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Item 1. Financial Statements

2020-11-09 compared with 2020-08-05 · 759 added, 775 removed, 191 unchanged (89% of the section changed)

FINANCIAL STATEMENTS

BIOSOLAR, INC.

CONDENSED BALANCE SHEETS

BALANCE SHEETS

CURRENT ASSETS

12 unchanged sentences

Derivative liability

Convertible promissory notes net of debt discount of $200,416 and $254,896, respectively

Convertible promissory notes net of debt discount of

$271,816 and $254,896, respectively

TOTAL CURRENT LIABILITIES

LONG TERM LIABILITIES

Convertible promissory notes net of debt discount of $0 and $801, respectively

Convertible promissory notes net of debt discount of

$0 and $801, respectively

TOTAL LONG TERM LIABILITIES

2 unchanged sentences

Preferred stock, $0.0001 par value;

10,000,000 authorized shares, none issued and outstanding

Preferred treasury stock, 1000 and 0 shares outstanding, respectively

10,000,000 authorized shares, none issued

and outstanding

Common stock, $0.0001 par value;

3,000,000,000 authorized shares 282,735,072 and 133,912,520 shares issued and outstanding, respectively

3,000,000,000 authorized shares 369,109,960

and 133,912,520 shares issued and outstanding, respectively

Preferred treasury stock, 1000 and 0 shares outstanding, respectively

Additional paid in capital

6 unchanged sentences

TOTAL LIABILITIES AND SHAREHOLDERS’

The accompanying notes are an integral part

of these unaudited condensed financial statements.

BIOSOLAR, INC.

CONDENSED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE

30, 2020 AND 2019

accompanying notes are an integral part of these unaudited condensed financial statements.

STATEMENTS OF OPERATIONS

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

OPERATING EXPENSES

8 unchanged sentences

Gain (Loss) on change in derivative liability

(15,695,109 )

(15,864,120 )

Interest expense

TOTAL OTHER INCOME (EXPENSES)

(15,903,864 )

(16,529,993 )

NET INCOME (LOSS)

$ (16,062,126 )

$ (16,993,385 )

BASIC EARNINGS (LOSS) PER SHARE

DILUTED EARNING (LOSS) PER SHARE

DILUTED EARNINGS (LOSS)

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING

2,124,796,718

The accompanying notes are an integral part

of these unaudited condensed financial statements.

BIOSOLAR, INC.

CONDENSED STATEMENT OF SHAREHOLDERS’

FOR THE THREE AND SIX MONTHS ENDED JUNE

30, 2020 AND 2019

SIX MONTHS ENDED JUNE 30, 2019

Preferred Stock

accompanying notes are an integral part of these unaudited condensed financial statements.

STATEMENT OF SHAREHOLDERS’

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

MONTHS ENDED SEPTEMBER 30, 2019

Balance at December 31, 2018

1 unchanged sentence

(17,000,210 )

Issuance of common shares for converted promissory notes and accrued interest

Balance at June 30, 2019 (unaudited)

Issuance of common shares for converted promissory

notes and accrued interest

Balance at September 30, 2019 (unaudited)

$ (26,968,511 )

$ (14,041,473 )

SIX MONTHS ENDED JUNE 30, 2020

Preferred Stock

MONTHS ENDED SEPTEMBER 30, 2020

Balance at December 31, 2019

1 unchanged sentence

(12,215,711 )

Issuance of common shares for converted promissory notes and accrued interest

Balance at June 30, 2020 (unaudited)

Issuance of common shares for converted promissory

notes and accrued interest

(16,993,385 )

The accompanying notes are an integral part

of these unaudited condensed financial statements.

BIOSOLAR, INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND

Six Months Ended

Balance at September 30, 2020 (unaudited)

$ (41,524,226 )

$ (28,570,902 )

accompanying notes are an integral part of these unaudited condensed financial statements.

STATEMENTS OF CASH FLOWS

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss)

Adjustment to reconcile net income(loss) to net cash (used in) provided

by operating activities

$ (16,993,385 )

Adjustment to reconcile net income(loss) to net cash

(used in) provided by operating activities

Depreciation and amortization expense

(Gain) Loss on net change in derivative liability

Loss on conversion of debt

Amortization of debt discount recognized as interest expense

Amortization of debt discount recognized as interest

(Increase) Decrease in Changes in Assets

14 unchanged sentences

SUPPLEMENTAL SCHEDULE OF NON-CASH TRANSACTIONS

Common stock issued for convertible notes and accrued interest

Common stock issued for convertible notes and accrued

Fair value of initial derivative

The accompanying notes are an integral part

of these unaudited condensed financial statements.

BIOSOLAR, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND

accompanying notes are an integral part of these unaudited condensed financial statements.

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

of Presentation

The accompanying unaudited condensed

financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America

for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

Accordingly, they do

not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.

Operating results for the six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for

the year ending December 31, 2020.

For further information refer to the financial statements and footnotes thereto included in

the Company’s Form 10-K for the year ended December 31, 2019.

Going Concern

The accompanying condensed financial

statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization

of assets and liabilities and commitments in the normal course of business.

The accompanying unaudited financial statements do

not reflect any adjustments that might result if the Company is unable to continue as a going concern.

The Company has not generated

revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue

as a going concern.

The ability of the Company to continue as a going concern and appropriateness of using the going concern basis

is dependent upon, among other things, additional cash infusion.

The Company has historically obtained funds through private placements

offerings of equity and debt.

Management believes that it will be able to continue to raise funds by sale of its securities to

its existing shareholders and prospective new investors to provide the additional cash needed to meet the Company’s obligations

as they become due, and will allow the development of its core of business.

No assurance can be given that any future financing

will be available or, if available, that it will be on terms that are satisfactory to the Company.

Even if the Company is able

to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial

dilution for our stock holders, in case of equity financing.

accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted

in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation

Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles

for complete financial statements.

In the opinion of management, all normal recurring adjustments considered necessary for a fair

presentation have been included.

Operating results for the nine months ended September 30, 2020 are not necessarily indicative

of the results that may be expected for the year ending December 31, 2020.

For further information refer to the financial statements

and footnotes thereto included in the Company’s Form 10-K for the year ended December 31, 2019.

accompanying condensed financial statements have been prepared on a going concern basis of accounting, which contemplates continuity

of operations, realization of assets and liabilities and commitments in the normal course of business.

The accompanying unaudited

financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.

The Company has not generated revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s

ability to continue as a going concern.

The ability of the Company to continue as a going concern and appropriateness of using

the going concern basis is dependent upon, among other things, additional cash infusion.

The Company has historically obtained

funds through private placements offerings of equity and debt.

Management believes that it will be able to continue to raise funds

by sale of its securities to its existing shareholders and prospective new investors to provide the additional cash needed to

meet the Company’s obligations as they become due, and will allow the development of its core of business.

can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the

Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the

case of debt financing or cause substantial dilution for our stock holders, in case of equity financing.

OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant

accounting policies of the Company is presented to assist in understanding the Company’s financial statements.

The financial

statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity.

These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently

applied in the preparation of the financial statements.

Revenue Recognition

The Company will recognize revenue

when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and

risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably

summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial

The financial statements and notes are representations of the Company’s management, which is responsible for

their integrity and objectivity.

These accounting policies conform to accounting principles generally accepted in the United States

of America and have been consistently applied in the preparation of the financial statements.

Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of

an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the

related receivable is reasonably assured.

To date, the Company has not had significant revenues and is in the development stage.

Cash and Cash Equivalent

The Company considers all highly

liquid investments with an original maturity of three months or less to be cash equivalents.

Use of Estimates

The preparation of financial

statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that

affect the amounts reported in the accompanying financial statements.

Significant estimates made in preparing these financial statements,

include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, derivative liabilities and

the fair value of stock options.

and Cash Equivalent

Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates

and assumptions that affect the amounts reported in the accompanying financial statements.

Significant estimates made in preparing

these financial statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance,

derivative liabilities and the fair value of stock options.

Actual results could differ from those estimates.

Intangible Assets

The Company has patent applications

to protect the inventions and processes behind its proprietary bio-based back-sheet, a protective covering for the back of photovoltaic

solar modules traditionally made from petroleum-based film.

Intangible assets that have finite useful lives continue to be amortized

over their useful lives.

Company has patent applications to protect the inventions and processes behind its proprietary bio-based back-sheet, a protective

covering for the back of photovoltaic solar modules traditionally made from petroleum-based film.

Intangible assets that have

finite useful lives continue to be amortized over their useful lives.

Less accumulated amortization

Amortization expense for the six months

ended June 30, 2020 and the year ended December 31, 2019 was $1,511 and $1,511, respectively.

BIOSOLAR, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND

Amortization expense for the

nine months ended September 30, 2020 and the year ended December 31, 2019 was $2,266 and $1,511, respectively.

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock-Based Compensation

The Company measures the cost

of employee services received in exchange for an equity award based on the grant-date fair value of the award.

All grants under

our stock-based compensation programs are accounted for at fair value and that cost is recognized over the period during which

an employee, consultant, or director are required to provide service in exchange for the award (the vesting period).

expense for options granted to employees and non-employees is determined in accordance with the standard as the fair value of the

consideration received or the fair value of the equity instruments issued, whichever is more reliably measured.

Compensation expense

for awards granted is re-measured each period.

Determining the appropriate

fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based

payment and stock price volatility.

The Company used Black Scholes to value its stock option awards which incorporated the

Company’s stock price, volatility, U.S.

Company measures the cost of employee services received in exchange for an equity award based on the grant-date fair value of

All grants under our stock-based compensation programs are accounted for at fair value and that cost is recognized

over the period during which an employee, consultant, or director are required to provide service in exchange for the award (the

vesting period).

Compensation expense for options granted to employees and non-employees is determined in accordance with the

standard as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more

reliably measured.

Compensation expense for awards granted is re-measured each period.

the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected

life of the stock-based payment and stock price volatility.

The Company used Black Scholes to value its stock option awards

which incorporated the Company’s stock price, volatility, U.S.

risk-free rate, dividend rate, and estimated life.

The stock options terminate seven

(7) years from the date of grant or upon termination of employment.

As of June 30, 2020, 15,950,000 stock options are outstanding.

Net Earnings (Loss) per Share

Net earnings (Loss) per share

dictates the calculation of basic earnings (loss) per share and diluted earnings per share.

Basic earnings (loss) per share are

computed by dividing by the weighted average number of common shares outstanding during the year.

Diluted net earnings (loss) per

share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of

stock options and stock based awards (Note 4), plus the assumed conversion of convertible debt (Note 5).

For the six months ended June

30, 2020, the Company’s diluted loss per share is the same as the basic loss per share, and the inclusion of any potential

shares would have had an anti-dilutive effect due to the Company generating a loss.

The Company has included 15,950,000 stock options

and the shares issuable from convertible debt of $2,739,790, because their impact was dilutive.

For the six months ended June

30, 2019, the Company’s diluted loss per share is the same as the basic loss per share, and the inclusion of any potential

shares would have had an anti-dilutive effect due to the Company generating a loss.

The Company has excluded 15,950,000 stock options,

and the shares issuable from convertible debt of $2,839,026, because their impact was anti-dilutive.

Fair Value of Financial Instruments

Fair Value of Financial Instruments,

requires disclosure of the fair value information, whether recognized in the balance sheet, where it is practicable to estimate

As of June 30, 2020, the amounts reported for cash, inventory, prepaid expenses, accounts payable, and accrued expenses,

approximate the fair value because of their short maturities.

Fair value is defined as the

price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants

at the measurement date.

ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities

(level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

options terminate seven (7) years from the date of grant or upon termination of employment.

As of September 30, 2020, 15,950,000

stock options are outstanding.

Earnings (Loss) per Share Calculations

earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share.

Basic earnings

(loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year.

net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased

to include the effect of stock options and stock based awards (Note 4), plus the assumed conversion of convertible debt (Note

the nine months ended September 30, 2020, the Company’s diluted loss per share is the same as the basic loss per share,

and the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

has included 15,950,000 stock options and the shares issuable from convertible debt of $2,759,704, because their impact was dilutive.

the nine months ended September 30, 2019, the Company’s diluted loss per share is the same as the basic loss per share,

and the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

has excluded 15,950,000 stock options, and the shares issuable from convertible debt of $2,602,220, because their impact was anti-dilutive.

Value of Financial Instruments

Value of Financial Instruments, requires disclosure of the fair value information, whether recognized in the balance sheet, where

it is practicable to estimate that value.

As of September 30, 2020, the amounts reported for cash, inventory, prepaid expenses,

accounts payable, and accrued expenses, approximate the fair value because of their short maturities.

value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date.

ASC Topic 820 established a three-tier fair value hierarchy which prioritizes

the inputs used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets

for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

These tiers include:

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

BIOSOLAR, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND

1, defined as observable inputs such as quoted prices for identical instruments in active markets;

2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as

quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that

are not active;

3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own

assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value

drivers are unobservable.

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

We measure certain financial

instruments at fair value on a recurring basis.

Assets and liabilities measured at fair value on a recurring basis are as follows

at June 30, 2020:

measure certain financial instruments at fair value on a recurring basis.

Assets and liabilities measured at fair value on a recurring

basis are as follows at September 30, 2020:

Derivative Liability

Total Liabilities measured at fair value

The following is a reconciliation of the derivative

liability for which Level 3 inputs were used in determining the approximate fair value:

following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair

Balance as of December 31, 2019

Fair value of derivative liabilities issued

Gain on change in derivative liability

Balance as of June 30, 2020

Recently Issued Accounting

Pronouncements

Management does not believe

that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the

accompanying condensed financial statements.

During the six months ended June

30, 2020, the Company issued 148,822,552 shares of common stock upon conversion of convertible promissory notes in the amount of

$379,744, plus accrued interest of $32,490, and other fees of $1,500 at prices ranging from $0.00140 - $0.0072.

The Company had

no gain or loss upon conversion, since the conversions were made under the terms of the agreements.

During the six months ended

June 30, 2019, the Company issued 27,394,459 shares of common stock upon conversion of convertible promissory notes in the amount

of $259,134, plus accrued interest of $27,776, with an aggregate fair value loss of $404,741 at prices ranging from $0.0192 - $0.0341.

Stock Options

The Company did not grant any

stock options during the three months ended June 30, 2020 and 2019, respectively.

Number of Options

Weighted average exercise

Number of Options

Weighted average exercise

Loss on change in derivative liability

Balance as of September 30, 2020

Issued Accounting Pronouncements

does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material

effect on the accompanying condensed financial statements.

During the nine months ended

September 30, 2020, the Company issued 235,197,440 shares of common stock upon conversion of convertible promissory notes in the

amount of $572,329, plus accrued interest of $61,115, and other fees of $4,750 at prices ranging from $0.00140 - $0.0285.

had no gain or loss upon conversion, since the conversions were made under the terms of the agreements.

the nine months ended September 30, 2019, the Company issued 50,016,700 shares of common stock upon conversion of convertible

promissory notes in the amount of $431,875, plus accrued interest of $53,083, with an aggregate fair value loss on conversion

of $789,084 at prices ranging from $0.0192 - $0.0437.

Company did not grant any stock options during the three months ended September 30, 2020 and 2019, respectively.

Outstanding as of the beginning of the periods

1 unchanged sentence

Exercisable as of the end of the periods

BIOSOLAR, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

OPTIONS (Continues)

The weighted average remaining

contractual life of options outstanding as of June 30, 2020 and 2019 was as follows:

Exercisable Price

Options Outstanding

Options Exercisable

Weighted Average Remaining Contractual Life (years)

Exercisable Price

Stock Options Outstanding

Stock Options Exercisable

Weighted Average Remaining Contractual Life (years)

The stock-based compensation expense recognized in

the statement of operations during the six months ended June 30, 2020 and 2019, related to the granting of these options was $0

and $0, respectively.

As of June 30, 2020 and 2019, respectively, there

was no intrinsic value with regards to the outstanding options.

weighted average remaining contractual life of options outstanding as of September 30, 2020 and 2019 was as follows:

stock-based compensation expense recognized in the statement of operations during the nine months ended September 30, 2020 and

2019, related to the granting of these options was $0 and $0, respectively.

of September 30, 2020 and 2019, respectively, there was no intrinsic value with regards to the outstanding options.

PROMISSORY NOTES

As of June 30, 2020, the outstanding convertible

promissory notes net of debt discount are summarized as follows:

of September 30, 2020, the outstanding convertible promissory notes net of debt discount are summarized as follows:

Convertible Promissory Notes, net of debt discount

1 unchanged sentence

Total long-term liabilities

Maturities of long-term debt, net of debt

discount for the next four years are as follows:

At June 30, 2020, the Company

had $2,739,790 in convertible promissory notes, which had a remaining debt discount of $200,416, leaving a net balance of $2,739,790.

The Company issued an unsecured

convertible promissory note (the “May 2014 Note”), in the amount of $500,000 on May 2, 2014, the effective date.

May Note shall mature on May 2, 2022.

of long-term debt, net of debt discount for the next four years are as follows:

September 30, 2020, the Company had outstanding convertible promissory notes in the amount of $2,759,704, which had a remaining

debt discount of $271,816, leaving a net balance of $2,487,888.

Company issued an unsecured convertible promissory note (the “May 2014 Note”), in the amount of $500,000 on May 2,

2014, the effective date.

The May Note shall mature on May 2, 2022.

The May 2014 Note bears interest at 10% per annum.

The May 2014 Note is convertible into

shares of the Company’s common stock at a conversion price of the lesser of a) $0.25 per share of common stock (subject to

adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent (50%) of the average three

(3) lowest trading prices of three (3) separate trading days recorded after the effective date, or c) the lowest effective price

granted to any person or entity after the effective date to acquire common stock.

If the Borrower fails to deliver shares in accordance

with the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any portion,

in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned

to the Principal Sum with the rescinded conversion shares returned to the Borrower.

In addition, for each conversion, in the event

shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be

assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered.

fair value of the May 2014 Note has been determined by using the Binomial lattice formula from the effective date of each tranche.

During the six months ended June 30, 2020, the Company issued 24,924,555 shares of common stock upon conversion of principal in

the amount of $26,470, plus accrued interest of $14,314.

The May 2014 Note was converted based on the terms of the agreement, and

the Company did not recognize a gain or loss on the conversion in the financials.

The May 2014 Note was converted based on the

terms of the agreement and no gain or loss was recognized in the financials.

As of June 30, 2020, the remaining balance of the

May 2014 Note was $71,680.

BIOSOLAR, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND

PROMISSORY NOTES (Continued)

The Company issued various unsecured

convertible promissory notes (the “2015-2018 Notes”) in the aggregate amount of $2,500,000 on various dates from January

30, 2015 through January 17, 2019, the effective dates.

The 2015-2018 Notes were extended and shall mature on dates from January

30, 2023 thru January 17, 2024.

The 2015-2018 Notes bear an interest rate of 10% per annum.

The 2015-2018 Notes are convertible

into shares of the Company’s common stock at conversion prices ranging from the a) the lesser of $0.03 to $0.25 per share

2014 Note is convertible into shares of the Company’s common stock at a conversion price of the lesser of a) $0.25 per share

of common stock (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or b) fifty percent

(50%) of the lowest trade price recorded since the original effective date, or c) the lowest effective price per share granted

to any person or entity after the effective date to acquire common stock.

If the Borrower fails to deliver shares in accordance

within the time frame of three (3) business days, the Lender, at any time prior to selling all of those shares, may rescind any

portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion

amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower.

In addition, for each conversion,

in the event shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per

day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered.

The fair value of the 2015-2018 Notes have been determined by using the Binomial lattice formula from the effective date of each

The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $801 during

the six months ended June 30, 2020.

As of June 30, 2020, the 2015-2018 Notes had a remaining aggregate balance of $2,340,000.

The Company issued various unsecured

convertible promissory notes (the “Feb-Apr 2019 Notes”) in the aggregate principal amount of $107,000.

paid an original issue discount of $4,000 and received funds in the amount of $103,000.

The Feb 2019 tranche was extended to August

The Apr 2019 Note matures on October 11, 2020.

The Feb-Apr 2019 Notes bear interest at 10% per annum.

The Feb-Apr 2019

Notes may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the

lowest one (1) day trading price during the fifteen (15)-trading-day period prior to the conversion date.

The parties agree that

if the shares of common stock issuable upon conversion of these Feb-Apr 2019 Notes are not delivered by the deadline, the Borrower

shall pay to the holder of the Feb-Apr 2019 Notes $2,000 per day in cash, for each day beyond the deadline that the Borrower fails

to deliver such common stock.

The conversion feature of the Feb-Apr 2019 Notes was considered a derivative in accordance with current

accounting guidelines because of the reset conversion features of the Feb-Apr 2019 Notes.

The fair value of the Feb-Apr 2019 Notes

has been determined by using the Binomial lattice formula from the effective date of the notes.

During the period ended June 30,

2020, the Company issued 27,903,524 shares of common stock upon conversion of $63,274 in principal, accrued interest of $3,676

and $1,500 in other fees.

The Feb-Apr 2019 Notes were converted based on the terms of the agreement and the Company did not recognized

a gain or loss on conversion in the financials.

The Company recorded amortization of debt discount, which was recognized as interest

expense in the amount of $21,801 during the six months ended June 30, 2020.

The Feb-Apr 2019 Notes as of June 30, 2020, had

a remaining balance of $9,110.

Company issued an unsecured convertible promissory note on July 16, 2019 (the “July 2019 Note”), in the aggregate principal

(50%) of the average three (3) lowest trading prices of three (3) separate trading days recorded after the effective date, or

c) the lowest effective price granted to any person or entity after the effective date to acquire common stock.

If the Borrower

fails to deliver shares in accordance with the time frame of three (3) business days, the Lender, at any time prior to selling

all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares

and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower.

In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive of the day of conversion),

a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion)

until the shares are delivered.

The fair value of the May 2014 Note has been determined by using the Binomial lattice formula

from the effective date of each tranche.

During the nine months ended September 30, 2020, the Company issued 64,094,322 shares

of common stock upon conversion of principal in the amount of $63,270, plus accrued interest of $34,963.

The May 2014 Note was

converted based on the terms of the agreement, and the Company did not recognize a gain or loss on the conversion in the financials.

As of September 30, 2020, the remaining balance of the May 2014 Note was $34,880.

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

PROMISSORY NOTES (Continued)

Company issued various unsecured convertible promissory notes (the “2015-2018 Notes”) in the aggregate amount of $2,500,000

on various dates from January 30, 2015 through January 17, 2019, the effective dates.

The maturity dates of the 2015-2018 Notes

were extended, and as result, mature on dates from January 30, 2023 thru January 17, 2024.

The 2015-2018 Notes bear an interest

rate of 10% per annum.

The 2015-2018 Notes are convertible into shares of the Company’s common stock at conversion prices

ranging from the a) the lesser of $0.03 to $0.25 per share of common stock (subject to adjustment for stock splits, dividends,

combinations and other similar transactions) or b) fifty percent (50%) of the lowest trade price recorded since the original effective

date, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock.

If the Borrower fails to deliver shares in accordance within the time frame of three (3) business days, the Lender, at any time

prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable

to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares

returned to the Borrower.

In addition, for each conversion, in the event shares are not delivered by the fourth business day (inclusive

of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive

of the day of the conversion) until the shares are delivered.

The fair value of the 2015-2018 Notes have been determined by using

the Binomial lattice formula from the effective date of each tranche.

The Company recorded amortization of debt discount, which

was recognized as interest expense in the amount of $801 during the nine months ended September 30, 2020.

As of September 30,

2020, the 2015-2018 Notes had a remaining aggregate balance of $2,340,000.

Company issued various unsecured convertible promissory notes (the “Feb-Apr 2019 Notes”) in the aggregate principal

amount of $107,000.

The Company paid an original issue discount of $4,000 and received funds in the amount of $103,000.

2019 Note matured on July 16, 2020.

2019 tranche was extended to August 22, 2020.

The Apr 2019 Note matures on October 11, 2020.

The Feb-Apr 2019 Notes bear interest

at 10% per annum.

The Feb-Apr 2019 Notes may be converted into shares of the Company’s common stock at a conversion price

of sixty-one (61%) percent of the lowest one (1) day trading price during the fifteen (15)-trading-day period prior to the conversion

The parties agree that if the shares of common stock issuable upon conversion of these Feb-Apr 2019 Notes are not delivered

by the deadline, the Borrower shall pay to the holder of the Feb-Apr 2019 Notes $2,000 per day in cash, for each day beyond the

deadline that the Borrower fails to deliver such common stock.

The conversion feature of the Feb-Apr 2019 Notes was considered

a derivative in accordance with current accounting guidelines because of the reset conversion features of the Feb-Apr 2019 Notes.

The fair value of the Feb-Apr 2019 Notes has been determined by using the Binomial lattice formula from the effective date of

During the period ended September 30, 2020, the Company issued 34,267,881 shares of common stock upon conversion of

$72,384 in principal, accrued interest of $6,351 and $1,750 in other fees.

The Feb-Apr 2019 Notes were converted based on the

terms of the agreement and the Company did not recognized a gain or loss on conversion in the financials.

The Company recorded

amortization of debt discount, which was recognized as interest expense in the amount of $21,801 during the nine months ended

September 30, 2020.

The Feb-Apr 2019 Notes was fully converted as of September 30, 2020.

Company issued an unsecured convertible promissory note on July 16, 2019 (the “July 2019 Note”), in the aggregate

principal amount of $53,000.

The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000.

The July 2019 Note matured on July 16, 2020.

The July 2019 Note bears interest at 10% per annum.

The July 2019 Note may be converted into

shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing

bid prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if shares of the common stock

issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day

in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the July

2019 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features

of the July 2019 Note.

The fair value of the July 2019 Notes has been determined by using the Binomial lattice formula from the

effective date of the notes.

During the period ended June 30, 2020, the Company issued 8,248,918 shares of common stock upon conversion

of principal in the amount of $53,000, plus interest of $2,650.

The July 2019 Note was converted based on the terms of the agreement,

and the Company did not recognize a gain or loss on conversion in the financials.

The Company recorded amortization of debt discount,

which was recognized as interest expense in the amount of $28,672 during the six months ended June 30, 2020.

The July 2019

Note as of June 30, 2020 had a remaining balance of $0.

The Company issued an unsecured

convertible promissory note on August 8, 2019 (the “August 2019 Note”), in the aggregate principal amount of $53,500.

The July 2019 Note may be converted

into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2)

day closing bid prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if shares of

the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder

$2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion

feature of the July 2019 Note was considered a derivative in accordance with current accounting guidelines because of the reset

conversion features of the July 2019 Note.

The fair value of the July 2019 Notes has been determined by using the Binomial lattice

formula from the effective date of the notes.

During the period ended September 30, 2020, the Company issued 8,248,918 shares

of common stock upon conversion of principal in the amount of $53,000, plus interest of $2,650.

The July 2019 Note was converted

based on the terms of the agreement, and the Company did not recognize a gain or loss on conversion in the financials.

recorded amortization of debt discount, which was recognized as interest expense in the amount of $28,672 during the nine months

ended September 30, 2020.

The July 2019 Note was fully converted as of September 30, 2020.

Company issued an unsecured convertible promissory note on August 8, 2019 (the “August 2019 Note”), in the aggregate

principal amount of $53,500.

The Company paid an original issue discount of $2,000 and received funds in the amount of $51,500.

The August 2019 Note shall mature

on August 8, 2020.

The August 2019 Note shall mature on February 14, 2021.

The August 2019 Note bears interest at 10% per annum.

The August 2019 Note may be converted into shares of the

Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest

bid price during the fifteen (15) trading days prior to the conversion date.

The parties agree that if shares of the common stock

issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day

in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the August

2019 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features

of the August 2019 Note.

The fair value of the August 2019 Notes has been determined by using the Binomial lattice formula from

the effective date of the notes.

The Company recorded amortization of debt discount, which was recognized as interest expense in

the amount of $26,604 during the six months ended June 30, 2020.

The August 2019 Note had a remaining balance of $53,500 as

of June 30, 2020.

BIOSOLAR, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND

The August 2019

Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the

lowest one (1) day trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date.

agree that if shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower

shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common

The conversion feature of the August 2019 Note was considered a derivative in accordance with current accounting guidelines

because of the reset conversion features of the August 2019 Note.

The fair value of the August 2019 Notes has been determined

by using the Binomial lattice formula from the effective date of the notes.

The Company issued 21,000,000 shares of common stock

upon conversion of principal in the amount of $40,676, plus other fees of $3,000.

The August 2019 Note was converted based on

the terms of the agreement and the Company did not recognize a gain or loss on conversion in the financials.

The Company recorded

amortization of debt discount, which was recognized as interest expense in the amount of $32,305 during the nine months ended

September 30, 2020.

The August 2019 Note as of September 30, 2020 had a remaining balance of $12,824.

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

PROMISSORY NOTES (Continued)

The Company issued an unsecured

convertible promissory note on August 29, 2019 (the “August 29, 2019 Note”), in the aggregate principal amount of $63,000.

Company issued an unsecured convertible promissory note on August 29, 2019 (the “August 29, 2019 Note”), in the aggregate

principal amount of $63,000.

The Company paid an original issue discount of $3,000 and received funds in the amount of $60,000.

The August 29, 2019 Note matures

on August 29, 2020.

The August 29, 2019 Note matures on August 29, 2020.

The August 29, 2019 Note bears an interest at 10% per annum.

The August 29, 2019 Note may be converted into

shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing

bid prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if shares of the common stock

issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day

in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the August

29, 2019 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features

of the August 29, 2019 Note.

The fair value of the August 29, 2019 Note has been determined by using the Binomial lattice formula

from the effective date of the notes.

During the six months ended June 30, 2020, the Company issued 13,624,762 upon conversion

in principal of $63,000, plus accrued interest of $3,150.

The August 2019 Note was converted based on the terms of the agreement

and the Company did not recognize a gain or loss on conversion in the financials.

The Company recorded amortization of debt discount,

which was recognized as interest expense in the amount of $24,408 during the six months ended June 30, 2020.

The August 29,

Note as of June 30, 2020 has a remaining balance of $0.

The Company issued an unsecured

convertible promissory note on October 1, 2019 (the “Oct 2019 Note”), in the aggregate principal amount of $63,000.

2019 Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of

the lowest average two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date.

agree that if shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower

shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common

The conversion feature of the August 29, 2019 Note was considered a derivative in accordance with current accounting guidelines

because of the reset conversion features of the August 29, 2019 Note.

The fair value of the August 29, 2019 Note has been determined

by using the Binomial lattice formula from the effective date of the notes.

During the nine months ended September 30, 2020, the

Company issued 13,624,762 shares of common stock upon conversion in principal of $63,000, plus accrued interest of $3,150.

August 2019 Note was converted based on the terms of the agreement and the Company did not recognize a gain or loss on conversion

in the financials.

The Company recorded amortization of debt discount, which was recognized as interest expense in the amount

of $24,408 during the nine months ended September 30, 2020.

The August 2019 Note was fully converted as of September 30,

Company issued an unsecured convertible promissory note on October 1, 2019 (the “Oct 2019 Note”), in the aggregate

principal amount of $63,000.

The Company paid an original issue discount of $3,000 and received funds in the amount of $60,000.

The October 1, 2019 Note matures

on October 1, 2020.

The October 1, 2019 Note matures on October 1, 2020.

The Oct 2019 Note bears interest at 10% per annum.

The Oct 2019 Note may be converted into shares of the Company’s

common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen

(15) trading days prior to the conversion date.

The parties agree that if shares of the common stock issuable upon conversion of

these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond

the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the Oct 2019 Note was considered a

derivative in accordance with current accounting guidelines because of the reset conversion features of the Oct 2019 Note.

fair value of the Oct 2019 Note has been determined by using the Binomial lattice formula from the effective date of the notes.

During the six months ended June 30, 2020, the Company issued 28,413,462 shares of common stock upon conversion of principal of

$63,000, plus accrued interest of $3,150.

The Oct 2019 Note was converted based on the terms of the agreement and the Company did

not recognized a gain or loss on conversion in the financials.

The Company recorded amortization of debt discount, which was recognized

as interest expense in the amount of $47,336 during the six months ended June 30, 2020.

The Oct 2019 Note as of June 30, 2020,

had a remaining balance of $0.

The Company issued an unsecured

convertible promissory note on November 4, 2019 (the “Nov 2019 Note”), in the aggregate principal amount of $58,000.

The Oct 2019 Note may

be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average

two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if shares

of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder

$2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion

feature of the Oct 2019 Note was considered a derivative in accordance with current accounting guidelines because of the reset

conversion features of the Oct 2019 Note.

The fair value of the Oct 2019 Note has been determined by using the Binomial lattice

formula from the effective date of the notes.

During the nine months ended September 30, 2020, the Company issued 28,413,462 shares

of common stock upon conversion of principal of $63,000, plus accrued interest of $3,150.

The Oct 2019 Note was converted based

on the terms of the agreement and the Company did not recognized a gain or loss on conversion in the financials.

The Company recorded

amortization of debt discount, which was recognized as interest expense in the amount of $47,336 during the nine months ended

September 30, 2020.

The Oct 2019 Note was fully converted as of September 30, 2020.

Company issued an unsecured convertible promissory note on November 4, 2019 (the “Nov 2019 Note”), in the aggregate

principal amount of $58,000.

The Company paid an original issue discount of $3,000 and received funds in the amount of $55,000.

The November 4, 2019 Note matures

on November 4, 2020.

The November 4, 2019 Note matures on November 4, 2020.

The Nov 2019 Note bears interest at 10% per annum.

The Nov 2019 Note may be converted into shares of the Company’s

common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen

(15) trading days prior to the conversion date.

The parties agree that if the shares of the common stock issuable upon conversion

of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond

the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the Nov 2019 Note was considered a

derivative in accordance with current accounting guidelines because of the reset conversion features of the Nov 2019 Note.

fair value of the Nov 2019 Note has been determined by using the Binomial lattice formula from the effective date of the notes.

During the six months ended June 30, 2020, the Company issued 24,588,385 shares of common stock upon conversion of $58,000 in principal,

plus accrued interest of $ 2,900.

The Nov 2019 Note was converted based on the terms of the agreement and the Company did not recognize

a gain or loss on conversion in the financials.

The Company recorded amortization of debt discount, which was recognized as interest

expense in the amount of $48,967 during the six months ended June 30, 2020.

The Nov 2019 Note as of June 30, 2020 had a remaining

balance of $0.

The Nov 2019 Note may

be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average

two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if the

shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to

the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

conversion feature of the Nov 2019 Note was considered a derivative in accordance with current accounting guidelines because of

the reset conversion features of the Nov 2019 Note.

The fair value of the Nov 2019 Note has been determined by using the Binomial

lattice formula from the effective date of the notes.

During the nine months ended September 30, 2020, the Company issued 24,588,385

shares of common stock upon conversion of $58,000 in principal, plus accrued interest of $ 2,900.

The Nov 2019 Note was converted

based on the terms of the agreement and the Company did not recognize a gain or loss on conversion in the financials.

recorded amortization of debt discount, which was recognized as interest expense in the amount of $48,967 during the nine months

ended September 30, 2020.

The Nov 2019 Note was fully converted as of September 30, 2020.

Company issued an unsecured convertible promissory note on December 20, 2019 (the “Dec 2019 Note”), in the aggregate

13 unchanged sentences

lattice formula from the effective date of the notes.

During the six months ended June 30, 2020, the Company issued 21,118,946

During the nine months ended September 30, 2020, the Company issued 21,118,946

shares of common stock upon the conversion of principal of $53,000, plus accrued interest of $2,650.

1 unchanged sentence

based on the terms of the agreement and the Company did not recognize a gain or loss on the conversion in the financials.

recorded amortization of debt discount, which was recognized as interest expense in the amount of $51,407 during the six

months ended June 30, 2020.

The Dec 2019 Note as of June 30, 2020, had a remaining balance of $0.

BIOSOLAR, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2020 AND

Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $51,407 during the nine

months ended September 30, 2020.

The Dec 2019 Note was fully converted as of September 30, 2020.

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

PROMISSORY NOTES (Continued)

The Company issued an unsecured

convertible promissory note on January 23, 2020 (the “Jan 2020 Note”), in the aggregate principal amount of $53,000.

Company issued an unsecured convertible promissory note on January 23, 2020 (the “Jan 2020 Note”), in the aggregate

principal amount of $53,000.

The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000.

The January 23, 2020 Note matures

on January 23, 2021.

The January 23, 2020 Note matures on January 23, 2021.

The Jan 2020 Note bears interest at 10% per annum.

The Jan 2020 Note may be converted into shares of the Company’s

common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen

(15) trading days prior to the conversion date.

The parties agree that if the shares of the common stock issuable upon conversion

of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond

the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the Jan 2020 Note was considered a

derivative in accordance with current accounting guidelines because of the reset conversion features of the Jan 2020 Note.

fair value of the Jan 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes.

The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $23,025 during the

six months ended June 30, 2020.

The Jan 2020 Note as of June 30, 2020 had a remaining balance of $53,000.

The Company issued an

unsecured convertible promissory note on February 13, 2020 (the “Feb 2020 Note”), in the aggregate principal

amount of $53,500.

The Jan 2020 Note may

be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average

two (2) day closing bid prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if the

shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to

the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

conversion feature of the Jan 2020 Note was considered a derivative in accordance with current accounting guidelines because of

the reset conversion features of the Jan 2020 Note.

The fair value of the Jan 2020 Note has been determined by using the Binomial

lattice formula from the effective date of the notes.

During the nine months ended September 30, 2020, the Company issued 12,320,494

of common stock upon conversion of $53,000 in principal, plus accrued interest of $2,650.

The Jan 2020 Note was converted based

on the terms of the agreement and the Company did not recognize a gain or loss on the conversion in the financials.

recorded amortization of debt discount, which was recognized as interest expense in the amount of $53,000 during the nine months

ended September 30, 2020.

The Jan 2020 Note was fully converted as of September 30, 2020.

Company issued an unsecured convertible promissory note on February 13, 2020 (the “Feb 2020 Note”), in the aggregate

principal amount of $53,500.

The Company paid an original issue discount of $2,000 and received funds in the amount of $51,500.

2020 Note matures on February 13, 2021.

The Feb 2020 Note matures on February 13, 2021.

The Feb 2020 Note bears interest at 10% per annum.

The Feb 2020 Note may be converted

into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day

trading price or lowest bid price during the fifteen (15) trading days prior to the conversion date.

The parties agree that

if the shares of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower

shall pay to the Holder $2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such

common stock.

The conversion feature of the Feb 2020 Note was considered a derivative in accordance with current accounting

guidelines because of the reset conversion features of the Feb 2020 Note.

The fair value of the Feb 2020 Note has been

determined by using the Binomial lattice formula from the effective date of the notes.

The Company recorded amortization of

debt discount, which was recognized as interest expense in the amount of $20,026 during the six months ended June 30,

The Feb 2020 Note as of June 30, 2020 had a remaining balance of $53,500.

The Company issued an unsecured

convertible promissory note on March 2, 2020 (the “Mar 2020 Note”), in the aggregate principal amount of $53,000.

Company paid an original issue discount of $3,000 and received funds in the amount of $50,000.

The March 2, 2020 Note matures on

March 2, 2021.

into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading

price or lowest bid price during the fifteen (15) trading days prior to the conversion date.

The parties agree that if the shares

of the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder

$2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion

feature of the Feb 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset

conversion features of the Feb 2020 Note.

The fair value of the Feb 2020 Note has been determined by using the Binomial lattice

formula from the effective date of the notes.

The Company recorded amortization of debt discount, which was recognized as interest

expense in the amount of $33,474 during the nine months ended September 30, 2020.

The Feb 2020 Note as of September 30, 2020

had a remaining balance of $53,500.

Company issued an unsecured convertible promissory note on March 2, 2020 (the “Mar 2020 Note”), in the aggregate principal

amount of $53,000.

The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000.

2, 2020 Note matures on March 2, 2021.

The Mar 2020 Note bears interest at 10% per annum.

The Mar 2020 Note may be converted into shares of the Company’s

common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen

(15) trading days prior to the conversion date.

The parties agree that if the shares of the common stock issuable upon conversion

of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond

the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the Mar 2020 Note was considered a

derivative in accordance with current accounting guidelines because of the reset conversion features of the Mar 2020 Note.

fair value of the Mar 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes.

The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $17,389 during the

six months ended June 30, 2020.

The Mar 2020 Note as of June 30, 2020 had a remaining balance of $53,000.

The Mar 2020 Note may be converted into

shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day

closing bid prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if the shares of

the common stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder

$2,000 per day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion

feature of the Mar 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset

conversion features of the Mar 2020 Note.

The fair value of the Mar 2020 Note has been determined by using the Binomial lattice

formula from the effective date of the notes.

During the nine months ended September 30, 2020, the Company issued 7,520,270 shares

of common stock upon conversion in principal of $53,000, plus accrued interest of $2,650.

The Mar 2020 Note was converted based

on the terms of the agreement and the Company did not recognize a gain or loss on the conversion in the financials.

recorded amortization of debt discount, which was recognized as interest expense in the amount of $53,000 during the nine months

ended September 30, 2020.

The Mar 2020 Note was fully converted as of September 30, 2020.

The Company issued an unsecured

5 unchanged sentences

The Apr 2020 Note may be converted into shares of the Company’s

common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen

(15) trading days prior to the conversion date.

The parties agree that if the shares of the common stock issuable upon conversion

of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond

the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the Apr 2020 Note was considered a

derivative in accordance with current accounting guidelines because of the reset conversion features of the Apr 2020 Note.

fair value of the Apr 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes.

common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the

fifteen (15) trading days prior to the conversion date.

The parties agree that if the shares of the common stock issuable upon

conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for

each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the Apr 2020 Note

was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Apr

The fair value of the Apr 2020 Note has been determined by using the Binomial lattice formula from the effective date

of the notes.

The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $22,507

during the nine months ended September 30, 2020.

The Apr 2020 Note as of September 30, 2020 had a remaining balance of $53,000.

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

PROMISSORY NOTES (Continued)

Company issued an unsecured convertible promissory note on June 22, 2020 (the Jun 2020 Note), in the aggregate principal amount

The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000.

The June 22, 2020

Note matures on June 22, 2021.

The Jun 2020 Note bears interest at 10% per annum.

The Jun 2020 Note may be converted into shares

of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing

bid prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if delivery of the common

stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per

day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion feature of

the Jun 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion

features of the Jun 2020 Note.

The fair value of the Jun 2020 Note has been determined by using the Binomial lattice formula from

the effective date of the notes.

The Company recorded amortization of debt discount, which was recognized as interest expense

in the amount of $14,521 during the nine months ended September 30, 2020.

The Jun 2020 Note as of September 30, 2020 had

a remaining balance of $53,000.

Company issued an unsecured convertible promissory note on July 6, 2020 (the Jul 2020 Note), in the aggregate principal amount

The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000.

The Jul 2020 Note

matures on July 6, 2021.

The Jul 2020 Note bears interest at 10% per annum.

The Jul 2020 Note may be converted into shares of

the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid

prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if delivery of the common stock

issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day

in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the

Jul 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features

of the Jul 2020 Note.

The fair value of the Jul 2020 Note has been determined by using the Binomial lattice formula from the effective

date of the notes.

The Company recorded amortization of debt discount, which was recognized as interest expense in the amount

of $12,488 during the nine months ended September 30, 2020.

The Jul 2020 Note as of September 30, 2020 had a remaining balance

Company issued an unsecured convertible promissory note on August 4, 2020 (the Aug 2020 Note), in the aggregate principal amount

The Company paid an original issue discount of $3,000 and received funds in the amount of $50,000.

The August 4, 2020

Note matures on August 4, 2021.

The Aug 2020 Note bears interest at 10% per annum.

The Aug 2020 Note may be converted into shares

of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing

bid prices during the fifteen (15) trading days prior to the conversion date.

The parties agree that if delivery of the common

stock issuable upon conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per

day in cash, for each day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion feature of

the Aug 2020 Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion

features of the Aug 2020 Note.

The fair value of the Aug 2020 Note has been determined by using the Binomial lattice formula from

the effective date of the notes.

The Company recorded amortization of debt discount, which was recognized as interest expense

in the amount of $8,422 during the nine months ended September 30, 2020.

The Aug 2020 Note as of September 30, 2020 had a

remaining balance of $53,000.

The Company issued an unsecured

convertible promissory note on August 17, 2020 (the “Aug 2020 Note”), in the aggregate principal amount of $53,500.

The Company paid an original issue discount of $2,000 and received funds in the amount of $51,500.

The Aug 2020 Note matures on

August 17, 2021.

The Aug 2020 Note bears interest at 10% per annum.

The Aug 2020 Note may be converted into shares of the Company’s

common stock at a conversion price of sixty-one (61%) percent of the lowest one (1) day trading price or lowest bid price during

the fifteen (15) trading days prior to the conversion date.

The parties agree that if the shares of the common stock issuable upon

conversion of these Notes are not delivered by the deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each

day beyond the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the Aug 2020 Note was considered

a derivative in accordance with current accounting guidelines because of the reset conversion features of the Aug 2020 Note.

fair value of the Aug 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes.

The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $33,474 during the

six months ended June 30, 2020.

The Apr 2020 Note as of June 30, 2020 had a remaining balance of $53,000.

nine months ended September 30, 2020.

The Aug 2020 Note as of September 30, 2020 had a remaining balance of $53,500.

The Company issued an unsecured

convertible promissory note on June 22, 2020 (the Jun 2020 Note), in the aggregate principal amount of $53,000.

The Company paid

an original issue discount of $3,000 and received funds in the amount of $50,000.

The June 22, 2020 Note matures on June 22, 2021.

The Jun 2020 Note bears interest at 10% per annum.

The Jun 2020 Note may be converted into shares of the Company’s common

stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen

convertible promissory note on September 14, 2020 (the Sep 2020 Note), in the aggregate principal amount of $53,000.

paid an original issue discount of $3,000 and received funds in the amount of $50,000.

The September 14, 2020 Note matures on September

The Sep 2020 Note bears interest at 10% per annum.

The Sep 2020 Note may be converted into shares of the Company’s

common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) day closing bid prices during the fifteen

(15) trading days prior to the conversion date.

2 unchanged sentences

the deadline that the Borrower fails to deliver such common stock.

The conversion feature of the Jun 2020 Note was considered a

derivative in accordance with current accounting guidelines because of the reset conversion features of the Jun 2020 Note.

fair value of the Jun 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes.

The conversion feature of the Sep 2020 Note was considered a

derivative in accordance with current accounting guidelines because of the reset conversion features of the Sep 2020 Note.

fair value of the Sep 2020 Note has been determined by using the Binomial lattice formula from the effective date of the notes.

The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $8,422 during the

six months ended June 30, 2020.

The Jun 2020 Note as of June 30, 2020 had a remaining balance of $53,000.

BIOSOLAR, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND

We evaluated the financing

transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible

promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate.

note has no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting

standards for equity classification.

The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would

be a separation into a host contract and derivative instrument.

The Company elected to initially and subsequently measure the

note in its entirety at fair value, with changes in fair value recognized in earnings.

The Company recorded a derivative liability

representing the imputed interest associated with the embedded derivative.

The derivative liability is adjusted periodically per

the stock price fluctuations.

The convertible

notes issued and described in Note 5 do not have fixed settlement provisions because their conversion prices are not fixed.

conversion feature has been characterized as derivative liabilities to be re-measured at the end of every reporting period with

the change in value reported in the statement of operations.

During the six months ended

June 30, 2020, as a result of the convertible notes (“Notes”) issued that were accounted for as derivative liabilities,

we determined that the fair value of the conversion feature of the convertible notes at issuance was $265,500, based upon a Binomial-Model

We recorded the full value of the derivative as a liability at issuance with an offset to valuation discount, which

will be amortized over the life of the Notes.

During the six months ended June

30, 2020, the Company converted $379,744 in principal of convertible notes, plus accrued interest of $32,490, and other fees of

At June 30, 2020, the fair value of the derivative liability was $9,353,713.

For purpose of determining the

fair market value of the derivative liability for the embedded conversion, the Company used the Binomial lattice valuation

The significant assumptions used in the Binomial lattice valuation model for the derivative are as follows:

Risk free interest rate

0.14% - 1.47%

Stock volatility factor

131.0% -203.0%

Weighted average expected option life

nine months ended September 30, 2020.

The Sep 2020 Note as of September 30, 2020 had a remaining balance of $53,000.

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion

feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its

variable conversion rate.

The note has no explicit limit on the number of shares issuable so they did not meet the conditions

set forth in current accounting standards for equity classification.

The Company elected to recognize the note under paragraph

815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument.

The Company elected to initially

and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings.

recorded a derivative liability representing the imputed interest associated with the embedded derivative.

The derivative liability

is adjusted periodically per the stock price fluctuations.

convertible notes issued and described in Note 5 do not have fixed settlement provisions because their conversion prices are not

The conversion feature has been characterized as derivative liabilities to be re-measured at the end of every reporting

period with the change in value reported in the statement of operations.

the nine months ended September 30, 2020, as a result of the convertible notes (“Notes”) issued that were accounted

for as derivative liabilities, we determined that the fair value of the conversion feature of the convertible notes at issuance

was $478,000, based upon a Binomial-Model calculation.

We recorded the full value of the derivative as a liability at issuance

with an offset to valuation discount, which will be amortized over the life of the Notes.

During the nine months ended

September 30, 2020, the Company converted $572,329 in principal of convertible notes, plus accrued interest of $61,115, and other

fees of $4,750.

At September 30, 2020, the fair value of the derivative liability was $25,261,322.

purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used the

Binomial lattice valuation model.

The significant assumptions used in the Binomial lattice valuation model for the derivative

are as follows:

free interest rate

volatility factor

average expected option life

months - 5 years

Expected dividend yield

dividend yield

AND CONTINGENCIES

The Company rents office space

on a yearly basis with a monthly rent payment in the amount of $550.

In the normal course of business,

the Company may be involved in legal proceedings, claims and assessments arising.

Such matters are subject to many uncertainties,

and outcomes are not predictable with assurance.

In the opinion of management, the ultimate disposition of these matters will not

have a material adverse effect on the Company’s financial position or results of operations.

At June 30, 2020, there were

no legal proceedings against the Company.

BIOSOLAR, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND

Management has evaluated subsequent

events according to the requirements of ASC TOPIC 855 and has determined that there are the following subsequent events:

On July 2, 2020 the Company

issued 11,045,019 shares of common stock upon conversion of principal in the amount of $10,430, plus accrued interest of $5,769

according to the conditions of the convertible note dated as of May 2, 2014.

On July 6, 2020 the Company

issued 6,364,357 shares of common stock upon conversion of principal in the amount of $9,110, plus accrued interest of $2,675,

and other fees of $250 according to the conditions of the convertible note dated as of April 5, 2019.

On July 6, 2020 the Company

issued 8,000,000 shares of common stock upon conversion of principal in the amount of $14,128, plus other fees of $1,000 according

to the conditions of the convertible note dated as of August 8, 2019.

On July 13, 2020 the Company

issued 5,000,000 shares of common stock upon conversion of principal in the amount of $9,980, plus other fees of $1,000 according

to the conditions of the convertible note dated as of August 8, 2019.

On July 20, 2020 the Company

issued 8,000,000 shares of common stock upon conversion of principal in the amount of $16,568, plus other fees of $1,000 according

to the conditions of the convertible note dated as of August 8, 2019.

On July 24, 2020 the Company

issued 6,976,744 shares of common stock upon conversion of principal in the amount of $30,000 according to the conditions of the

convertible note dated as of January 23, 2019.

On July 27, 2020 the Company

issued 5,343,750 shares of common stock upon conversion of principal in the amount of $23,000 plus accrued interest of $2,650 according

to the conditions of the convertible note dated as of January 23, 2019.

On July 28, 2020 the Company

issued 11,031,846 shares of common stock upon conversion of principal in the amount of $10,370, plus accrued interest of $5,810.04

according to the conditions of the convertible note dated as of May 2, 2014.

On August 3, 2020, the Company

entered into a convertible promissory note with an investor providing for the sale by the Company of a 10% unsecured convertible

note (the “August 3, 2020 Note”) in the principal amount of $53,000.

The August 3, 2020 Note is convertible into shares

of common stock of the Company at a price equal to a variable conversion price of 61% of the average of the two lowest (1) day

trading prices for common stock during the fifteen (15) trading day period prior to the conversion date.

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note on Forward-Looking Statements.

Certain statements

in “Management’s Discussion and Analysis or Plan of Operation”

below, and elsewhere in this quarterly report,

are not related to historical results, and are forward-looking statements.

Company rents office space on a yearly basis with a monthly rent payment in the amount of $550.

the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising.

are subject to many uncertainties, and outcomes are not predictable with assurance.

In the opinion of management, the ultimate

disposition of these matters will not have a material adverse effect on the Company’s financial position or results of operations.

September 30, 2020, there were no legal proceedings against the Company.

TO CONDENSED FINANCIAL STATEMENTS –

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has determined that there are the following

subsequent events:

October 8, 2020 the Company issued 17,171,727 shares of common stock upon conversion of principal in the amount of $15,940, plus

accrued interest of $9,245 according to the conditions of the convertible note dated as of May 2, 2014.

October 12, 2020, an addendum was executed for the Bountiful convertible note dated October 1, 2015, to extend the maturity date

to October 1, 2023.

October 13, 2020, the Company received funds of $25,000 on the convertible note dated February 26, 2018.

October 28, 2020 the Company issued 3,921,569 shares of common stock upon conversion of principal in the amount of $20,000 according

to the conditions of the convertible note dated as of April 23, 2020.

October 30, 2020 the Company issued 8,695,122 shares of common stock upon conversion of principal in the amount of $33,000, plus

accrued interest of $2,650 according to the conditions of the convertible note dated as of April 23, 2020.

2, 2020, the Company entered into a securities purchase agreement in the amount of $53,000 less other fees of $3,000 for net funds

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note on Forward-Looking Statements.

statements in “Management’s Discussion and Analysis or Plan of Operation”

below, and elsewhere in this quarterly

report, are not related to historical results, and are forward-looking statements.

Forward-looking statements present our expectations

20 unchanged sentences

or the negative of such terms or other words and terms of similar meaning.

we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,

levels of activity, performance, achievements, or timeliness of such results.

Moreover, neither we nor any other person assumes

responsibility for the accuracy and completeness of such forward-looking statements.

We are under no duty to update any of the

forward-looking statements after the date of this quarterly report.

Subsequent written and oral forward looking statements attributable

to us or to persons acting in our behalf are expressly qualified in their entirety by the cautionary statements and risk factors

set forth in our annual report on Form 10-K filed with the SEC on March 9, 2020, and in other reports filed by us with the SEC.

You should read the

following description of our financial condition and results of operations in conjunction with the financial statements and accompanying

notes included in this report.

We are developing innovative

technologies to increase the capacity and reduce the cost of storing electrical energy.

We have previously developed an innovative

material technology to reduce the cost per watt of electricity produced by Photovoltaic, or PV, solar modules.

We have been and

will continue working on a silicon anode additive material technology intended to increase the storage capacity of current and

future generation of lithium-ion batteries while lowering the cost of storing electrical energy.

While we had generally

focused on energy storage technology and materials in the past, we are currently focusing on developing a new EV battery material

processing technology intended to drastically reduce the cost of lithium-ion batteries for EVs.

We were incorporated

in the State of Nevada on April 24, 2006, as BioSolar Labs, Inc.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future

results, levels of activity, performance, achievements, or timeliness of such results.

Moreover, neither we nor any other person

assumes responsibility for the accuracy and completeness of such forward-looking statements.

We are under no duty to update any

of the forward-looking statements after the date of this quarterly report.

Subsequent written and oral forward looking statements

attributable to us or to persons acting in our behalf are expressly qualified in their entirety by the cautionary statements and

risk factors set forth in our annual report on Form 10-K filed with the SEC on March 9, 2020, and in other reports filed by us

with the SEC.

should read the following description of our financial condition and results of operations in conjunction with the financial statements

and accompanying notes included in this report.

are developing innovative technologies to increase the capacity and reduce the cost of storing electrical energy.

We have previously

developed an innovative material technology to reduce the cost per watt of electricity produced by Photovoltaic, or PV, solar

We have been and will continue working on a silicon anode additive material technology intended to increase the storage

capacity of current and future generation of lithium-ion batteries while lowering the cost of storing electrical energy.

we had generally focused on energy storage technology and materials in the past, we are currently focusing on developing a new

EV battery material processing technology intended to drastically reduce the cost of lithium-ion batteries for EVs.

were incorporated in the State of Nevada on April 24, 2006, as BioSolar Labs, Inc.

Our name was changed to BioSolar, Inc.

on June 8, 2006.

Our principal

executive offices are located at 27936 Lost Canyon Road, Suite 202, Santa Clarita, California 91387, and our telephone number is

(661) 251-0001.

Our principal executive offices are located at 27936 Lost Canyon Road, Suite 202, Santa Clarita, California 91387, and

our telephone number is (661) 251-0001.

Our fiscal year end is December 31.

Recent Transactions

Application of Critical Accounting Policies

Our discussion and

analysis of our financial condition and results of operations are based upon our unaudited financial statements, which have been

prepared in accordance with accounting principles generally accepted in the United States of America.

The preparation of these

financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues

and expenses, and related disclosures of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates, including

those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation

using a Binomial lattice valuation model.

We base our estimates on historical experience and on various other assumptions, such

as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the

circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that

are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions;

of Critical Accounting Policies

discussion and analysis of our financial condition and results of operations are based upon our unaudited financial statements,

which have been prepared in accordance with accounting principles generally accepted in the United States of America.

The preparation

of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,

revenues and expenses, and related disclosures of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates,

including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value

computation using a Binomial lattice valuation model.

We base our estimates on historical experience and on various other assumptions,

such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under

the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities

that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or

however, we believe that our estimates, including those for the above-described items, are reasonable.

Use of Estimates

The preparation of

financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions

that affect the amounts reported in the accompanying financial statements.

Significant estimates made in preparing these financial

statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, derivative liabilities

and the fair value of stock options.

preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates

and assumptions that affect the amounts reported in the accompanying financial statements.

Significant estimates made in preparing

these financial statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance,

derivative liabilities and the fair value of stock options.

Actual results could differ from those estimates.

Fair Value of Financial Instruments

Our cash, cash

equivalents, investments, inventory, prepaid expenses, and accounts payable are stated at cost which approximates fair value due

to the short-term nature of these instruments.

Recently Issued Accounting Pronouncements

Management reviewed

currently issued pronouncements during the three months ended June 30, 2020, and does not believe that any other recently issued,

but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed unaudited

financial statements.

Results of Operations –

Three Months Ended June 30,

2020 Compared to the Three Months Ended June 30, 2019

OPERATING EXPENSES

General and Administrative Expenses

Value of Financial Instruments

cash equivalents, investments, inventory, prepaid expenses, and accounts payable are stated at cost which approximates fair value

due to the short-term nature of these instruments.

Issued Accounting Pronouncements

reviewed currently issued pronouncements during the three months ended September 30, 2020, and does not believe that any other

recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying

condensed unaudited financial statements.

of Operations –

Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019

and Administrative Expenses

General and administrative

(“G&A”) expenses decreased by $17,647 to $100,240 for the three months ended June 30, 2020, compared to $117,887

for the prior period ended June 30, 2019.

This decrease in G&A expenses was the result of a decrease in insurance expense and

professional fees.

Research and Development

(“R&D”) expenses decreased by $4,921 to $40,212 for the three months ended June 30, 2020, compared to $45,133 for

the prior period ended June 30, 2019.

This overall decrease in R&D expenses was the result of a decrease in consulting services.

(“G&A”) expenses increased by $19,217 to $122,477 for the three months ended September 30, 2020, compared to $103,260

for the prior period ended September 30, 2019.

This increase in G&A expenses was the result of an increase in salary expense

and professional fees.

and Development

and Development (“R&D”) expenses decreased by $25,721 to $34,750 for the three months ended September 30, 2020,

compared to $60,471 for the prior period ended September 30, 2019.

This overall decrease in R&D expenses was the result of

a decrease in consulting services.

Depreciation expense

for the three months ended June 30, 2020 and 2019 was $1,091 and $1,317, respectively.

Other Income/(Expenses)

for the three months ended September 30, 2020 and 2019 was $1,092 and $2,752, respectively.

Income/(Expenses)

Other income and (expenses)

decreased by $7,051,392 to $6,275,796 for the three months ended June 30, 2020, compared to $(775,596) for the prior period ended

June 30, 2019.

The decrease in other income and (expenses) was the result of an increase in non-cash gain on change in fair value

of the derivative instruments of $6,838,090, a decrease in interest expense of $13,100, which includes non-cash expense of amortization

of debt discount in the amount of $5,453, a decrease in fair value loss on conversion of debt of $200,207 and interest income of

The decrease in other income and (expenses) was primarily due to the net change in the fair value of the derivative instruments

and amortization of debt discount.

Net Income (Loss)

Our net income for the

three months ended June 30, 2020 was $6,134,253, compared to a net loss of $(939,933) for the prior period ended June 30, 2019.

The increase in net income was due to an increase in non-cash other income (expenses) associated with the net change in derivative

instruments estimated each period.

These estimates are based on multiple inputs, including the market price of our stock, interest

rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and

probabilities of certain outcomes based on management projections.

These inputs are subject to significant changes from period

to period and to management’s judgment;

therefore, the estimated fair value of the derivative liabilities will fluctuate

from period to period, and the fluctuation may be material.

increased by $(15,214,304) to $(15,904,807) for the three months ended September 30, 2020, compared to $(689,503) for the prior

period ended September 30, 2019.

The increase in other income and (expenses) was the result of an increase in non-cash gain on

change in fair value of the derivative instruments of $15,240,756, a decrease in interest expense of $26,405, which includes non-cash

expense of amortization of debt discount in the amount of $21,708, and interest income of $47.

The increase in other income and

(expenses) was primarily due to the net change in the fair value of the derivative instruments.

Income (Loss)

net loss for the three months ended September 30, 2020 was $(16,062,126), compared to a net loss of $(855,986) for the prior period

ended September 30, 2019.

The increase in net loss was due to an increase in non-cash other income (expenses) associated with

the net change in derivative instruments estimated each period.

These estimates are based on multiple inputs, including the market

price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in

the respective agreements and probabilities of certain outcomes based on management projections.

These inputs are subject to significant

changes from period to period and to management’s judgment;

therefore, the estimated fair value of the derivative liabilities

will fluctuate from period to period, and the fluctuation may be material.

The Company has not generated any revenues.

Results of Operations –

Six Months Ended June 30, 2020

Compared to the Six Months Ended June 30, 2019

OPERATING EXPENSES

General and Administrative Expenses

administrative (“G&A”) expenses decreased by $4,961 to $219,059 for the six months ended June 30, 2020,

compared to $224,020 for the prior period ended June 30, 2019.

This decrease in G&A expenses was the result of a decrease

in insurance expense and travel expense.

Research and Development

Development (“R&D”) expenses decreased by $36,302 to $83,832 for the six months ended June 30, 2020, compared

to $120,134 for the prior period ended June 30, 2019.

This overall decrease in R&D expenses was the result of a decrease

in consulting services and third-party services.

Depreciation expense

for the six months ended June 30, 2020 and 2019 was $2,182 and $3,045, respectively.

Other Income/(Expenses)

Other income and (expenses)

decreased by $3,514,066 to $(626,186) for the six months ended June 30, 2020, compared to $2,887,880 for the prior period ended

June 30, 2019.

The decrease in other income and (expenses) was the result of an decrease in non-cash gain on change in fair value

of the derivative instruments of $3,939,129, a decrease in interest expense of $20,327, which includes non-cash expense of amortization

of debt discount in the amount of $17,147, a decrease in fair value loss on conversion of debt of $404,741 and interest income

The decrease in other income and (expenses) was primarily due to the net change in the fair value of the derivative instruments

and amortization of debt discount.

Net Income (Loss)

Our net loss for the six months ended June

30, 2020 was $(931,259), compared to a net income of $2,540,681 for the prior period ended June 30, 2019.

The increase in net loss

was due to an increase in non-cash other income (expenses) associated with the net change in derivative instruments estimated each

These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price

volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain

outcomes based on management projections.

These inputs are subject to significant changes from period to period and to management’s

therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation

may be material.

The Company has not generated any revenues during the six months ended June 30, 2020.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability

of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on

an ongoing basis.

Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable

and accounts payable and capital expenditures.

of Operations –

Nine months ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019

and Administrative Expenses

and administrative (“G&A”) expenses increased by $14,255 to $341,536 for the nine months ended September 30, 2020,

compared to $327,281 for the prior period ended September 30, 2019.

This increase in G&A expenses was the result of an increase

in salary expense and professional fees.

and Development

and Development (“R&D”) expenses decreased by $62,022 to $118,582 for the nine months ended September 30, 2020,

compared to $180,604 for the prior period ended September 30, 2019.

This overall decrease in R&D expenses was the result of

a decrease in consulting services and third-party services.

expense for the nine months ended September 30, 2020 and 2019 was $3,274 and $5,798, respectively.

Income/(Expenses)

income and (expenses) increased by $(18,728,371) to $(16,529,993) for the nine months ended September 30, 2020, compared to $2,198,378

for the prior period ended September 30, 2019.

The decrease in other income and (expenses) was the result of an increase in non-cash

loss on change in fair value of the derivative instruments of $18,775,145, and an increase in interest income of $42, with a decrease

in interest expense of $46,732, which includes non-cash expense of amortization of debt discount in the amount of $38,816,.

increase in other income and (expenses) was primarily due to the net change in the fair value of the derivative instruments and

amortization of debt discount.

Income (Loss)

net loss for the nine months ended September 30, 2020 was $(16,993,385), compared to a net income of $1,684,695 for the prior

period ended September 30, 2019.

The increase in net loss was due to an increase in non-cash other income (expenses) associated

with the net change in derivative instruments estimated each period.

These estimates are based on multiple inputs, including the

market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined

in the respective agreements and probabilities of certain outcomes based on management projections.

These inputs are subject to

significant changes from period to period and to management’s judgment;

therefore, the estimated fair value of the derivative

liabilities will fluctuate from period to period, and the fluctuation may be material.

The Company has not generated any revenues

during the nine months ended September 30, 2020.

AND CAPITAL RESOURCES

is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise

operate on an ongoing basis.

Significant factors in the management of liquidity are funds generated by operations, levels of accounts

receivable and accounts payable and capital expenditures.

The unaudited condensed

3 unchanged sentences

do not reflect any adjustments that might result if we are unable to continue as a going concern.

During the six months ended June

30, 2020, we did not generate any revenues, incurred a net loss of $931,259, due to an overall change in non-cash derivative liability,

and used cash of $264,518 in operations.

As of June 30, 2020, we had a working capital deficit of $11,017,934 and a shareholders’

During the nine months ended

September 30, 2020, we did not generate any revenues, incurred a net loss of $16,993,385, due to an overall change in non-cash

derivative liability, and used cash of $449,028 in operations.

As of September 30, 2020, we had a working capital deficit of $27,066,309

and a shareholders’

deficit of $28,570,902.

These factors, among others, raise substantial doubt about our ability to continue as a going concern.

In the three months

ended June 30, 2020, we obtained funding through the sale of our securities.

Management believes that we will be able to continue

to raise funds through the sale of our securities to existing and new investors.

Management believes that funding from existing

and prospective new investors and future revenue will provide the additional cash needed to meet our obligations as they become

due, and will allow the development of our core business operations.

No assurance can be given that any future financing will be

available or, if available, that it will be on terms that are satisfactory to the Company.

Even if the Company is able to obtain

additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution

for our stock holders, in case of equity financing.

As of June 30, 2020, we

had a working capital deficit of $11,017,934 compared to a working capital deficit of $10,048,922 for the year ended December 31,

This increase in working capital deficit of $969,012 was due primarily to a decrease in prepaid expenses, derivative liability

associated with our outstanding notes, with an increase in accounts payable, and accrued expenses.

During the six months

ended June 30, 2020, we used $264,518 of cash for operating activities, as compared to $363,530 for the prior period ended June

The decrease in the use of cash for operating activities for the current period was a result of a decrease in research

and development cost, compared to the prior six months ended June 30, 2019.

Cash provided from

financing activities was $265,500 for the six months ended June 30, 2020, as compared to $354,000 for the prior period ended June

These factors, among others, raise substantial doubt about our ability to continue

as a going concern.

the three months ended September 30, 2020, we obtained funding through the sale of our convertible debt.

Management believes that

we will be able to continue to raise funds through the sale of our securities to existing and new investors.

Management believes

that funding from existing and prospective new investors and future revenue will provide the additional cash needed to meet our

obligations as they become due and will allow the development of our core business operations.

No assurance can be given that

any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company.

the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing

or cause substantial dilution for our stockholders, in case of equity financing.

As of September 30,

2020, we had a working capital deficit of $27,066,309 compared to a working capital deficit of $10,048,922 for the year ended December

This increase in working capital deficit of $17,289,203 was due primarily to an increase in accounts payable, and accrued

expenses, derivative liability associated with our outstanding notes, with a decrease in prepaid expenses, and convertible notes.

the nine months ended September 30, 2020, we used $449,028 of cash for operating activities, as compared to $532,620 for the prior

period ended September 30, 2019.

The decrease in the use of cash for operating activities for the current period was a result

of a decrease in prepaid expenses, compared to the prior nine months ended September 30, 2019.

provided from financing activities was $478,000 for the nine months ended September 30, 2020, as compared to $523,500 for the

prior period ended September 30, 2020.

The decrease was due to decline in equity financing during the current period.

The convertible notes are convertible

into shares of common stock, which have limitations on conversion.

The lender is limited to no more than a 4.99% beneficial ownership

of the outstanding shares of common stock.

Beneficial ownership is determined in accordance with Section 13(d) of the Exchange

Act of 1934, as amended.

Our ability to continue as a going concern is dependent upon raising capital through financing transactions

and future revenue.

Our capital needs have primarily been met from the proceeds of the sale of our securities, as we currently

have not generated any revenues.

Our independent auditors,

in their report on our audited financial statements for the year ended December 31, 2019, expressed substantial doubt about our

ability to continue as a going concern.

Our financial statements as of June 30, 2020 have been prepared under the assumption that

we will continue as a going concern.

Our ability to continue as a going concern ultimately is dependent upon our ability to generate

revenue, which is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies

and, ultimately, to achieve profitable operations.

Our financial statements do not include any adjustments that might result from

the outcome of this uncertainty.

PLAN OF OPERATION AND FINANCING NEEDS

We are engaged in the

development of innovative technologies that increase the capacity and reduce the cost of storing electrical energy.

We are currently

focusing on developing a high capacity silicon anode material technology to increase the storage capacity and reduce cost of the

future generation of lithium-ion batteries for electric vehicles by 2021.

Our plan of operation

within the next three months is to utilize our cash balances to work on developing a new EV battery material processing technology.

We believe that our current cash and investment balances will be sufficient to support development activity and general and administrative

expenses for the next two months.

Management estimates that it will require additional cash resources during 2020, based upon its

current operating plan and condition.

We do not expect increased expenses during the third quarter of 2020.

We will be investigating

additional financing alternatives, including equity and/or debt financing.

There is no assurance that capital in any form would

be available to us, and if available, on terms and conditions that are acceptable.

If we are unable to obtain sufficient funds

during the next three months, we may be forced to reduce the size of our organization, which could have a material adverse impact

on, or cause us to curtail and/or cease the development of our products

Off-Balance Sheet Arrangements

As of June 30, 2020,

we did not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial

condition, revenues, result of operations, liquidity or capital expenditures.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

As a smaller reporting

company, as that term is defined in Item 10(f)(1) of Regulation S-K, we are not required to provide information required by this

The convertible

notes are convertible into shares of common stock, which have limitations on conversion.

The lender is limited to no more than

a 4.99% beneficial ownership of the outstanding shares of common stock.

Beneficial ownership is determined in accordance with

Section 13(d) of the Exchange Act of 1934, as amended.

Our ability to continue as a going concern is dependent upon raising capital

through financing transactions and future revenue.

Our capital needs have primarily been met from the proceeds of the sale of

our securities, as we currently have not generated any revenues.

independent auditors, in their report on our audited financial statements for the year ended December 31, 2019, expressed substantial

doubt about our ability to continue as a going concern.

Our financial statements as of September 30, 2020 have been prepared under

the assumption that we will continue as a going concern.

Our ability to continue as a going concern ultimately is dependent upon

our ability to generate revenue, which is dependent upon our ability to obtain additional equity or debt financing, attain further

operating efficiencies and, ultimately, to achieve profitable operations.

Our financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

OF OPERATION AND FINANCING NEEDS

are engaged in the development of innovative technologies that increase the capacity and reduce the cost of storing electrical

We are currently focusing on developing a high capacity silicon anode material technology to increase the storage capacity

and reduce cost of the future generation of lithium-ion batteries for electric vehicles by 2021.

plan of operation within the next three months is to utilize our cash balances to work on developing a new EV battery material

processing technology.

We believe that our current cash and investment balances will be sufficient to support development

activity and general and administrative expenses for the next two months.

Management estimates that it will require additional

cash resources during 2020, based upon its current operating plan and condition.

We do not expect increased expenses during the

third quarter of 2020.

We will be investigating additional financing alternatives, including equity and/or debt financing.

There is no assurance that capital in any form would be available to us, and if available, on terms and conditions that are acceptable.

If we are unable to obtain sufficient funds during the next three months, we may be forced to reduce the size of our organization,

which could have a material adverse impact on, or cause us to curtail and/or cease the development of our products

Sheet Arrangements

of September 30, 2020, we did not have any off- balance sheet arrangements that are reasonably likely to have a current or future

effect on our financial condition, revenues, result of operations, liquidity or capital expenditures.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

a smaller reporting company, as that term is defined in Item 10(f)(1) of Regulation S-K, we are not required to provide information

required by this Item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements