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

FORM 10-KSB/A

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Amendment No. 5

|[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 EXCHANGE ACT
|----- | ----------------------------------------------------------------

For the fiscal year
ended December 31, 2003

Commission File
No. 0-27599

SULPHCO, INC.

(Name of Small
Business Issuer in its Charter)

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

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

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

Securities registered
pursuant to Section 12(b) of the Act: None

Securities 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 October 29, 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 $36,388,355.

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EXPLANATORY NOTE

SulphCo,
Inc. (the Company) is filing this Form 10-KSB/A (Amendment No. 5)
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) 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 new independent
auditors,  Mark Bailey & Company, Ltd. dated June 17, 2004, and the report of Daniel
J. Forbush,  Certified Public Accountant, dated May 13, 2002, 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.

The
Company is restating the financial statements for the year ended December 31, 2003, in
order to reflect the additional of Note 2, which  explains the reason for the restatement
of the 2002 financial statements. The restatement did not result in a change in Net Loss
for the year ended  December 31, 2003 from the Net Loss previously reported in Amendment
No. 3. There were no other material changes from the financial statements filed  with the
Original Filing as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3 and
Amendment No. 4.

This
Amendment No. 5 does not amend any other information previously filed in the Original
Filing as amended by Amendment No. 1, Amendment No.  2,  Amendment No. 3. and Amendment
No. 4. The Original Filing as amended by Amendment No. 1, Amendment No. 2, Amendment No.
3 and Amendment No. 4 is  hereby superseded and amended with respect to the section set
forth in this Amendment.

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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

INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

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TABLE OF CONTENTS

|Independent Auditors Report                  | F-2 
|--------------------------------------------- | ----
|                                             
|Predecessor Independent Auditors Report      | F-3 
|                                             
|Balance Sheet                                 | F-4 
|                                             
|Statements of Operations                      | F-5 
|                                             
|Statement of Changes in Shareholders Deficit | F-6 
|                                             
|Statements of Cash Flows                      | F-9 
|                                             
|Notes to Financial Statements                 | F-10

---

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
|-------------------------------------------------------------------- | ------------------------------------ | -----------------------------------------------

Independent
Auditors Report

June 17, 2004

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. The financial statements of SulphCo, Inc. from inception to December 31, 2001
were  audited by other auditors whose report dated May 13, 2002, expressed an unqualified
opinion, including an explanatory paragraph regarding a going concern on those
statements.

We  conducted our
audits in accordance with auditing 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. The statements of operations, changes  in
shareholders deficit, and statements of cash flows of the Company from inception
to December 31, 2001 were audited by other independent accountants whose report dated May
13, 2002 expressed an unqualified opinion on those statements.

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 from  inception
and 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 of the financial statements, certain errors resulting in an  overstatement of
additional paid in capital and overstatement employee compensation as of  December 31,
2002, were discovered by management of the Company during the current year.  Accordingly,
an adjustment has been made to the retained earnings as of December 31, 2002  to correct
the error.

Mark Bailey & Company,
Ltd.Reno, Nevada

F-2

---

Daniel J. ForbushCertified Public Accountant

INDEPENDENT
AUDITORS REPORT

To  the Board of
Directors    And Shareholders of    SulphCo, Inc.

I have audited the
balance sheet of SulphCo, Inc. (A Development Stage Company) as of December 31, 2001 and
the related statements of operations, stockholders equity, and cash flows for the
year then ended. For the comparative statements I relied upon the predecessor
auditors report issued June 13, 2001 for the year ended December 31, 2000 and the
period from inception to December 31, 1999, on which an unqualified opinion was given.
Some reclassifications of prior year items were entered to facilitate comparisons. These
financial statements are the responsibility of the Companys management. My
responsibility is to express an opinion on the financial statements based on my audit.

I have conducted my
audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that I 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. I believe that my audit provides a reasonable basis for
my opinion.

In my opinion, the
financial statements referred to above present fairly, in all material respects, the
financial position of SulphCo, Inc. (A Development Stage Company) as of December 31, 2001
and the related statements of operations, stockholders equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.

The accompanying
financial statements have been presented assuming that the Company will continue as a
going concern. As discussed in Note 6 to the financial statements, the Company has
suffered losses from operations and has yet to make a sale of the process, which raises
doubt about its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

Reno, NevadaMay 13,
2002

F-3

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

|ASSETS                                                                   
|-------------------------------------------------------------------------
|                                                                         
|Current Assets                                                           
|Cash                                                                     
|Accounts receivable                                                      
|Spare parts inventory                                                    
|Prepaid expenses                                                         
|                                                                         
|Total current assets                                                     
|                                                                         
|                                                                         
|Fixed Assets                                                             
|Property and equipment (net of accumulated depreciation of $525,842)     
|Desulphurization unit                                                    
|                                                                         
|Total fixed assets                                                       
|                                                                         
|                                                                         
|Other Assets                                                             
|Deferred tax asset (net of valuation allowance of $6,130,948)            
|Deposits                                                                 
|                                                                         
|Total other assets                                                       
|                                                                         
|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                                                     
|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-4

---

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

|                                                         |                  |  | For the Years Ended |            
|-------------------------------------------------------- | ---------------- |  | ------------------- | -----------
|                                                         | Inceptionto date |  | December 31,2003    |            
|                                                         |                  |  |                     |            
|Revenue                                                  |                  |  |                     |            
|Sales                                                    |                  |  | $                   | 42,967     
|Interest income                                          |                  |  |                     | 39,309     
|                                                         |                  |  |                     |            
|                                                        
|Total revenue                                            |                  |  |                     | 82,276     
|                                                        
|Expenses                                                
|Salary and wage expense                                  |                  |  |                     | (7,490,408 
|Director fees                                            |                  |  |                     | (195,500   
|General and administrative expenses (restated for 2002)  |                  |  |                     | (8,064,855 
|Research and development expenses                        |                  |  |                     | (1,231,493 
|Loss on disposal of investment                           |                  |  |                     | (221,711   
|Depreciation expense                                     |                  |  |                     | (565,647   
|                                                         |                  |  |                     |            
|                                                        
|Total expenses                                           |                  |  |                     | (17,769,614
|                                                        
|Loss from operations                                     |                  |  |                     | (17,687,338
|                                                         |                  |  |                     |            
|                                                        
|Interest expense                                         |                  |  |                     | (46,011    
|                                                         |                  |  |                     |            
|                                                        
|Loss before income taxes                                 |                  |  |                     | (17,733,349
|                                                        
|Provision for income taxes                               |                  |  |                     | -          
|                                                         |                  |  |                     |            
|                                                        
|Net loss (restated for 2002)                             |                  |  | $                   | (17,733,349
|                                                         |                  |  |                     |            
|                                                        
|Loss per share - basic and dilutited (restated for 2002) |                  |  | $                   | (0.57      
|                                                         |                  |  |                     |            
|                                                        
|Weighted average shares outstanding - basic and diluted  |                  |  |                     | 31,321,421 
|                                                         |                  |  |                     |            

The Accompanying
Notes are an Integral Part of the Financial Statements

F-5

---

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

|                                                 |  | Common Stock |  | AdditionalPaid-in |  | Accumulated    |   | Stock issuedfor prepaid |   | CommonStock |  | StockSubscriptions |  | Total      |  
|------------------------------------------------ |  | ------------ |  | ----------------- |  | -------------- | - | ----------------------- | - | ----------- |  | ------------------ |  | ---------- | -
|                                                 |  | Shares       |  | Amount            |  | Capital        |   | Deficit                 |   | interest    |  | Subscribed         |  | Receivable |  
|                                                 | 
|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        |   |                         |   |             |  |                    |  | (208,500   | )
|                                                
|Stock options issed 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              | ) |             |  | -                  |  | (208,500   | )
|                                                
|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 sharen 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      |   |                         |   |             |  |                    |  | (4,778,000 | )
|                                                
|Stock issued in exchange for notes payable       |  |              |  |                   |  |                |   |                         |   |             |  |                    |  |            |  
|at $1.50 per share in June 2001                  |  | 425,000      |  | 425               |  | 637,075        |   |                         |   |             |  |                    |  | (637,500   | )
|                                                
|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        |   |                         |   |             |  |                    |  | (282,000   | )
|                                                
|Stock issued to a related party for cash at      |  |              |  |                   |  |                |   |                         |   |             |  |                    |  |            |  
|$0.50 per share in June 2001                     |  | 350,000      |  | 350               |  | 174,650        |   |                         |   |             |  |                    |  |            |  

The Accompanying
Notes are an Integral Part of the Financial Statements

F-6

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

|                                                |  | Common Stock |   | AdditionalPaid-in |   | Accumulated |   | Stock issuedfor prepaid |   | CommonStock |  | StockSubscriptions |  | Total      |  
|----------------------------------------------- |  | ------------ | - | ----------------- | - | ----------- | - | ----------------------- | - | ----------- |  | ------------------ |  | ---------- | -
|                                                |  | Shares       |   | Amount            |   | Capital     |   | Deficit                 |   | interest    |  | Subscribed         |  | Receivable |  
|                                                | 
|Cash received for subscription in July 2001     |  |              |   |                   |   |             |   |                         |   |             |  |                    |  | 282,000    |  
|                                               
|Cash received for subscriptions in August 2001  |  |              |   |                   |   |             |   |                         |   |             |  |                    |  | 340,000    |  
|                                               
|Shares isssued for subsctiption receivable      |  |              |   |                   |   |             |   |                         |   |             |  |                    |  |            |  
|of $2,000,000 in September 2001                 |  | 2,758,620    |   | 2,759             |   | 1,997,241   |   |                         |   |             |  |                    |  | (2,000,000 | )
|                                               
|Shares 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  | ) |                         |   |             |  |                    |  | 784,500    |  
|                                               
|Cash received for subscriptions                 |  |              |   |                   |   |             |   |                         |   |             |  |                    |  | 200,000    |  
|                                               
|Shares returned in December 2001                |  | (100,000     | ) | (100              | ) | (59,900     | ) |                         |   |             |  |                    |  | 50,000     |  
|                                               
|Stock options issued at a weighted average      |  |              |   |                   |   |             |   |                         |   |             |  |                    |  |            |  
|issue price of $0.75 per share in October 2001  |  |              |   |                   |   | 89,020      |   |                         |   |             |  |                    |  |            |  
|                                               
|Net loss                                        |  |              |   |                   |   |             |   | (6,927,524              | ) |             |  |                    |  |            |  
|                                                | 
|Balance at December 31, 2001                    |  | 39,927,170   |   | 39,927            |   | 15,636,632  |   | (8,420,719              | ) | -           |  | -                  |  | (6,249,500 | )
|                                               
|Stock issued for related party services         |  |              |   |                   |   |             |   |                         |   |             |  |                    |  |            |  
|at $0.50 per share in March 2002                |  | 10,000,000   |   | 10,000            |   | 4,990,000   |   |                         |   |             |  |                    |  |            |  
|                                               
|Shares returned in May 2002 (restated)          |  | (1,000,000   | ) | (1,000            | ) | (599,000    | ) |                         |   |             |  |                    |  | 500,000    |  
|                                               
|Shares returned in June 2002 (restated)         |  | (100,000     | ) | (100              | ) | (81,900     | ) |                         |   |             |  |                    |  | 72,000     |  
|                                               
|Shares returned in July 2002 (restated)         |  | (25,000      | ) | (25               | ) | (44,725     | ) |                         |   |             |  |                    |  | 37,500     |  
|                                               
|Payment on stock subscription received          |  |              |   |                   |   |             |   |                         |   |             |  |                    |  |            |  
|in July 2002                                    |  |              |   |                   |   |             |   |                         |   |             |  |                    |  | 515,500    |  
|                                               
|Shares returned in July 2002 (restated)         |  | (1,000,000   | ) | (1,000            | ) | (599,000    | ) |                         |   |             |  |                    |  | 500,000    |  
|                                               
|Stock issued for services at $0.10 per          |  |              |   |                   |   |             |   |                         |   |             |  |                    |  |            |  
|share in September 2002                         |  | 50,000       |   | 50                |   | 4,950       |   |                         |   |             |  |                    |  |            |  
|                                               
|Shares returned in September 2002 (restated)    |  | (431,000     | ) | (431              | ) | (535,919    | ) |                         |   |             |  |                    |  | -          |  
|                                               
|Shares issued for services at $0.27 per         |  |              |   |                   |   |             |   |                         |   |             |  |                    |  |            |  
|share in October 2002                           |  | 50,000       |   | 50                |   | 13,450      |   |                         |   |             |  |                    |  |            |  
|                                               
|Stock Options issued in November 2002           |  |              |   |                   |   |             |   |                         |   |             |  |                    |  |            |  
|for $0.10 per share (restated)                  |  |              |   |                   |   | 31,500      |   |                         |   |             |  |                    |  |            |  
|                                               
|Shares issued to a related party for cash at    |  |              |   |                   |   |             |   |                         |   |             |  |                    |  |            |  
|$0.10 per share in November 2002                |  | 100,000      |   | 100               |   | 9,900       |   |                         |   |             |  |                    |  |            |  
|                                               
|Shares issued to a related party for cash at    |  |              |   |                   |   |             |   |                         |   |             |  |                    |  |            |  
|$0.10 per share in December 2002                |  | 50,000       |   | 50                |   | 4,950       |   |                         |   |             |  |                    |  |            |  
|                                               
|Net loss (restated)                             |  |              |   |                   |   |             |   | (6,243,277              | ) |             |  |                    |  |            |  
|                                                | 
|Balance at December 31, 2002                    |  | 47,621,170   |   | 47,621            |   | 18,830,838  |   | (14,663,996             | ) |             |  | -                  |  | (4,624,500 | )

The Accompanying
Notes are an Integral Part of the Financial Statements

F-7

---

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

|                                             |  | Common Stock |   | AdditionalPaid-in |   | Accumulated  |   | Stock issuedfor prepaid |   | CommonStock |   | StockSubscriptions |  | Total      |  
|-------------------------------------------- |  | ------------ | - | ----------------- | - | ------------ | - | ----------------------- | - | ----------- | - | ------------------ |  | ---------- | -
|                                             |  | Shares       |   | Amount            |   | Capital      |   | Deficit                 |   | interest    |   | Subscribed         |  | Receivable |  
|                                             | 
|Stock subscribed for services at $0.42 per   |  |              |   |                   |   |              |   |                         |   |             |   |                    |  |            |  
|share in February 2003                       |  |              |   |                   |   | 20,950       |   |                         |   |             |   | 50                 |  |            |  
|                                            
|Payment on stock subscription                |  |              |   |                   |   |              |   |                         |   |             |   |                    |  |            |  
|received in February 2003                    |  |              |   |                   |   |              |   |                         |   |             |   |                    |  | 3,575,000  |  
|                                            
|Shares 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 June 2003                           |  | 50,000       |   | 50                |   | 15,950       |   |                         |   |             |   |                    |  |            |  
|                                            
|Shares returned in August 2003               |  | (196,870     | ) | (197              | ) | (196,678     | ) |                         |   |             |   |                    |  | 196,875    |  
|                                            
|Shares returned in September 2003            |  | (3,130       | ) | (3                | ) | (3,322       | ) |                         |   |             |   |                    |  | 3,325      |  
|                                            
|Shares issued to a related party for cash at |  |              |   |                   |   |              |   |                         |   |             |   |                    |  |            |  
|$0.23 per share in November 2003             |  | 2,173,913    |   | 2,174             |   | 497,826      |   |                         |   |             |   |                    |  |            |  
|                                            
|Shares returned in December 2003             |  | (25,000      | ) | (25               | ) | (44,525      | ) |                         |   |             |   |                    |  | 37,300     |  
|                                            
|Stock subscribed for prepaid interest        |  |              |   |                   |   |              |   |                         |   |             |   |                    |  |            |  
|at $0.296 per share in December 2003         |  |              |   |                   |   | 295,000      |   |                         |   | (296,000    | ) | 1,000              |  |            |  
|                                            
|Net loss                                     |  |              |   |                   |   |              |   | (3,069,353              | ) |             |   |                    |  |            |  
|                                             | 
|                                            
|Balance at December 31, 2003                 |  | 49,670,083   |   | $49,670           |   | $ 19,432,489 |   | $(17,733,349            | ) | $(296,000   | ) | $1,050             |  | $(812,000  | )
|                                             | 

The Accompanying
Notes are an Integral Part of the Financial Statements

F-8

---

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

|                                                                            | Inceptionto Date |  | 2003 |             | 2002 |  
|--------------------------------------------------------------------------- | ---------------- |  | ---- | ----------- | ---- | -
|                                                                            |                  |  |      |             |      |  
|Cash Flows from Operating Activities                                        |                  |  |      |             |      |  
|Net loss                                                                    |                  |  | $    | (17,733,349 | )    | $
|                                                                           
|Adjustments to reconcile net loss to net cash used in operating activities:
|Depreciation expense                                                        |                  |  |      | 565,647     |      |  
|Shares issued for services                                                  |                  |  |      | 5,309,818   |      |  
|Shares subscribed for services                                              |                  |  |      | 21,000      |      |  
|Loss on disposal of subsidiary                                              |                  |  |      | 220,086     |      |  
|Increase in accounts receivable                                             |                  |  |      | (231        | )    |  
|Increase in spare parts inventory                                           |                  |  |      | (101,606    | )    |  
|Decrease in related party receivable                                        |                  |  |      | 1,359,185   |      |  
|Increase in work in progress                                                |                  |  |      | (583,470    | )    |  
|(Increase) decrease in prepaid expenses                                     |                  |  |      | (9,472      | )    |  
|Increase (decrease) in accounts payable                                     |                  |  |      | 26,254      |      |  
|Increase in accrued liabilities                                             |                  |  |      | 103,758     |      |  
|Increase (decrease) in legal settlement                                     |                  |  |      | 13,636      |      |  
|                                                                            |                  |  |      |             |      |  
|Net cash used in operating activities                                       |                  |  |      | (10,808,744 | )    |  
|                                                                            |                  |  |      |             |      |  
|                                                                           
|Cash Flows from Investing Activities                                        |                  | 
|Purchase of capital assets                                                  |                  |  |      | (254,147    | )    |  
|Investment in subsidiary                                                    |                  |  |      | (220,086    | )    |  
|Payment of deposits                                                         |                  |  |      | (36,822     | )    |  
|Development of intangible assets                                            |                  |  |      | (15,843     | )    |  
|                                                                            |                  |  |      |             |      |  
|Net cash used in investing activities                                       |                  |  |      | (526,898    | )    |  
|                                                                            |                  |  |      |             |      |  
|                                                                           
|Cash Flows from Financing Activities                                       
|Proceeds from issuance of stock                                             |                  |  |      | 6,890,200   |      |  
|Proceeds from (return of) stock subscriptions                               |                  |  |      | 4,240,887   |      |  
|Proceeds from issuance of related party notes payable                       |                  |  |      | 3,500,000   |      |  
|Proceeds from issuance of line of credit                                    |                  |  |      | 750,000     |      |  
|Return of capital                                                           |                  |  |      | (118,427    | )    |  
|Payments on contracts payable                                               |                  |  |      | (250,000    | )    |  
|Principal payments on line of credit                                        |                  |  |      | (750,000    | )    |  
|Principal payments on advance from related party                            |                  |  |      | (2,191,285  | )    |  
|                                                                            |                  |  |      |             |      |  
|Net cash provided by financing activities                                   |                  |  |      | 12,071,375  |      |  
|                                                                            |                  |  |      |             |      |  
|Net increase (decrease) in cash and cash equivalents                        |                  |  |      | 735,733     |      |  
|                                                                           
|Cash and cash equivalents at inception,                                    
|December 31, 2002 and 2001                                                  |                  |  |      | -           |      |  
|                                                                            |                  |  |      |             |      |  
|Cash and cash equivalents at December 31, 2003 and 2002                     |                  |  | $    | 735,733     |      | $
|                                                                            |                  |  |      |             |      |  

Supplemental
Information and Noncash Transactions

During the years ended
December 31, 2003, and 2002, $27,950 and $16,869 were paid for interest, respectively, and
no amounts were paid for income taxes.

In December 2003 one
million common shares were subscribed at $0.296 per share for prepaid interest of
$296,000.

In February 2003 a
stock subscription of $3,575,000 was paid with $1,655,000 in cash and the relief of notes
payable of $1,920,000.

In 2002 notes payable
of $1,000,000 were relieved with the decrease of $1,000,000 in subscriptions payable.

The Accompanying
Notes are an Integral Part of the Financial Statements

F-9

---

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

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

| | 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
July  1999.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | The
Company is still considered a developmental stage company in 2003, as defined by
Statement  of Financial Accounting Standards (SFAS) No. 7. The Company is engaged in the
business of  developing and marketing equipment and a process for removing sulfur from
petroleum.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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-10

---

SULPHCO, INC.(A
Company in the Development Stage)NOTES TO FINANCIAL STATEMENTSDecember 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 and 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deposit
| | -------

| | The
Company paid a deposit for its leased premises. The deposit is refundable at the end of
the lease.
| | ------------------------------------------------------------------------------------------------------

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

| | Property
and equipment are recorded at cost, less accumulated depreciation. In accordance with
FASB  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 loss is recognized in the
statement of  operations. During the year ended December 31, 2003, the Company abandoned
an investment  with a cost of $221,711 (See Note 3).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

F-11

---

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

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

|                               | 2003      | Estimated lives
|------------------------------ | --------- | ---------------
|Equipment                      | $585,984  | 3 years        
|Computers                      | 67,367    | 3 years        
|Office furniture               | 44,669    | 5 to 7 years   
|Leasehold improvements         | 50,337    | 3 years        
|                               |           |                
|                               | 748,357   |                
|Less: Accumulated depreciation | (525,842) |                
|                               |           |                
|Total                          | $222,515  |                
|                               |           |                

| | The
Company has an uncommissioned desulphurization unit. This unit consists of a trailer
containing equipment to be used to remove sulfur from crude oil. The Company incurred
$65,872 in costs during the year ended December 31, 2003 and $321,167 in costs and
accrued  $40,591 in sales taxes on this unit during the year ended December 31, 2002 for
a total  cost of $427,630. The unit was classified as property, plant and equipment
because the  Company intended to own the unit and receive a rental payment for it. In
2003 management  determined that the unit may be sold, so $427,630 was reclassified to
fixed assets from  construction-in-progress as of December 31, 2003 and the sales tax
accrual was removed  from the accounts of the Company. As parts to the unit are upgraded
or replaced, the  Company adjusts the cost accordingly.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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

F-12

---

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

| | 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.  During the period ended December 31, 2003, there was no revenue. In  2002 the
Company  was  awarded a  contract  from the U. S.  Navy for  research  relating  to the
desulphurization  process.  Revenue  was  recognized  on the  contract at its
completion.  The  Company  plans to collect  royalties  from  licensing  and the
deployment  of their  desulphurization units.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-13

---

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

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

| | In
April 2003 the Financial Accounting Standards Board (FASB) issued 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-14

---

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

|2. | Restatement
of 2002 Financial Statements
|-- | ----------------------------------------

| | As
the Company engaged in a reaudit of the 2002 financial statements, the Company discovered
that the compensation expense related to cancellation of 2,781,000 options was not
accounted for. The Company also issued 150,000 options for $0.10 per share; the expense
was not accounted for. The changes resulting from these restatements reduces the net loss
and additional paid in capital by $298,850, and had no material effect on the loss per
share.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Investment
in Subsidiary
|-- | ------------------------

| | On
November 1, 2001, the Company formed a joint venture to implement its desulphurization
process throughout Europe. To initiate the program, the company granted an Exclusive
Technology License to Innovative Clean Technologies S.A., 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 with Innovative Clean Technologies S.A.
(ICT). ICT has not fulfilled the requirements of its license in that it has not submitted
the monthly reports along with the royalty payments envisioned in the agreement.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
joint venture agreement was cancelled as of August 5, 2002. As of this date, ICT had no
authority to represent the Company and was demanded to immediately return the  Companys
equipment valued at $221,771 contributed to this venture. The Company  believed that it
would obtain the return of the assets. As of the report date, after  numerous attempts to
obtain the assets during the year ended December 31, 2003, it has  been determined that
the Company will not receive their equipment back from ICT. The  Company has written off
the investment.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-15

---

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

|4. | 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------

|5. | Notes
Payable
|-- | -------------

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

| | The
$250,000 note due to a related party has an interest rate of 9.6 percent, and requires
monthly interest 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 amount of $250,000 was still
outstanding at December 31, 2003. (See Note 8).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
December 30, 2003, under the Boards approval, 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. Each note required 500,000 shares of the  Companys
common stock, in lieu of interest payment, 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 shares
to the Chairman and CEO and 500,000 shares to the related party.  (See Note 8)
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | Operating
Lease
|-- | ---------------

| | In
March 2003 the Company entered into a lease agreement on its new location in Sparks,
Nevada.  In February 2004 the Company extended its  lease term for one additional year to
March 3, 2005. (See Note 14)
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-16

---

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

| | Following
is a schedule of payments required under the rental lease agreement with Dermody
Industrial Group:
| | ------------------------------------------------------------------------------------------------------------

|2004                         | $443,068
|---------------------------- | --------
|2005                         | 73,845  
|2006                         | -0-     
|2007                         | -0-     
|2008                         | -0-     
|After 2008                   | -0-     
|                             |         
|Total minimum lease payments | $516,913
|                             |         

| | 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
lease 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.
| | --------------------------------------------------------------------------------------

|7. | Contingent
Liabilities
|-- | ----------------------

| | 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 thereunder . The Company has retained counsel and
has responded to the inquiry and is awaiting response from the SEC. 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 brought 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  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 owes $13,636.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-17

---

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

| | Financial
instruments which potentially subject the Company to concentrations of credit risk
consist  mainly of cash equivalents. The Company maintains amounts on deposit with
financial  institutions which exceed federally insured limits. The Company has not
experienced any  significant losses in such accounts, nor does management believe it is
exposed to any  significant credit risk.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | Related
Party Transactions
|-- | --------------------------

| | In
December 2001 the Chairman and CEO of the Company borrowed $1,360,685 from the Company.
The notes were payable upon demand and carried interest at the prime rate on the date of
each note. At December 31, 2000, the Company had advances from the Chairman payable on
demand with no interest in the amount of $100,000. The Chairman used the advances to
offset the receivable and repaid the remaining receivable during 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2002 the Company borrowed $500,000 under a line of credit at 4.23% from Nevada State
Bank naming the Chairman as the guarantor of the loan. The line of credit matured in May
2003. (See Note 4).
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
August 2002 the Company issued a note to a related party at an interest rate of 9.6%. The
note is due in March 2004. For the year ended 2003 the Company paid a total of $24,000 in
interest and the balance of the note was $250,000 at December 31, 2003. (See Note 5).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-18

---

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

| | In
December 2003 the Company borrowed $250,000 from the CEO and Chairman. (See Note 5).
| | ---------------------------------------------------------------------------------------

| | In
November 2003 the Company issued 2,173,913 shares of the Company stock at $0.23 per share
to the Chairman and CEO for $500,000. (See Note 9).
| | ------------------------------------------------------------------------------------------------------------------------------------------------

| | In
June 2003 the Company issued 50,000 shares at $0.32 per share for the services of a
Director valued at $16,000. (See Note 9).
| | --------------------------------------------------------------------------------------------------------------------------------

| | In
March 2003 the Company issued 50,000 shares at $0.33 per share to a director for cash of
$16,500. (See Note 9).
| | ------------------------------------------------------------------------------------------------------------------

| | 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. (See
Note 14).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
CEO was paid consulting fees of $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
December 2003 the Company issued a $500,000 note to a related party. Upon signing the
note, $250,000 of the principal was obtained, with the balance of $250,000 to be obtained
upon demand by the Company (See Note 5). In January 2004 the Company issued 500,000
shares  to the related party in lieu of interest on this note. (See Note 14)
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | Common
Stock
|-- | ------------

| | Holders
of common stock are entitled to one vote per share on all matters submitted to a vote of
holders of common stock. The holders of common stock do not have cumulative voting
rights.  The election of directors is determined by a plurality of votes cast, and,
except as  otherwise required by law, the certificate of incorporation or bylaws, all
other matters  are determined by a majority of the votes cast. The common stock has no
preemptive rights  and is not convertible, redeemable or assessable. The holders of
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-19

---

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

| | common
stock are entitled  to receive ratably such dividends, if any, as may be declared  by the
board out of legally  available funds, subject to any preferential dividend rights  of
outstanding preferred  stock. Upon any liquidation, dissolution or winding up of the
Company, after payment of  all debts and liabilities, and after payment of any
liquidation preferences of then  outstanding preferred stock, the holders of common stock
will be entitled to receive a  portion of all remaining assets that are legally available
for distribution. The rights,  preferences and privileges of holders of common stock are
subject to, and may be adversely  affected by, the rights of holders of shares of any
series of preferred stock which may be  designated and issued in the future.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has the authority, subject to certain limitations prescribed by law, to issue
from  time to time up to an aggregate of 10,000,000 shares of preferred stock in one or
more  classes or series and to determine the designation and the number of shares of any
class  or series as well as the voting rights, preferences, limitations and special
rights, if  any, of the shares of any class or series, including dividend rights,
dividend rates,  conversion rights and terms, redemption rights and terms, and
liquidation preferences. The  issuance of preferred stock may have the effect of
delaying, deferring or preventing a  change of control. There are no shares of preferred
stock outstanding, and the Company  currently have no plans to issue any shares of
preferred stock.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2003 one million common shares were subscribed for prepaid interest of $296,000
on related party notes. Also in December 25,000 shares of common stock were returned to
the Company to cancel a subscription receivable of $37,300.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

F-20

---

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

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

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

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

| | 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. Also,
in February 2003, a subscription of $3,575,000 was relieved when a loan of $1,920,000 was
forgiven, and cash of $1,655,000 was received.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10. | Stock
Options
|--- | -------------

| | The
Company has adopted the disclosure-only provisions of SFAS No. 123, Accounting for
Stock-Based Compensation. Accordingly, no compensation cost has been recognized for
employees in the financial statements. On February 17, 2003, Kirk S. Schumacher,
President  of the Company, was granted stock options to purchase 1,000,000 shares of the
Companys stock at an exercise price of $.55 per share, expiring February 14, 2005.
On May 8, 2003, Pat Lacy, Controller of the Company, was granted stock options to
purchase  100,000 shares of the Companys common stock at an exercise price of $.35
per share,  expiring May 8, 2005. Had compensation cost for the Companys stock
options been  determined based on the fair value at the grant date for awards in 2003 and
2002,  consistent with the provisions of SFAS No. 123, the Companys net earnings
and  earnings per share would have been reduced to the pro forma amounts indicated below:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                             | 2003             
|---------------------------- | -----------------
|Net loss - as reported       | $ (3,069,353)    
|                             |                  
|Net loss - pro forma         | $ (3,087,376)    
|                             |                  
|Loss per share - as reported | $          (0.06)
|                             |                  
|Loss per share - pro forma   | $          (0.06)
|                             |                  

F-21

---

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

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

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

|                                                               | Shares      |  | Weighted AverageExercise Price
|-------------------------------------------------------------- | ----------- |  | ------------------------------
|                                                               |             |  |                               
|Options outstanding, beginning of year                         | -0-         |  | $-0-                          
|Options exercised                                              | -0-         |  | $-0-                          
|Options granted                                                | 1,100,000   |  | $0.53                         
|                                                               |             |  |                               
|Options outstanding, end of year                               | 1,100,000   |  | $0.53                         
|                                                               |             |  |                               
|Option price range at end of year                              | $0.35-$0.55 |  |                               
|Weighted-average fair value of options Granted during the year | $0.59       |  |                               

| | There
were no stock options at December 31, 2002.
| | -------------------------------------------------

| | 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-22

---

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

|11. | Stock
Subscriptions
|--- | -------------------

| | In
September 2001 the Company issued 2,758,620 shares 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. This dispute has not yet been resolved as of
the report  date (See Note 14).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of December 31, 2003, the total stock subscription receivable was $812,000. Of this
amount, $737,000 was in dispute and $75,000 was due from a third party. At December 31,
2002 the receivable was $4,624,500.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12. | Provision
for Income Taxes
|--- | --------------------------

| | The
Company recognizes deferred tax liabilities and benefits for the expected future tax
consequences of events that have been included in the financial statements or tax
returns.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deferred
tax liabilities and benefits are recognized using enacted tax rates in effect for the
year  in which the differences are expected to reverse.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following is a schedule of the composition of the provision for income taxes:
| | ---------------------------------------------------------------------------------

|Federal                                  | 2003 |  | 2002 |    
|---------------------------------------- | ---- |  | ---- | ---
|Current                                  |      |  | $    | -0-
|Deferred                                 |      |  |      | -0-
|                                         |      |  |      |    
|Total provision for federal income taxes |      |  | $    | -0-
|                                         |      |  |      |    

| | Deferred
tax benefits and liabilities are calculated using enacted tax rates in effect for the
year  in which the differences are expected to reverse.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deferred
income taxes consist of future tax benefits and liabilities attributable to:
| | -------------------------------------------------------------------------------------

F-23

---

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

|                                        | 2003 |  | 2002 |            
|--------------------------------------- | ---- |  | ---- | -----------
|Net operating loss carryforward         |      |  | $    | 18,032,199 
|                                        |      |  |      |            
|                                       
|Net deferred federal income tax benefit |      |  |      | 18,032,199 
|                                       
|Valuation                               |      |  |      | (18,032,199
|                                        |      |  |      |            
|Total provision for income taxes        |      |  | $    | -0-        
|                                        |      |  |      |            

| | Reconciliation
of the statutory federal income tax rate to the Companys effective tax rate is as
follows:
| | ----------------------------------------------------------------------------------------------------------

|                                               | December 31 | 
|---------------------------------------------- | ----------- | 
|                                               | 2003        | 
|Net loss before taxes                          |             | 
|U.S. statutory rate                            |             | 
|                                               |             | 
|Change in deferred tax                         |             | 
|Change in deferred tax asset valuation account |             | 
|                                               |             | 
|Total tax expense                              |             | 
|                                               |             | 
|Effective tax rate                             |             | 
|                                               |             | 

| | The
net change in the valuation account was $1,043,580 and $2,224,323, in the years ended
December 31, 2003, and 2002, respectively. The valuation allowance has been estimated in
an amount equal to the projected future benefit of the loss carryforward because there is
no assumption that the Company will generate sufficient income to utilize the tax
benefit.  The Company has incurred losses since its inception. The Company has unused net
operating  losses available for carryforwards of approximately $18,032,199 that will
start to expire  in 2019.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13. | Fair
Value of Financial Instruments
|--- | -----------------------------------

| | Financial
Accounting Standards Board SFAS No. 107, Disclosure About Fair Value of Financial
Instruments is a part of a continuing process by the FASB to improve information on
financial statements. The following methods and assumptions were used by the Company in
estimating its fair value disclosures for such financial instruments as defined by the
Statement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-24

---

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

| | The
carrying amounts reported in the balance sheets for accounts receivable approximate fair
value due to their short-term nature. Notes payable approximate fair value as their
stated  interest rates approximate a market rate available to the Company.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14. | Subsequent
Events
|--- | -----------------

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

| | Also
in January 2004 the Company  filed suit for the  remittance  of $737,000,  the balance of
the stock  subscription  that is in dispute.  (See Note 11)
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
February 2004 the Company extended their lease term for an additional one year to March
3, 2005. (See Note 6)
| | ----------------------------------------------------------------------------------------------------------------

| | 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 (See Note 5).
| | -------------------------------------------------------------------------------------------------------------------

| | In
June 2004 the Company entered into two private placements. The first private placement
was  to sell 2,978,333 shares of common stock at $0.90 per share, warrants exercisable at
$1.125 per share for 1,073,217 shares of common stock, and additional investment rights
entitling the purchaser to purchase up to 6,132,667 shares of common stock at a purchase
price of $0.90 and a warrant to purchase up to 2,146,433 shares at $1.125 per share. The
second private placement was to sell 2,030,960 shares of common stock at $1.25 per share,
warrants exercisable at $1.5625 per share for 731,846 shares of common stock, and
additional investment rights entitling the purchaser to purchase up to 2,090,989 shares
of  common stock at $1.25 per share and a warrant to purchase up to 1,463,692 shares at
$1.5625 per share.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-25

---

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.
|------ | ---------------------------------

|(23.2) | Consent
of Daniel J. Forbush, Certified Public Accountant.
|------ | ----------------------------------------------------------

|(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.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

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.
| | -------------

|January 25, 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) | January 25, 2005
|-------------------------------------------- | ----------------------------------------------------------------------------------------- | ----------------

|/s/ Alan L. Austin, Jr.

Alan L. Austin, Jr. | Vice President of Finance and CFO
(Principal Financial and
Accounting Officer) | January 25, 2005
|-------------------------------------------- | ------------------------------------------------------------------------------ | ----------------

|Richard L. Masica | Director | January 25, 2005
|----------------- | -------- | ----------------

|/s/ Harry P. Holman

Harry P. Holman | Director | January 25, 2005
|------------------------------------ | -------- | ----------------

|/s/ Loren J. Kalmen

Loren J. Kalmen | Director | January 25, 2005
|------------------------------------ | -------- | ----------------



---