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ITEM 1. BUSINESS.
Unless otherwise stated or the context requires otherwise, references in this annual report on Form 10-K to “Biosolar”, the “Company”, “we”, “us”, or “our” refer to Biosolar, Inc.
Overview
We are developing an innovative technology to produce bio-based materials from renewable plant sources that will reduce the cost per watt of Photovoltaic solar modules. Most of the solar industry is focused on photovoltaic efficiency to reduce cost, but we are introducing a new dimension of cost reduction by replacing petroleum-based plastic solar module components with durable bio-based components. The process for producing electricity from sunlight is known as Photovoltaics. Photovoltaic ("PV") is the science of capturing and converting sun light into electricity.
We are focusing our research and product development efforts on producing bio-based components that meet the thermal and durability requirements of current solar module manufacturing processes for conventional crystalline cell designs as well as thin film PV devices in an effort to capitalize on what we perceive as cost advantages to current petroleum based solar cell components.
We are focusing our research and product development efforts on bio-based backsheets, substrates, superstrates, module and panel components.
Corporate Information and History
We were incorporated in the State of Nevada on April 24, 2006, as BioSolar Labs, Inc. Our name was changed to BioSolar, Inc. on June 8, 2006. Our principal executive offices are located at 27936 Lost Canyon Road, Suite 202, Santa Clarita, California 91387, and our telephone number is (661) 251-0001. Our fiscal year end is December 31.
Industry Overview
The solar industry relies on two distinctly different solar energy technologies. Solar energy can be converted directly into electricity using photovoltaic devices or into heat by solar thermal devices. Photovoltaic devices convert sunlight directly into electricity through a photovoltaic (PV) cell, commonly called a solar cell, a non-mechanical device usually made from silicon alloys. Solar thermal devices, on the other hand, are typically used for directly heating swimming pools, heating water for domestic use, and space heating of buildings.
Our product development focus is based on photovoltaic technology, thus we are currently a part of the photovoltaic segment of the industry. "Photovoltaics" is derived from the words photo, meaning light, and voltaic, meaning voltage producing. Sunlight, not heat, fuels photovoltaic cells. The cells, made mostly of the semiconductor silicon, convert sunlight directly into electricity.
There remains a variety of techniques for manufacturing the coatings needed to create solar cells. Emerging thin film cell manufacturing holds much promise because the coatings use less silicon than traditional films and can be manufactured at low cost and in large volume.
The simplest cells power watches and calculators; more complex systems provide power to the electric grid, and provide electricity to pump water, power communications equipment, light homes and run appliances.
In photovoltaics, light particles called photons penetrate the cell and knock electrons free from the silicon atoms, creating an electric current. As long as light flows into the cell, electrons flow out of the cell. The cell does not use up its electrons and lose power, similar to a battery, as it is a converter that turns one kind of energy (sun light) into another (flowing electrons).
Photovoltaic cells are typically combined into modules that hold about 40 cells. Ten such modules are mounted in photovoltaic arrays. Such arrays can be used to generate electricity for a single building or, in large numbers, for a power plant.
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Stand-alone photovoltaic systems produce power independently of the utility grid. In some off-the-grid locations, even one half kilometer from power lines, stand-alone photovoltaic systems can be more cost effective than extending power lines. They are especially appropriate for remote, environmentally sensitive areas, such as national parks, cabins, and remote homes.
In rural areas, small stand-alone solar arrays often power farm lighting, fence chargers for electric fences, and solar water pumps, which provide water for livestock. Some hybrid systems combine solar power with other power sources such as wind or diesel. Photovoltaic technology can be combined with construction materials and be built into a building rather than added on top of a building. In such building-integrated photovoltaics, photovoltaic systems are incorporated into or become elements of a building's structure.
Companies are manufacturing solar panels that look like construction materials, such as roof shingles. It is also possible to produce windows that have solar cells integrally constructed as part of the window surface or by placing thin films on the window.
Research and Development
BioSolar develops and produces robust bio-based components that meet the stringent thermal and durability requirements of current solar cell manufacturing processes. BioSolar intends to further develop biobased materials to be used directly in conventional manufacturing systems, such as injection molding and thin-film roll-to-roll, to create superstrate layer, substrate layer, backsheet as well as module and panel components.
One issue with the use of bio-based materials in solar panels is that most bio-based materials have much lower melting temperature and fragile molecular structure than those of conventional petroleum based plastic materials. BioSolar’s strategy is to identify those biobased materials that are inherently durable, then apply proprietary material processes to enhance the desirable characteristics of these biobased materials – turning them into robust and durable materials to be used as solar panel components. As a result, our latest BioBacksheet has been proven to be more durable than its conventional petroleum based backsheets in the market today.
We have developed multiple versions of our bio-based backsheet to date, and the latest version of the mono-layer Biobacksheet has successfully obtained Underwriters Laboratories’ (UL) material certification in February 2011. This version of BioSolar Backsheet (BioBacksheetTM) is designed for conventional C-Si solar cell modules, which currently represents over 70 percent of solar modules produced in the world, as well as for certain thin film solar modules. The provisional relative thermal index (RTI) rating by UL was issued during the 3nd quarter of 2011, and solar panel manufacturers are now able to submit their panels incorporating BioBacksheet for UL/IEC certification (or recertification) before going into mass production. These backsheets are available in rolls of film for direct use in lamination and roll-to-roll assembly systems. We project that backsheet can be manufacturered at significantly lower cost than those of traditional backsheets.
In addition, the company has an ongoing test program to determine the physical properties and characteristics that will be most suitable for commercially available solar cell devices, and build prototype solar panels, as we attempt to validate the commercial viability of this product in various forms.
Marketing Strategy
BioSolar, Inc. is developing a technology to produce bio-based materials from renewable plant sources that will reduce the cost per watt of solar cells. Most of the solar industry is focused on photovoltaic efficiency to reduce cost. BioSolar is the first company to introduce a new dimension of cost reduction by replacing petroleum-based plastic solar cell components with durable bio-based materials. During first quarter of 2011, BioBacksheetTM, the company’s first commercially available product obtained Underwriters Laboratories’ (UL) material certification, which is now a required step before solar panel manufacturers can start incorporating the product into their solar panels for UL certification of their products. Other related products are in the research and development stage.
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We intend to market our bio-based solar module components directly to photovoltaic module manufacturers as well as through manufacturer’s reps. In order to create a favorable environment for sales, we plan to undertake advertising and promotion efforts. These efforts will be outsourced and will require the services of advertising and public relations firms. We have tentatively chosen a firm whom we believe is capable of assisting us with comprehensive advertising and promotion plans. We have not yet finalized the potential costs of our marketing strategy.
Our marketing strategy includes working with various manufacturing partners in geographical target markets representing photovoltaic module manufactures.
Backlog of Orders
There are currently no orders for sales at this time.
Government Contracts
There are no government contracts at this time.
Compliance with Environmental Laws and Regulations
Our operations are subject to local, state and federal laws and regulations governing environmental quality and pollution control. To date, our compliance with these regulations has had no material effect on our operations, capital, earnings, or competitive position, and the cost of such compliance has not been material. We are unable to assess or predict at this time what effect additional regulations or legislation could have on our activities.
Manufacturing and Distribution
We currently do not have any mechanism for the manufacture and distribution of BioBacksheet within the company, nor do we have adequate financing to undertake these efforts on our own. We will be outsourcing manufacturing and distribution efforts to contract manufacturing and distributions firms.
Intellectual Property
On October 22, 2008, we filed a patent to protect the intellectual property rights for “Phovoltaic Laminated Module Backsheet, Films and Coatings for Use in Module Backsheet, and Processes for Making the Same”, application number 12/256,176. The inventors listed on the patent application are Stanley Levy, the company’s Chief Technology Officer, and Josh Cottrell. The company is listed as the assignee.
On May 19, 2011, we filed a patent to protect the intellectual property rights for “Photovoltaic Module Backsheet, Materials for Use in Module Backsheet and Process for Making the Same”, application number 13/093,549. The inventor listed on the patent application is Stanley Levy, the company’s Chief Technology Officer. The company is listed as assignee
Both applications are pending.
We rely upon confidentiality agreements signed by our employees, consultants and third parties to protect our intellectual property.
Competition
While there are a number of companies manufacturing backsheet and other plastic components for PV devices, such as Madico, Inc, we do not know of any employing the use of bio-based components.
Technology Development Partners
To assist us in the development of our technology, we intend to seek out and enter into technology development agreements with other entities with PV and bio-based materials expertise.
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EMPLOYEES
As of March 28, 2012 we had two (2) full time employees. We have not experienced any work stoppages and we consider relations with our employees to be good.
ITEM 1A. RISK FACTORS
WE HAVE A LIMITED OPERATING HISTORY UPON WHICH YOU CAN BASE AN INVESTMENT DECISION.
Our company was formed on April 24, 2006 and therefore, we have a limited operating history upon which you can make an investment decision, or upon which we can accurately forecast future sales. You should, therefore, consider us subject to the business risks associated with a new business. The likelihood of our success must be considered in light of the expenses, difficulties and delays frequently encountered in connection with the formation and initial operations of a new business.
WE HAVE A LIMITED HISTORY OF LOSSES AND HAVE NEVER REALIZED REVENUES TO DATE. WE EXPECT TO CONTINUE TO INCUR LOSSES AND NO ASSURANCE CAN BE GIVEN THAT WE WILL REALIZE REVENUES. ACCORDINGLY, WE MAY NEVER ACHIEVE AND SUSTAIN PROFITABILITY.
Since inception, we have incurred losses and have negative cash flows from operations and have never realized revenues. From inception through December 31, 2011, we incurred a net loss of $4,780,768. These factors, among others discussed in Note 1 to the financial statements, raise substantial doubt about the ability to continue as a going concern. We expect to continue to incur net losses until we are able to realize revenues to fund our continuing operations. We may fail to achieve any or significant revenues from sales or achieve or sustain profitability. Accordingly, there can be no assurance of when, if ever, we will be profitable or be able to maintain profitability.