UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB/A

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Amendment No. 7

|[X] | ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ------------------------------------------------------------------------------

|[   ] | TRANSITION
REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES ACT 1934
|----- | -----------------------------------------------------------------------

For the fiscal year
ended December 31, 2003

Commission file
number 0-27599

SULPHCO, INC.(Name
of Small Business Issuer in its Charter)

|Nevada(State or other jurisdictionof incorporation or organization) | 88-0224817(I.R.S. EmployerIdentification No.)
|------------------------------------------------------------------- | ---------------------------------------------

|850 Spice Islands Drive, Sparks, NV(Address of principal executive offices) | 89431(Zip Code)
|--------------------------------------------------------------------------- | ---------------

Issuers Telephone
number:  (775) 829-1310

Securities registered
pursuant to Section 12(b) of the Act:  NoneSecurities registered pursuant to Section
12(g) of the Act:

Common Stock, Par
Value $0.001 Per Share(Title of Class)

Check
whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of
the Exchange Act during the past 12 months (or for such shorter period that the
registrant  was required to file such reports), and (2) has been subject to such filings
requirements  for the past 90 days.  Yes [X]  No [   ]

---

Check
if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B
is not contained in this form, and no disclosure will be contained, to the best of
registrants knowledge, in definitive proxy or information statements incorporated
by  reference in Part III of this Form 10-KSB or any amendment to the Form  10-KSB.  [X]

State
issuers revenues for its most recent fiscal year: The Company had no revenue for
the  year ending December 31, 2003.

State
the aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was sold, or
the average bid and asked price of such common equity, as of a specified date within the
past 60 days: On March 10, 2004, the aggregate market value of the voting and
non-voting  common equity held by non-affiliates, based on the closing price of the
common equity on  that date, equals $29,051,751.

2

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EXPLANATORY NOTE

SulphCo,
Inc. (the Company) is filing this Form 10-KSB/A (Amendment No. 7)
to amend its Annual Report on Form 10-KSB for the fiscal year ended December 31, 2003
(the  Original Filing) filed on March 29, 2004 with the Securities and
Exchange  Commission (SEC), as amended by Amendment No. 1 filed with the SEC
on June 14,  2004 (Amendment No. 1), and amended by Amendment No. 2 filed
with the SEC on  July 1, 2004 (Amendment No. 2), and amended by Amendment No.
3 filed with the  SEC on November 12, 2004 (Amendment No. 3), and amended by
Amendment No. 4  filed with the SEC on November 24, 2004 (Amendment No. 4),
and amended by  Amendment No. 5 filed with the SEC on January 26, 2005 (Amendment
No. 5), and  amended by Amendment No. 6 filed with the SEC on February 9, 2005 (Amendment
No.  6, and together with Amendment Nos. 1-6, inclusive, the Prior  Amendments)
in order to (i) refile in its entirety Part I  Item 7.  Financial Statements to
include restated audited financial statements for the years  ended December 31, 2003 and
December 31, 2002 and the report thereon prepared by the  Companys independent
auditors, Mark Bailey & Company, Ltd. dated June 17, 2004  (Restated April 4, 2005),
and (ii) to refile in its entirety Part III  Item  13. Exhibits and Reports
on Form 8-K to reflect the updated certifications of our  Chief Executive Officer
and Principal Accounting Officer included with this Amendment.

As
indicated in Note 2 to the restated financial statements included in this Amendment No.
7,  the Company has identified certain errors in its previously issued financial
statements  related to the capitalization of certain research and development expenses in
the amount  of $101,606 for the year ended December 31, 2003. As a result, the Company
has restated  its previously issued financial statements for the year ended December 31,
2003. The  Company previously reported a net loss of $3,069,353, or $(0.06) per share,
for the year  ended December 31, 2003. The restatement resulted in the Company reporting
net loss of  $3,170,959 million, or $(0.07) per share, for the year ended December 31,
2003.

There
were no other material changes from the financial statements filed with the Original
Filing as amended by the Prior Amendments

This
Amendment No. 7 does not amend any other information previously filed in the Original
Filing as amended by the Prior Amendments. The  Original Filing as amended by the Prior
Amendments is hereby superseded and amended with respect to the information set forth in
this Amendment.

3

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ITEM 7. FINANCIAL
STATEMENTS

SULPHCO, INC.

(A DEVELOPMENT
STAGE COMPANY)

FINANCIAL
STATEMENTS

FOR THE YEARS ENDED

DECEMBER 31, 2003

AND

DECEMBER 31, 2002

WITH

AUDIT REPORT OF

REGISTERED PUBLIC
ACCOUNTING FIRM

4

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TABLE OF CONTENTS

|Report of Registered Public Accounting Firm  | F-2      
|-------------------------------------------- | ---------
|Balance Sheet                                | F-3      
|Statements of Operations                     | F-4      
|Statement of Changes in Stockholders Equity | F-5 - F-7
|Statements of Cash Flows                     | F-8      
|Notes to Financial Statements                | F-9      

---

MARK BAILEY & CO.
LTD.

Certified Public
AccountantsManagement Consultants

|Office Address:1495 Ridgeview Drive, Ste. 200Reno, Nevada 89509-6634 | Phone: 775/332.4200Fax: 775/332.4210 | Mailing Address:P.O. Box 6060Reno, Nevada 89513
|-------------------------------------------------------------------- | ------------------------------------ | -----------------------------------------------

Report of
Registered Public Accounting Firm

June 17, 2004
(Restated April 4, 2005)

Board of Directors
Sulphco, Inc.

We have audited the
accompanying balance sheet of Sulphco, Inc., (a company in the development stage) as of
December 31, 2003, and the related statements of operations, shareholders deficit
and cash flows for the years ended December 31, 2003 and 2002. These financial statements
are the responsibility of the Companys management.Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our
audits in accordance with standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the
financial statements referred to above present fairly, in all material respects, the
financial position of Sulphco, Inc., (a company in the development stage), as of December
31, 2003, and the results of its operations and its cash flows for the years ended
December 31, 2003 and 2002, in conformity with accounting principles generally accepted in
the United States.

As discussed in Note
2, during 2004, the Company determined that it should have recognized compensation expense
related to the issuance of stock options for the year ended December 31, 2002. The Company
also identified certain errors in its previously issued financial statements related to
the capitalization of certain research and development expenses for the year ended
December 31, 2003. As a result, the Company has restated its previously issued
financial statements for the year ended December 31, 2003 and has recorded a prior period
adjustment to its accumulated deficit as of December 31, 2002.

/s/ Mark Bailey & Company,
Ltd.Reno, Nevada

F-2

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SULPHCO, INC.
(A Company in the Development Stage)BALANCE SHEET
December 31, 2003

ASSETS

|                                                                                                          | 2003 | 
|--------------------------------------------------------------------------------------------------------- | ---- | 
|Current Assets                                                                                            |      | 
|Cash                                                                                                      |      | 
|Other current assets                                                                                      |      | 
|                                                                                                          |      | 
|Total current assets                                                                                      |      | 
|                                                                                                          |      | 
|Property and equipment (net of accumulated depreciation of $525,842)                                      |      | 
|                                                                                                          |      | 
|Other Assets                                                                                              |      | 
|Deferred tax asset (net of valuation allowance of $6,176,204)                                             |      | 
|Other                                                                                                     |      | 
|                                                                                                          |      | 
|Total assets                                                                                              |      | 
|                                                                                                          |      | 
|                                                                                                         
|LIABILITIES
AND STOCKHOLDERS EQUITY                                                                     
|Current Liabilities                                                                                       |      | 
|Accounts payable                                                                                          |      | 
|Accrued expenses                                                                                          |      | 
|Settlement liability                                                                                      |      | 
|Related party notes payable                                                                               |      | 
|                                                                                                          |      | 
|Total current liabilities                                                                                 |      | 
|                                                                                                          |      | 
|Commitments and Contingencies                                                                             |      | 
|                                                                                                          |      | 
|Stockholders Equity                                                                                      |      | 
|Preferred stock, 10,000,000 shares authorized ($.001 par value)
    none issued                           |      | 
|Common stock, $.001 par value, 100,000,000 shares authorized
    49,670,083 shares issued and outstanding |      | 
|Additional paid-in-capital (restated for 2002)                                                            |      | 
|Stock issued for prepaid expense                                                                          |      | 
|Stock subscriptions receivable                                                                            |      | 
|Common stock subscribed                                                                                   |      | 
|Deficit accumulated during the development stage (restated for 2002)                                      |      | 
|                                                                                                          |      | 
|Total stockholders equity                                                                                |      | 
|                                                                                                          |      | 
|Total liabilities and stockholders equity                                                                |      | 
|                                                                                                          |      | 

The Accompanying
Notes are an Integral Part of the Financial Statements

F-3

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SULPHCO, INC.
(A Company in the Development Stage)STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2003 and 2002 and From Inception

|                                                        | Restated 2003 |  | Restated 2002 |                       | Inception to date |  
|------------------------------------------------------- | ------------- |  | ------------- | --------------------- | ----------------- | -
|                                                       
|Revenue                                                 |               |  |               |                       |                   |  
|Sales                                                   |               |  | $             | -                     |                   | $
|                                                       
|Expenses                                                |               | 
|General and administrative expenses (restated for 2002) |               |  |               | (2,111,300            | )                 |  
|Research and development expenses                       |               |  |               | (620,416              | )                 |  
|Depreciation expense                                    |               |  |               | (191,043              | )                 |  
|                                                        |               |  |               |                       |                   |  
|Total expenses                                          |               |  |               | (2,922,759            | )                 |  
|                                                        |               |  |               |                       |                   |  
|Loss from operations                                    |               |  |               | (2,922,759            | )                 |  
|                                                        |               | 
|Other income (expense)                                  |               | 
|Interest income                                         |               |  |               | -                     |                   |  
|Interest expense                                        |               |  |               | (26,489               | )                 |  
|Loss on disposal of investment                          |               |  |               | (221,711              | )                 |  
|                                                        |               |  |               |                       |                   |  
|Loss before income taxes                                |               |  |               | (3,170,959            | )                 |  
|                                                        |               |  |               |                       |                   |  
|Provision for income taxes                              |               |  |               | -                     |                   |  
|                                                        |               |  |               |                       |                   |  
|Net loss (restated for 2002)                            |               |  | $             | (3,170,959            | )                 | $
|                                                        |               |  |               |                       |                   |  
|Loss per share - basic and diluted                      |               |  | $             | (0.07                 | )                 | $
|                                                        |               |  |               |                       |                   |  
|Weighted average shares outstanding - basic and diluted |               |  |               | 47,965,000            |                   |  
|                                                        |               |  |               |                       |                   |  
|                                                        |               |  |               |                       |                   |  
|                                                        |               |  |               | Pro Forma Income Data |                  
|                                                        |               |  |               |                       |                   |  
|Net loss as reported (restated)                         |               |  | $             | (3,170,959            | )                 | $
|Effect of error not corrected (net of tax)              |               |  |               | 101,606               |                   |  
|                                                        |               |  |               |                       |                   |  
|Pro forma net loss previously reported                  |               |  | $             | (3,069,353            | )                 | $
|                                                        |               |  |               |                       |                   |  
|Pro forma loss per share: basic and diluted             |               |  | $             | (0.06                 | )                 | $
|                                                        |               |  |               |                       |                   |  

The Accompanying
Notes are an Integral Part of the Financial Statements

F-4

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SULPHCO, INC.
(A Company in the Development Stage)STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
For the Years Ended December 31, 2003 and 2002 and From Inception

|                                                                                      |  | Common Stock |  | Additional Paid-in Capital |        | Accumulated Deficit |   | Stock issued for prepaid interest |   | Common Stock Subscribed |            | Stock Subscriptions Receivable |   | Total Equity | 
|------------------------------------------------------------------------------------- |  | ------------ |  | -------------------------- | ------ | ------------------- | - | --------------------------------- | - | ----------------------- | ---------- | ------------------------------ | - | ------------ | 
|
|                                                                                      |  |              | 
|Balance, January 13, 1999                                                             |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock issued for cash at $167 per share                                               |  | 1,000        |  | $                          | 1      |                     | $ | 166,999                           |   | $                       |           |                                | $ |             | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Restate from recapitalization of GRD, Inc.                                            |  | 19,999,000   |  |                            | 19,999 |                     |   | (19,999                           | ) |                         |           |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Net loss                                                                              |  |              |  |                            |        |                     |   |                                   |   |                         | (128,802   | )                              |   |              | 
|                                                                                      |  |              | 
|Balance at December 31, 1999                                                          |  | 20,000,000   |  | $                          | 20,000 |                     | $ | 147,000                           |   | $                       | (128,802   | )                              | $ |             | 
|                                                                                      |  |              | 
|Contributions from stockholders       in
     December 2000                          
|Cash                                                                                  |  |              |  |                            |        |                     |   | 169,168                           |   |                         |            |                                |   |              | 
|Equipment                                                                             |  |              |  |                            |        |                     |   | 362,331                           |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Acquisition of Filmworld, Inc.                                                        |  | 1,200,000    |  |                            | 1,200  |                     |   | (251,200                          | ) |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock issued for cash and subscription       receivable
     at $0.50 per share       |  | 820,000      |  |                            | 820    |                     |   | 409,180                           |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock options issued at $.50 per share in        December
     2000                   |  |              |  |                            |        |                     |   | 919,401                           |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock options issued at $1.50 per share        in
     December 2000                  |  |              |  |                            |        |                     |   | 94,799                            |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Net loss                                                                              |  |              |  |                            |        |                     |   |                                   |   |                         | (1,364,393 | )                              |   |              | 
|                                                                                      |  |              | 
|Balance at December 31, 2000                                                          |  | 22,020,000   |  | $                          | 22,020 |                     | $ | 1,850,679                         |   | $                       | (1,493,195 | )                              | $ |             | 
|                                                                                      |  |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                        
|Stock issued for intangible assets at $4.25       per
     share in January 2001      |  | 292,800      |  |                            | 293    |                     |   | 1,244,107                         |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock issued for intangible assets at $2.85       per
     share in February 2001     |  | 400,000      |  |                            | 400    |                     |   | 1,139,600                         |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock sold to a related party at $1.47       per
     share February 2001             |  | 24,750       |  |                            | 25     |                     |   | 36,431                            |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock issued for marketing services       at $2.86
     per share April 2001          |  | 200,000      |  |                            | 200    |                     |   | 571,800                           |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Issuance of options to related parties for       services
     in June 2001           |  |              |  |                            |        |                     |   | 773,931                           |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock issued in exchange for notes payable       at
     $0.50 per share in June 2001 |  | 9,556,000    |  |                            | 9,556  |                     |   | 4,768,444                         |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock issued in exchange for notes payable       at
     $1.50 per share in June 2001 |  | 425,000      |  |                            | 425    |                     |   | 637,075                           |   |                         |            |                                |   |              | 
|                                                                                     
|Stock sold for cash at $2.94 per share in June 2001                                   |  | 100,000      |  |                            | 100    |                     |   | 293,900                           |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock issued for a note receivable at $1.41       per
     share in June 2001         |  | 200,000      |  |                            | 200    |                     |   | 281,800                           |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Stock issued to a related party for cash at       $0.50
     per share in June 2001   |  | 350,000      |  |                            | 350    |                     |   | 174,650                           |   |                         |            |                                |   |              | 
|                                                                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|Cash received for subscription in July
     2001                                      |  |              |  |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 

The Accompanying
Notes are an Integral Part of the Financial Statements

F-5

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SULPHCO, INC.
(A Company in the Development Stage)STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
For the Years Ended December 31, 2003 and 2002 and From Inception

|                                                                                                           |  | Common Stock |   | Additional Paid-in Capital |        | Accumulated Deficit |   | Stock issued for prepaid interest |   | Common Stock Subscribed |             | Stock Subscriptions Receivable |   | Total Equity | 
|---------------------------------------------------------------------------------------------------------- |  | ------------ | - | -------------------------- | ------ | ------------------- | - | --------------------------------- | - | ----------------------- | ----------- | ------------------------------ | - | ------------ | 
|
|                                                                                                           |  |              |  
|Cash received for subscriptions in August 2001                                                             |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock issued for subscription receivable       of
     $2,000,000 in September 2001                        |  | 2,758,620    |   |                            | 2,759  |                     |   | 1,997,241                         |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock issued to a related party for       consulting
     fees at $0.85 per share       in November 2001   |  | 4,000,000    |   |                            | 4,000  |                     |   | 3,396,000                         |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Shares returned in November 2001                                                                           |  | (300,000     | ) |                            | (300   | )                   |   | (1,558,147                        | ) |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Cash received for subscriptions                                                                            |  |              |   |                            |        |                     |   |                                   |   |                         |            |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock returned in December 2001                                                                            |  | (100,000     | ) |                            | (100   | )                   |   | (49,900                           | ) |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock options issued at a weighted       average
     issue price of $0.75 per share       in October 2001 |  |              |   |                            |        |                     |   | 89,020                            |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Net loss                                                                                                   |  |              |   |                            |        |                     |   |                                   |   |                         | (6,927,525  | )                              |   |              | 
|                                                                                                           |  |             
|Balance at December 31, 2001                                                                               |  | 39,927,170   |   | $                          | 39,928 |                     | $ | 15,646,632                        |   | $                       | (8,420,720  | )                              | $ |             | 
|                                                                                                           |  |             
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock issued for related party services       at
     $0.50 per share in March 2002                        |  | 10,000,000   |   |                            | 10,000 |                     |   | 4,990,000                         |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock returned in May 2002                                                                                 |  | (1,000,000   | ) |                            | (1,000 | )                   |   | (499,000                          | ) |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock returned in June 2002                                                                                |  | (100,000     | ) |                            | (100   | )                   |   | (71,900                           | ) |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock returned in July 2002                                                                                |  | (25,000      | ) |                            | (25    | )                   |   | (37,475                           | ) |                         |             |                                |   |              | 
|                                                                                                          
|Payment on stock subscription received        in
     July 2002                                            |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock returned in July 2002                                                                                |  | (1,000,000   | ) |                            | (1,000 | )                   |   | (499,000                          | ) |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock issued for services at $0.10 per       share
     in September 2002                                  |  | 50,000       |   |                            | 50     |                     |   | 4,950                             |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock returned in September 2002                                                                           |  | (431,000     | ) |                            | (431   | )                   |   | (440,069                          | ) |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock issued for services at $0.27 per       share
     in October 2002                                    |  | 50,000       |   |                            | 50     |                     |   | 13,450                            |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock issued to a related party for cash at       $0.10
     per share in November 2002                    |  | 100,000      |   |                            | 100    |                     |   | 9,900                             |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Stock issued to a related party for cash at       $0.10
     per share in December 2002                    |  | 50,000       |   |                            | 50     |                     |   | 4,950                             |   |                         |             |                                |   |              | 
|                                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              | 
|Net loss (as previously reported)                                                                          |  |              |   |                            |        |                     |   |                                   |   |                         | (6,542,126  | )                              |   |              | 
|                                                                                                           |  |             
|Balance at December 31, 2002 (as       previously
     reported)                                           |  | 47,621,170   |   | $                          | 47,621 |                     | $ | 19,122,438                        |   | $                       | (14,962,846 | )                              | $ |             | 
|                                                                                                           |  |             

The Accompanying
Notes are an Integral Part of the Financial Statements

F-6

---

SULPHCO, INC.
(A Company in the Development Stage)STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
For the Years Ended December 31, 2003 and 2002 and From Inception

|                                                                                           |  | Common Stock |   | Additional Paid-in Capital |        | Accumulated Deficit |   | Stock issued for prepaid interest |   | Common Stock Subscribed |             | Stock Subscriptions Receivable |   | Total Equity |  
|------------------------------------------------------------------------------------------ |  | ------------ | - | -------------------------- | ------ | ------------------- | - | --------------------------------- | - | ----------------------- | ----------- | ------------------------------ | - | ------------ | -
|
|                                                                                           |  |              |  
|Net loss (as previously reported)                                                          |  |              |   |                            |        |                     |   |                                   |   |                         | (6,542,126  | )                              |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Stock options issued in November 2002      for services
     at $0.10 per share (restated) |  |              |   |                            |        |                     |   | 31,500                            |   |                         | (31,500     | )                              |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Net loss (restated)                                                                        |  |              |   |                            |        |                     |   |                                   |   |                         | (6,573,627  | )                              |   |              |  
|                                                                                           |  |             
|Balance at December 31, 2002 (restated)                                                    |  | 47,621,170   |   | $                          | 47,621 |                     | $ | 19,153,938                        |   | $                       | (14,994,346 | )                              | $ |             |  
|                                                                                           |  |             
|                                                                                           |  |              |   |                            |        |                     |   |                                  
|Stock subscribed for services at $0.42 per       share
     in February 2003               |  |              |   |                            |        |                     |   | 20,950                            |   |                         |             |                                |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Payment on stock subscription       received in
     May 2003                              |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Stock issued to a related party for cash at       $0.33
     per share in March 2003       |  | 50,000       |   |                            | 50     |                     |   | 16,450                            |   |                         |             |                                |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Stock issued for services at $0.32 per       share
     in May 2003                        |  | 50,000       |   |                            | 50     |                     |   | 15,950                            |   |                         |             |                                |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Stock returned in August 2003                                                              |  | (196,870     | ) |                            | (197   | )                   |   | (196,678                          | ) |                         |             |                                |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Stock returned in September 2003                                                           |  | (3,130       | ) |                            | (3     | )                   |   | (3,322                            | ) |                         |             |                                |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Stock issued to a related party for cash at       $0.23
     per share in November 2003    |  | 2,173,913    |   |                            | 2,174  |                     |   | 497,826                           |   |                         |             |                                |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Stock returned in December 2003                                                            |  | (25,000      | ) |                            | (25    | )                   |   | (37,275                           | ) |                         |             |                                |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Stock subscribed for prepaid interest       at
     $0.296 per share in December 2003      |  |              |   |                            |        |                     |   | 295,000                           |   |                         |             |                                |   | (296,000     | )
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Net loss as previously reported                                                            |  |              |   |                            |        |                     |   |                                   |   |                         | (3,069,353  | )                              |   |              |  
|                                                                                           |  |             
|                                                                                          
|Balance at December 31, 2003      (as previously reported)                                 |  | 49,670,083   |   | $                          | 49,670 |                     | $ | 19,762,839                        |   | $                       | (18,063,699 | )                              | $ | (296,000     | )
|                                                                                           |  |             
|Net loss as previously
     reported                                                       |  |              |   |                            |        |                     |   |                                   |   |                         | (3,069,353  | )                              |   |              |  
|Research and development expense                                                           |  |              |   |                            |        |                     |   |                                   |   |                         | (101,606    | )                              |   |              |  
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  
|Net loss (restated)                                                                        |  |              |   |                            |        |                     |   |                                   |   |                         | (3,170,959  | )                              |   |              |  
|                                                                                           |  |             
|Balance at December 31, 2003
     (restated)                                               |  | 49,670,083   |   | $                          | 49,670 |                     | $ | 19,762,839                        |   | $                       | (18,165,305 | )                              | $ | (296,000     | )
|                                                                                           |  |              |   |                            |        |                     |   |                                   |   |                         |             |                                |   |              |  

The Accompanying
Notes are an Integral Part of the Financial Statements

F-7

---

SULPHCO, INC.
(A Company in the Development Stage)STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2003 and 2002 and From Inception

|                                                        | 2003 |  | 2002 |            | Inceptionto Date |  
|------------------------------------------------------- | ---- |  | ---- | ---------- | ---------------- | -
|Cash Flows from Operating Activities                    |      |  |      |            |                  |  
|Net loss                                                |      |  | $    | (3,170,959 | )                | $
|                                                       
|Adjustments to reconcile net loss to net cash           |      | 
|used in operating activities:                           |      | 
|Depreciation expense                                    |      |  |      | 191,043    |                  |  
|Shares issued for services                              |      |  |      | 16,000     |                  |  
|Shares subscribed for services                          |      |  |      | 21,000     |                  |  
|(Increase) decrease in accounts receivable              |      |  |      | (231       | )                |  
|Loss on disposal of subsidiary                          |      |  |      | 221,711    |                  |  
|(Increase) decrease in prepaid expenses                 |      |  |      | 211        |                  |  
|Increase (decrease) in accounts payable                 |      |  |      | (103,800   | )                |  
|Increase in accrued liabilities                         |      |  |      | 4,644      |                  |  
|Increase (decrease) in legal settlement                 |      |  |      | (86,364    | )                |  
|                                                        |      |  |      |            |                  |  
|Net cash used in operating activities                   |      |  |      | (2,906,745 | )                |  
|                                                        |      |  |      |            |                  |  
|Cash Flows from Investing Activities                    |      | 
|Purchase of property and equipment                      |      |  |      | (276,854   | )                |  
|Investment in subsidiary                                |      |  |      | -          |                  |  
|Payment of deposits                                     |      |  |      | (15,742    | )                |  
|Development of intangible assets                        |      |  |      | -          |                  |  
|                                                        |      |  |      |            |                  |  
|Net cash used in investing activities                   |      |  |      | (292,596   | )                |  
|                                                        |      |  |      |            |                  |  
|Cash Flows from Financing Activities                    |      | 
|Proceeds from issuance of stock                         |      |  |      | 516,500    |                  |  
|Proceeds from stock subscriptions                       |      |  |      | 1,655,000  |                  |  
|Proceeds from issuance of related party notes payable   |      |  |      | 2,250,000  |                  |  
|Proceeds from issuance of line of credit                |      |  |      | -          |                  |  
|Return of capital                                       |      |  |      | -          |                  |  
|Payments on contracts payable                           |      |  |      | -          |                  |  
|Principal payments on line of credit                    |      |  |      | (500,000   | )                |  
|Decrease in related party receivable                    |      |  |      | -          |                  |  
|Principal payments on advance from related party        |      |  |      | -          |                  |  
|                                                        |      |  |      |            |                  |  
|Net cash provided by financing activities               |      |  |      | 3,921,500  |                  |  
|                                                        |      |  |      |            |                  |  
|Net increase (decrease) in cash and cash equivalents    |      |  |      | 722,159    |                  |  
|                                                       
|Cash and cash equivalents at inception,                 |      | 
|December 31, 2002 and 2001                              |      |  |      | 13,574     |                  |  
|                                                        |      |  |      |            |                  |  
|Cash and cash equivalents at December 31, 2003 and 2002 |      |  | $    | 735,733    |                  | $
|                                                        |      |  |      |            |                  |  

Supplemental
Information and Noncash TransactionsDuring the years ended December 31, 2003, and 2002,
$26,489 and $16,912 were paid for interest, respectively.

During the years
ended December 31, 2003 and 2002 no income taxes were paid.

The Accompanying
Notes are an Integral Part of the Financial Statements

F-8

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

|1. | Organization
and Significant Accounting Policies
|-- | ------------------------------------------------

| | Business
| | --------

| | The
Company is considered a developmental stage company in 2003, as defined by
Statement  of Financial Accounting Standards (SFAS) No. 7 due to the Company  continuing to develop and market equipment and processes for the
upgrading of crude oil by  reducing its weight and the reduction of sulfur content.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Sulphco,
Inc. (the Company), formerly Film World, Inc., was originally organized under the laws of
the State of Nevada on December 23, 1986 under the name Hair Life Inc. The Company became
inactive during 1987 and remained inactive until September 1994. In September 1994,
through a reverse acquisition agreement, the Patterson Group became a wholly owned
subsidiary of Hair Life, Inc. Operations were conducted via two subsidiaries until 1998,
at which time all operations were discontinued and the Company remained dormant until
January 1999 at which time it was restated from the recapitalization of GRD, Inc.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
July 1999 the Company acquired film rights and changed the corporate name to Film World,
Inc. In December 2000 the Company discontinued its film operations and distributed all
assets and liabilities related to that business to certain shareholders in exchange for
their stock.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2000, the Company entered into an exchange agreement with GRD, Inc. (DBA
Sulphco)  and issued 1,200,000 shares in exchange for all of the outstanding shares of
GRD, Inc.  Since the shareholders of GRD, Inc. continue to control the Company, the
merger was  accounted for as a reverse acquisition of Film World, Inc., and the name was
changed to  SulphCo, Inc.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Use
of Estimates in the Preparation of Financial Statements
| | -----------------------------------------------------------

| | The
preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates. The
markets  for the Companys products and services are characterized by competition,
rapid  technological development, regulatory changes, and new product introductions, all
of which  may impact the future value of the Companys assets.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-9

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

| | Cash
and Cash Equivalents
| | -------------------------

| | For
the purpose of the statements of cash flows, all highly liquid investments with
maturities  of three months or less are considered to be cash equivalents. There were no
cash  equivalents as of December 31, 2003. 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Accounts
Receivable and Allowance for Doubtful Accounts
| | -------------------------------------------------------

| | The
Companys receivables are recorded when billed and represent claims against third
parties that will be settled in cash. The carrying value of the Companys
receivables, net of the allowance for doubtful accounts, represents their estimated net
realizable value.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company evaluates the collectibility of accounts receivable on a case-by-case basis. The
Company records a reserve for bad debts against amounts due to reduce the net recognized
receivable to an amount the Company believes will be reasonably collected. The reserve is
a discretionary amount determined from the analysis of aging.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fair
Value of Financial Instruments
| | -----------------------------------

| | The
carrying amount of financial instruments held by the Company, which include cash and cash
equivalents, accounts receivable, accounts payable and accrued liabilities, approximate
fair value due to their short duration. The carrying amount of the Companys notes
payable approximate their fair value based on incremental borrowing rates for similar
types of borrowing arrangements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Property
and Equipment
| | ----------------------

| | Property
and equipment are recorded at cost, less accumulated depreciation. In accordance with
SFAS  144, the Company reviews its long-lived assets for impairment. Whenever events or
changes  in circumstances indicate that the carrying amount of the assets might not be
recovered  through undiscounted future cash flows, such losses are recognized in the
statement of  operations.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
cost of property, plant, and equipment is depreciated over the remaining estimated useful
lives of the assets ranging from 3 to 7 years. Leasehold improvements are depreciated
over  the lesser of the terms of the lease or the estimated useful lives of the assets.
Depreciation is computed using the straight line method for both financial reporting and
income tax purposes. Expenditures for maintenance and repairs are expensed when incurred,
while betterments are capitalized. Gains and losses on the sale of property and equipment
are reflected in the statement of operations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-10

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

| | Research
and Development
| | ------------------------

| | The
Company expenses research and development costs as incurred.
| | ----------------------------------------------------------------

| | Income
Taxes
| | ------------

| | The
Company  provides for income taxes under the provisions of Statements of Financial
Accounting  Standards  (SFAS) No. 109 Accounting  for Income
Taxes. SFAS No. 109 requires an asset and liability based approach in accounting
for income taxes.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deferred
income tax assets and liabilities are recorded to reflect the tax consequences in future
years of temporary differences between revenue and expense items for financial statement
and income tax purposes. Valuation allowances are provided against assets that are not
likely to be realized. Deferred tax assets and liabilities are measured using the enacted
tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets
and  liabilities of a change in tax rates is recognized in income in the period that
includes  the enactment date.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Loss
Per Share
| | --------------

| | The
computation of basic and diluted earnings per common share is based on the weighted
average number of shares outstanding during the year, plus the common stock equivalents.
Common stock equivalents are not included in the diluted loss per share calculation when
their effect is antidilutive.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Revenue
Recognition
| | -------------------

| | In
2000 the Securities and Exchange  Commission (SEC) issued Staff  Accounting  Bulletin
(SAB) No. 101,  Revenue  Recognition in Financial  Statements.  Pursuant to
SAB No. 101 and the relevant generally accepted  accounting  principles,  the Company
will recognize revenue upon  the passage of title, ownership and the risk of loss to the
customer.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Reclassifications
| | -----------------

| | Certain
prior year amounts have been reclassified to conform to the current year presentation.
These reclassifications did not have an impact on previously reported financial position,
cash flows, or results of operations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-11

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

| | New
Accounting Pronouncements
| | -----------------------------

| | In
April 2003 the Financial Accounting Standards Board (FASB) issued Statements
of Financial Accounting Standards (SFAS) 149 Amendment of Statement 133
on Derivative Instruments and Hedging Activities. This statement, which amends and
clarifies existing accounting pronouncements, addresses financial accounting and
reporting  for derivative or other hybrid instruments. This Statement requires that
contracts with  comparable characteristics be accounted for similarly. It is effective
for contracts  entered into or modified after September 30, 2003. The Company does not
expect the  adoption of SFAS 149 to have any impact on the financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2003 the FASB issued SFAS 150, Accounting for Certain Financial Instruments
with  Characteristics of both Liabilities and Equity, which is effective at the
beginning  of the first interim period beginning after March 15, 2003. This statement
establishes  standards for the Companys classification of liabilities in the
financial statements  that have characteristics of both liabilities and equity. The
Company believes the  adoption of SFAS 150 will have no effect on the Companys
financial position or  results of operations.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2003 the FASB issued SFAS 132R, Employers Disclosures about Pensions
and Other Postretirement Benefitsan amendment of SFAS 87, 88, and 106. This
Statement revises employers disclosures about pension plans and other
postretirement  benefit plans. It does not change the measurement or recognition of those
plans required  by SFAS 87, Employers Accounting for Pensions, SFAS 88,
Employers Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits, and SFAS 106, Employers Accounting
for Postretirement Benefits Other Than Pensions. This Statement retains  the
disclosure requirements contained in SFAS 132, Employers Disclosures about
Pensions and Other Postretirement Benefits, which it replaces. It requires
additional disclosures to those in the original Statement 132 about the assets,
obligations, cash flows, and net periodic benefit cost of defined benefit pension plans
and other defined benefit postretirement plans. The required information is required to
be  provided separately for pension plans and for other postretirement benefit plans. The
Company has no Pension or Other Postretirement Benefits.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Restatement
of Financial Statements
|-- | -----------------------------------

| | During
2004 the Company determined that it should have recognized compensation expense related
to  the issuance of stock options in the amount of $31,500 for the year ended December
31,  2002. The Company also identified certain errors in its previously issued financial
statements related to the capitalization of certain research and development expenses in
the amount of $101,606 for the year ended December 31, 2003. As a result, the Company has
restated its previously issued financial statements for the year ended December 31, 2003
and has recorded a prior period adjustment to its accumulated deficit as of December 31,
2002. The Company previously reported a net loss of $3,069,353, or $(0.06) per share, and
$6,542,127 or $(0.15) per share for the years ended December 31, 2003 and 2002,
respectively. The restatements resulted in the Company reporting net loss of $3,170,959
million, or $(0.07) per share and net loss of $6,573,627, or $(0.15) per share for the
years ended December 31, 2003 and 2002, respectively.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-12

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

|3. | Property
and Equipment
|-- | ----------------------

| | The
following is a summary of property, plant, and equipment  at cost, less accumulated
depreciation:
| | ------------------------------------------------------------------------------------------------------

|                               | 2003 |           | 2002 |         
|------------------------------ | ---- | --------- | ---- | --------
|Equipment                      |      | $585,984  |      | $454,410
|Computers                      |      | 67,367    |      | 45,901  
|Office furniture               |      | 44,669    |      | 26,458  
|Desulfurization unit           |      | 427,630   |      | 361,758 
|Leasehold improvements         |      | 50,337    |      | 11,434  
|                               |      |           |      |         
|                               |      | 1,175,987 |      | 899,961 
|Less: Accumulated depreciation |      | (525,842  | )    | (334,799
|                               |      |           |      |         
|Total                          |      | $650,145  |      | $565,162
|                               |      |           |      |         

|4. | Collaboration
Agreement
|-- | -----------------------

| | The
Company has an uncommissioned desulfurization unit. This unit consists of a trailer
containing equipment to be used to remove sulfur from crude oil that was sent to
ChevronTexacos El Segundo refinery for testing during 2003 as part of the  Companys
collaboration agreement with Energy Technology Company (ETC), a  division of
ChevronTexaco. The Company spent $65,872 and $361,758 for the years ended  December 31,
2003 and 2002, respectively, upgrading and developing the equipment.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
December 31, 2003 and 2002 the value of the desulfurization unit (unit) was
$427,630 and $361,758, respectively (See Note 3). No depreciation expense related to the
unit was recognized in 2003 or 2002 as it is considered work in process.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-13

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

|5. | Investment
in Subsidiary
|-- | ------------------------

| | On
November 1, 2001, the Company formed a joint venture to implement its desulfurization
process throughout Europe. To initiate the program, the company granted an Exclusive
Technology License to Innovative Clean Technologies S.A. (ICT), a Luxembourg
corporation and wholly owned subsidiary of Eliop International. Eliop International is a
Luxembourg corporation that was owned 50.5% by the Company. These corporations are
managed  by Mr. Luigi Profumo, who controls Eliop, a major petroleum refinery in Genoa,
Italy. This  investment was valued in 2001 based on the net book value of equipment
provided to the  refinery in Italy under the licensing agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
joint venture agreement was cancelled as of August 5, 2002 for ICTs failure to
comply with the terms of the contract. At the time of cancellation, ICT had no authority
to represent the Company and was demanded to immediately return the Companys
equipment valued at $221,771. The Company believed the assets would be returned sometime
during 2003. After numerous failed attempts to obtain the assets during the year ended
December 31, 2003, it was determined that the Company would not receive the equipment.
During the year ended December 31, 2003, the Company abandoned the investment valued at
$221,711.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | Line
of Credit
|-- | --------------

| | In
2002 the Company negotiated a $500,000 revolving line of credit with Nevada State Bank at
an interest rate of prime (4.25 percent), with the Chairman and CEO of the Company as the
guarantor. The funds assisted the Company in meeting short-term cash flow requirements.
The line of credit expired on May 24, 2003.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
December 31, 2003 and 2002, the Company owed $-0- and $500,000, respectively, to Nevada
State Bank under the line of credit agreement.
| | -----------------------------------------------------------------------------------------------------------------------------------------

|7. | Notes
Payable  Related Party
|-- | -----------------------------

| | The
Companys notes payable consist of the following as of December 31, 2003:
| | -----------------------------------------------------------------------------

| | The
Company has a $250,000 note due to a related party with an interest rate of 9.6 percent
that requires monthly interest only payments of $2,000. This note matures on March 1,
2004. Any unpaid accrued interest will be due with the principal when the note matures.
In  2003 the Company paid $24,000 of interest on the note. The principal balance of
$250,000  was still outstanding at December 31, 2003.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-14

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

| | On
December 30, 2003, the Company issued a $500,000 note to the Chairman and CEO and a
$500,000 note to a related party. From each of these notes, $250,000 was obtained before
year end. The balance of $250,000 for each note will be obtained when the Company needs
it  with both notes maturing on December 30, 2004. Each note required 500,000 restricted
shares of the Companys common stock issued at $0.296 per restricted share, in lieu
of cash interest, to be delivered to the note holder by January 15, 2004. The notes are
due on demand. In January 2004 the Company issued 500,000 subscribed shares to the
Chairman and CEO and 500,000 shares to the related party. At December 31, 2003 the
Company  had $296,000 in prepaid interest classified as a contra equity account related
to the  notes.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | Operating
Lease
|-- | ---------------

| | The
Company  leases office and warehouse  space in Sparks,  Nevada.  In March 2003 the
Company  extended its lease term for one  additional  year to February, 2004 and in
February of 2004, the lease was again extended for one year to March, 2005. (See Note 15)
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Following
is a schedule of payments required under the rental lease agreement:
| | ------------------------------------------------------------------------------

|2004                               |  | $443,068
|---------------------------------- |  | --------
|2005                               |  | 73,845  
|2006                               |  | -0-     
|2007                               |  | -0-     
|After
      2007                   |  | -0-     
|                                   |  |         
|Total
      minimum lease payments |  | $516,919
|                                   |  |         

| | In
2003, the Company was also obligated for the lease of another property from the Chairman
and CEO under a non-cancelable lease agreement. The lease required that the Company make
payments until either the lease term expired in February 2004, or the property was sold.
The property sold in November 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company paid $427,138 and $78,315 for rent expense in 2003 and 2002, respectively.
| | --------------------------------------------------------------------------------------

F-15

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

|9. | Contingencies
|-- | -------------

| | The
Company is currently the subject of an SEC investigation. The SEC alleges violations of
Sections 5(a), 5(c) and 17(a) of the Securities Act of 1934 and Section 10(b) of the
Securities Act of 1934 and Rule 10b-5. The Company has retained counsel and responded to
the inquiry. As of the report date, the SEC has not responded and, therefore, the outcome
of the action is not determinable at this time. Any such action could have a material
adverse effect on the Company.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
November 2001, a former employee filed a complaint against the Company, claiming that an
employment agreement between the Company and the former employee had been breached. A
settlement was reached in February 2003. The former employee received the 2 million
shares  of common stock that were previously cancelled when his employment ended with the
Company.  The Company was also required to pay $100,000 to the former employee on an
installment  basis. As of December 31, 2003, the Company owed $13,636.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10. | Related
Party Transactions
|--- | --------------------------

| | In
2003, the Company leased property from the Chairman and CEO under a non-cancelable lease
agreement. The rent paid to the Chairman in 2003, and 2002, was $71,500 and $78,315,
respectively.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Chairman and CEO was paid $300,000 and $250,000 in 2003 and 2002, respectively, under an
employment contract. The agreement is set to terminate on July 1, 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
February 2003, the Company subscribed 50,000 shares of common stock to a director at
$0.42  per share for director services of $21,000. These shares were issued in March
2004.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
March 2003, the Company issued 50,000 shares of common stock at $0.33 per share to a
director for cash of $16,500.
| | ---------------------------------------------------------------------------------------------------------------------

| | In
June 2003, the Company issued 50,000 shares of common stock at $0.32 per share for the
services of a Director valued at $16,000.
| | -----------------------------------------------------------------------------------------------------------------------------------

| | In
November 2003, the Company issued 2,173,913 shares of common stock at $0.23 per share to
the Chairman and CEO for $500,000.
| | ------------------------------------------------------------------------------------------------------------------------------

| | In
December 2003 the Company subscribed 1,000,000 shares of restricted common stock at
$0.296  per share for prepaid interest due on related party notes.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------

F-16

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

| | See
Note 7 for related party notes payable as of December 31, 2003.
| | -------------------------------------------------------------------

|11. | Common
Stock
|--- | ------------

| | The
Company  had the following transactions related to its common stock during the year ended
December  31, 2003:
| | -----------------------------------------------------------------------------------------------------------------

| | In
February 2003 the Company agreed to issue 50,000 shares of common stock to a director at
$0.42 per share for director services of $21,000. These shares were issued in March 2004.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
March 2003 the Company issued 50,000 shares of common stock at $0.33 per share for cash
of  $16,500.
| | -------------------------------------------------------------------------------------------------------

| | In
May 2003 the Company received payment of $3,575,000 for stock subscriptions in the form
of  $1,655,000 in cash and the relief of loans payable of $1,920,000.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2003 the Company issued 50,000 shares of common stock at $0.32 per share for the
services of a Director valued at $16,000.
| | ---------------------------------------------------------------------------------------------------------------------------------

| | In
August 2003 196,870 common shares were returned to the Company to cancel part of a
subscription receivable of $200,000. In September 2003 3,130 common shares were returned
to the Company to cancel the balance of the subscription receivable.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
November 2003 the Company issued 2,173,913 shares of common stock at $0.23 per share to
the Chairman and CEO for $500,000.
| | -----------------------------------------------------------------------------------------------------------------------------

| | In
December 2003 25,000 common shares were returned to the Company to cancel a subscription
receivable of $37,300.
| | ------------------------------------------------------------------------------------------------------------------

| | In
December 2003 one million restricted common shares were subscribed for and subsequently
issued restricted shares at $0.296 per share in January 2004 for interest of $296,000 on
related party notes.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12. | Stock
Options
|--- | -------------

| | The
Company has adopted the disclosure provision for stock-based compensation of SFAS No.
123,  Accounting for Stock-Based Compensation, and SFAS No. 148, Accounting
for Stock-Based Compensation-Transition and Disclosure, which was released in
December 2002 as an amendment of SFAS No. 123, but continues to account for such items
using the intrinsic value method as outlined under Accounting Principles Board  (APB)
Opinion No. 25, Accounting for Stock Issued to Employees.  Under APB 25, if
the exercise price of the Companys employee stock options equals or  exceeds the
fair market value of the underlying stock on the date of grant no compensation  expense
is recognized.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-17

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

| | The
Black-Scholes option valuation model was developed for use in estimating the fair value
of  traded options, which have no vesting restrictions and are fully transferable. In
addition, option valuation models require the input of highly subjective assumptions
including the expected stock price volatility. Because the Companys employee stock
options have characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the fair value
estimate, in managements opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of the Companys employee stock options.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
purposes of pro forma disclosures, the estimated fair value of the options is amortized
to  expense over the vesting period of the options. The following table illustrates the
effect  on net loss per share if the fair value-based method had been applied to all
awards:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                             | 2003 |  | 2002 |           
|---------------------------- | ---- |  | ---- | ----------
|Net loss - as reported       |      |  | $    | (3,170,959
|                             |      |  |      |           
|                            
|Net loss - pro forma         |      |  | $    | (3,188,982
|                             |      |  |      |           
|                            
|Loss per share - as reported |      |  | $    | (0.07     
|                             |      |  |      |           
|                            
|Loss per share - pro forma   |      |  | $    | (0.07     
|                             |      |  |      |           

| | The
fair value of each option granted is estimated at the date of grant using the
Black-Scholes option-pricing model with the following assumptions.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------

|                                | 2003       | 2002 
|------------------------------- | ---------- | -----
|Expected Dividend yield         | $ -0-      | $ -0-
|Expected stock price volatility | 272%       | n/a  
|Risk free interest rate         | 4.00-4.65% | n/a  
|Expected life of options        | 3 years    | n/a  

| | The
following table summarizes information about stock options outstanding at December 31,
2003 and 2002:
| | ---------------------------------------------------------------------------------------------------------

F-18

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

|                       | 2003   |  | 2002                         |          
|---------------------- | ------ |  | ---------------------------- | ---------
|                       | Shares |  | WeightedAverageExercisePrice |          
|Outstanding, beginning |        |  |                              | -        
|Option granted         |        |  |                              | 1,100,000
|                       |        |  |                              |          
|Outstanding, ending    |        |  |                              | 1,100,000
|                       |        |  |                              |          

| | The
Company has a Non-Officer Limited Stock Appreciation Rights Plan. In August 2003 ten
employees were granted awards for 2,500 limited stock appreciation rights, each with a
multiplier of eighteen, at a base price of $0.24. The limited stock appreciation rights
are exercisable only upon the following two conditions being met; first, the closing price
of the Companys common stock must have exceeded $10 for at least three consecutive
trading days; second, the Company must have engaged in an Acquisition after the first
condition is met.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13. | Stock
Subscriptions
|--- | -------------------

| | In
September 2001 the Company issued 2,758,620 shares, as part of the 12,639,620 total share
subscription, under a subscription agreement in which a third party agreed to place the
shares with investors interested in assisting the Company in reaching its objectives. The
shares were valued at $0.725 per share for a total value of $2,000,000. At December 31,
2002, the Company had received $1,116,000 in cash from the third party. In early 2003
another $75,000 was received. In April 2002 the Company requested that the third party
immediately remit the balance of $737,000 or return 1,023,611 shares for cancellation. In
January 2004 the Company filed suit for the remittance of the $737,000 related to the
disputed subscription. This dispute has not yet been resolved as of the report date.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14. | Income
Taxes
|--- | ------------

| | The
significant components of the Companys deferred tax assets are as follows:
| | -------------------------------------------------------------------------------

|                                 | 2003 |  | 2002 |           
|-------------------------------- | ---- |  | ---- | ----------
|Deferred tax assets:             |      |  |      |           
|Net operating loss carryforwards |      |  | $    | 6,176,204 
|Valuation allowance              |      |  |      | (6,176,204
|                                 |      |  |      |           
|Net deferred tax assets          |      |  | $    | -         
|                                 |      |  |      |           

F-19

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

| | For
the year ended December 31, 2003, the valuation allowance was increased by $1,078,126 due
to the uncertainties surrounding the realization of the deferred tax assets, resulting
from the Companys net loss of $3,170,959 for the year ended December 31, 2003 and an
accumulated deficit of $18,165,305 at December 31, 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
provision (benefit) for income taxes differs from the provision (benefit) amount computed
by applying the statutory federal tax rate (34%) to the loss before taxes due to the
following:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                   | 2003 |  | 2002 |           
|---------------------------------- | ---- |  | ---- | ----------
|Computed expected benefit          |      |  | $    | (1,078,126
|Increase in valuation allowance    |      |  |      | 1,078,126 
|                                   |      |  |      |           
|Provision (benefit) for income tax |      |  | $    | -         
|                                   |      |  |      |           

| | As
of December 31, 2003, the Company had a net operating loss carryforward for federal
income  tax purposes of $18,165,305. This net operating loss carryforward will begin to
expire in  2019. The valuation allowance has been estimated in an amount equal to the
projected  future benefit of the loss carryforward due to the current assumption the
Company will not  generate sufficient income to utilize the future tax benefit.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15. | Quarterly
Financial Information (Unaudited)
|--- | -------------------------------------------

| | Summarized
unaudited quarterly financial information for the years ended December 31, 2003 and 2002
are noted below (in thousands, except for per share amounts):
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                         |  |  | 2003         |       
|---------------------------------------- |  |  | ------------ | ------
|                                         |  |  | Dec. 31,2003 |       
|Net revenues                             |  |  | $            | -     
|Gross profit                             |  |  | $            | -     
|Net (loss)                               |  |  | $            | (1,534
|Net (loss) per share - basic and diluted |  |  | $            | (0.04 

F-20

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

|                                       |  |  | 2002         |      
|-------------------------------------- |  |  | ------------ | -----
|                                       |  |  | Dec. 31,2002 |      
|Net revenues                           |  |  | $            | -    
|Gross profit                           |  |  | $            | -    
|Net loss                               |  |  | $            | (581 
|Net loss per share - basic and diluted |  |  | $            | (0.03

|16. | Subsequent
Events
|--- | -----------------

| | In
January 2004, the Company issued 500,000 shares to the Chairman and 500,000 shares to a
related party for prepaid interest of $296,000 on notes payable.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | Also
in January 2004, the Company filed suit for the remittance of $737,000, the balance of
the  stock subscription that is in dispute.
| | ---------------------------------------------------------------------------------------------------------------------------------------

| | In
February 2004, the Company extended their lease term for an additional one year to March
3, 2005.
| | ----------------------------------------------------------------------------------------------------

| | In
March 2004, the Company issued the 50,000 shares subscribed at $0.42 per share to a
director for director fees of $21,000.
| | -----------------------------------------------------------------------------------------------------------------------------

| | Also
in March 2004, the Company retired the note payable to a related party in the amount of
$250,000.
| | ------------------------------------------------------------------------------------------------------

| | In
June 2004, the Company entered into two private placements. The first private placement
was to sell 2,978,342 units. The units consist of 2,978,342 shares of common stock at
$0.90 per share, warrants exercisable at $1.125 per share for 1,073,690 shares of common
stock, and additional investment rights entitling the purchaser to purchase up to
6,135,357 shares of common stock at a purchase price of $0.90, and a warrant to purchase
up to 2,147,379 shares at $1.125 per share. The investment rights are exercisable by
investors for 180 trading days following the effective date of the registration
statement.  The warrants are exercisable for up to 30 months after the date of their
issuance.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-21

---

SULPHCO, INC.
(A Company in the Development Stage)NOTES TO FINANCIAL STATEMENTS
December 31, 2003, and 2002

| | The
second private placement was to sell 2,030,960 units. The units consist of 2,030,960
shares of common stock at $1.25 per share, warrants exercisable at $1.5625 per share for
732,161 shares of common stock, and additional investment rights entitling the purchaser
to purchase up to 2,091,889 shares of common stock at $1.25 per share and a warrant to
purchase up to 1,464,322 shares at $1.5625 per share. The investment rights are
exercisable by investors for 180 trading days following the effective date of the
registration statement. The warrants are exercisable for up to 30 months after the date
of  their issuance.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-22

---

ITEM 13. EXHIBITS AND
REPORTS ON FORM 8-K

|AssignedNumber | Description
|-------------- | -----------

|**(3)(i) | Restated
Articles of Incorporation of SulphCo, Inc. as filed on December 30, 2003 with the Nevada
Secretary of State.
|-------- | ---------------------------------------------------------------------------------------------------------------------

|*(3)(ii) | Amended and Restated By-laws of the Company.
|-------- | --------------------------------------------

|*(10.1) | Executive
Employment Agreement dated as of February 17, 2003, by and between SulphCo, Inc. and Kirk
S. Schumacher.
|------- | ------------------------------------------------------------------------------------------------------------------

|**(10.2) | 2003
Non-Officer Limited Stock Appreciation Rights Plan.
|-------- | --------------------------------------------------------

|**(14) | Code
of Ethics, adopted by the Board of Directors on March 12, 2004.
|------ | --------------------------------------------------------------------

|(23.1) | Consent
of Mark Bailey & Co. Ltd.
|------ | ---------------------------------

|(31.1) | Certifications
of Chief Executive Officer pursuant to Rule 13a-14 under the Securities Exchange Act of
1934.
|------ | ------------------------------------------------------------------------------------------------------------

|(31.2) | Certifications
of Chief Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of
1934.
|------ | ------------------------------------------------------------------------------------------------------------

|(32.1) | Certifications
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.
|------ | -------------------------------------------------------------------------------------------------------------------------------

---

|* | Incorporated
by reference from the Companys Form 10-QSB for the quarter ended March  31, 2003
(SEC File No. 000-27599) as   filed with the SEC on May 14, 2003.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Incorporated
by reference from the Companys Form 10-KSB for the year ended December  31, 2003
(SEC File No. 000-27599) as   filed with the SEC on March 29, 2004.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

5

---

SIGNATURES

In
accordance with Section 13 of the Securities Exchange Act of 1934, the registrant  caused
this report to be signed on its behalf by the undersigned, thereunto duly  authorized.

| | SULPHCO,
INC.
| | -------------

|April 14, 2005 | By: | /s/
Rudolf W. Gunnerman
|-------------- | --- | -----------------------

| |  | Rudolf
W. GunnermanChief Executive Officer
| |  | ------------------------------------------

In
accordance with the Exchange Act, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.

|SIGNATURE | POSITION | DATE
|--------- | -------- | ----

|/s/ Rudolf W. Gunnerman

Rudolf W. Gunnerman | Chairman of the Board of Directors,
Chief Executive Officer(Principal Executive Officer) | April 14, 2005
|-------------------------------------------- | ---------------------------------------------------------------------------------------- | --------------

|/s/ Alan L. Austin, Jr.

Alan L. Austin, Jr. | Vice President of Finance and
CFO (Principal Financial and
Accounting Officer) | April 14, 2005
|-------------------------------------------- | ------------------------------------------------------------------------------ | --------------

|Richard L. Masica | Director | April 14, 2005
|----------------- | -------- | --------------

|/s/ Harry P. Holman

Harry P. Holman | Director | April 14, 2005
|------------------------------------ | -------- | --------------

|/s/ Loren J. Kalmen

Loren J. Kalmen | Director | April 14, 2005
|------------------------------------ | -------- | --------------

|Robert Henri Charles van Maasdijk | Director | April 14, 2005
|--------------------------------- | -------- | --------------

6

---

EXHIBIT INDEX

|AssignedNumber | Description
|-------------- | -----------

|**(3)(i) | Restated
Articles of Incorporation of SulphCo, Inc. as filed on December 30, 2003 with the Nevada
Secretary of State.
|-------- | ---------------------------------------------------------------------------------------------------------------------

|*(3)(ii) | Amended and Restated By-laws of the Company.
|-------- | --------------------------------------------

|*(10.1) | Executive
Employment Agreement dated as of February 17, 2003, by and between SulphCo, Inc. and Kirk
S. Schumacher.
|------- | ------------------------------------------------------------------------------------------------------------------

|**(10.2) | 2003
Non-Officer Limited Stock Appreciation Rights Plan.
|-------- | --------------------------------------------------------

|**(14) | Code
of Ethics, adopted by the Board of Directors on March 12, 2004.
|------ | --------------------------------------------------------------------

|(23.1) | Consent
of Mark Bailey & Co. Ltd.
|------ | ---------------------------------

|(31.1) | Certifications
of Chief Executive Officer pursuant to Rule 13a-14 under the Securities Exchange Act of
1934.
|------ | ------------------------------------------------------------------------------------------------------------

|(31.2) | Certifications
of Chief Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of
1934.
|------ | ------------------------------------------------------------------------------------------------------------

|(32.1) | Certifications
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.
|------ | -------------------------------------------------------------------------------------------------------------------------------

---

|* | Incorporated
by reference from the Companys Form 10-QSB for the quarter ended March  31, 2003
(SEC File No. 000-27599) as   filed with the SEC on May 14, 2003.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Incorporated
by reference from the Companys Form 10-KSB for the year ended December  31, 2003
(SEC File No. 000-27599) as   filed with the SEC on March 29, 2004.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

---