | ||||||
|
TOTAL
CURRENT LIABILITIES
|
8,472 | 3,283 | ||||||
|
SHAREHOLDERS'
EQUITY
|
||||||||
|
Common
stock, $0.0001 par value;
|
||||||||
|
500,000,000
authorized common shares
|
||||||||
|
153,566,777
and 147,766,777 shares issued and outstanding,
respectively
|
15,356 | 14,776 | ||||||
|
Additional
paid in capital
|
3,752,771 | 3,315,351 | ||||||
|
Deficit
accumulated during the development stage
|
(3,365,966 | ) | (2,714,314 | ) | ||||
|
TOTAL
SHAREHOLDERS' EQUITY
|
402,161 | 615,813 | ||||||
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$ | 410,633 | $ | 619,096 | ||||
3
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS
(Unaudited)
|
From Inception
|
||||||||||||||||||||
|
April 24, 2006
|
||||||||||||||||||||
|
For the Three Months Ended
|
For the Nine Months Ended
|
through
|
||||||||||||||||||
|
September 30, 2010
|
September 30, 2009
|
September 30, 2010
|
September 30, 2009
|
September 30, 2010
|
||||||||||||||||
|
REVENUE
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
|
OPERATING
EXPENSES
|
||||||||||||||||||||
|
General
and administrative expenses
|
194,302 | 149,148 | 518,368 | 436,053 | 2,842,775 | |||||||||||||||
|
Research
and development
|
35,168 | 26,001 | 126,886 | 51,641 | 590,257 | |||||||||||||||
|
Depreciation
and amortization
|
2,030 | 1,498 | 5,944 | 4,068 | 16,622 | |||||||||||||||
|
TOTAL
OPERATING EXPENSES
|
231,500 | 176,647 | 651,198 | 491,762 | 3,449,654 | |||||||||||||||
|
LOSS
FROM OPERATIONS BEFORE OTHER INCOME
|
(231,500 | ) | (176,647 | ) | (651,198 | ) | (491,762 | ) | (3,449,654 | ) | ||||||||||
|
TOTAL
OTHER INCOME/(EXPENSES)
|
||||||||||||||||||||
|
Interest
income
|
86 | 788 | 526 | 3,314 | 87,068 | |||||||||||||||
|
Penalties
|
(180 | ) | - | (180 | ) | - | (180 | ) | ||||||||||||
|
TOTAL
OTHER INCOME/(EXPENSES)
|
(94 | ) | 788 | 346 | 3,314 | 86,888 | ||||||||||||||
|
LOSS
BEFORE PROVISION FOR TAXES
|
(231,594 | ) | (175,859 | ) | (650,852 | ) | (488,448 | ) | (3,362,766 | ) | ||||||||||
|
Income
taxes
|
- | - | (800 | ) | (800 | ) | (3,200 | ) | ||||||||||||
|
NET
LOSS
|
$ | (231,594 | ) | $ | (175,859 | ) | $ | (651,652 | ) | $ | (489,248 | ) | $ | (3,365,966 | ) | |||||
|
BASIC
AND DILUTED LOSS PER SHARE
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
|
WEIGHTED-AVERAGE
COMMON SHARES OUTSTANDING BASIC AND DILUTED
|
151,284,168 | 138,375,473 | 149,452,125 | 135,048,529 | ||||||||||||||||
The
accompanying notes are an integral part of these financial
statements
4
BIOSOLAR,
INC.
(A
Development Stage Company)
STATEMENTS
OF SHAREHOLDERS’ EQUITY
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Additional
|
during the
|
|||||||||||||||||||
|
Common stock
|
Paid-in
|
Development
|
||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||
|
Balance
at December 31, 2009
|
147,766,777 | $ | 14,776 | $ | 3,315,351 | $ | (2,714,314 | ) | $ | 615,813 | ||||||||||
|
Issuance
of common shares in May 2010 for services
|
||||||||||||||||||||
|
(800,000
common shares issued at a fair value of $0.11 per share)
(unaudited)
|
800,000 | 80 | 87,920 | - | 88,000 | |||||||||||||||
|
Issuance
of common shares in May 2010 for cash
|
||||||||||||||||||||
|
(2,500,000
common shares issued at a price of $0.08 per share)
(unaudited)
|
2,500,000 | 250 | 199,750 | - | 200,000 | |||||||||||||||
|
Issuance
of common shares in September 2010 for cash
|
||||||||||||||||||||
|
(2,500,000
common shares issued at a price of $0.06 per share)
(unaudited)
|
2,500,000 | 250 | 149,750 | - | 150,000 | |||||||||||||||
|
Net
loss for the nine months ended September 30, 2010
(unaudited)
|
- | - | - | (651,652 | ) | (651,652 | ) | |||||||||||||
|
Balance
at September 30, 2010 (unaudited)
|
153,566,777 | $ | 15,356 | $ | 3,752,771 | $ | (3,365,966 | ) | $ | 402,161 | ||||||||||
The
accompanying notes are an integral part of these financial
statements
5
BIOSOLAR,
INC.
(A
Development Stage Company)
STATEMENTS
OF CASH FLOWS
(Unaudited)
|
From Inception
|
||||||||||||
|
April 24, 2006
|
||||||||||||
|
Nine Months Ended
|
through
|
|||||||||||
|
September 30, 2010
|
September 30, 2009
|
September 30, 2010
|
||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net
loss
|
$ | (651,652 | ) | $ | (489,248 | ) | $ | (3,365,966 | ) | |||
|
Adjustment
to reconcile net loss to net cash
|
||||||||||||
|
used
in operating activities
|
||||||||||||
|
Depreciation
and amortization expense
|
5,944 | 4,068 | 16,622 | |||||||||
|
Issuance
of stock for services
|
- | - | 237,260 | |||||||||
|
Changes
in Assets and Liabilities
|
||||||||||||
|
(Increase)
Decrease in:
|
||||||||||||
|
Inventory
|
(1,628 | ) | 4,432 | (18,704 | ) | |||||||
|
Prepaid
expenses
|
59,716 | (8,296 | ) | 47,300 | ||||||||
|
Deposits
|
- | - | (770 | ) | ||||||||
|
Increase
(Decrease) in:
|
- | |||||||||||
|
Accounts
payable
|
5,852 | (18,015 | ) | 8,385 | ||||||||
|
Accrued
expenses
|
(750 | ) | - | - | ||||||||
|
Credit
card payable
|
87 | 703 | 87 | |||||||||
|
NET
CASH USED IN OPERATING ACTIVITIES
|
(582,431 | ) | (506,356 | ) | (3,075,786 | ) | ||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
|
Purchase
of equipment
|
(2,587 | ) | (25,513 | ) | (79,208 | ) | ||||||
|
Patent
expenditures
|
(34,652 | ) | (11,268 | ) | (121,026 | ) | ||||||
|
Proceeds
from /(investments in) certificate of deposits
|
147,288 | 225,250 | - | |||||||||
|
NET
CASH (USED)/PROVIDED IN INVESTING ACTIVITIES
|
110,049 | 188,469 | (200,234 | ) | ||||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds
from common stock subcription payable
|
- | 203,000 | 203,000 | |||||||||
|
Proceeds
from issuance of common stock
|
350,000 | 517,000 | 3,239,867 | |||||||||
|
NET
CASH PROVIDED IN FINANCING ACTIVITIES
|
350,000 | 720,000 | 3,442,867 | |||||||||
|
NET
INCREASE/(DECREASE) IN CASH
|
(122,382 | ) | 402,113 | 166,847 | ||||||||
|
CASH,
BEGINNING OF PERIOD
|
289,229 | 33,391 | - | |||||||||
|
CASH,
END OF PERIOD
|
166,847 | 435,504 | 166,847 | |||||||||
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||||||
|
Interest
paid
|
$ | - | $ | - | $ | - | ||||||
|
Taxes
paid
|
$ | 800 | $ | 800 | $ | 3,200 | ||||||
|
SUPPLEMENTAL
SCHEDULE OF NON-CASH ACTIVITIES
|
||||||||||||
|
Common
stock issued for prepaid services
|
$ | 88,000 | $ | - | $ | 88,000 | ||||||
The
accompanying notes are an integral part of these financial
statements
6
BIOSOLAR,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS-UNAUDITED
SEPTEMBER
30, 2010
|
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 nine months ended September
30, 2010 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2010. 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, 2009.
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. A
development stage activity is 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.
7
BIOSOLAR,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS-UNAUDITED
SEPTEMBER
30, 2010
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
Loss per Share
Calculations
Loss per
Share calculates basic earnings per share and diluted earnings per share. Basic
earnings per share is 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 nine months ended
September 30, 2010 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
|
|
Management
reviewed accounting pronouncements issued during the nine months ended
September 30, 2010, and no pronouncements were adopted during the
period.
|
|
3.
|
CAPITAL
STOCK
|
During
the nine months ended September 30, 2010, the Company issued 2,500,000 shares of
common stock at a price of $0.08 per share for cash of $200,000; issued
2,500,000 shares of common stock at a price of $0.06 per share for cash of
$150,000, with warrants attached to purchase 5,000,000 shares of common stock;
issued 800,000 shares of common stock at a fair value of $0.11 per share for
prepaid services.
|
4.
|
SUBSEQUENT
EVENT
|
|
|
Management
has evaluated subsequent events according to the requirements of ASC TOPIC
855, and has determined there are no subsequent events to be
reported.
|
8
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
modules. 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 module 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 PV solar
module 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 PV 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.
9
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, inventory, prepaid expenses, and accounts payable
are stated at cost which approximates fair value due to the short-term nature of
these instruments.
Recently
Issued Accounting Pronouncements
Management
reviewed accounting pronouncements issued during the nine months ended September
30, 2010, and no pronouncements were adopted during the period.
RESULTS
OF OPERATIONS – THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THE
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009
OPERATING
EXPENSES
General and Administrative
Expenses
General
and administrative (“G&A”) expenses increased by $45,154 to $194,302 for the
three months ended September 30, 2010, compared to $149,148 for the prior period
September 30, 2009. The G&A expenses increased by $82,315 to $518,368 for
the nine months ended September 30, 2010, compared to $436,053 for the prior
period September 30, 2009. This increase in G&A expenses was the result of
an increase in consulting and marketing fees to promote the
Company.
Research and
Development
Research
and Development (“R&D”) expenses increased by $9,167 to $35,168 for the
three months ended September 30, 2010, compared to $26,001 for the prior period
September 30, 2009. The R&D expenses increased by $75,245 to $126,886 for
the nine months ended September 30, 2010, compared to $51,641 for the prior
period. This overall increase in R&D expenses was the result of an increase
in outside services by corporations for testing the product, and an increase in
materials and supplies to produce samples.
Net Loss
Our Net
Loss increased by $55,735 to $231,594 for the three months ended September 30,
2010, compared to $175,859 for the prior period September 30, 2009. The Net Loss
increased by $162,404 to $651,652 for the nine months ended September 30, 2010,
compared to $489,248 for the prior period September 30, 2009. The increase in
Net Loss was due to an increase in G&A and R&D expenses. Currently
the Company is in its development stage and had no revenues.
LIQUIDITY
AND CAPITAL RESOURCES
As of
September 30, 2010, we had $217,779 of working capital as compared to $462,726
for the year ended December 31, 2009. This decrease of $244,947 was due
primarily due to increased
expenses as the Company transitions from research and development
stage into production stage.
During
the nine months ended September 30, 2010, the Company used $(582,431) of cash
for operating activities, as compared to $(506,356) for the prior period
September 30, 2009. The increase of $76,075 in the use of cash for operating
activities was primarily due to an increase in net loss, inventory and accounts
payable.
10
Cash
provided in investing activities for the nine months ended September 30,
2010 was $110,049,
as compared to cash provided of $188,469 for the prior period September 30,
2009. The overall net change of $78,420 in investing activities was primarily
due to a decrease in the proceeds from investing in certificate of
deposits.
Cash
provided from financing activities was $350,000 for the nine months ended
September 30, 2010, as compared to $720,000 for the prior period September 30,
2009. 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 September 30, 2010 have been prepared under the
assumption that we will continue as a going concern from inception (April 24,
2006) through September 30, 2010. Our independent registered public accounting
firm has issued their report dated March 24, 2010 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 modules.
Our plan
of operation within the next twelve months is to utilize our cash balances to
fully 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 module components, and build solar modules, 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 three months.
Management estimates that it will require additional cash resources during 2010,
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 six 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
Evaluation
of Disclosure 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: (i) recorded, processed, summarized and reported, within the
time periods specified in the Commission's rules and forms, and (ii) accumulated
and communicated to our management, including our chief executive officer and
chief financial officer, as appropriate to allow timely decisions regarding
required disclosure.
Changes
in Internal Control Over Financial Reporting
There was
no change to our internal control over financial reporting that occurred during
our last fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial
reporting.
11
PART II
- OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
None.
There are
no material changes from the risk factors previously disclosed in the
Registrant’s Form 10-K filed on March 24, 2010.
During
the period covered by this report, the Company sold units composing of common
stock and warrants for total proceeds of $150,000.
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 and issuances of its shares of common stock described above.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM
4. (REMOVED AND RESERVED)
ITEM
5. OTHER INFORMATION
None
|
Description
|
||
|
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)
|
12
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).
|
13
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 November 5,
2010.
|
BIOSOLAR
|
||
|
By:
|
/s/ David Lee
|
|
|
Chief
Executive Officer (Principal Executive
|
||
|
Officer
) and Acting Chief Financial Officer
|
||
|
(Principal
Financial Officer and Principal Accounting
Officer)
|
14