|UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
      FORM 10-QSB
|----------------------------------------------------------------------------------------
|                                                                                        
|                                                                                        
|                                                                                        

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2005.
|- | --------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                 
|o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT for the transition period from _______ to ________.             

|                                   
|-----------------------------------
|Commission File No. 0-27599        
|                                   
|SULPHCO, INC.                      
|                                   
|(Name of the small business issuer)
|                                   
|                                   
|                                   
|                                   

|                                         
|-----------------------------------------
|850 Spice Islands Drive, Sparks, NV 89431
|                                         
|(Address of principal executive offices) 
|                                         
|(775) 829-1310                           
|                                         
|(Issuers telephone number)              

Number of shares outstanding of each of the issuers classes of common equity, as of the latest
practicable date: 56,594,385 shares of common stock issued and outstanding as of May 13, 2005.

Transitional Small Business Disclosure Format: YesoNox

---



PART I

Item 1. Financial Statements.

SULPHCO, INC.
  (A Company in the Development Stage)BALANCE SHEETMarch 31, 2005
  (unaudited)

|                                                                                                                                                | March 31, 2005 |            
|----------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | -----------
|                                                                                                                                                |                |            
|Current Assets:                                                                                                                                 |                |            
|Cash and cash equivalents                                                                                                                       | $              | 8,828,287  
|Other                                                                                                                                           |                | 10,000     
|Prepaid expenses                                                                                                                                |                | 27,177     
|                                                                                                                                                |                |            
|Total current assets                                                                                                                            |                | 8,865,464  
|                                                                                                                                                |                |            
|                                                                                                                                                |                |            
|Property and Equipment (net of accumulated depreciation of $672,005)                                                                            |                | 462,153    
|                                                                                                                                                |                |            
|                                                                                                                                               
|Other Assets                                                                                                                                    |                |            
|Deferred tax asset (net of valuation allowance of $8,375,961)                                                                                   |                |           
|Intangible assets (net of accumulated amortization of $2,598)                                                                                   |                | 258,553    
|Other                                                                                                                                           |                | 36,822     
|                                                                                                                                                |                |            
|Total other assets                                                                                                                              |                | 295,375    
|                                                                                                                                                |                |            
|Total assets                                                                                                                                    | $              | 9,622,992  
|                                                                                                                                                |                |            
|                                                                                                                                               
|Current Liabilities                                                                                                                             |                |            
|Accounts payable                                                                                                                                | $              | 180,693    
|Unearned revenue                                                                                                                                |                | 300,000    
|Accrued liabilities                                                                                                                             |                | 245,169    
|Accrued late registration fees                                                                                                                  |                | 438,000    
|Related party notes payable                                                                                                                     |                | 1,000,000  
|                                                                                                                                                |                |            
|                                                                                                                                                |                |            
|Total current liabilities                                                                                                                       |                | 2,163,862  
|                                                                                                                                                |                |            
|                                                                                                                                                |                |            
|Long Term Related Party Note Payable                                                                                                            |                | 7,000,000  
|                                                                                                                                                |                |            
|                                                                                                                                                |                |            
|Commitment and Contingencies                                                                                                                    |                |           
|                                                                                                                                                |                |            
|                                                                                                                                                |                |            
|Total liabilities                                                                                                                               |                | 9,163,862  
|                                                                                                                                                |                |            
|                                                                                                                                                |                |            
|Stockholders Equity                                                                                                                            |                |            
|Preferred stock: 10,000,000 shares authorized
           ($0.001 par value) none issued                                                         |                |           
|Common stock: 100,000,000 shares authorized
           ($0.001 par value) 56,529,385 shares
           issued and outstanding at March 31, 2005 |                | 56,529     
|Paid in capital                                                                                                                                 |                | 25,825,179 
|Prepaid expense via stock issuance                                                                                                              |                | (42,900    
|Stock subscription receivable                                                                                                                   |                | (744,500   
|Deficit accumulated during the development stage                                                                                                |                | (24,635,178
|                                                                                                                                                |                |            
|Total stockholders equity                                                                                                                      |                | 459,130    
|                                                                                                                                                |                |            
|Total liabilities and stockholders equity                                                                                                      | $              | 9,622,992  
|                                                                                                                                                |                |            

The Accompanying Notes are an Integral Part of the Financial Statements

---



SULPHCO, INC.
(A Company in the Development Stage)STATEMENT OF OPERATIONSMarch 31, 2005
(unaudited)

|                                               | Three Months Ended
      March 31 |            | Inception 
    to date |  
|---------------------------------------------- | --------------------------------- | ---------- | ---------------------- | -
|
|                                               |                                   |            |                        |  
|                                               |                                   |            |                        |  
|Revenue                                        |                                   |            |                        |  
|Sales                                          | $                                 |           |                        | $
|                                              
|Expenses                                       |                                   |            |                        |  
|General and administrative expenses            |                                   | (1,434,115 | )                      |  
|Research and development expenses              |                                   | (141,515   | )                      |  
|Depreciation & amortization                    |                                   | (44,519    | )                      |  
|Loss on disposal of asset                      |                                   |           |                        |  
|Loss on impairment of asset                    |                                   | (233,900   | )                      |  
|                                               |                                   |            |                        |  
|                                               |                                   |            |                        |  
|Total operating expenses                       |                                   | (1,854,049 | )                      |  
|                                               |                                   |            |                        |  
|                                               |                                   |            |                        |  
|Loss from operations                           |                                   | (1,854,049 | )                      |  
|                                              
|Other income (expense)                         |                                   |            |                        |  
|Interest income                                |                                   | 39,377     |                        |  
|Interest expense                               |                                   | (70,750    | )                      |  
|Late registration fees                         |                                   | (438,000   | )                      |  
|                                               |                                   |            |                        |  
|                                               |                                   |            |                        |  
|Loss before taxes                              |                                   | (2,323,422 | )                      |  
|                                               |                                   |            |                        |  
|Income tax benefit (provision)                 |                                   |           |                        |  
|                                               |                                   |            |                        |  
|                                               |                                   |            |                        |  
|Net loss                                       | $                                 | (2,323,422 | )                      | $
|                                               |                                   |            |                        |  
|                                               |                                   |            |                        |  
|Loss per share: basic and diluted              | $                                 | (0.04      | )                      | $
|                                               |                                   |            |                        |  
|                                               |                                   |            |                        |  
|Weighted average shares
     basic and diluted |                                   | 56,529,385 |                        |  
|                                               |                                   |            |                        |  

The Accompanying Notes are an Integral Part of the Financial Statements

---



SULPHCO, INC.
(A Company in the Development Stage)STATEMENT OF CASH FLOWMarch 31, 2005
(unaudited)

|                                                                           | Three Months Ended 
      March 31 |            | Inception 
    to date |  
|-------------------------------------------------------------------------- | ---------------------------------- | ---------- | ---------------------- | -
|
|                                                                           |                                    |            |                        |  
|Cash Flows From Operating Activities                                       |                                    |            |                        |  
|Net loss                                                                   | $                                  | (2,323,422 | )                      | $
|Adjustments to reconcile net loss to cash used
   in operating activities: |                                    |            |                        |  
|                                                                           |                                    |            |                        |  
|Depreciation & amortization                                                |                                    | 44,519     |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Shares issued for services                                                 |                                    | 305,675    |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Shares issued for compensation expense                                     |                                    | 204,000    |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Shares issued for interest expense                                         |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Contribution from stockholder                                              |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Shares subscribed for services                                             |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Loss on disposal of subsidiary                                             |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|(Increase) decrease in accounts receivable                                 |                                    | 317,800    |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|(Increase) decrease in prepaid expenses                                    |                                    | 11,683     |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Decrease in accounts payable                                               |                                    | (113,820   | )                      |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Decrease in accrued liabilities                                            |                                    | (240,800   | )                      |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Accrued late registration fees                                             |                                    | 438,000    |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Loss on impairment of asset                                                |                                    | 233,900    |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Increase in unearned revenue                                               |                                    | 300,000    |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Decrease in legal settlement                                               |                                    |           |                        |  
|                                                                           |                                    |            |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Net cash used in operating activities                                      |                                    | (822,465   | )                      |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                          
|Cash Flows From Investing Activities                                       |                                    |            |                        |  
|Purchase of property and equipment                                         |                                    | (133,565   | )                      |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Investment in subsidiary                                                   |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Payment of deposit                                                         |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Development of intangible assets                                           |                                    | (88,522    | )                      |  
|                                                                           |                                    |            |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                        |  
|Net cash used in investing activities                                      |                                    | (222,087   | )                      |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                          
|Cash Flows from Financing Activities                                       |                                    |            |                        |  
|Proceeds from issuance of stock                                            |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Proceeds from stock subscription                                           |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Proceeds from issuance of related party notes payable                      |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Proceeds from issuance of line of credit                                   |                                    |           |                        |  
|Return on capital                                                          |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Principal payments on related party notes payable                          |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Decrease in related party receivable                                       |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Payments on contract payable                                               |                                    |           |                        |  
|Principal payments on line of credit                                       |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|Principal payments on advance from related party                           |                                    |           |                        |  
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                       
|                                                                           |                                    |            |                        |  
|Net cash provided by financing activities                                  |                                    |           |                        |  
|                                                                           |                                    |            |                        |  
|Net increase (decrease) in cash and cash equivalents                       |                                    | (1,044,552 | )                      |  
|                                                                           |                                    |            |                        |  
|Cash and cash equivalents at beginning of period                           |                                    | 9,872,839  |                        |  
|                                                                           |                                    |            |                        |  
|Cash and cash equivalents at end of period                                 | $                                  | 8,828,287  |                        | $
|                                                                           |                                    |            |                        |  

|                                                                                                                                                                                                                
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Supplemental Information and non cash transactions                                                                                                                                                              
|                                                                                                                                                                                                                
|During the three months ended March 31, 2005, and 2004, the Company paid $70,750 and $80,000 in interest,
respectively. The Company paid no income taxes during the three months ended March 31, 2005, and 2004.

The Accompanying Notes are an Integral Part of the Financial Statements

---



|SULPHCO, INC. 
      (A Company in the Development Stage)NOTES TO THE INTERIM FINANCIAL STATEMENTSMarch 31, 2005 (unaudited)
|----------------------------------------------------------------------------------------------------------------------------
|                                                                                                                            
|1.                                                                                                                          
|                                                                                                                            
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|                                                                                                                            
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|2.                                                                                                                          
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|3.                                                                                                                          
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|4.                                                                                                                          
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|5.                                                                                                                          
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|                                                                                                                            
|                                                                                                                            

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SULPHCO, INC. 
  (A Company in the Development Stage)NOTES TO THE INTERIM FINANCIAL STATEMENTS
  March 31, 2005 (unaudited)

|   | On December 31, 2004, under the Boards approval, the Company issued a $7,000,000 note to the Chairman and CEO. Interest on the note will be based at the rate of 3-month LIBOR plus 0.5% per annum, with payments due and payable December 31 of 2005, 2006, and on the note maturity date of December 31, 2007, at which time the principal is also due. As of March 31, 2005, interest payable of $50,750 has been accrued on this note.                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The CEO was paid $90,000 during the quarter, under an employment contract. The agreement is set to terminate on July 1, 2005.
        An interest payment of $10,000 was made to the Chairman and CEO in connection with an outstanding note payable. (See Note 3)
        An interest payment of $10,000 was made to a related party in connection with an outstanding note payable. (See Note 3)
        The Company has a consulting agreement with a Director and, as of March 31, 2005, have paid $55,191 in consulting fees and $6,266 in travel related expenses.
        The Company has a consulting agreement with a related party and, as of March 31, 2005, have paid $30,000 in consulting fees and $37,120 in travel related expenses.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|7. | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In January 2005, fifty thousand restricted shares of common stock were issued to a Director for services valued at $273,500.
        In January 2005, fifty thousand restricted shares of common stock were issued to an Officer for compensation expense valued at $204,000.
        The Company is obligated to pay $438,000 in late registration fees due to the registration statement related to a private placement having not yet gone effective, as per the agreement. As of March 31, 2005, the full amount has been accrued.                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|8. | Commitments and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Financial instruments, which potentially subject the Company to concentrations of credit risk, consist mainly of cash equivalents. The Company maintains amounts on deposit with financial institutions, which exceed federally insured limits. The Company has not experienced any significant losses in such accounts, nor does management believe it is exposed to any significant credit risk.                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---



|SULPHCO, INC. 
      (A Company in the Development Stage)NOTES TO THE INTERIM FINANCIAL STATEMENTS
      March 31, 2005 (unaudited)
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   
|                                                                                                                                   
|                                                                                                                                   
|9.                                                                                                                                 
|                                                                                                                                   
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|                                                                                                                                   
|                                                                                                                                   

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Item 2. Plan of Operation

Our Business

We
are engaged in the business of developing and commercializing our patented and proprietary technology
for the upgrading of crude oil. Our patented and proprietary process, which we refer
to as Sonocracking is based upon the novel use of high power ultrasonics 
the application of high energy, high frequency sound waves  to effect beneficial changes in
the chemical composition of crude oil. These beneficial changes include an increase in the gravity
of the crude oil and corresponding increase in the amount of lighter oils that can be recovered during
refining processes. Other beneficial changes to the crude oil as a result of the Sonocracking
technology include a reduction in the weight percentage of sulfur as well as a reduction in the parts
per million of nitrogen. Although our primary focus has been the application of the Sonocracking
technology to crude oil, we believe that beneficial changes to other petroleum products and chemicals
are also possible.

The
initial markets for our Sonocracking technology and our Sonocracker units are expected
to be crude oil producers and refiners. The economic value of crude oil is driven largely by both
the gravity of the crude and sulfur content. Because our technology is expected to increase the gravity
of the crude oil and at the same time reduce the sulfur content in a cost-effective way, the successful
commercialization of our technology can be expected to produce economic benefits to future customers
in these markets.

References in this report to we, us, our company and SulphCo refer
to SulphCo, Inc., a Nevada corporation.

Overview of Development Activities

We
have been developing our Sonocracking technology on an ongoing basis since January 1999. Testing
has been done through in-house facilities, and more recently by ChevronTexaco Energy Technology Co.
(ChevronTexaco), a unit of ChevronTexaco Corp. To date, such testing has been limited
to samples produced by prototypes which have processed up to 55 gallons of crude oil in a laboratory
setting. Beginning in mid-2002 our development activities have centered around re-designing, upgrading
and testing of laboratory scale prototypes utilizing more powerful ultrasonic generators, and redesigning
these prototypes to accommodate the more powerful generators. Substantially all of the development
work to date has been conducted by SulphCo personnel.

SulphCo
is continuing its Sonocracking development work on crude oil, primarily through data generated
from its pilot plant located at its headquarters in Sparks, Nevada, with a processing capacity of
1,000 bbl/day. SulphCo is also developing and testing improved ultrasonic probes and associated electrical
components at the same facility.

During
2004, SulphCo has invested resources to upgrade both the analytical equipment in its laboratory as
well as production equipment in its workshop to support its development activities. During 2004,
SulphCo has also begun the preliminary designs of larger and complete commercial scale Sonocracking
units.

In January 2005 ChevronTexaco installed a 2,000 bbl./day Sonocracking system in its pilot plant
at the Richmond Technology Center in Richmond, California, using components owned by us and which
have been expensed for financial statement purposes as research and development, to further evaluate
and develop the technology with SulphCo. The relationship between SulphCo and ChevronTexaco has been
defined through a series of agreements including a Laboratory Test Agreement entered into in November
2002, a Refinery Test Agreement entered into in June of 2003 and most recently a Collaboration Agreement
entered into in August 2004 and extensions of the Collaboration Agreement signed in February 2005
and April 2005. As discussed below, the parties are in the process of discussing a new agreement
which is expected to replace the existing Collaboration Agreement.

---



Plan of Operation During the Next 12 Months

During the next 12 months we intend to continue development and commercialization activities currently
underway and to explore new activities. In this regard:

| |  | We completed the development and deployment of a pre-production Sonocracker pilot plant which
is currently being utilized at ChevronTexacos laboratory facility in Richmond, California,
with a capacity of up to 2,000 bbl per day.                                                                                                                                                                                 
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | We expect to complete remaining design and engineering work for a 25,000 bbl or more per day Sonocracker
unit during the second quarter of 2005. Once the design and engineering work for the 25,000 bbl unit
is fully developed and tested, we intend to manufacture two initial 25,000 bbl units in anticipation
of receipt of a customer order. We intend to fabricate the units at our facility in Sparks, Nevada.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | We plan to continue to engage in ongoing development and testing activities, both at our facility and
in collaboration with ChevronTexaco, including laboratory testing at ChevronTexacos Richmond,
California facilities.                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | We expect to continue to explore other partnerships and relationships conducive to the further development
and deployment of our Sonocracking technology.                                                                                                                                                                                                                                                             

The
precise timing of the activities under the Collaboration Agreement (and any new agreements with ChevronTexaco)
over the next 12 months and beyond cannot be predicted with certainty, as they are dependent upon
the timing of completion of development and commercialization milestones, the requirements of our
collaborative partner, and the outcome of negotiations which are currently ongoing with ChevronTexaco.
In this regard, the Collaboration Agreement was set to expire on May 6, 2005. However, effective
April 28, 2005, in order to provide for another business relationship, the parties entered into an
amendment to the Collaboration Agreement extending Phase 1 under the Collaboration Agreement to July
6, 2005, solely to allow the parties additional time to negotiate a new agreement to replace the
Collaboration Agreement. We cannot assure you as to whether the parties will reach a new agreement,
the terms of the new agreement, or whether a further extension of the Collaboration Agreement, if
necessary, will be entered into.

Along with our ongoing collaboration with ChevronTexaco, we expect to continue to explore other partnerships
and relationships conducive to the further development and deployment of our Sonocracking technology.

In this regard,  in February 2005 we entered into an agreement with OIL-SC, Ltd (OIL-SC) based
in Seoul, South Korea, which provides for the sale by us to OIL-SC of a Sonocracker pilot
plant utilizing our Sonocracking technology for $1 million and the appointment of OIL-SC as
our marketing representative for oil refiners in South Korea. The pilot plant, which is expected
to have a processing capacity of up to 2,000 bbl/day, will be located in South Korea, and is intended
to both serve as a demonstration unit for our Sonocracking technology to South Korean refiners
and to upgrade petroleum products which OIL-SC purchases on the open market. We expect to construct,
deliver, and assemble the Sonocracker unit in August 2005, and we are required by our agreement
to provide start-up assistance in connection with OIL-SCs operation of the pilot plant.

The agreement with OIL-SC calls for the $1 million purchase price for the pilot plant to be paid to
us in installments, the initial installment of $300,000 having been paid to us on March 15, 2005,
and additional installments of $200,000, $50,000 and $450,000 payable on July 1, September 1 and
December 1, 2005. This agreement also provides that OIL-SC is entitled to a full refund of all payments
if the pilot plant does not operate within agreed specifications within 90 days of the installation
of the pilot plant. These specifications call for the pilot plant to upgrade a specified grade of
medium weight crude oil (Arab Medium Crude) by increasing its gravity (API) by 9.8%, reducing sulfur
weight content by 29.4%, and reducing nitrogen content by 29.9%. As the payment of the $1 million
purchase price is refundable if the pilot plant does not meet the agreed specifications, no portion
of the purchase price will be recorded as revenue in our financial statements until the pilot plant
is successfully installed and tested under the agreement with OIL-SC, which is not expected to occur
until August 2005.

---



We have not licensed our Sonocracking technology to OIL-SC and we are unable to determine at this time
the precise marketing activities to be undertaken with OIL-SC in South Korea.

In February 2004 we formed a joint venture with two Kuwaiti nationals to engage in the marketing
of our technology in Kuwait. To date, marketing activities by the Kuwait joint venture have been
limited to exploring sales of demonstration units in Kuwait. We have not licensed our Sonocracking
technology to the joint venture and we are unable to determine at this time what activities, if any,
the Kuwait joint venture will undertake in the future. At this time, we have not taken any steps
to line up customer orders other than informal discussions with the Kuwait Oil Company through the
Kuwait joint venture regarding the possible acquisition of a demonstration unit.

We do not expect to generate any revenues from the sale of Sonocracker units or the licensing
of our technology until at least the second half of 2005.

Liquidity and Financial Results

As of April 30, 2005, we had $8,448,014 in available cash reserves. Included in this amount is $300,000
received by us from OIL-SC on March 15, 2005 and classified as unearned revenue on our balance sheet.

As we are a development stage company, we have not generated any material revenues since we commenced
our current line of business in 1999, and we do not anticipate generating any material revenues on
a sustained basis unless and until a licensing agreement, sale of an initial production scale unit
or other commercial arrangement is entered into with respect to our technology.

As of March 31, 2005, we had an accumulated deficit of approximately $24.6 million, which includes
approximately $6.3 million of stock-based compensation expense, all of which represents compensation
to officers and directors and their affiliates and members of their immediate family, and we incurred
losses of $2.3 million for the three month period ending March 31, 2005. These losses are principally
associated with the research and development of our upgrading and desulfurization technologies, development
of pre-production prototypes and related marketing activity, and we expect to continue to incur expenses
in the future for development, commercialization and sales and marketing activities related to the
commercialization of our technologies.

Accounts payable of approximately $181,000 at March 31, 2005, represent various monthly bills for operating
expenses paid to unrelated third parties, including utility bills, machining services, laboratory
expenses, plant and office expenses and public relations expenses. Accrued liabilities of approximately
$245,000 at March 31, 2005, represent accrued payroll, related taxes and professional service fees.
Of this amount, approximately $82,000 represents accrued payroll expenses. Related party notes payable
of $8,000,000 at March 31, 2005, represent loans funded by Dr. Gunnerman and Erika Herrmann, Dr.
Gunnermans sister-in-law, and are described under Recent Financing Activities section
below.

Our monthly cash outflow, or cash burn rate, as of the date of this report, is approximately $326,000
per month for fixed and normal recurring expenses, as follows:

|Salaries and consulting expenses | $ | 157,000 | 
|-------------------------------- | - | ------- | 
|Plant and property leases        |   | 38,500  | 
|Professional fees                |   | 31,500  | 
|R&D Expenses                     |   | 30,000  | 
|Interest expense                 |   | 24,000  | 
|Office, phone, utilities         |   | 8,000   | 
|Patent renewal and maintenance   |   | 10,000  | 
|Travel and entertainment         |   | 20,000  | 
|Miscellaneous                    |   | 7,000   | 
|                                 |   |        
|                                 |   |         | 
|Total                            | $ | 326,000 | 
|                                 |   |        
|                                 |   |        

---



Salary and consulting expenses represents salary and payroll costs for all of our full
time employees and consulting payments. Included in this amount are monthly salaries and related
payroll costs to officers and directors and members of their immediate family as follows: Alan
Austin - $16,000; Kristina Gunnerman-Ligon - $13,000; and an aggregate of approximately $1,000 per
month of other monthly payroll costs for these individuals. As of March 31, 2005, payments of $30,000
per month for Dr. Gunnermans full time services as our CEO have been made pursuant to a consulting
agreement with RWG, Inc., a company wholly-owned by Dr. Gunnerman. Effective January 2005 we entered
into a monthly consulting agreement with Global 6, LLC, a company owned by Peter Gunnerman, which
provides for Global 6 to provide management consulting services to us on a month-to-month basis,
for a monthly consulting fee of $10,000 which amount is included in Salaries and consulting
expenses. Peter Gunnerman is the son of Rudolf Gunnerman, our Chairman and Chief Executive Officer.

Monthly
fixed and recurring expenses for Plant and property leases of $38,500 represents the
monthly lease payment to an unaffiliated third party for our facility located at 850 Spice Islands
Drive, Sparks, Nevada, which includes our executive offices (8,752 square feet), research facilities
(5,988 square feet) and manufacturing space (77,385 square feet).

Included in professional fees are estimated recurring legal fees paid to outside corporate and patent
counsel and ongoing litigation expenses, audit and review fees paid to our independent accountants,
and fees paid for investor relations.

Interest
expense represents interest paid to Erika Herrmann and Dr. Gunnerman for notes payable. Two
notes payable in the amount of $500,000 each, carry an interest rate of 8% and are paid quarterly,
commencing April 1, 2005. For the purposes of our schedule of monthly cash outflows, interest on
these notes of $6,666 per month represent quarterly payments of $20,000 for these notes. Also included
in interest expense are interest payments to Dr. Gunnerman for a note payable in the
amount of $7,000,000. Interest on this note is paid annually, commencing December 30, 2005 and ending
on December 30, 2007 and is accrued quarterly at a rate of 1-month LIBOR (2.4% at December
30, 2004) plus .5% which is equivalent to $16,917 per month.

Under the Collaboration Agreement entered into with ChevronTexaco effective August 6, 2004, as amended
to date, each party is required to bear its own expenses in connection with the activities conducted
and proposed to be conducted under such agreement. Estimated increased monthly expenses expected
to be incurred by us during the term of the Collaboration Agreement and any new agreement with ChevronTexaco
are expected to relate primarily to development activities and include an additional $11,000 of salary
expense per month for the addition of two engineers, $25,000 per month of additional research and
development costs, $4,000 of additional patent expenses, and $10,000 per month of additional miscellaneous
expenses such as outside non-professional services, shipping costs and equipment rental. Research
and development costs include the cost of laboratory equipment and modifications to our demonstration
unit. All of these incremental amounts are included in our total estimate of $326,000 per month for
fixed and normal recurring expenses.

Anticipated expenditures under our agreement with OIL-SC during the next 12 months are included in
our total estimate of $326,000 per month.



---



We
intend to incur additional expenditures during the next 12 months for development and manufacture
of Sonocracker units. These expenditures will relate to the design of the Sonocracker
units, and are included in the monthly cash outflow described above. Additional funding requirements
during the next 12 months may arise upon the placement of an order by a future customer for one or
more Sonocracker units or a material change in our relationship with ChevronTexaco. We
expect that funding for the cost of manufacturing of any particular unit would be available either
from current cash reserves or from potential customers before we commence manufacturing the unit.
In addition, as we are unable to determine the precise timing of development activities or receipt
of customer orders, monthly cash outflow may increase significantly as we increase our research and
development activities, and prepare for additional assembly and manufacturing duties associated with
the deployment of the Sonocracking technology.

In the past we have financed our research and development activities primarily through debt and equity
financings from our principal shareholder, Rudolf W. Gunnerman, and other parties.

Recent Financing Activities

As of March 31, 2005, a short-term promissory note in the amount of $500,000 is outstanding and payable
to Erika Herrmann, the sister-in-law of Dr. Gunnerman. The note is due December 30, 2005 and carries
an interest rate of 8 percent per annum. The agreement provides for mandatory prepayments from revenues
we receive from the sale of our products or the licensing of our technology or otherwise, and from
the amount of unrestricted loan or equity financings we receive.

As of March 31, 2005, a short-term promissory note in the amount of $500,000 is outstanding and payable
to Dr. Gunnerman. The note is due December 30, 2005 and carries an interest rate of 8 percent per
annum. The agreement provides for mandatory prepayments from revenues we receive from the sale of
our products or the licensing of our technology or otherwise, and from the amount of unrestricted
loan or equity financings we receive.

In June 2004 we conducted two private placements with institutional and other third party investors
for the sale of units consisting of our common stock, warrants, and rights to acquire additional
stock and warrants, generating net cash proceeds of approximately $2.3 million. The commitment made
by Rudolf W. Gunnerman, our chairman and CEO, in April 2004 to fund up to an additional $2,000,000
in loans to us, of which $250,000 had been advanced in June 2004, has now been repaid, and the $2,000,000
commitment by Dr. Gunnerman has been superseded by funding received by us in June 2004 from these
two private placements. Additional cash proceeds of $2.3 million were generated as of November 2,
2004, when investors in the June 2004 placements acquired the remaining unpurchased units pursuant
to the terms of the June 2004 placements, and up to $15.2 million may be generated upon exercise
of warrants and rights if investors in the June 2004 private placements exercise all available warrants
and rights. As of March 31, 2005, we are obligated to pay approximately $438,000 in the aggregate
to investors in the private placements as late registration fees due to the fact that the registration
statement covering the private placement shares has not yet been declared effective by the SEC. Late
registration fees continue to accrue at the monthly rate of 2% of the investors cash investment
plus 1.5% per month of the unpaid late fee, or approximately $104,000 per month, until the registration
is declared effective. We have had informal discussions with some of the private placement investors
who have expressed interest in receiving restricted shares in lieu of cash fees and we expect that
we will reach agreement with most of the investors to pay these fees with restricted shares in lieu
of cash. Accordingly, we have not included the payment of these fees in calculating our estimated
monthly cash flow discussed in Liquidity and Financial Results above. However, as of
the date of this report no formal agreements have been entered into with any investors to pay these
fees by issuing additional restricted shares.

In December 2004 Dr. Gunnerman advanced $7 million to us as a loan. The loan is evidenced by a promissory
note which bears interest at the rate of 0.5% above the 30 day LIBOR rate, adjusted quarterly
and payable annually, and the entire principal amount is due and payable in December 2007. The LIBOR
rate, which stands for London Interbank Offered Rate, is a reference rate for short-term loans between
banks in the London interbank market. The initial loan rate under the promissory note on December
31, 2004, was 2.9% (0.5% above the LIBOR rate), and the interest rate under the note
is adjusted quarterly. We anticipate using these funds both to meet our working capital needs and
for funding the initial manufacturing costs associated with producing two 25,000 bbl per day Sonocracker
units at our facility in Sparks, Nevada. We expect to complete the design and engineering of these
units during the second quarter of 2005 at our facility in Sparks, Nevada.

---



Accordingly, we anticipate that our existing capital resources will be sufficient to fund our cash
requirements through the next twelve months. The extent and timing of our future capital requirements
will depend primarily upon the rate of our progress in the development and commercialization of our
technologies, our ability to maintain our collaborative arrangement with ChevronTexaco and the terms
of any future arrangement, and the timing of future customer orders.

To date we have generated no material revenues from our business operations. We are unable to predict
when or if we will be able to generate additional revenues from commercial activities or the amounts
expected from such activities. These revenue streams may be generated by us or in conjunction with
collaborative partners or third party licensing arrangements, and may include provisions for one-time,
lump sum payments in addition to ongoing royalty payments or other revenue sharing arrangements.
However, we presently have no commitments for any such payments.

Sources of additional capital include the exercise of additional investment rights and warrants issued
to investors in the June 2004 private placements, and funding through future collaborative arrangements,
licensing arrangements and debt and equity financings. We do not know whether additional financing
will be available on commercially acceptable terms when needed. If we cannot raise funds on acceptable
terms when needed, we may not be able to successfully commercialize our technologies, take advantage
of future opportunities or respond to unanticipated requirements. If we are unable to secure such
additional financing when needed, we will have to curtail or suspend all or a portion of our business
activities and we could be required to cease operations entirely. Further, if we issue equity securities,
our shareholders may experience severe dilution of their ownership percentage.

Research and Development During the Next 12 Months

We intend to continue our research and development program during the next 12 months in order to expand
the development of the design and manufacture of commercial desulfurization units which embody our
proprietary technology. Management anticipates that our research and development costs, including
a portion of salaries for full time employees, will be approximately $50,000 per month, or $600,000
during the next 12 months. The $50,000 anticipated monthly expenditure for research and development
is included within our estimated monthly cash outflow, or burn rate, of approximately $326,000 per
month for fixed and normal recurring expenses, as described above.

Employees

As of April 5, 2005, we had 17 full-time employees and a consulting agreement with RWG, Inc., for
the full-time services of our chairman and CEO, Rudolf W. Gunnerman. We do not expect any material
changes in the number of our employees during the next 12 months unless required to service future
customer orders.

Forward Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws that
relate to future events or our future financial performance. In some cases, you can identify forward-looking
statements by terminology, such as may, will, should, could,
expect, plan, anticipate, believe, estimate,
project, predict, intend, potential or continue
or the negative of such terms or other comparable terminology, although not all forward-looking statements
contain such terms. In addition, these forward-looking statements include, but are not limited to,
statements regarding:

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| |  | implementing our business strategy;                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                            
| |  | commercialization and marketing of our products under development;                                                                                         
| |   |                                                                                                                                                            
| |  | our intellectual property;                                                                                                                                 
| |   |                                                                                                                                                            
| |  | our estimates of future revenue and profitability;                                                                                                         
| |   |                                                                                                                                                            
| |  | our estimates or expectations of continued losses;                                                                                                         
| |   |                                                                                                                                                            
| |  | our expectations regarding future expenses, including research and development, sales and marketing,
manufacturing and general and administrative expenses;
| |   |                                                                                                                                                            
| |  | difficulty or inability to raise additional financing, if needed, on terms acceptable to us;                                                               
| |   |                                                                                                                                                            
| |  | our estimates regarding our capital requirements and our needs for additional financing;                                                                   
| |   |                                                                                                                                                            
| |  | attracting and retaining customers and employees;                                                                                                          
| |   |                                                                                                                                                            
| |  | sources of revenue and anticipated revenue; and                                                                                                            
| |   |                                                                                                                                                            
| |  | competition in our market.                                                                                                                                 

These statements are only predictions. Although we believe that the expectations reflected in these
forward-looking statements are reasonable, we cannot guarantee future results, levels of activity,
performance or achievements. We are not required to and do not intend to update any of the forward-looking
statements after the date of this report or to conform these statements to actual results. In light
of these risks, uncertainties and assumptions, the forward-looking events discussed in this report
might not occur. Actual results, levels of activity, performance, achievements and events may vary
significantly from those implied by the forward-looking statements. In this report, we refer to information
regarding our potential markets and other industry data. We believe that we have obtained this information
from reliable sources that customarily are relied upon by companies in our industry, but we have
not independently verified any of this information.

Item 3.  Controls and Procedures

The
Company maintains disclosure controls and procedures designed to ensure that information required
to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the specified time periods. As of the end of the period
covered by this report, the Companys Chief Executive Officer and Chief Financial Officer evaluated,
with the participation of the Companys management, the effectiveness of the Companys
disclosure controls and procedures. The Company is continuing to develop and improve disclosure controls
in order to eliminate previously identified weaknesses from early 2004. There were changes made in
the Companys internal disclosure procedures in the first quarter in order to significantly
improve the disclosure controls as of the report date. Based on the evaluation, which disclosed no
significant deficiencies or material weaknesses, the Companys Chief Executive Officer and Chief
Financial Officer concluded that the Companys disclosure controls and procedures are effective
as of March 31, 2005.

PART II

Item 2.  Changes in Securities.

During the three months ended March 31, 2005, we sold and issued unregistered securities in the following
transactions.

In connection with Mr. Masicas appointment to the Board of Directors in November 2004,
SulphCo agreed to grant Mr. Masica 50,000 shares of our common stock on January 1, 2005, for services
as a director based upon SulphCos determination of the value of the services rendered and to
be rendered by Mr. Masica as a director. These services were valued based upon the Board of Directors
evaluation of the fair market value of these services to the Company and in view of the limited availability
of cash resources and the restricted nature of the stock. The terms provide for Mr. Masica to receive
50,000 shares of our common stock valued at $5.47 per share based on the market value of the shares
at the time of issuance. All such securities are being issued and sold in reliance on the exemption
from registration contained in Section 4(2) of the Securities Act of 1933, as amended, and the certificates
representing such securities were or will be issued with a restrictive legend reflecting the limitations
on future transfer of those securities. The offer and sale of these securities was made without public
solicitation or advertising. The investor represented to us that he was knowledgeable and sophisticated,
and was experienced in business and financial matters so as to be capable of evaluating an investment
in our securities and was an accredited investor within the meaning of Regulation D promulgated
under the Securities Act of 1933. Prior to the offer and sale of these securities this investor was
a consultant to the Company. This investor was afforded full access to information regarding our
business, including reports filed with the SEC.

---



SulphCo agreed to grant Alan L. Austin, Jr. 50,000 shares of our common stock effective January 7,
2005, valued at $4.08 per share, in consideration of his agreement to be employed by the Company
as its Vice President of Finance and Chief Financial Officer. The issuance of these 50,000 shares
was based upon SulphCos determination of the value of the services to be rendered by Mr. Austin
as an executive officer of the Company. These services were valued based upon the Board of Directors
evaluation of the fair market value of these services to the Company, the restricted nature of the
stock, and in order to motivate Mr. Austin to accept the Companys offer of employment. Such
shares are being issued and sold in reliance on the exemption from registration contained in Section
4(2) of the Securities Act of 1933, as amended, and the certificates representing such securities
will be issued with a restrictive legend reflecting the limitations on future transfer of those securities.
The offer and sale of these securities was made without public solicitation or advertising to an
individual who had a pre-existing relationship with the Companys CEO. The investor represented
to us that he was knowledgeable and sophisticated, was experienced in business and financial matters
so as to be capable of evaluating an investment in our securities, and had substantial prior work
experience as a chief financial officer. Prior to the sale of these securities Mr. Austin was afforded
full access to information regarding our business, including reports filed with the SEC.

---



Item 5.   Other Information.

On May 10, 2005, the Company and Märkisches Werk GmbH (MWH) entered into a Manufacturing
Agreement which provides for the manufacture by MWH of the Companys Sonocracking probe assembly
and reactor (Equipment). Under the terms of the Manufacturing Agreement the Company is
required to purchase Equipment it may require from time to time exclusively from MWH, so long as
MWH is able to meet certain requirements as to price, quality and delivery schedules. The Manufacturing
Agreement has a term of five years, subject to earlier termination upon the occurrence of specified
defaults.

Item 6. Exhibits and Reports on Form 8-K.

(a)  Exhibits.

| | 31.1      Certification of Chief Executive Officer
pursuant to Rule 13a-14 under the Securities Exchange Act of 1934.                 
| | --------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                       
| | 31.2      Certification of Chief Financial Officer pursuant
to Rule 13a-14 under the Securities Exchange Act of 1934.                 
| |                                                                                                                                       
| | 32.1      Certification of CEO and CFO Pursuant to 18 U.S.C.ss.1350,
as Adopted Pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002.

(b)  Reports on Form 8-K.

On
January 3, 2005, we filed a Current Report on Form 8-K under Items 1.01 and 5.02 to report the departure
of our former president, Kirk Schumacher, and the entering into of a separation agreement.

On
January 4, 2005, we filed a Current Report on Form 8-K under Item 1.01 to report the loan of $7 million
to the Company by Rudolf W. Gunnerman, Chairman and CEO.

On
January 10, 2005, we filed a Current Report on Form 8-K under Item 5.02 to report the appointment
of Alan L. Austin, Jr. as our Vice President of Finance and Chief Financial Officer.

On
February 10, 2005, we filed a Current Report on Form 8-K under Item 1.01 to report an amendment to
the Collaboration Agreement with ChevronTexaco Energy Technology Co. in order to extend Phase 1 activities
by an additional three months.

On
February 25, 2005, we filed a Current Report on Form 8-K under Item 1.01 to report the entering into
of an equipment sale and marketing agreement with OIL-SC, Ltd.

---



SIGNATURES

In
accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

|Dated: May 16, 2005 | SULPHCO, INC. (Registrant)                                                                                                                
|------------------- | ------------------------------------------------------------------------------------------------------------------------------------------
|                    |                                                                                                                                           
|                    |                                                                                                                                           
|                    | /s/ Rudolf W. Gunnerman                                                                                                                   
|                    | By: Rudolf W. Gunnerman
    Its: Chairman of the Board of Directors 
    and Chief Executive Officer                                      
|                    |                                                                                                                                           
|                    |                                                                                                                                           
|                    | /s/ Alan L. Austin, Jr.                                                                                                                   
|                    | By:  Alan L. Austin, Jr.
    Its: Vice President of Finance, 
    Chief Financial Officer
    (Principal Financial and Accounting Officer)
|                    |                                                                                                                                           

---



EXHIBIT INDEX

|31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14 under the Securities Exchange Act
of 1934.                 
|---- | ----------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                             
|31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act
of 1934.                 
|     |                                                                                                                             
|32.1 | Certification of CEO and CFO Pursuant to 18 U.S.C.ss.1350, as Adopted Pursuant to ss. 906 of the Sarbanes-Oxley
Act of 2002.
|     |                                                                                                                             

---