NewHydrogen, Inc. - Quarter Report: 2010 March (Form 10-Q)

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

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIOSOLAR, INC.

(A Development Stage Company)

BALANCE SHEETS

	March 31, 2010			December 31, 2009
	(Unaudited)
ASSETS

CURRENT ASSETS
Cash & cash equivalents	$	70,752		$	289,229
Certificates of deposits		147,468			147,288
Inventory, raw materials		24,306			17,076
Prepaid expenses		29,044			12,416

TOTAL CURRENT ASSETS		271,570			466,009

PROPERTY AND EQUIPMENT
Machinery and equipment		76,281			74,643
Computer		1,978			1,978
		78,259			76,621
Less accumulated depreciation		(12,588	)		(10,638	)

NET PROPERTY AND EQUIPMENT		65,671			65,983

OTHER ASSETS
Patents, net of amortization of $40		92,859			86,334
Deposit		770			770

TOTAL OTHER ASSETS		93,629			87,104

TOTAL ASSETS	$	430,870		$	619,096



LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	11,173		$	2,533
Accrued expense		-			750

TOTAL CURRENT LIABILITIES		11,173			3,283

SHAREHOLDERS' EQUITY
Common stock, $0.0001 par value;
500,000,000 authorized common shares
147,766,777 and 147,766,777 shares issued and outstanding, respectively		14,776			14,776
Additional paid in capital		3,315,351			3,315,351
Deficit accumulated during the development stage		(2,910,430	)		(2,714,314	)

TOTAL SHAREHOLDERS' EQUITY		419,697			615,813

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	430,870		$	619,096

BIOSOLAR, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

							From Inception
							April 24, 2006
	Three Months Ended						through
	March 31, 2010			March 31, 2009			March 31, 2010

REVENUE	$	-		$	-		$	-

OPERATING EXPENSES
Selling and marketing expenses		23,389			27,573			747,791
General and administrative expenses		129,299			118,177			1,729,305
Research and development		41,016			14,700			504,387
Depreciation and amortization		1,950			1,285			12,628

TOTAL OPERATING EXPENSES		195,654			161,735			2,994,111

LOSS FROM OPERATIONS BEFORE OTHER INCOME		(195,654	)		(161,735	)		(2,994,111	)

TOTAL OTHER INCOME
Interest income		338			1,499			86,881

LOSS BEFORE PROVISION FOR TAXES		(195,316	)		(160,236	)		(2,907,230	)

Income taxes		(800	)		(800	)		(3,200	)

NET LOSS	$	(196,116	)	$	(161,036	)	$	(2,910,430	)


BASIC AND DILUTED LOSS PER SHARE	$	(0.00	)	$	(0.00	)

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC AND DILUTED		147,766,777			133,366,777

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

Net loss for the three months ended March 31, 2010 (unaudited)		-		-		-		(196,116	)		(196,116	)

Balance at March 31, 2010 (unaudited)		147,766,777	$	14,776	$	3,315,351	$	(2,910,430	)	$	419,697

BIOSOLAR, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

							From Inception
							April 24, 2006
	Year Ended						through
	March 31, 2010			March 31, 2009			March 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(196,116	)	$	(161,036	)	$	(2,910,430	)
Adjustment to reconcile net loss to net cash
used in operating activities
Depreciation and amortization expense		1,950			1,285			12,628
Issuance of stock for services		-			-			237,260
Changes in Assets and Liabilities
(Increase) Decrease in:
Inventory		(7,230	)		(497	)		(24,306	)
Prepaid expenses		(16,628	)		(2,075	)		(29,044	)
Deposits		-			-			(770	)
Increase (Decrease) in:
Accounts payable		8,640			(10,813	)		11,173
Accrued expenses		(750	)		-			-
Credit card payable		-			987			-

NET CASH USED IN OPERATING ACTIVITIES		(210,134	)		(172,149	)		(2,703,489	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(1,638	)		-			(78,259	)
Patent expenditures		(6,525	)		(1,025	)		(92,899	)
Proceeds from /(investments in) certificate of deposits		(180	)		226,695			(147,468	)

NET CASH (USED)/PROVIDED IN INVESTING ACTIVITIES		(8,343	)		225,670			(318,626	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock subcription payable		-			-			203,000
Proceeds from issuance of common stock		-			-			2,889,867

NET CASH PROVIDED IN FINANCING ACTIVITIES		-			-			3,092,867

NET INCREASE/(DECREASE) IN CASH		(218,477	)		53,521			70,752

CASH, BEGINNING OF PERIOD		289,229			33,391			-

CASH, END OF PERIOD		70,752			86,912			70,752

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	-		$	-		$	-
Taxes paid	$	800		$	800		$	3,200

BIOSOLAR, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

March 31, 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 three months ended March 31, 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.

BIOSOLAR, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

March 31, 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 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 three months ended March 31, 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 three months ended March 31, 2010, and no pronouncements were adopted during the period.

3.	CAPITAL STOCK

During the three months ended March 31, 2010, the Company issued no shares of common stock.

4.	SUBSEQUENT EVENT

Management has evaluated subsequent events pursuant to the requirements of Topic 855 and has determined there are no subsequent events to be reported.

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.

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 three months ended March 31, 2010, and no pronouncements were adopted during the period.

RESULTS OF OPERATIONS – THREE MONTHS ENDED MARCH 31, 2010 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2009

OPERATING EXPENSES

Selling and Marketing Expenses

Selling and marketing ("S&M") expenses decreased by $(4,184) to $23,389 for the three months ended March 31, 2010 compared to the prior period. S&M expenses decreased due to a decrease in advertising expense.

General and Administrative Expenses

General and administrative (“G&A”) expenses increased by $11,122 to $129,299 for the three months ended March 31, 2010, compared to the prior period. This increase in G&A expenses was the result of an increase in consulting fees.

Research and Development

Research and Development (“R&D”) expenses increased by $26,316 to $41,016 for the three months ended March 31, 2010, compared to the prior period. This increase in R&D expenses was the result of an increase in outside services by corporations.

Net Loss

Our Net Loss increased by $35,080 to $(196,116) for the three months ended March 31, 2010, compared to the prior period. The increase in Net Loss was due to an increase in operating expenses. Currently the Company is in its development stage and had no revenues.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2010, we had $260,397 of working capital as compared to $257,435 for the prior period. This increase of $2,962 was due primarily to an overall increase in current assets.

During the three months ended March 31, 2010, the Company used $(210,134) of cash for operating activities, as compared to $(172,149) for the prior period. The increase of $37,985 in the use of cash for operating activities was primarily due to an increase in the purchase of raw materials and prepaid expenses.

Cash used in investing activities for the three months ended March 31, 2010 was $(8,343), as compared to cash provided of $225,670 for the prior period. The net change of $234,013 in investing activities was primarily due to proceeds from investing in certificate of deposits in the prior period, as compared to purchase of intangible and tangible assets in the current period.

Cash provided from financing activities was $0 for the three months ended March 31, 2010 and 2009, respectively. 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 March 31, 2010 have been prepared under the assumption that we will continue as a going concern from inception (April 24, 2006) through March 31, 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 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

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.

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 24, 2010.

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

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION

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 May 10, 2010.

	BIOSOLAR

	By:	/s/ David Lee
		Chief Executive Officer (Principal Executive Officer) and Acting Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)