UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549

FORM 10-QSB/A

Amendment No. 2

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended September 30, 2004.

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For
the transition period from _______ to ________.

Commission File No. 0-27599

SULPHCO, INC.

(Name of the small business issuer)

Nevada	88-0224817
(State of Incorporation)	(I.R.S. Employer Identification No.)

850 Spice Islands Drive, Sparks, NV 89431

(Address of principal executive offices)

(775) 829-1310

(Issuer’s telephone number)

Number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 56,129,385 shares of common stock issued and outstanding as of November 4, 2004.

Transitional Small Business Disclosure Format: Yes o  No x

EXPLANATORY NOTE  

SulphCo, Inc. (the “Company”) is filing this Form 10-QSB/A (“Amendment No. 2”) to amend its Quarterly Report on Form 10-QSB for the period ended September 30, 2004 (the “Original Filing”) filed on November 12, 2004 with the Securities and Exchange Commission (“SEC”) as amended by Amendment No. 1 filed with the SEC on January 25, 2005, in order to (i) refile in its entirety “Part I - Item 1. Financial Statements” to amend its unaudited financial statements for the periods ended September 30, 2004, and September 30, 2003, (ii) refile “Part II - Item 6. Exhibits and Reports on Form 8-K” in its entirety to reflect the new certifications of our Chief Executive Officer and Chief Financial Officer included with this Amendment No. 1 as Exhibits 31.1 and 31.2, respectively; and (ii) to include new Exhibits 31.1, 31.2 and 32.1.

The Company is amending the financial statements included in this report due to a restatement of the financial statements for the year ended December 31, 2003. The amendment results in a change in Net Loss for the periods ended September 30, 2004, and September 30, 2003, from the Net Loss previously reported in the Original Filing as amended. There were no other material changes from the financial statements filed with the Original Filing as previously amended.

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 The Original Filing is hereby superseded and amended with respect to the section set forth in this Amendment.

PART I – ITEM 1. FINANCIAL STATEMENTS 

SULPHCO, INC.
(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

FOR THE QUARTER ENDED
SEPTEMBER 30, 2004

(UNAUDITED)

SULPHCO, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
BALANCE SHEET
September 30, 2004
 (unaudited)

ASSETS
	September 30, 2004
Current Assets
Cash	$	1,350,946
Related party accounts receivable (net of allowance for bad debts of $15,373)		15,474
Prepaid expenses		8,622
Total current assets		1,375,042
Property and equipment (net of accumulated depreciation of $597,388)		192,518
Other Assets
Deferred tax asset (net of valuation allowance of $7,007,805)		—
Desulphurization prototype		427,630
Deposits		36,822
Total other assets		464,452
Total assets	$	2,032,012
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	90,633
Accrued expenses		49,934
Related party notes payable		1,000,000
Total current liabilities		1,140,567
Commitments and Contingencies		—
Stockholders’ Equity
Preferred stock: 10,000,000 shares authorized ($0.001 par value)
none issued
Common stock, $.001 par value, 100,000,000 shares authorized
53,662,234 shares issued and outstanding		53,662
Additional paid-in-capital		22,451,593
Interest prepaid via issuance of stock		(181,250	)
Stock subscriptions receivable		(812,000	)
Deficit accumulated during the development stage		(20,620,560	)
Total stockholders’ equity		891,445
Total liabilities and stockholders’ equity	$	2,032,012

The Accompanying Notes are an Integral Part of the Financial Statements

SULPHCO, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2004 and 2003
(unaudited)

	Inception to date			For the Three Months Ended September						For the Nine Months Ended September 30
				2004			2003			2004			2003
Revenue
Sales	$	42,967		$	—		$	—		$	—		$	—
Interest income		44,228			4,919			1			4,919			3
Total revenue		87,195			4,919			1			4,919			3
Expenses
Salary and wage expense		(8,176,381	)		(240,352	)		(500,280	)		(685,973	)		(612,710	)
Director fees		(195,500	)		—			—			—			(18,500	)
General and administrative expenses		(9,588,588	)		(468,685	)		164,929			(1,193,383	)		(583,474	)
Research and development expenses		(1,614,371	)		(115,582	)		(88,891	)		(382,878	)		(262,000	)
Loss on disposal of asset		(221,711	)		—			—			—			—
Depreciation expense		(637,193	)		(21,777	)		(46,090	)		(71,546	)		(139,978	)
Total expenses		(20,433,744	)		(846,396	)		(470,332	)		(2,333,780	)		(1,616,662	)
Loss from operations		(20,346,549	)		(841,477	)		(470,331	)		(2,328,861	)		(1,616,659	)
Interest expense		(274,011	)		(74,000	)		(6,000	)		(228,000	)		(20,298	)
Loss before income taxes		(20,620,560	)		(74,000	)		(6,000	)		(2,556,861	)		(20,298	)
Provision for income taxes		—			—			—			—			—
Net loss		(20,620,560	)		(915,477	)		(6,000	)		(2,556,861	)		(1,636,957	)
Loss per share:- basic	$	(0.60	)	$	(0.02	)	$	(0.01	)	$	(0.05	)	$	(0.03	)
Weighted average - basic		33,887,420			53,679,734			47,589,920			51,910,985			47,649,642
Loss per share:- diluted	$	(0.60	)	$	(0.01	)	$	(0.01	)	$	(0.05	)	$	(0.03	)
Weighted average - diluted		34,059,001			61,261,665			47,589,920			55,143,449			47,649,642

The Accompanying Notes are an Integral Part of the Financial Statements

SULPHCO, INC AND SUBSIDIARIES
(A Company in the Development Stage)
STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2004
(unaudited)

	Inception to Date		September 30, 2004		September 30, 2003
Cash Flows from Operating Activities
Net loss	(20,620,560	)	(2,556,861	)	(1,636,957	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense	637,193		71,546		139,978
Shares issued for services	5,523,518		213,700		16,000
Shares issued for interest expense	74,000		74,000		—
Loss on disposal of subsidiary	221,711
Increase in allowance for doubtful debts	36,373		15,373		—
increase in spare parts inventory	(101,606	)
Increase in accounts receivable	(30,848	)	(30,617	)	—
Decrease in related party receivable	1,359,185		—		—
Increase in work in progress	(583,470	)
Decrease (increase) in prepaid expenses	33,627		43,099		(4,477	)
(Decrease) increase in accounts payable	67,250		40,996		(114,054	)
(Decrease) increase in accrued liabilities	71,691		(30,442	)	(29,700	)
Decrease in legal settlement	—		(13,636	)	(65,909	)
Net cash used in operating activities	(13,311,936	)	(2,172,842	)	(1,695,119	)
Cash Flows from Investing Activities
Purchase of capital assets	(254,147	)	—		(768,186	)
Disposal of asset	60,061		60,061		—
Investment in subsidiary	(220,086	)	—		—
Payment of deposits	(36,822	)	—		(13,245	)
Development of intangible assets	(15,843	)	—		—
Net cash provided by (used in) investing activities	(466,837	)	60,061		(781,431	)
Cash Flows from Financing Activities
Proceeds from issuance of stock	9,222,944		2,332,744		—
Proceeds from exercise of stock options	145,250		145,250		16,500
Proceeds from stock subscriptions	4,571,237		—		3,575,000
Proceeds from issuance of related party notes payable	4,170,000		500,000		—
Proceeds from issuance of line of credit	750,000		—		—
Return of capital	(118,427	)	—		—
Principal payments on related party notes	(420,000	)	(250,000	)	(170,000	)
Payments on contracts payable	(250,000	)	—		—
Principal payments on line of credit	(750,000	)	—		(500,000	)
Principal payments on advance from related party	(2,191,285	)	—		—
Net cash provided by financing activities	15,129,719		2,727,994		2,921,500
Net increase in cash and cash equivalents	1,350,946		615,213		444,950
Cash and cash equivalents at inception,	1,350,946
period ending December 31, 2003 and 2002	—		735,733		13,574
Cash and cash equivalents at September 30, 2004	1,350,946		1,350,946		458,524

Supplemental Information and Noncash Transactions

During the nine months ended September 30, 2004, and 2003, $6,000 and $20,298 were paid for interest, respectively, and no amounts were paid for income taxes.

In January 2004 one million subscribed shares were issued for interest expense of $74,000 and prepaid interest of $222,000.

In March 2004 fifty thousand subscribed shares were issued for the services of a director.

In July 2004 forty-five thousand shares were issued for marketing consulting in the amount of $128,700.

The Accompanying Notes are an Integral Part of the Financial Statements

SULPHCO, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2004
(unaudited)

1.	Basis of Presentation
	The accompanying unaudited interim financial statements of Sulphco, Inc., (the “Company”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America, pursuant to the Securities and Exchange Commission rules and regulations. In management’s opinion, all adjustments necessary for a fair presentation of the results for the interim periods have been reflected in the interim financial statements. The results of operations for any interim period are not necessarily indicative of the results for a full year. All adjustments to the financial statements are of a normal recurring nature.
	Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Such disclosures are those that would substantially duplicate information contained in the most recent audited financial statements of the Company, such as significant accounting policies and stock options. Management presumes that users of the interim statements have read or have access to the audited financial statements and notes thereto included in the Company’s most recent annual report on Form 10-KSB.
2.	Consolidation
	The Company owns 49% of a joint venture that it is the primary beneficiary of, to market and deploy the Company’s technology in Kuwait. There was no activity in the entity during the quarter ended September 30, 2004. The Company and this entity make up the consolidation group (See Note 4).
	Generally accepted accounting principles require consolidation of all majority-owned subsidiaries even if they have “non-homogeneous” operations, as well as the primary beneficiary of a variable interest entity. The consolidated financial statements include all such subsidiaries. All material inter-company transactions have been eliminated.

SULPHCO, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2004
(unaudited)

3.	Prepaid Expenses via Issuance of Stock
	In January 2004 the Company issued one million shares of common stock, to a related party, in lieu of interest for two loans totaling $1,000,000. At September 30, 2004 the prepaid interest balance was $74,000. The prepaid interest is amortized over one year (the life of the loan). (See Note 5).
	In July 2004 the Company issued forty-five thousand shares of common stock as consideration for consulting service for a one year period. The total value of the services was $128,700. As of September 30, 2004 the prepaid consulting expense was $107,250.
4.	Investments

	In April 2004 the Company entered into an agreement with Kuwaiti nationals to deploy the Company’s technology in the Kuwait. The Company owns 49% of the joint venture and will consolidate the entity. As of the end of the three months ended September 30, 2004, there was no investment in or expenses from the joint venture.
5.	Related Party Transactions

In March 2004 the Company issued 50,000 shares of subscribed common stock to a director at $0.42 per share for director services in the prior year.

An officer was paid consulting fees of $120,000 during the quarter, under an employment contract. The agreement is set to terminate on June 30, 2005.

The Company had outstanding at September 30, 2004, a $500,000 note due to a related party, as well as a $500,000 note payable to an officer. The Company issued 500,000 shares to each, the related party and officer, in lieu of interest on these notes resulting in an effective interest rate of 29.5%.

SULPHCO, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2004
(unaudited)

6.	Capital Stock
	In January 2004 one million subscribed common shares were issued for prepaid interest of $296,000. (See Note 3).
	Also in January 2004 one hundred thousand shares were issued at $0.85 per share for consulting services valued at $85,000.
	In March 2004 fifty thousand subscribed common shares were issued for Director services valued in the prior year at $21,000.
	In June 2004, the Company entered into two private placements. The first private placement was to sell 2,978,333 units. The units consist of 2,978,333 shares of common stock at $0.90 per share, warrants exercisable at $1.125 per share for 1,073,217 shares of common stock, and additional investment rights entitling the purchaser to purchase up to 6,132,667 shares of common stock at a purchase price of $0.90, and a warrant to purchase up to 2,146,433 shares at $1.125 per share. The second private placement was to sell 2,030,960 units. The units consist of 2,030,960 shares of common stock at $1.25 per share, warrants exercisable at $1.5625 per share for 731,846 shares of common stock, and additional investment rights entitling the purchaser to purchase up to 2,090,989 shares of common stock at $1.25 per share and a warrant to purchase up to 1,463,692 shares at $1.5625 per share. Investors purchased 1,490,000 units of the first offering and 1,015,000 of the second offering for $2,335,477 net of offering cost of $274,126.
	In July 2004 forty-five thousand shares were issued at $2.86 per share for consulting services valued at $128,700. (See Note 3)
7.	Stock Options
	No additional stock options were exercised during the 3 months ended September 30, 2004.

SULPHCO, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2004
(unaudited)

8.	Commitments and Contingencies
	The Company is currently the subject of an SEC investigation. The SEC alleges violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1934 and Section 10(b) of the Securities Act of 1934 and Rule 10b-5 thereunder. The Company has retained council and has responded to the inquiry and is awaiting response from the SEC. The outcome of the action is not determinable at this time. Any such action could have a material adverse effect on the Company.
	Financial instruments, which potentially subject the Company to concentrations of credit risk, consist mainly of cash equivalents. The Company maintains amounts on deposit with financial institutions, which exceed federally insured limits. The Company has not experienced any significant losses in such accounts, nor does management believe it is exposed to any significant credit risk.
	There are various claims pending against the Company arising in the normal course of the Company’s business. Although the amount of liability at September 30, 2004, cannot be ascertained, management is of the opinion that any resulting liability will not materially affect the Company’s financial position.
	In January 2004 the Company filed suit against a former director and their former stock transfer agent for the remittance of $737,000 for the balance of a stock subscription payable to the Company.

PART II - ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Assigned Number	Description
(31.1)	Certifications of Chief Executive Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934.
(31.2)	Certifications of Chief Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934.
(32.1)	Certifications of CEO and CFO Pursuant to 18 U.S.C. §. 1350, as Adopted Pursuant to §.906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

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

Dated:  February 8, 2005
	SULPHCO, INC. (Registrant)
	/s/ Rudolf W. Gunnerman
	——————————————
	By: Rudolf W. Gunnerman
	Its: Chairman of the Board of Directors
	and Chief Executive Officer
	/s/ Alan L. Austin, Jr.
	——————————————
	By: Alan L. Austin, Jr.
	Its: Vice President of Finance and
	Chief Financial Officer
	(Principal Financial and Accounting Officer)