Epoxy 10Q 2010 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2010

OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-53669

NEOHYDRO TECHNOLOGIES CORP.

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

200 Centennial Avenue

Suite 200

Piscataway, New Jersey 08854

(Address of principal executive offices, including zip code.)

732-377-2063

(telephone number, including area code)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES [X] NO [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [ ] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	[ ]	Accelerated Filer	[ ]
Non-accelerated Filer	[ ]	Smaller Reporting Company	[X]
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [X] NO [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 58,990,000 as of May 17, 2010.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Neohydro Technologies Corp.

(A Development Stage Company)

March 31, 2010

0; Index

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets (Unaudited) .....................................................................................................F–1

Consolidated Statements of Operations (Unaudited) ...................................................................................F–2

Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) ..................................................F–3

Consolidated Statements of Cash Flows (Unaudited) ..................................................................................F–4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ..........................................F–5

-2-

Neohydro Technologies Corp. and Subsidiary
(A Development Stage Company)
Consolidated Balance Sheets
(Expressed in US Dollars) (Unaudited)


	March 31,			December 31,
	2010			2009

ASSETS
Current Assets
Cash and cash equivalents	$	17,721		$	39,118
Prepaid expenses		8,000			-
Total Assets	$	25,721		$	39,118



LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities		64,716			66,074
Due to related party (Note 4)		43,550			25,048
Loan payable (Note 5)		63,000			35,000
Convertible note, less unamortized discount of $nil (December 31, 2009 - $31,893) (Note 6)		52,137			18,107
Derivative liability (Note 6)		24,215			21,607
Total current liabilities		247,618			165,836

Commitments and Contingencies		-			-
Stockholders' Deficit
Preferred Stock, $0.00001 par value;
authorized 100,000,000 shares, none issued and outstanding		-			-
Common Stock, $0.00001 par value;
authorized 800,000,000 shares,
58,990,000 shares issued and outstanding		590			590
Additional paid-in capital		742,910			742,910
Deficit accumulated during the development stage		(965,397	)		(870,218	)
Total stockholders' deficit		(221,897	)		(126,718	)
Total Liabilities and Stockholders' Deficit	$	25,721		$	39,118

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

F-1

-3-

Neohydro Technologies Corp. and Subsidiary
(A Development Stage Company)
Consolidated Statements of Operations
(Expressed in US Dollars)
(Unaudited)
	Three months ended March 31, 2010			Three months ended March 31, 2009			Period from November 13, 2007 (Date of Inception) to March 31, 2010

Revenue	$	-		$	-		$	-

Costs and expenses
General and administrative		58,541			-			237,413

Operating Loss		(58,541	)		-			(237,413	)

Other Income (Expense)
Interest expense		(34,030	)		-			(38,126	)
(Loss) Gain on change in fair value of derivative liability		(2,608	)		-			11,774

Total other expense		(36,638	)		-			(26,352	)

Loss from continuing operations		(95,179	)		-			(263,765	)

Discontinued operations
Gain on disposal of discontinued operations		-			-			18,177
Loss from discontinued operations		-			(55,510	)		(719,809	)

Total loss from discontinued operations		-			(55,510	)		(701,632	)

Net Loss	$	(95,179	)	$	(55,510	)	$	(965,397	)

Net loss per share - Basic and Diluted:

Loss from continuing operations	$	(0.00	)	$	-
Discontinued operations		-			(0.00	)
Net loss	$	(0.00	)	$	(0.00	)

Weighted Average Shares Outstanding
Basic and Diluted		58,990,000			73,050,000

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

F-2

-4-

Neohydro Technologies Corp. and Subsidiary
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
For the Period November 13, 2007 (Inception) to March 31, 2010
(Expressed in US Dollars)
(Unaudited)

	Common Stock, $0.00001 par value						Additional Paid-in		Deficit Accumulated During the Development
	Shares			Amount			Capital		Stage			Total

Common shares sold for cash at $0.000125 per share		40,000,000		$	400		$	4,600	$	-		$	5,000
Common shares sold for cash at $0.00125 per share		32,800,000			328			40,672		-			41,000
Donated services		-			-			1,500		-			1,500
Net Loss		-			-			-		(26,792	)		(26,792	)
Balance - December 31, 2007		72,800,000			728			46,772		(26,792	)		20,708

Common shares sold for cash at $0.40 per unit, less costs of $10,000		250,000			3			89,997		-			90,000
Donated services		-			-			6,000		-			6,000
Net Loss		-			-			-		(637,507	)		(637,507	)
Balance - December 31, 2008		73,050,000			731			142,769		(664,299	)		(520,799	)

Common shares returned and cancelled (Note 3)		(14,560,000	)		(146	)		146		-			-
Common shares issued for cash at $0.20 per unit		500,000			5			99,995		-			100,000
Donated capital - amount due licensor								500,000					500,000
Net Loss		-			-			-		(205,919	)		(205,919	)
Balance - December 31, 2009		58,990,000		$	590		$	742,910	$	(870,218	)	$	(126,718	)

Net Loss		-			-			-		(95,179	)		(95,179	)
Balance - March 31, 2010		58,990,000		$	590		$	742,910	$	(965,397	)	$	(221,897	)

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

F-3

-5-

Neohydro Technologies Corp. and Subsidiary
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Expressed in US Dollars)
(Unaudited)
	Three months ended March 31, 2010			Three months ended March 31, 2009			Period from November 13, 2007 (Date of Inception) to March 31, 2010
Cash Flows from Operating Activities
Net loss	$	(95,179	)	$	(55,510	)	$	(965,397	)
Adjustments to reconcile net loss to net cash used
for operating activities:
Donated services		-			-			7,500
Impairment of mineral property acquisition costs		-			-			6,500
Amortization of terminated license agreement costs		-			-			1,096
Impairment of terminated license agreement costs		-			-			498,904
Gain on disposal of discontinued operations		-			-			(18,177	)
Loss (Gain) on re-valuation of derivative liability		2,608			-			(11,774	)
Accretion of debt discount		34,030			-			38,126
Change in operating assets and liabilities:
Prepaid expenses		(8,000	)		25,295			(8,000	)
Accounts payable and accrued liabilities		(1,358	)		17,898			82,893
Net cash used for operating activities		(67,899	)		(12,317	)		(368,329	)

Cash Flows from Investing Activities
Mineral property acquisition costs		-			-			(6,500	)
Net cash used for investing activities		-			-			(6,500	)

Cash Flows from Financing Activities
Bank indebtedness		-			106			-
Proceeds from sales of common stock - net		-			-			236,000
Increase in amount due to related party		18,502			10,000			43,550
Proceeds from convertible note		-			-			50,000
Increase in loan payable		28,000			-			63,000
Net cash provided by financing activities		46,502			10,106			392,550

Increase (Decrease) in cash		(21,397	)		(2,211	)		17,721

Cash - beginning of period		39,118			2,268			-

Cash - end of period	$	17,721		$	57		$	17,721

Supplemental disclosures of cash flow information:
Interest paid	$	-		$	-		$	-
Income taxes paid	$	-		$	-		$	-
Non cash investing and financing activities:
Acquisition of license agreement in exchange
for liability due Licensor of license agreement	$	-		$	-		$	500,000
Contribution of amount due Licensor of
terminated license agreement	$	-		$	500,000		$	-

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

F-4

-6-

Neohydro Technologies Corp. and Subsidiary

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Expressed in US Dollars)

(Unaudited)

1.	Nature of Operations

Neohydro Technologies Corp. (the “Company”) was incorporated in the State of Nevada on November 13, 2007 as Rioridge Resources Corp. On July 22, 2008, the Company changed its name to Neohydro Technologies Corp. From December 14, 2007 to September 20, 2008, the Company’s principal business was the acquisition and exploration of mineral resources. On September 22, 2008 (see Note 3), the Company entered into a licensing agreement and acquired the exclusive worldwide marketing, distribution and licensing rights to water sterilization technology. On March 31, 2009, this license agreement was terminated by the licensor. On June 8, 2009 (see Note 9), the Company entered into a licensing agreement to market and sell in Canada an environmental fuel efficient turbo technology called Green Interactive Hybrid System (“GIHS 221;). On September 1, 2009, the Company incorporated Green Interactive Hybrid Technologies Canada Inc. “GIH Canada” in the Province of Alberta, Canada as a wholly-owned subsidiary to better attract Canadian investment.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception, has never paid dividends and is unlikely to generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at March 31, 2010, the Company has a working capital deficit of $221,897 and has accumulated losses of $965,397 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going conce rn. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern

2.	Summary of Significant Accounting Policies

a)	Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is December 31.

F-5

-7-

Neohydro Technologies Corp. and Subsidiary

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Expressed in US Dollars)

(Unaudited)

2.	Summary of Significant Accounting Policies (continued)

b)	Interim Financial Information

The unaudited financial statements as of March 31, 2010 and for the three months ended March 31, 2010 and 2009 and for the period November 13, 2007 (inception) to March 31, 2010 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2010 and the results of operations and cash flows for the periods then ended. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudit ed. The results for the three month period ended March 31, 2010 are not necessarily indicative of the results to be expected for any subsequent quarters of the entire year ending December 31, 2010. The balance sheet at December 31, 2009 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2009 as included in our Form 10-K filed with the Securities and Exchange Commission on April 15, 2010.

c)	Financial Instruments

Our financial instruments consist principally of cash, cash equivalents, due to related party, accounts payable, convertible notes, and derivative liabilities. ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments establish a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements.

The fair value of the derivative instruments are determined based on “Level 2” inputs, which consist of quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

F-6

-8-

Neohydro Technologies Corp. and Subsidiary

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Expressed in US Dollars)

(Unaudited)

2.	Summary of Significant Accounting Policies (continued)

Fair Value Hierarchy

The Company has categorized its financial instruments, based on the priority of inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

Financial assets and liabilities recorded on the condensed consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1 Financial assets and liabilities for which values are based on unadjusted quoted prices for identical assets or liabilities in an active market that management has the ability to access.

Level 2 Financial assets and liabilities for which values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability (commodity derivatives and interest rate swaps).

Level 3 Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company conducts a review of fair value hierarchy classifications on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities.

The following presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at March 31, 2010. These items are included in “derivative liability” on the consolidated balance sheet.

	Fair Value Measurements on a Recurring Basis
	March 31, 2010
	Level 1	Level 2	Level 3	Total
Liabilities:
Derivative liability	-	$24,215	-	$24,215
Total liabilities at fair value	-	$24,215	-	$24,215

F-7

-9-

Neohydro Technologies Corp. and Subsidiary

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Expressed in US Dollars)

(Unaudited)

2.	Summary of Significant Accounting Policies (continued)

d)	Reclassifications

Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

e)	Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3.	Licence Agreement Costs, Net

On September 22, 2008, the Company entered into an agreement with Neohydro Corp. ("Licensor") and Dean Themy ("Themy") and acquired the exclusive worldwide marketing, distribution and distribution rights, along with patent and intellectual rights, to the Licensor's water sterilization technology for the treatment of industrial waste water in industries such as the oil and gas industry. Licensor reserved the sole and exclusive right to manufacture the Licensed Products.

The price for the license was $500,000. No due date for payment, or interest provisions were specified in the agreement. In addition, the Company's majority stockholder and president transferred 14,560,000 shares of Company Common Stock to Themy, president of the Licensor. On September 10, 2008, Themy was appointed director of the Company. On September 22, 2008, Themy was appointed president of the Company.

The agreement also provided for the payment of royalties to Licensor of 10% of sales of licensed products. The Company was also to use its best efforts to provide funding for business development and marketing.

The Company initially capitalized the $500,000 license agreement cost and recorded amortization expense of $1,096 for the period September 22, 2008 to September 30, 2008 (using the straight line method over the estimated 10 year economic life of the agreement). As at September 30, 2008, the Company reviewed the remaining $498,904 carrying value of the license agreement costs for potential impairment. Considering all facts and circumstances, the Company concluded that it was not more likely than not that any of the $498,904 carrying cost was recoverable. Accordingly, the Company expensed a $498,904 as a provision for impairment of license agreement costs at September 30, 2008 and reduced the license agreement costs, net, to $nil.

On March 31, 2009, the License Agreement was terminated by the Licensor due to the Company’s failure to comply with funding schedules set forth in the agreement.

On April 22, 2009, the Company executed an Agreement and Release with Licensor and Themy. Themy returned the 14,560,000 shares of Company common stock transferred to him pursuant to the License Agreement. Also, Licensor and Themy released the Company from any liabilities and claims due them and agreed to hold harmless the Company from any and all claims by third parties which Themy incurred while affiliated with the Company. The Company released Licensor and Themy from any claims due to the Company and agreed to hold harmless Licensor and Themy from any claims.

F-8

-10-

Neohydro Technologies Corp. and Subsidiary

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Expressed in US Dollars)

(Unaudited)

4.	Related Party Balances/Transactions

Due to related parties, which are non-interest bearing, unsecured, and have no specific terms of repayment, consist of:

			March 31, 2010		December 31, 2009
Due to former chief executive officer (from November 13, 2007 to September 22 ,2008) for advances and expenses paid on behalf of the Company		$	21,000	$	20,998
	Due to significant stockholders
Unpaid consulting fees			22,550		4,050
Total		$	43,550	$	25,048

For the three months ended March 31, 2010, the Company incurred $37,500, $12,500 per month, (March 31, 2009 - $Nil) in management fees expense for services provided by its current chief executive officer (from June 8, 2009).

5. Loan Payable

On July 30, 2009, the Company entered into a loan agreement with a private company (“Lender”) for $35,000. The loan was non-interest bearing and was due in full on March 1, 2010. The loan could be cancelled upon the conversion of the loan into shares by the Lender. The loan was not repaid by the due date of March 1, 2010 and on April 9, 2010 a new agreement was signed. (see Note 10(b)).

b)	On March 31, 2010 a private company loaned the Company $28,000. The loan is non-interest bearing and has no repayment terms. On May 6, 2010 the private company loaned an additional $17,000 and entered into a convertible note agreement for the gross amount of $45,000 (see Note 10(c)).

F-9

-11-

Neohydro Technologies Corp. and Subsidiary

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Expressed in US Dollars)

(Unaudited)

6. Convertible Note

On December 17, 2009, the Company entered into a convertible note agreement with a private company. The Company received $50,000 which bears interest at 15% per annum and was due on March 31, 2010. Interest shall be payable on the note when the principal amount becomes due. The loan and any unpaid interest are convertible into shares of common stock at a conversion price which is the lesser of (a) $0.15 or (b) a 25% discount to the five day value weighted average stock price of the common stock as of the date of conversion. The Company recognized the fair value of the embedded beneficial conversion feature of $35,989 as a derivative liability and reduced the carrying value of the convertible loan to $14,011. The discount on the convertible loan was accreted over the term of the convertible loan, increasing the carry ing value to the face value of $50,000. As at March 31, 2010, the discount was fully accreted and the carrying value of the convertible debt was $50,000. At March 31, 2010, accrued interest of $2,137 was also outstanding. The fair value of the derivative liability at March 31, 2010 was $24,215 and a loss of $2,608 was recorded on the change in the fair value of the derivative liability for the three months ended March 31, 2010. On April 1, 2010, the due date of the loan was extended to June 1, 2010 (see Note 10(a)).

7. Share Purchase Warrants

A summary of the changes in the Company’s common share purchase warrants is presented below:

	Number of Warrants	Weighted Average Exercise Price

Balance – December 31, 2009 and March 31, 2010	1,250,000	$0.15

The warrants issued during 2009 were in conjunction with a share issuance. The Company determined the fair value of both the common stock and warrants as of the date the transactions were initially entered into. The fair value of the warrants was determined using the Black-Scholes method. The Company allocated the proceeds between the warrants and the stock based on the relative fair values as follows:

		2009

Relative fair value of warrants		$76,747
Relative fair value of stock		$23,253

As at March 31, 2010, the following common share purchase warrants were outstanding:

Description	Number of Warrants	Exercise Price	Expiry Date

Issued September 23, 2008	250,000	$0.40	September 23, 2011
Issued October 1, 2009	500,000	$0.10	October 1, 2012
Issued October 1, 2009	500,000	$0.08	October 1, 2013

Total	1,250,000

F-10

-12-

Neohydro Technologies Corp. and Subsidiary

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Expressed in US Dollars)

(Unaudited)

8. Income Taxes

No provisions for income taxes have been recorded in the periods presented since the Company has incurred net losses since inception.

Based on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset of $147,098 at March 31, 2010 (December 31, 2009 - $127,194) attributable to the future utilization of the net operating loss carry-forward of $432,641 at March 31, 2010 (December 31, 2009 - $374,100) will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements. The Company will continue to review this valuation allowance and make adjustments as appropriate. The $432,641 net operating loss carry-forward expires $25,292 in year 2027, $132,603 in year 2028, $216,205 in year 2029, and $58,541 in year 2030.

Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

The components of the net deferred income tax assets consist of:

		March 31, 2010		December 31, 2009

Net operating loss carry-forward	$	147,098	$	127,194

Valuation allowance		(147,098)		(127,194)

Net deferred income tax assets	$	–	$	–

Expected income tax expense (benefit) computed by applying the U.S. statutory income tax rates to pre-tax income (loss) differs from the Company’s provision for (benefit from) income taxes, as follows:

		For the Three Months Ended
		March 31, 2010		March 31, 2009

Expected income tax expense (benefit) at statutory rates	$	(32,361)	$	(18,873)
Non-deductible accretion		11,570		–
Non-deductible gain on re-valuation of derivative liability		887		–

Change in valuation allowance		19,904		18,873

Provision for (benefit from) income taxes	$	–	$	–

F-11

-13-

Neohydro Technologies Corp. and Subsidiary

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Expressed in US Dollars)

(Unaudited)

9. Commitments and Contingencies

On June 8, 2009, the Company entered into a licensing agreement with Gene Peckover, a sole proprietor as president of Gene Vettes of Lynden, a Washington corporation (the “GIHS Licensor”) to be formed, wherein Licensor granted to the Company an exclusive license covering the territory of Canada and other such territories that shall be mutually agreed upon and the right to market and sell an environmental fuel efficient turbo technology called Green Interactive Hybrid System (“GIHS”). The term of the license is three years subject to the following:

	1.	The Company must purchase and have operational a demonstration GIHS by December 31, 2009.
	2.	The Company must sell at least 3 GIHS units by December 31, 2009.
	3.	The Company must sell at least 25 GIHS units by December 31, 2010.
	4.	The Company must sell at least 200 GIHS units by December 31, 2011.
	5.	The Company must sell at least 500 GIHS units by December 31, 2012.

On November 23, 2009, the terms of the license agreement were amended as follows:

	1.	The Company must purchase and have operational a demonstration GIHS by June 30, 2010.
	2.	The Company must sell at least 3 GIHS units by December 31, 2010.
	3.	The Company must sell at least 25 GIHS units by December 31, 2011.
	4.	The Company must sell at least 200 GIHS units by December 31, 2012.
	5.	The Company must sell at least 500 GIHS units by December 31, 2013.

On June 8, 2009, the Company entered into a fee agreement with Michael Kulcheski and Harry Gelbard wherein the Company agreed to issue Kulcheski 9,000,000 restricted shares of common stock and Gelbard 6,000,000 restricted shares of common stock in consideration of Kulcheski and Gelbard using reasonable commercial efforts to sell, market, distribute, and manufacture the GIHS license granted to the Company by the GIHS Licensor and to manage the development of our technology.

If the first and second milestones of the GIHS licensing agreement described in the preceding paragraph are not achieved, Kulcheski and Gelbard are to return the 15,000,000 shares of common stock held by them to the treasury of the Company. These shares are not considered outstanding for accounting purposes.

On June 8, 2009, Kulcheski was appointed chief executive officer, chief financial officer and director of the Company.

F-12

-14-

Neohydro Technologies Corp. and Subsidiary

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Expressed in US Dollars)

(Unaudited)

10. Subsequent Events

On April 1, 2010, the due date of the $50,000 convertible note described in Note 6 was extended to June 1, 2010. Except for the extension of the maturity date, the extension did not change any of the terms of the convertible note; thus, the debt still does not meet the definition of “conventional convertible debt” because the number of shares which may be issued upon the conversion of the debt is not fixed. As the conversion feature meets the criteria of an embedded derivative the conversion feature will continue to be bifurcated and accounted for as a derivative liability.

On April 9, 2010, the Company entered into a convertible loan agreement which replaced the loan agreement for $35,000 referred to in Note 5(a). According to the terms of the agreement the loan is due March 1, 2011 and bears interest at 12% per annum. Interest shall be payable on the note when the principal amount becomes due. The loan and any unpaid interest are convertible into shares of common stock at a conversion price which is the lesser of (a) $0.015 or (b) a 25% discount to the five day value weighted average stock price of the common stock as of the date of conversion.

The debt does not meet the definition of “conventional convertible debt” because the number of shares which may be issued upon the conversion of the debt is not fixed. As the conversion feature meets the criteria of an embedded derivative the conversion feature will be bifurcated and accounted for as a derivative liability.

On May 6, 2010, the Company entered into a convertible note agreement to secure $45,000 of advances referred to in Note 5(b). According to the terms of the agreement the loan is due on June 30, 2010 and bears interest at 15% per annum. Interest shall be payable on the note when the principal amount becomes due. The loan and any unpaid interest are convertible into shares of common stock at a conversion price which is the lesser of (a) $0.02 or (b) a 25% discount to the five day value weighted average stock price of the common stock as of the date of conversion.

F-13

-15-

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement Regarding Forward-looking Statements

This section of the report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Plan of Operation

We are a Development Stage Company, focused on “Green” technologies in the automotive, transportation, and power generation industries, and, focused initially on the light -duty trucking industry, but we have not yet generated or realized any revenues from our business activities. Neohydro has licensed a unique patented turbo hybrid system. This revolutionary Green Interactive Hybrid System™ is proven to assist an engine to operate more efficiently, with less effort, less fuel consumption, and enhanced horsepower. Thus increasing engine life as well as adding obvious economic benefits, and enhanced horsepower to many significantly underpowered vehicles, such as limousines and fleet vehicles where incremental cost for larger engines may not be an economically viable option. Advanced t uning methods also significantly decrease harmful emissions. In the case of most technological enhancements with vehicles, there are significant concerns about negating existing factory warranty protection. At present the Company’s technology is only engineered for one automobile manufacture where it does not void the manufacturer’s warranty.

Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated in the near future.

On June 8, 2009, the Company entered into a licensing agreement with Gene Peckover, a sole proprietor as president of Gene Vettes of Lynden, a Washington corporation (“Licensor”) to be formed wherein Licensor granted to the Company an exclusive license covering the territory of Canada and other such territories that shall be mutually agreed upon and the right to market and sell an environmental fuel efficient turbo technology called Green Interactive Hybrid System (“GIHS”). The term of the license is three years with automatic subsequent renewals subject to the following:

	1.	The Company must purchase and have operational one demonstration GIHS by December 31, 2009.
	2.	The Company must sell at least three GIHS units by December 31, 2009.
	3.	The Company must sell at least twenty-five GIHS units by December 31, 2010.
	4.	The Company must sell at least two hundred GIHS units by December 31, 2011.
	5.	The Company must sell at least five hundred GIHS units by December 31, 2012.

-16-

On November 23, 2009 the licensor granted a six month extension to the terms of the License Agreement and added Europe and Scandinavia to the company’s territory by way of a duly executed Amendment to the License Agreement. The amended terms are as follows:

	1.	The Company must purchase and have operational one demonstration GIHS by June 30, 2010.
	2.	The Company must sell at least three GIHS units by December 31, 2010.
	3.	The Company must sell at least twenty-five GIHS units by December 31, 2011.
	4.	The Company must sell at least two hundred GIHS units by December 31, 2012.
	5.	The Company must sell at least five hundred GIHS units by December 31, 2013.

All other provisions of the Agreement dated the 8th day of June 2009 remain in full force and effect.

This revolutionary Green Interactive Hybrid System™ is proven to cause an engine to operate with less effort, less fuel consumption, and enhanced power. In addition, advanced tuning methods significantly decrease harmful emissions.

To meet our need for cash we seek additional capital. If we obtain any purchase orders from our customers and if the purchase orders prove profitable, we will attempt to raise additional money through a subsequent private placement, public offering or through loans. If we do not have enough money to complete our sales and marketing initiatives, we will have to find alternative sources, like a second public offering, a private placement of securities, or loans from our officers or others.

Our officers and directors are willing to loan us money except to cover expenses relating to the purchase of inventory in supplies and materials required to assemble the units at this time. At the present time, we are looking at arrangements to raise additional cash to fulfill our obligations to the License Agreement. If we need additional cash and can't raise it, we will either have to suspend activities until we do raise the cash, or cease activities entirely. Other than as described in this paragraph, we have no other financing plans.

We lease our office space. We lease the office from Office NJ of Piscataway on a month to month basis. Our monthly rental is $119.We do not intend to hire additional employees at this time other than occasional temporary office staff as needed from time to time to assist in market research.

Operations

We have no revenues in the periods ended March 31, 2010. In the three months ended March 31, 2010, we incurred net losses of $(95,179) . From November 13, 2007 (inception date) to March 31, 2010 we incurred a net loss of $(965,397).

General and administrative expenses relating to continuing operations increased for the three months ended March 31, 2010 to approximately $(58,541) from $0 for the three month period ended March 31, 2009. The increase of $(58,541) was primarily due to increased management fees, consulting fees, legal and accounting. In addition, for the three months ended March 31, 2010, accretion of discount on convertible note in the amount of $(34,030) contributed to the net losses of $(95,179) for the 3 months ending March 31, 2010

-17-

On September 1, 2009 we incorporated Green Interactive Hybrid Technologies Canada Inc. (GIH Technologies) in the Province of Alberta, Canada as a wholly owned subsidiary to better attract Canadian investment and as its primary location and focus.

The positive environmental and economic benefits of the company’s products open the opportunity for the company to apply for a variety of governmental grants, both provincial and federal. These grants range from development capital at extremely favorable loan rates, to outright grant capital for development and subsequent production. Grant capital focuses on the furthering of green concepts and applications that, now and in the future, will result in significant increase in fuel efficiency, while reducing the carbon footprint. The high price of fossil fuel has brought to light the need for not only conservation, but also technologies that create efficiency of operation leading to direct fuel savings and decreased pollution.

It is the Company’s intention to establish an R&D facility in Calgary to further the development of the company’s products and to benefit from government funding for R&D initiatives. The focus of the Company’s R&D will be to adapt the GIHS to other engine platforms, i.e. Light duty diesel trucks, stationary gas and diesel engines for the production of electricity and air compression, to aid the lucrative and demanding oil and gas arena, and marine engines, resulting in the same remarkable benefits in power, fuel economy with significant reduction in fossil fuel pollutants.

On October 1, 2009, we completed a private placement of our common stock pursuant to Regulation S of the Securities Act of 1933 (the “Act”). We sold 500,000 units to one corporation and raised $100,000. Each unit consisted of one share of common stock; one series A warrant; and, one series B warrant. Each series A warrant is convertible into one share of common stock at a conversion price of $0.10 per warrant and each series B warrant is convertible into one share of common stock at a conversion price of $0.08 per warrant. The series A warrants are exercisable for a period of 36 months from October 1, 2009 and the series B warrants are exercisable for a period of 48 months from October 1, 2009. The transaction took place outside the United States of America an d the purchaser was a non-US corporation as defined in Regulation S of the Act.

Milestones

We have one milestone for the next twelve months. It is to sell a sufficient number of GIHS systems to generate revenues in order to operate profitably.

Other milestones are as follows:

1. Raise additional capital by the end of June 30, 2010.

2. We plan on changing our company name to better reflect our business.

3. Apply and obtain government grants and subsidies through the Canadian Subsidiary Company in the next 60 days.

4. Purchase the first demonstration GIHS system by the end of June 30, 2010.

5. Sell 3 GIHS systems by the end of December 31, 2010.

-18-

6. Establish a partnership or joint venture with a dealership in Alberta who will supply vehicles at fleet prices.

7. Begin R&D development through the Canadian Subsidiary Company on the GIHS, in order for the system to be compatible with other vehicle platforms.

We have nominal cash at the present time and cannot operate until we raise additional capital.

Limited Operating History; Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance. We have just completed our first quarter of our current operations as a company focused on “Green” technologies in the automotive, transportation, power generation, and, focused initially on the light -duty trucking industry and have not generated any revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the sales cycle and manufacturing, and possible cost overruns due to price and cost increases in raw materials.

To become profitable and competitive, we must sell a sufficient number of our GIHS systems to generate a profit.

We have no assurance that future financing will be available to us in the future on satisfactory terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our activities. Equity financing could result in additional dilution to existing shareholders.

From Inception on November 13, 2007

The Company acquired the Rio Lode Claim, which was located on November 24, 2007 and filed on December 7, 2007 in the Clark County recorder’s office in Las Vegas as File 081, Page 0010 in the official records book No. T20070212450. The Rio Lode Claim is located within Section 6, Township 25-S, Range 58-E, in the Yellow Pine Mining District of Clark County, Nevada.

Since then the claims were renewed until August 31, 2009. Accordingly, we have not conducted any work on the property and we have terminated our mining operations altogether.

On September 22, 2008, we entered into a licensing agreement with Neohydro Corp., a Nevada corporation located in Houston, Texas (“Neohydro Corp”) to use all of Neohydro Corp.’s patent and intellectual rights for the purpose of the exclusive worldwide marketing, distribution and licensing rights of the Business for the treatment of industrial waste water for industries. The Neohydro Corp.’s intellectual rights and trade secrets are directed at the use of water sterilization technology, which utilizes innovative high voltage electrolysis devices to transform water. The technology is able to change the nature of the water itself. The Company agreed to use its best efforts to provide funding for business development.

On September 23, 2008, we completed a private placement for 250,000 units at $0.40 per unit for gross proceeds of $100,000. Each unit consisted of one share of common stock and one Series A Warrant. Each Series A Warrant entitles the holder to purchase one share of common stock at $0.40 per share expiring three years from the closing date. The Company incurred finder’s fees of $10,000 in connection with the private placement.

-19-

On March 31, 2009, Neohydro Corp. terminated its licensing agreement with us as a result of our failure to comply with the funding schedule set out in Section 3.2 of the Licensing Agreement. On September 25, 2008 we reported in our Form 8-K that on September 22, 2008, we entered into a licensing agreement with Neohydro Corp., a Nevada corporation located in Houston Texas (“Neohydro Corp.”) and Dean Themy (“Themy”) whereby we were granted a worldwide license from Neohydro Corp. to use its intellectual property rights for the purposes of developing, modifying, marketing, selling, offering or otherwise distributing products for the treatment of industrial water. Specifically excluded therefrom was the right to manufacture products.

We also executed an non-compete agreement with Neohydro Corp. The fee for the license was $500,000, also, the Company was to use its best efforts to provide funding for business development of $1,400,000 payable as follows: $100,000 by September 26, 2008; $150,000 by October 15, 2008; $250,000 by October 30, 2008; $300,000 by January 15, 2009; $300,000 by April 15, 2009; and, $300,000 by July 15, 2009. In addition we were obligated to issue to Neohydro Corp. an amount of common stock equal to the value of 20% of our total outstanding common shares or approximately 14,560,000 restricted shares of common stock for this license. Also we were obligated to pay a royalty of 10% of the gross proceeds from the sale of products. We did not make any sales.

We are no longer in either business.

	1.	The Company must purchase and have operational a demonstration GIHS by December 31, 2009.
	2.	The Company must sell at least 3 GIHS units by December 31, 2009.
	3.	The Company must sell at least 25 GIHS units by December 31, 2010.
	4.	The Company must sell at least 200 GIHS units by December 31, 2011.
	5.	The Company must sell at least 500 GIHS units by December 31, 2012.

-20-

	1.	The Company must purchase and have operational one demonstration GIHS by June 30, 2010.
	2.	The Company must sell at least three GIHS units by December 31, 2010.
	3.	The Company must sell at least twenty-five GIHS units by December 31, 2011.
	4.	The Company must sell at least two hundred GIHS units by December 31, 2012.
	5.	The Company must sell at least five hundred GIHS units by December 31, 2013.

All other provisions of the Agreement dated the 8th day of June 2009 shall remain in full force and effect.

On October 1, 2009, we completed a private placement of our common stock pursuant to Regulation S of the Securities Act of 1933 (the “Act”). We sold 500,000 units to one corporation and raised $100,000. Each unit consisted of one share of common stock; one series A warrant; and, one series B warrant. Each series A warrant is convertible into one share of common stock at a conversion price of $0.10 per warrant and each series B warrant is convertible into one share of common stock at a conversion price of $0.08 per warrant. The series A warrants are exercisable for a period of 36 months from October 1, 2009 and the series B warrants are exercisable for a period of 48 months from October 1, 2009. The transaction took place outside the United States of America and the purchaser was a non-US corporation as defined in Regulation S of the Act.

Liquidity and Capital Resources

We do not have sufficient funds to operate. Future operating activities are expected to be funded by loans from our officers and directors.

We owned a 100% interest in a Mineral Claim located in Clark County, Nevada, in consideration for $6,500. The claim was registered in the name of the company. The claim has not been renewed and the claim expired on August 31, 2009.

In November, 2007, we issued 40,000,000 shares of common stock to our sole officer and director, Venugopal Rao Balla, pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933. The purchase price of the shares was $5,000. This was accounted for as an acquisition of shares. Venugopal Rao Balla covered some of our initial expenses by paying $125 for incorporation documents and $2,634 website support and operation costs. The amount owed to Mr. Balla is non-interest bearing, unsecured and due on demand. Further the agreement with Mr. Balla is oral and there is no written document evidencing the agreement.

-21-

In December 2007, we issued 32,800,000 shares of common stock to 41 individuals in exchange for $41,000. The shares were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933.

On September 23, 2008, we completed a private placement for 250,000 units at $0.40 per unit for proceeds of $100,000. Each unit consists of one share of common stock and one Series A Warrant. Each Series A Warrant entitles the holder to purchase one share of common stock at $0.40 per share expiring three years from the closing date. The Company incurred finder’s fees of $10,000 in connection with the private placement.

In April 2009, Dean Themy returned 14,560,000 shares to the Company.

On July 30, 2009, the Company entered into a loan agreement with a private company for $35,000. (“Lender”). The loan is non-interest bearing and due in full on March 1, 2010. The loan can be cancelled upon the conversion of the loan into shares by the Lender. The loan was not repaid by the due date of March 1, 2010 and on April 9, 2010 a new agreement was signed. On April 9, 2010, the Company entered into a convertible loan agreement which replaced the loan agreement for $35,000. According to the terms of the agreement the loan is due March 1, 2011 and bears interest at 12% per annum. Interest shall be payable on the note when the principal amount becomes due. The loan and any unpaid interest are convertible into shares of common stock at a conversion price which is the lesser of (a) $0.015 or (b) a 2 5% discount to the five day value weighted average stock price of the common stock as of the date of conversion.

On October 1, 2009, we completed a private placement of our common stock pursuant to Regulation S of the Securities Act of 1933 (the “Act”). We sold 500,000 units to one corporation and raised $100,000. Each unit consisted of one share of common stock; one series A warrant; and, one series B warrant. Each series A warrant is convertible into one share of common stock at a conversion price of $0.10 per warrant and each series B warrant is convertible into one share of common stock at a conversion price of $0.08 per warrant. The series A warrants are exercisable for a period of 36 months from October 1, 2009 and the series B warrants are exercisable for a period of 48 months from October 1, 2009. The transaction took place outside the United States of America and the purchaser was a non-US corporation as defined in Regulation S of the Act.

On December 17, 2009, the Company entered into a convertible note agreement with a private company. The Company received $50,000 which bears interest at 15% per annum and is due on March 31, 2010. Interest shall be payable on the note when the principal amount becomes due. The loan and any unpaid interest are convertible into shares of common stock at a conversion price which is the lesser of (a) $0.15 or (b) a 25% discount to the five day value weighted average stock price of the common stock as of the date of conversion. On April 1, 2010, the due date of the loan was extended to June 1, 2010.

-22-

On March 31, 2010 a private company advanced the Company $28,000. The loan is non-interest bearing and has no repayment terms. On May 6, 2010 the private company loaned an additional $17,000 and entered into a convertible note agreement for the gross amount of $45,000. On May 6, 2010, the Company entered into a convertible note agreement to secure $45,000 of advances referred to in Note 5(b). According to the terms of the agreement the loan is due on June 30, 2010 and bears interest at 15% per annum. Interest shall be payable on the note when the principal amount becomes due. The loan and any unpaid interest are convertible into shares of common stock at a conversion price which is the lesser of (a) $0.02 or (b) a 25% discount to the five day value weighted average stock price of the common stock as of the date of conversion.

As of March 31, 2010, our total assets were $25,721 and our total liabilities were $247,618.

We lease our office space from Stratis Business Centers of Piscataway on a month to month basis. Our monthly rental is $119. We do not intend to hire additional employees at this time.

Limited Operating History; Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance. We have just started our current operations and have not generated any revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the sales cycle and manufacturing, and possible cost overruns due to price and cost increases in metals.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective. Further, there were no changes in our internal control over financial reporting during the quarter ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

-23-

PART II. OTHER INFORMATION

ITEM 1A.

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 6.

EXHIBITS.

The following documents are included herein:

Exhibit No.	Document Description

10.1	Lease Agreement (filed as exhibit 10.1 to the Company’s Form S-1 Registration Statement filed on March 13, 2008 and incorporated herein by reference thereto).

31.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

* Filed herewith

-24-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 17th day of May, 2010.

	NEOHYDRO TECHNOLOGIES CORP.

	BY:	MICHAEL R. KULCHESKI
		Michael R. Kulcheski, President, Principal Executive Officer, Secretary, Treasurer, Principal Financial Officer, Principal Accounting Officer and sole member of the Board of Directors.

-25-

EXHIBIT INDEX

Exhibit No.	Document Description

10.1	Lease Agreement (filed as exhibit 10.1 to the Company’s Form S-1 Registration Statement filed on March 13, 2008 and incorporated herein by reference thereto).

31.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

* Filed herewith

-26-

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Good

Epoxy (EPXY) Inactive 10-Q2010 Q1 Quarterly report

Content analysis