PTOS 10-K Fiscal year ended March 31, 2011

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended March 31, 2011

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

For the transition period from ___________ to ______________

P2 SOLAR, INC.

(Exact name of registrant as specified in its charter)

Delaware	333-91190	98-0234680
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)
UNIT 204, 13569 - 76 AVENUE SURREY, BRITISH COLUMBIA, CANADA, V3W 2W3
(Address of principal executive offices)
Registrant’s telephone number, including area code: (604) 592-0047

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act [] Yes [X ] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the [ ]Yes [X ] No

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [  ] 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 (§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). Not Applicable.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not  contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

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” and smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]  (Do not check if a smaller reporting company)	Smaller reporting company [ X ]

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of the last business day of the registrant’s most recently completed first fiscal quarter. $3,561,613.60.

As of July 11, 2011, the Company had 53,728,179 shares issued and outstanding.

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PART I

ITEM 1.

BUSINESS

Organizational Development

P2 Solar, Inc., a Delaware corporation (hereinafter referred to as “we”, “us”, the “Company”, or the “Registrant”) has been in existence as a Company (including our predecessor British Columbia Corporation) since 1990.   As discussed more fully below, the Company’s current business operations are focused on the potential construction of a solar power plants.

The Company was initially organized under the laws of British Columbia, Canada, on November 21, 1990 as Spectrum Trading Inc. The Company’s initial business plan was to import leather products from India and sell them in Canada. However, the supplier in India did not materialize and the Company remained dormant until 1997.  In 1997, the Company began a chemical manufacturing business.  On May 14, 1999, pursuant to Section 388 of the Delaware General Corporation Law, the Company domesticated to Delaware and began a chemical manufacturing business; these operations were phased out in the end of 2008.  Subsequent to the Company’s domestication to Delaware, on June 3, 2004, the Company changed its name to Natco International, Inc. On March 11, 2009, the Company changed its name to P2 Solar, Inc.

Business of the Company

As discussed more fully below, the Company’s current business operations are focused on: i) solar panel technology; and ii) the potential construction of solar power plants located in India, Bulgaria, and Ontario, Canada.  The Company is currently a development stage company.

Solar Panel Business Operations

General Information

As disclosed on Form 8-K filed with the Securities and Exchange Commission on November 26, 2008, on November 21, 2008, the Company entered into an Intellectual Property License Agreement (the “License Agreement”) with Lassen Energy, Inc., a California corporation (“Lassen”), DBK Corporation (“DBK Corp”), a Nevada corporation, and Darry Boyd (“Boyd”) (DBK Corp and Boyd are collectively referred to herein as (“DBK”), pursuant to which Lassen and DBK agreed to provide the Company with several licenses (the “Licenses”) relating to the use of certain intellectual property owned by DBK and Lassen used in the manufacture of solar panels  (the “JIL Technology”).

As disclosed on a Form 8-K filed with the Securities and Exchange Commission on October 4, 2010, on September 29, 2010, the Company, Lassen, DBK Corp., and Boyd entered into an Agreement pursuant to which the parties agreed to terminate the License Agreement and each of the parties’ respective obligations under the License Agreement.  Specifically, all of the licenses granted under the License Agreement were terminated and the Company’s financial obligations under the License Agreement were terminated.  The agreed upon effective date of the License Termination Agreement was September 1, 2010.

Following the termination of the License Agreement, Lassen, DBK, and Darry Boyd transferred ownership of the intellectual property pertaining to the JIL Technology into Solarise Power, Inc. (“Solarise”), a privately owned Nevada corporation.   Solarise specializes in the development of solar panel technology.  On September 6, 2010, the Company acquired 1,004,999 shares of restricted common stock of Solarise, for a total purchase price of $2,500,000 which was paid as follows: i) consideration in the amount of $250,000; and ii) the issuance to Solarise of 1,000,000 shares of Series A Non-Voting Convertible Preferred Common Stock of the Company.  The 1,004,999 shares of Solarise acquired by the Company represent approximately 33.5% of the issued and outstanding shares of

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common stock of Solarise.  Through its relationship with Solarise, the Company anticipates that it will contribute up to $2,500,000 towards the development, testing and patenting of the intellectual property pertaining to the JIL Technology.  In accordance with the terms of the Series A Non-Voting Convertible Preferred Common Stock of the Company issued to Solarise, for every $2.25 that the Company contributes towards the operating costs of Solarise, one (1) Series A Non-Voting Convertible Preferred Common Stock of the Company owned by Solarise will be cancelled.  The Company is currently testing the hybrid panel containing the JIL Technology internally.  The Company has had a few issues with the performance of the panel that it is working towards solving.  Once the internal tests are completed the panel will be sent for independent testing and power certification with Intertek Laboratories in California.

Products

The JIL Technology is currently in the development stage and is not yet ready for commercial application. The Company is currently testing the hybrid panel containing the JIL Technology internally.  Once the internal tests are completed the panel will be sent for independent testing and power certification with Intertek Laboratories in California. Upon completion of the aforementioned testing, the Company anticipates that it will begin applying the JIL Technology to commercial applications.

It is anticipated that solar panels utilizing the JIL Technology will make use of a patent pending application of a technology called Multiple Energy Levels or MEL, which configures photovoltaic cells (PV) as a series of transistors instead of as diodes. The technology takes wavelength frequency to move a bucket of electrons through the junctions, which greatly improves photovoltaic efficiency.

Photovoltaic solar power is a renewable energy. Compared to nonrenewable sources such as coal, gas, oil, and nuclear, the perceived advantages are: it's non-polluting, has no moving parts to break down, and does not require much maintenance. A very important characteristic of PV power generation is that it does not require a large-scale installation to operate as conventional power generation stations. Power generators can be installed in a distributed fashion, on each house or business or school, using area that is already developed, and allowing individual users to generate their own power, quietly and safely.  Rooftop power can be added as more homes or businesses are added to a community, thereby allowing power generation to keep in step with growing needs without having to overbuild generation capacity as is often the case with conventional large scale power systems.

Customers

Due to the fact that the JIL Technology is still in the developmental stage, we do not currently have any customers.

Suppliers and Raw Materials

Due to the fact that the JIL Technology is still in the developmental stage, we do not currently have any suppliers.

Marketing

We anticipate that solar panels utilizing the JIL Technology will be marketed to the Residential and Commercial markets through Solarise.

Competition and Related Factors

Our chief competitor on the industrial side is Stirling Energy Systems, a systems integration and project management company that is developing equipment for utility-scale renewable energy power plants and distributed electric generating systems. On the residential and commercial side, our chief competitors are British Petroleum and Shell, both of which

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have substantially greater financial, manpower, and marketing resources than we do.  Our ability to compete with them will be based solely on the hope that the Lassen Solar Panels are significantly technologically superior to any solar panels they develop

Intellectual Property

As noted above, following the termination of the License Agreement, Lassen, DBK, and Darry Boyd transferred ownership of the intellectual property pertaining to the JIL Technology into Solarise.   Solarise specializes in the development of solar panel technology.  On September 6, 2010, the Company acquired 1,004,999 shares of restricted common stock of Solarise, for a total purchase price of $2,500,000 which was paid as follows: i) consideration in the amount of $250,000; and ii) the issuance to Solarise of 1,000,000 shares of Series A Non-Voting Convertible Preferred Common Stock of the Company.  The 1,004,999 shares of Solarise acquired by the Company represent approximately 33.5% of the issued and outstanding shares of common stock of Solarise.  Through its relationship with Solarise, the Company anticipates that it will contribute up to $2,500,000 towards the development, testing and patenting of the intellectual property pertaining to the JIL Technology.  In accordance with the terms of the Series A Non-Voting Convertible Preferred Common Stock of the Company issued to Solarise, for every $2.25 that the Company contributes towards the operating costs of Solarise, one (1) Series A Non-Voting Convertible Preferred Common Stock of the Company owned by Solarise will be cancelled.  The Company is currently testing the hybrid panel containing the JIL Technology internally.  Once the internal tests are completed the panel will be sent for independent testing and power certification with Intertek Laboratories in California.

Government Regulation

Our anticipated manufacture and distribution of solar panels utilizing the JIL Technology through Solarise will be subject to oversight and regulation in accordance with national and local ordinances relating to building codes, safety, environmental protection, and related matters. We are responsible for knowing all applicable regulatory requirements and must manufacture products to comply with all such requirements. Any new government regulations or utility policies that relate to our solar power products may result in significant additional expenses to us and our customers and, as a result, could cause a significant reduction in demand for our solar power products.

Power Plant Construction Business

On July 13, 2009, the Company entered into a Memorandum of Understanding (“MOU”) with the Punjab Energy Development Agency (“PEDA”) regarding the construction of a 25 mega watt power plant, which was to serve as the first phase of the larger 200 mega watt plant in Punjab, India.  No material definitive agreement had been signed regarding the construction of either power plant.  Pursuant to the terms of the MOU, the Company was only authorized to prepare and submit a pre-feasibility report for the proposed solar power project to PEDA; the MOU did not provide the Company with the authority to construct the solar power project.  Under the terms of the MOU, the Company was required to supply the pre-feasibility report to PEDA within 120 days of the execution of the MOU.  On November 5, 2009, the Company received an extension from PEDA until January 31, 2010 in which to submit its pre-feasibility report. On January 31, 2010, the Company submitted the pre-feasibility report to PEDA.  However, due to the New India Solar Mission implemented by the Indian Federal Government in an effort to enhance India’s use of solar technology, jurisdiction for the Company’s project was transferred to the Indian Federal Government.  Accordingly, the Indian Federal Government located in Delhi, India must approve the development and implementation of solar projects in India.  In July 2010, the Indian Federal Government released the new guidelines relating to the construction of solar plants in India.  The guidelines set out the procedure and terms under which the interested parties are able to apply and receive approval to build solar power plants in India under the India Solar Mission. The maximum size of project that the company can apply for in the first phase was 5 MW.  As a result of the enhanced guidelines, the Company was not able to complete the application process, and as such did not formally apply for the authority to construct a 5 MW plant in Punjab.  Due to the enhanced guidelines, the Company has elected to engage in efforts to partner with an established

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Indian company that has received approval from the Indian Federal or State Government for the construction of a solar farm.  The Company is currently in discussions with such companies regarding the prospect of a potential business relationship but to this date has been unsucccessful.  Also,the company is currently analyzing five sites in Ontario, Canada for the construction of  a  10 MW solar plant project.

On June 30, 2011, subsequent to the fiscal year end, the Company signed an option agreement to purchase a 7.3 MW project in Bulgaria.  This project is ready for construction; all Paoer Purchase agreements and permits are in place.  The land for the project has been secured.  The option agreement is subject to Company’s financial, legal, and technical due diligence.  If the company is satisfied with its due diligence results, the final share purchase agreement will be signed.  The cost to aquire the project is 185,000 Eros per MW.  The estimated cost to construct the project is approximately 20 million dollars.

The foregoing description of the option agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the option agreement which is filed as Exhibits 10.19 to this Form 10-K and is hereby incorporated by reference.

During the fiscal year ending March 31, 2011, and the subsequent twelve months, the Company anticipates that it will continue to pursue the development of the solar power plant in India, Bulgaria Ontario, and other parts of the world.  Additionally, the Company will work towards the development and commercialization of the hybrid solar panel containing JIL Technology.

Employees

As of the date of this Form 10-K, we do not have any full or part-time employees.  All work relating to the Company is carried on by the Company’s management.

Reports to Security Holders

We file reports with the SEC under section 15d of the Securities Exchange Act of 1934.  The reports will be filed electronically. You may read copies of any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549.  You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC also maintains an Internet site that will contain copies of the reports we file electronically.  The address for the SEC Internet site is http://www.sec.gov.

ITEM 1A.

RISK FACTORS.

Not Applicable.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not Applicable.

ITEM 2.

PROPERTIES.

Our principal office is located at Unit 204, 13569 – 76 Avenue, Surrey, British Columbia, Canada, V3W 2W3.  As of September 1, 2007 the Company has leased offices at #204, 13569 - 76 ^th Avenue, Surrey, BC, Canada.  Total space is 750 square feet for total rent of $900.00 per month.  The lease for the Company’s principal office lease will expire on August 31, 2012.

ITEM 3.

LEGAL PROCEEDINGS.

On December 12, 2007, the Company commenced legal proceedings in British  Columbia Supreme Court against Photo Violation Technologies Corp. ("PVT") and its president, Fred Mitschele (aka Fred Marlatt), claiming punitive, exemplary and consequential damages and other remedies arising

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from breach of contract and wrongful conduct on the part of Mitschele.  In the Action, the Company claimed PVT had breached the agreement among the Company, PVT and Mitschele entered into on or about March 16, 2007, which provided for the completion of a reverse merger between the Company and PVT.   The Company also claimed in Court documents that Mitschele engaged in a number of wrongful acts, including inducing breach of contract, attempting to divert prospective investors from Company to PVT, failing to provide financial statements and other necessary documents. In February 2008, the Company extended the law suit to include, the other two directors and one employee.  On July 22, 2009, the Company was awarded a judgment in its legal proceeding against PVT in the amount of $1,485,000, plus interest.  The Company is in the process of pursuing all available options to collect on its judgment against PVT.  Additionally, in November 2008, the Company launched another law suit against PVT for spreading misinformation about the Company through a number of websites; this legal proceeding is currently ongoing.

ITEM 4.

(REMOVED AND RESERVED)

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information .

The Company’s shares trade on the OTCBB under the symbol “PTOS.”   The following table sets forth the high and low bid prices of our common stock (USD) for the last two fiscal years and subsequent interim period, as reported by the National Quotation Bureau and represents inter dealer quotations, without retail mark-up, mark-down or commission and may not be reflective of actual transactions:

	(U.S. $)
2009	HIGH	LOW
Quarter Ended March 31	$.81	$0.20
Quarter Ended June 30	$0.78	$0.25
Quarter Ended September 30	$0.75	$0.32
Quarter Ended December 31	$0.55	$0.30
2010	HIGH	LOW
Quarter Ended March 31	$0.43	$0.24
Quarter Ended June 30	$0.28	$0.15
Quarter Ended September 30	$0.22	$0.07
Quarter Ended December 31	$0.14	$0.05
2011	HIGH	LOW
Quarter Ended March 31	$0.15	$0.06

Holders .

As of March 31, 2011 there were 52,228,179 shares of common stock issued and outstanding and approximately 50 shareholders of record.

Dividends .

The Company has not declared or paid any cash dividends on its common stock during the fiscal years ended March 31, 2011 or 2010.  There are no restrictions on the common stock that limit the ability of us to pay dividends if declared by the Board of Directors and  the loan agreements and general

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security agreements covering the Company’s assets do not limit its ability to pay dividends.  The holders of common stock are entitled to receive dividends when and if declared by the Board of Directors, out of funds legally available therefore and to share pro-rata in any distribution to the stockholders. Generally, the Company is not able to pay dividends if after payment of the dividends, it would be unable to pay its liabilities as they become due or if the value of the Company’s assets, after payment of the liabilities, is less than the aggregate of the Company’s liabilities and stated capital of all classes

ITEM 6.

SELECTED FINANCIAL DATA.

Not Applicable.

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-K AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.

Background and Overview

P2 Solar, Inc., a Delaware has been in existence as a Company (including our predecessor British Columbia Corporation) since 1990.   As discussed more fully below, the Company’s current business operations are focused on: i) solar panel technology; and ii) the potential construction of a solar power plant located in India, Bulgaria, and Ontario, Canada.  The Company is currently a development stage company.

Solar Panel Technology

As disclosed on Form 8-K filed with the Securities and Exchange Commission on November 26, 2008, on November 21, 2008, the Company entered into an Intellectual Property License Agreement (the “License Agreement”) with Lassen Energy, Inc., a California corporation (“Lassen”), DBK Corporation (“DBK Corp”), a Nevada corporation, and Darry Boyd (“Boyd”) (DBK Corp and Boyd are collectively referred to herein as (“DBK”)), pursuant to which Lassen and DBK agreed to provide the Company with several licenses (the “Licenses”) relating to the use of certain intellectual property owned by DBK and Lassen used in the manufacture of solar panels  (the “JIL Technology”).

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As disclosed on a Form 8-K filed with the Securities and Exchange Commission on October 4, 2010, on September 29, 2010, the Company, Lassen, DBK Corp., and Boyd entered into an Agreement pursuant to which the parties agreed to terminate the License Agreement and each of the parties’ respective obligations under the License Agreement.  Specifically, all of the licenses granted under the License Agreement were terminated and the Company’s financial obligations under the License Agreement were terminated.  The agreed upon effective date of the License Termination Agreement was September 1, 2010.

Following the termination of the License Agreement, Lassen, DBK, and Darry Boyd transferred ownership of the intellectual property pertaining to the JIL Technology into Solarise Power, Inc. (“Solarise”), a privately owned Nevada corporation.   Solarise specializes in the development of solar panel technology.  On September 6, 2010, the Company acquired 1,004,999 shares of restricted common stock of Solarise, for a total purchase price of $2,500,000 which was paid as follows: i) consideration in the amount of $250,000; and ii) the issuance to Solarise of 1,000,000 shares of Series A Non-Voting Convertible Preferred Common Stock of the Company.  The 1,004,999 shares of Solarise acquired by the Company represent approximately 33.5% of the issued and outstanding shares of common stock of Solarise.  Through its relationship with Solarise, the Company anticipates that it will contribute up to $2,500,000 towards the development, testing and patenting of the intellectual property pertaining to the JIL Technology.  In accordance with the terms of the Series A Non-Voting Convertible Preferred Common Stock of the Company issued to Solarise, for every $2.25 that the Company contributes towards the operating costs of Solarise, one (1) Series A Non-Voting Convertible Preferred Common Stock of the Company owned by Solarise will be cancelled.  The Company is currently testing the hybrid panel containing the JIL Technology internally.  Once the internal tests are completed the panel will be sent for independent testing and power certification with Intertek Laboratories in California.

Power Plant Construction Business

On July 13, 2009, the Company entered into a Memorandum of Understanding (“MOU”) with the Punjab Energy Development Agency (“PEDA”) regarding the construction of a 25 mega watt power plant, which was to serve as the first phase of the larger 200 mega watt plant in Punjab, India.  No material definitive agreement had been signed regarding the construction of either power plant.  Pursuant to the terms of the MOU, the Company was only authorized to prepare and submit a pre-feasibility report for the proposed solar power project to PEDA; the MOU did not provide the Company with the authority to construct the solar power project.  Under the terms of the MOU, the Company was required to supply the pre-feasibility report to PEDA within 120 days of the execution of the MOU.  On November 5, 2009, the Company received an extension from PEDA until January 31, 2010 in which to submit its pre-feasibility report. On January 31, 2010, the Company submitted the pre-feasibility report to PEDA.  However, due to the New India Solar Mission implemented by the Indian Federal Government in an effort to enhance India’s use of solar technology, jurisdiction for the Company’s project was transferred to the Indian Federal Government.  Accordingly, the Indian Federal Government located in Delhi, India must approve the development and implementation of solar projects in India.  In July 2010, the Indian Federal Government released the new guidelines relating to the construction of solar plants in India.  The guidelines set out the procedure and terms under which the interested parties are able to apply and receive approval to build solar power plants in India under the India Solar Mission. The maximum size of project that the company can apply for in the first phase was 5 MW.  As a result of the enhanced guidelines, the Company was not able to complete the application process, and as such did not formally apply for the authority to construct a 5 MW plant in Punjab.  Due to the enhanced guidelines, the Company has elected to engage in efforts to partner with an established Indian company that has received approval from the Indian Federal or State Government for the construction of a solar farm.  The Company is currently in discussions with such companies regarding the prospect of a potential business relationship.  Also,the company is currently analyzing five sites in Ontario, Canada for the construction of  a  10 MW solar plant project.

Additionally, on June 30, 2011, subsequent to the fiscal year end, the Company signed an option agreement to purchase a 7.3 MW project in Bulgaria.  This project is ready for construction; all

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Paoer Purchase agreements and permits are in place.  The land for the project has been secured.  The option agreement is subject to Company’s financial, legal, and technical due diligence.  If the company is satisfied with its due diligence results, the final share purchase agreement will be signed.  The cost to aquire the project is 185,000 Eros per MW.  The estimated cost to construct the project is approximately 20 million dollars.

During the fiscal year ending March 31, 2011, and the subsequent twelve months, the Company anticipates that it will continue to pursue the development of the solar power plant in India, Ontario, and other parts of the world.  Additionally, the Company will work towards the development and commercialization of the hybrid solar panel containing JIL Technology.

Results of Operation

As of March 31, 2011, the Company remained in the development stage and had not generated any revenue from operations.  As a result, no meaningful comparison is possible regarding results of operation for the fiscal year ended March 31, 2011 as compared to the fiscal year ended March 31, 2010.

Liquidity and Capital Resources

The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our financial condition for the twelve months ended March 31, 2011. The following summary should be read in conjunction with the financial statements and accompanying notes to them included elsewhere in this report.  Our financial statements are stated in US Dollars and are prepared in accordance with generally accepted accounting principals of the United States (“GAAP”).

During the fiscal year ended March 31, 2011, the Company did not have any sales or generate any revenues.  As of March 31, 2011, the Company’s audited balance sheet reflects total assets of $2,034,621 which primarily consist of: i) a Loan to Photo Violations Technology Inc. in the principal amount of $1,485,000; ii) an interest receivable on the loan to Photo Violations Technology Inc. in the amount of $278,837; iii) a Performance Bond with the Punjab Government in the amount of $15,171; and iv) prepaid assets of $149,316.  As of March 31, 2011, the Company’s audited balance sheet reflects total liabilities of $216,739.  The Company has cash on hand of $3,162 and a deficit accumulated during the development stage of $5,978,073.

The Company does not have sufficient assets or capital resources to pay its on-going expenses.  Additionally, the Company does not currently have the funds necessary to make contributions to Solarise to facilitate the development of the JIL Technology or proceed with the joint development of a power plant in India. To date, the Company has primarily financed its operations through equity investment from investors, shareholder loans, and credit facilities from Canadian chartered banks and increases in payables and share subscriptions. Most of the financing has been debt financing from related and un-related parties.  Currently, our estimated fixed costs at this time are approximately $5400 per month; that figure includes $900 for lease payments, $500 for utilities, $3,000 for loan interest and principle payments, and $1,000 for miscellaneous expenses. We will have to raise approximately $5400 per month to cover operating expenses, and additional funds to cover contributions to Solarise and expenses if the Company enters into a business relationship with an Indian company relating to the establishment of a solar power plant.

The Company anticipates that it will attempt to raise approximately 2 to 3 million dollars through the sale of the Company’s securities to cover the Company’s operating expenses.  Furthermore, if the Company enters into a business relationship with an Indian company relating to the establishment of a solar power plant, the Company will pursue a combination of debt and equity financing in an effort to raise the necessary funds to cover the expenses associated with the development of the power plant.  We have had preliminary discussions with a number of groups regarding both a smaller and larger financing; we are hopeful that we will be able to obtain financing.  However, there is no guarantee that we will be successful in raising any additional capital.  If we are unable to finance the Company by debt

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or equity financing, or a combination of the two, we will have to look for other sources of funding to meet our requirements.  That source has not yet been identified.   On April 1, 2010, the Company entered into a one year Consulting Agreement with Sinova Holdings, Ltd.  Pursuant to the terms of the Consulting Agreement, in the event the Company’s power plant project is approved, Sinova will assist the Company in identifying strategic investors, financial investors, and/or investment banks for the purpose of securing funds necessary for the construction of the power plant in India through either equity or debt financing.  In return for the consulting services rendered by Sinova, the Company is required to issue Sinova a monthly retainer in the amount of 80,000 shares of restricted common stock.  Additionally, in the event Sinova is successful in assisting the Company in procuring funds for its business ventures, Sinova will be entitled to additional compensation.  A copy of the Consulting Agreement was filed as exhibit 10.16 to the Company’s Form 10-K filed with the Securities and Exchange Commission on July 14, 2010. The parties have temporarily suspended this Agreement until the Company is able to secure a solar plant project.  Accordingly, the Company is no longer issuing any shares to Sinova.

Our financial statements have been prepared on the going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Operations to date have been primarily financed by long-term debt and equity transactions as well as increases in payables and related party loans. Our future operations are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the continued support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurance that we will be successful. If we are not, we will be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy working capital and other cash requirements.

Off Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements of the Company required by Article 8 of Regulation S-X are attached to this report.

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P2 SOLAR, INC.

AUDITED FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED MARCH 31, 2011 and 2010

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of P2 Solar, Inc.

We have audited the accompanying balance sheets of P2 Solar, Inc. (a development stage Company) (the “Company”) as of March 31, 2011 and 2010, and the related statements of operations, stockholders’ deficit, and cash flows for the period since inception through March 31, 2011. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of P2 Solar, Inc. (a development stage Company) as of March 31, 2011 and 2010, and the results of its operations and its cash flows for the period since inception through March 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company has been in the development stage since its inception and continues to incur significant losses.  The Company’s viability is dependent upon its ability to obtain future financing and the success of its future operations.  These factors raise substantial doubt as to the Company’s ability to continue as a going concern.  Management’s plan in regard to these matters is also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Lake & Associates, CPA’s LLC

Lake & Associates, CPA’s LLC

Schaumburg, Illinois

July 12, 2011

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P2 Solar, Inc.

Development Stage Company

Notes to Financial Statements

March 31, 2011 and 2010

Expressed in US Dollars

1.

Nature of Operations and Going Concern

The Company was incorporated as Spectrum Trading Inc. under the laws of the Province of British Columbia, Canada, on November 21, 1990. On May 14, 1999, the Company was discontinued in British Columbia and was reincorporated as Spectrum International Inc. in the State of Delaware, U.S.A.  Effective September 3, 2004, the Company changed its name from Spectrum International Inc. to Natco International Inc. On March 11, 2009, the Company changed its name from the Natco International Inc. to P2 Solar, Inc.  The Company is in the development stage and has had no revenue since inception.

The Company signed a letter of agreement in February, 2008 with Lassen Energy, Inc to do a share exchange merger.  On November 28, 2008, the Company cancelled the merger agreement with Lassen and instead signed a licensing agreement with Lassen that gives the Company rights to their products in India, Canada, and Hawaii.  On September 3, 2010, the Company cancelled the licensing agreement with Lassen and signed a broader agreement with a company called Solarise Power Inc. (Solarise). Lassen, DBK, and Darry Boyd moved the entire Intellectual property (IP) pertaining to JIL Technology into Solarise and P2 solar will own 34% of Solarise.

These financial statements have been prepared on the basis of accounting principles applicable to a going concern which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. The Company has incurred significant operating losses over the past three years. The Company's continued existence is dependent upon its ability to raise additional capital and to achieve profitable operations through Solarise and financing and building of power plant in India and elsewhere.

If the going concern assumptions were not appropriate for these financial statements, then adjustments would be necessary in the carrying values of assets and liabilities, the reported revenues and expenses and the balance sheet classifications used.

2.    Summary of Significant Accounting Policies

a)   Fiscal Period

The Company's fiscal year ends on March 31.

b)    Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, term deposits and short term highly liquid investments with a term to maturity of less than one year from inception which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of changes in value.

c)    Use of Estimates

In conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could vary materially from those reported.

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d)    Foreign Currency Transactions

The Company's functional currency is the Canadian dollar and the reporting currency is the U.S. dollar.  Assets and liabilities are translated from the functional to the reporting currency at the exchange rate in effect at the balance sheet date and equity at the historical exchange rates. Revenue and expenses are translated at rates in effect at the time of the transactions. Resulting translation gains and losses are accumulated in a separate component of stockholders' equity - other comprehensive income (loss).  Realized foreign currency transaction gains and losses are credited or charged directly to operations.

e)    Property, Plant and Equipment

Property, plant and equipment are recorded at cost.  Depreciation is provided annually on the diminishing balance method to write-off the assets over their estimated useful lives as follows:

Computer and office equipment - 5 years

Manufacturing equipment - 10 years

f)  Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such asset will not be recovered.

g) Fair value of Financial Instruments

The company's financial instruments consist of accounts receivable, bank indebtedness, accounts payable and amounts due to related parties.  Unless otherwise noted, it is management's opinion that this Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values unless otherwise noted.

h) Stock-Based Compensation

Effective January 1, 2006, the Company adopted the provisions of Accounting Standards Codification (ASC) Topic 718 “Stock Compensation”, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees' requisite service period (generally the vesting period of the equity grant). Before January 1, 2006, the Company accounted for stock-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and complied with the disclosure requirements of SFAS No. 123, "Accounting for Stock-Based Compensation".  The Company adopted SFAS 123(R) using the modified prospective method, which requires the Company to record compensation expense over the vesting period for all awards granted after the date of adoption, and for the unvested portion of previously granted awards that remain outstanding at the date of adoption.  Accordingly, financial statements for the periods prior to January 1, 2006 have not been restated to reflect the fair value method of expensing share-based compensation. Adoption of ASC 718  does not change the way the Company accounts for share-based payments to non-employees, with guidance provided by SFAS 123 (as originally issued) and Emerging Issues Task Force Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in conjunction with Selling, Goods or Services".

i) Revenue Recognition

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Revenues are recognized when all of the following criteria have been met: persuasive evidence for an arrangement exists; delivery has occurred; the fee is fixed or determinable; and collection is reasonably assured.

j) Advertising Policy

The Company expenses the cost of advertising when incurred.

k) Research and Development

Research and development is expensed as incurred.

l) Shipping and Handling

The company includes the cost of shipping and handling as a component of cost of sales in accordance with ASC Topic 605,"Accounting for Shipping and Handling Fees and Costs."

m) Long-Lived Assets

The company monitors the recoverability of long-lived assets, including property, plant and equipment and product rights, based on estimates using factors such as current market value, future asset utilization, business climate and future undiscounted cash flows expected to result from the use of the related assets. The company policy is to record any impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable equal to the excess of the asset's carrying value over its fair value.

n) Loss Per Share

The company computes net loss per common share using ASC Topic 260  "Earnings Per Share" guidance.  Basic loss per common share is computed based on the weighted average number of shares outstanding for the period. Diluted loss per share is computed by dividing net loss by the weighted average shares outstanding assuming all dilutive potential common shares were issued. There were no dilutive potential common shares at March 31, 2011 and 2010.  Because the company has incurred net losses and has no potentially dilutive common shares, basic and diluted loss per share, is the same.  Additionally, for the purposes of calculating diluted loss per share, there were no adjustments to net loss.

o) Obligations Under Capital Leases

Leases are classified as either capital or operating.  Leases that transfer substantially all of the benefits and risks of ownership of property to the company are accounted for as capital leases.  At the time a capital lease is entered into, an asset is recorded with its related long-term financing. Payments under operating leases are expensed as incurred.

p) Segmented Reporting

ASC Topic 280 "Segment Reporting", changed the way public companies report information about segments of their business in their quarterly reports issued to stockholders. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenues and its major customers.  The company's sales are generated in one geographical area, Canada. All revenues consist of interest earned on investment.

q) Comprehensive Income

ASC Topic 220, "Comprehensive Income", establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements.

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r) Derivative Financial Instruments

The company was not a party to any derivative financial instruments during any of the reported fiscal periods.

s) Recent Accounting Pronouncements

In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), “Consolidation (Topic 810): Amendments for Certain Investment Funds.”  The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted.  The adoption of provisions of ASU 2010-10 does not have a material effect on the Company’s financial position, results of operations or cash flows.

ASU No. 2010-11 was issued in March 2010, and clarifies that the transfer of credit risk that is only in the form of subordination of one financial instrument to another is an embedded derivative feature that should not be subject to potential bifurcation and separate accounting.  This ASU will be effective for the first fiscal quarter beginning after June 15, 2010, with early adoption permitted. The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-12 (ASU 2010-12), Income Taxes (Topic 740): Accounting for Certain Tax Effects of the 2010 Health Care Reform Acts.   After consultation with the FASB, the SEC stated that it “would not object to a registrant incorporating the effects of the Health Care and Education Reconciliation Act of 2010 when accounting for the Patient Protection and Affordable Care Act”. The Company does not expect the provisions of ASU 2010-12 to have a material effect on the financial position, results of operations or cash flows of the Company.

ASU No. 2010-13 was issued in April 2010, and will clarify the classification of an employee share based payment award with an exercise price denominated in the currency of a market in which the underlying security trades.  This ASU will be effective for the first fiscal quarter beginning after December 15, 2010, with early adoption permitted.  The Company does not expect the provisions of ASU 2010-13 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-17 (ASU 2010-17), Revenue Recognition-Milestone Method (Topic 605): Milestone Method of Revenue Recognition. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. If a vendor elects early adoption and the period of adoption is not the beginning of the entity’s fiscal year, the entity should apply the amendments retrospectively from the beginning of the year of adoption. The Company does not expect the provisions of ASU 2010-17 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-18 “Receivables (Topic 310) – Effect of a Loan Modification When the Loan is Part of a Pool that is accounted for as a Single Asset – a consensus of the FASB Emerging Issues Task Force.”  ASU 2010-18 provides guidance on account for acquired loans that have evidence of credit deterioration upon acquisition. It allows acquired assets with common risk characteristics to be accounted for in the aggregate as a pool.  ASU 2010-18 is effective for modifications of loans accounted for within pools under Subtopic 310-30 in the first interim or annual reporting period ending on or after July 15, 2010.  The Company does not expect ASU 2010-18 to have an impact on its financial condition, results of operations, or disclosures.

In May 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update

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2010-19 (ASU 2010-19), Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The amendments in this Update are effective as of the announcement date of March 18, 2010. The Company does not expect the provisions of ASU 2010-19 to have a material effect on the financial position, results of operations or cash flows of the Company.

There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

Management 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 financial statements.

3. Solar Panel License and Share Exchange

On September 6, 2010, the Company acquired 1,004,999 shares of restricted common stock of Solarise Power, Inc., a privately owned Nevada corporation (“Solarise”) that specializes in the development of solar panel technology, for a total purchase price of $2,500,000 which was paid as follows:  i) consideration in the amount of $250,000; and ii) the issuance to Solarise of 1,000,000 shares of Series A Non-Voting Convertible Preferred Common Stock of the Company.  The 1,004,999 shares of Solarise acquired by the Company represent approximately 33.5% of the issued and outstanding shares of common stock of Solarise.

On September 29, 2010, the Company, Lassen, DBK Corp., and Boyd entered into an Agreement pursuant to which the parties agreed to terminate the License Agreement and each of the parties’ respective obligations under the License Agreement.  Specifically, all of the licenses granted under the License Agreement were terminated and P2 Solar’s financial obligations under the License Agreement were terminated.  The agreed upon effective date of the License Termination Agreement was September 1, 2010

As of March 31, 2011 the Company believes the Investment in Solarise to be fully impaired.

4.   Loan to Photo Violation Technologies Inc.

P2 Solar (“P2”) lent Photo Violation Technologies Corp., (“PVT”) $1,485,000.00 USD (the “Loan”). The Loan is the subject of a Loan Agreement and a Promissory Note. PVT has failed to pay any principal or interest on the Loan. P2 has sued PVT for $1,485,000.00 USD. P2 has also sued the Directors of PVT. P2’s action against the PVT Directors had been stayed pending posting of security for costs. $100,000 security for cost was paid on December 9, 2009.  P2’s action against PVT and Directors is continuing. Despite the fact that P2 lent PVT $1,485,000.00, PVT is disputed that it owed P2 the $1,485,000.00 it was lent by P2. PVT has filed a Counterclaim, purporting to have claims against P2 and others. PVT made no purported claims against P2 until after P2 sued PVT and PVT's Directors.  P2 was awarded a summary judgment of $1,485,000.00 plus interest by the courts on July 22, 2009.  The company is vigorously attempting to collect on the judgment.  In response to P2 motion the court put PVT into Bankruptcy on March 24, 2010.  P2 also commenced a second action against PVT for defamation after PVT published what was alleged to be a verbatim ruling from the Court, when, in fact, the ruling had been altered by PVT.   On July 8, 2011, the company received a settlement offer from PVT and its principles.  We are considering this offer but have not accepted it..

5.    Bank Indebtedness

There is no Bank Indebtedness

6.    Related Party Transactions

Other than as disclosed elsewhere in these financial statements, the following amounts have been

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recorded as transactions with related parties:

a) Amounts due to related parties are as follows:

b) Interest expense on amounts due to directors and an officer was $10,852 (2010 - $31,101).

c) Salaries and benefits include $73,462 (2009 - $68,653) paid to a director and officer of the Company.

d) As at March 31, 2011, a director and officer of the Company held approximately 33.40% of the issued and outstanding shares of the Company.

7.    Capital Stock

a) Authorized Stock

The company has authorized 500,000,000 common shares with a par value of $0.001 per share. Each common share shall entitle the holder to one vote, in person or proxy on any matter on which action of the stockholder of the corporation is sought. The company has authorized 5,000,000 shares of preferred stock with a par value of $0.001 per share. The holders of preferred stock have no rights except as determined by the Board of Directors of the company and/or provided by Delaware General Corporate Law.

b) Share Issuances

During the current period, the company issued a total of 19,130,590 common shares from the treasury.

From August 1, 2006 through August 31, 2010, the Company borrowed a total of $702,871 from certain holders (collectively referred to herein as the “Holders”) pursuant to the terms of Convertible Promissory Notes (collectively referred to herein as the “Notes”).  Pursuant to the terms of the Notes, the Holders were provided with the option of converting the outstanding balance of the Notes into shares of the Company’s Common Stock at a conversion price of $.12 per share.  On September 3, 2010, the Holders elected to exercise their conversion rights under the Notes.  In accordance with the terms of the Notes, on September 3, 2010, the Company caused the Company’s transfer agent to issue the Holders a total of 5,857,258 shares of the Company’s common stock.  Further four hundred thousand shares were issued to 5 different shareholders through private placements done in the amount of 110,000.  2,000,000 shares to two individuals were issued for consulting services for next 12 months.

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Another 873,332 shares have been approved for two individuals and a company for consulting services but these shares have not been issued but have been accounted for in these statements.

c) Share Subscriptions

At March 31, 2011 there was $32,000 worth outstanding Share Subscriptions.  Further share subscriptions of $14,200 were received subsequent to year-end.

d) Warrants

In conjunction with the Private placements, 400,000 warrants were issued to individuals and companies that participated in the private placement done in 2010.  Share subscriptions discussed above also have Warrants attached to them that have not been issued.

e)    Stock Options

There were 200,000 options issued to a company consultant for services.  As to the total number of Shares with respect to which the Option is granted, the Option shall be exercisable as follows:  (i) 50% of the Option (100,000 Shares) in the aggregate may be exercised on or after November 21, 2009 at an Exercise Price of $0.20 per Share; and (ii) 50% of the Option (100,000 Shares) in the aggregate may be exercised on or after November 1, 2010 at an Exercise Price  in an amount per Share that is 25% less than the ten day moving average of the Company’s Common Stock immediately prior to November 1, 2010.

The Company has committed to issue to the Chief Executive Officer 67,000 share purchase options every April.  These options will be exercisable at $0.10 per share and will expire five years after the date of grant.  Further bonus options are available to the Chief Executive Officer.  These bonus options entitle the Chief Executive Officer to purchase shares at 20% below the market price up to a value determined by 5% of the amount of annual profits from sales in excess of $2,500,000 up to $3,999,999 and 8% of the amount of annual profits from sales in excess of $4,000,000.  To date, sales have not exceeded $2,500,000 and thus no bonus options have been issued.

Under the Black-Scholes pricing model, the fair value of the warrants as of the issuance date was calculated to be $60,303 and charged as warrants expense for the period ended September 30, 2010.  The fair value of each option granted is estimated at the respective grant date using the Black-Scholes Option Module. The following assumptions were made in estimating fair value:

	Warrants & options
Expected volatility		2.14
Expected life		3.0
Risk-free interest rate		0.41%
Dividend yield		-

The following table summarizes stock options and warrants outstanding as of March 31, 2011, as well as activity during the twelve months then ended:

		Warrants		Options
Balance, March 31, 2010		1,102,786		200,000
Issued		400,000		0

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Exercised & expired		0		0
Balance, March 31, 2011		1,502,786		200,000

The following table provides certain information with respect to the above referenced warrants and options outstanding at March 31, 2011:

f)

Debt Conversion

From August 1, 2006 through August 31, 2010, the Company borrowed a total of $702,871 from certain holders (collectively referred to herein as the “Holders”) pursuant to the terms of Convertible Promissory Notes (collectively referred to herein as the “Notes”).  Pursuant to the terms of the Notes, the Holders were provided with the option of converting the outstanding balance of the Notes into shares of the Company’s Common Stock at a conversion price of $.12 per share.  On September 3, 2010, the Holders elected to exercise their conversion rights under the Notes.  In accordance with the terms of the Notes, on September 3, 2010, the Company caused the Company’s transfer agent to issue the Holders a total of 5,857,258 shares of the Company’s common stock.

8.    Income Taxes

The Company has accumulated net operating losses for federal income tax purposes of approximately $1,271,000, which may be carried forward and used to reduce taxable income of future years.  These losses expire as follows:

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2020		$	180,000
2021			117,000
2022			135,000
2023			141,000
2024			97,000
2025			109,000
2026			138,000
2027			29,000
2028			14,000
2029			119,000
2030			89,000
2031			103,000
		$	1,271,000

The potential future tax benefits of these losses have not been recognized in these financial statements due to uncertainty of their realization.  When the future utilization of some portion of the carry forwards is determined not to be "more likely than not," a valuation allowance is provided to reduce the recorded tax benefits from such assets.

9.   Commitments

As of September 1, 2007 the company has leased offices at #204, 13569 - 76 ^th Avenue, Surrey, BC, Canada.  Total space is 750 square feet for total rent of $900.00 per month.  This lease will expire on August 31, 2012.

10.  Reverse Merger Agreement(s)

On Feb 19, 2008, the Company signed a binding Letter of agreement with Lassen Energy, Inc (LEI), a US company that manufactures Solar Panels.

On April 18, 2008, the Company signed a definitive binding agreement with Lassen Energy, Inc to do a reverse merger.

On November 28, 2008, the Company cancelled the reverse merger agreement with Lassen Energy and signed share exchange and licensing agreement with Lassen Energy, Inc. See note 3 for more details.

11. Other Significant events

On April 19, 2010, the company signed an agreement with CCG, an IR firm with Head office in New York, to provide IR services.  The agreement is for 12 months and compensation consists of $11,000 per month plus out of pocket expenses. On June 2010, this agreement was put on hold until the company gets a power plant contract.

On April 1, 2010, the company signed an agreement with Sinova Capital, an investment Banker, based in the British Virgin Islands to raise the required money for the construction of Solar Power Plant in India.  This agreement has also been put on hold until a contract to build a power plant is received by the company.

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In Feb. 2011, Company signed a consulting agreement with Nav Dhaliwal to of Toronto, Ontario, Canada.  Nav is the Company representative in the Ontario region to develop that market.

On January 5, 2011 the Company hired William Robertson to take care of the Investor Relations work.

On January 15, 2011, William Robertson was issued 1,600,000 shares for his services.

On January 15, 2011, 50,000 shares and 50,000 warrants were issued to Sol Africa-Rennie for the subscription the Company received from her on December 30, 2010.

12. Subsequent Events

On April 1, 2011, the Company received a share subscription of $5000.00.

In June 2011, the Company received share subscriptions worth $6200.00.

In July 2011, the Company received further subscription worth $3000.00.

On April 9 2011, the Company signed an agreement with Photonix of Pune, India. P2 and Photonix have agreed to work together for the development of solar PV power projects in India.    P2 will also provide EPC services on an as-needed basis to Photonix clients.

On June 13, 2011, the Company has signed an agreement with Marketingworks, Inc.(MKWS) of Los Angeles, California.  MKWS will assist the Company with its marketing efforts through online social media for the Company for next 12 months.  1,500,000 restricted common shares were paid to MKWS for their services.

On June 15, 2011, the Company has signed an agreement with MUNC media, Inc. (MUNC) to assist the Company with its marketing efforts through various means for the next 12 months.  MUNC will be paid $3,500.00 per month paid quarterly.

On June 30, 2011 the Company has signed an option agreement to purchase a 7.3 MW project in Bulgaria, subject to due diligence.  The cost on the project will be 185,000 Euros per MW.  The cost to construct the project will be approximately 20 million dollars.

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ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We have had no changes in or disagreements with our accountants required to be disclosed pursuant to Item 304 of Regulation S-K.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported with the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.

Internal Control Over Financial Reporting

The management of the Company is responsible for the preparation of the financial statements and related financial information appearing in this Annual Report on Form 10-K. The financial statements and notes have been prepared in conformity with accounting principles generally accepted in the United States of America. The management of the Company also is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company's internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or

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timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company's disclosure controls and internal controls will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.

With the participation of the Chief Executive Officer and Chief Financial Officer, our management evaluated the effectiveness of the Company's internal control over financial reporting as of March 31, 2011 based upon the framework in Internal Control –Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management has concluded that, as of March 31, 2011, the Company's internal control over financial reporting was effective.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this Annual Report on Form 10-K.

There was no change in the Company's internal control over financial reporting during the last fiscal quarter, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 9B.     OTHER INFORMATION.

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.

Directors and Executive Officers

The following table sets forth, as of March 31, 2011, the names and ages of the directors and executive officers of the Registrant, the principal positions with the Registrant held by such persons. The executive officers are elected annually by the Board of Directors. The directors serve one year terms or until their successors are elected.

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Biographical Information

Raj-Mohinder S. Gurm . Mr. Gurm is the President, Chief Financial Officer, and a Director of the Company.  From 1985 to 1987 Mr. Gurm was a partner in B.R. International Marketing Company of Vancouver, BC a company, which provided North American representation to manufacturers from Asia. From 1987 to 1989 he was a manager of Metro Parking Ltd. of Vancouver, BC and was responsible for overseeing 70 employees and 20 parking lots. From 1989 to 1995 he was involved in importing products from Asia and selling them by the container loads to large retail chain stores. In 1995 Mr. Gurm was founder and president of Xanatel Communications Inc. a company involved in the wireless communications industry and which was sold to a public company listed on The Alberta Stock Exchange. Mr. Gurm has been a President and CEO of Spectrum International Inc. from 1990 to present. From Jan. 2000 to Nov. 9th, 2001 he was also President/CEO of Canoil Exploration Corporation, a publicly traded company that recently completed the acquisition of a Medical Equipment company. Mr. Gurm attended the University of British Columbia and earned a Bachelor of Sciences Degree in Biology in 1983. Born in 1960 in India, Mr. Gurm is a citizen and resident of Canada.

Hans Edblad .  Hans Edblad is 45 years old. In addition to serving as a director of the Company, Mr. Edblad also works as the Vice President of Business Development for the Company.  From 2006 to 2009 Mr. Edblad served as a consultant to the Company.  In addition to his work with the Company, Mr. Edblad is also the President of Chag Investments Ltd., a position he has held since 1997.  Chag Investments specializes in assisting businesses with business development and investment strategies.  Additionally, from 2002 to present Mr. Edblad has served as a consultant with APR Consulting Group specializing in technical market consulting to various individuals and companies.

Stephen Sleigh .  Stephen Sleigh is 57 years old currently serves as a director of the Company.  Since 2001, Mr. Sleigh has been a Certified General Accountant.  In addition to serving as a director of the Company, Mr. Sleigh has worked as the Controller for Zodiac Hurricane Technologies, Inc., (“Zodiac”) a French owned boat builder since 2001.  As the Controller, Mr. Sleigh handles all maters of accounting for Zodiac, including accounts payable, accounts receivable, and monitoring the company’s capital assets, as well as assisting with the development and maintenance of the company’s budgets.  Mr. Sleigh has a BSc., MSc., and a PhD in Chemistry from the University of Manchester, UK.

Family Relationships

There are no family relationships between any of the current directors or officers of the Company.

Involvement in Certain Legal Proceedings

None of our officers, directors, promoters or control persons has been involved in the past five (5) years in any of the following:

(1)

Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(2)

Any conviction in a criminal proceedings or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3)

Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

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(4)

Being found by a court of competent jurisdiction (in a civil action), the SEC or the U.S. Commodity Futures Trading Commission to have violated a federal or state securities laws or commodities law, and the judgment has not been reversed, suspended, or vacated.

Directorships

None of the Company’s executive officers or directors is a director of any company with a class of equity securities registered pursuant to Section 12 of the Securities exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

Code of Ethics

The Company has not yet adopted a code of ethics.  The Company intends to adopt a code of ethics in the near future.

ITEM 11.

EXECUTIVE COMPENSATION .

Executive Compensation

The following table sets forth, for the years indicated, all compensation paid, distributed or accrued for services, including salary and bonus amounts, rendered in all capacities by the Company’s chief executive officer , chief financial officer and all other executive officers ; the information contained below represents compensation paid to the Company’s officers for their work related to the Company.

Employment Agreements

On December 12, 1999, the Company entered into an employment agreement with Raj-Mohinder Gurm.  Pursuant to the terms of the employment agreement, Mr. Gurm is entitled to annual compensation of $72,000 at a rate of $6,000 per month.    A copy of the employment agreement was filed as Exhibit 10.4 to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on June 26, 2002, and is hereby incorporated by reference.

Option Grants in Last Fiscal Year

There were no options granted to anyone for the work he did for the company.

Equity Compensation Plan Information

The Company currently does not have any equity compensation plans .

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Director Compensation

The following table provides summary information concerning compensation awarded to, earned by, or paid to any of our directors for all services rendered to the Company in all capacities for the fiscal year ended March 31, 2011:

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of March 31, 2011, certain information with respect to the common stock beneficially owned by (i) each director and executive officer of the Company; (ii) each person who owns beneficially more than 5% of the common stock; and (iii) all directors and executive officers as a group:

(1) Director or Officer of Company

(2)Percentages are calculated based on 52,228,179shares outstanding as of March 31, 2011.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

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There were no material transactions, or series of similar transactions, during our Company’s last fiscal year, or any currently proposed transactions, or series of similar transactions, to which our Company was or is to be a party, in which the amount involved exceeded the lesser of $120,000 or one percent of the average of the small business issuer’s total assets at year-end for the last three completed fiscal years and in which any director, executive officer or any security holder who is known to us to own of record or beneficially more than five percent of any class of our common stock, or any member of the immediate family of any of the foregoing persons, had an interest.

Director Independence

The NASDAQ Stock Market has instituted director independence guidelines that have been adopted by the Securities & Exchange Commission.  These guidelines provide that a director is deemed “independent” only if the board of directors affirmatively determines that the director has no relationship with the company which, in the board’s opinion, would interfere with the director’s exercise of independent judgment in carrying out his or her responsibilities.  Significant stock ownership will not, by itself, preclude a board finding of independence.

For NASDAQ Stock Market listed companies, the director independence rules list six types of disqualifying relationships that preclude an independence filing.  The Company’s board of directors may not find independent a director who:

1.

is an employee of the company or any parent or subsidiary of the company;

2.

accepts, or who has a family member who accepts, more than $60,000 per year in payments from the company or any parent or subsidiary of the company other than (a) payments from board or committee services; (b) payments arising solely from investments in the company’s securities; (c) compensation paid to a family member who is a non-executive employee of the company’ (d) benefits under a tax qualified retirement plan or non-discretionary compensation; or (e) loans to directors and executive officers permitted under Section 13(k) of the Exchange Act;

3.

is a family member of an individual who is employed as an executive officer by the company or any parent or subsidiary of the company;

4.

is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the company made, or from which the company received, payments for property or services that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than (a) payments arising solely from investments in the company’s securities or (b) payments under non-discretionary charitable contribution matching programs;

5.

is employed, or who has a family member who is employed, as an executive officer of another company whose compensation committee includes any executive officer of the listed company; or

6.

is, or has a family member who is, a current partner of the company’s outside auditor, or was a partner or employee of the company’s outside auditor who worked on the company’s audit.

Based upon the foregoing criteria, our Board of Directors has determined that Raj-Mohinder S. Gurm is not an independent director under these rules as he is also employed by the Company as its Chief Executive Officer and President, respectively.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

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(1)

The aggregate fees billed by Lake & Associates, CPA’s LLC for audit of the Company's annual financial statements were $13,000.00 for the fiscal year ended March 31, 2011, and $21,000 for the fiscal year ended March 31, 2010.

Audit Related Fees

(2)

Lake & Associates, CPA’s LLC did not bill the Company any amounts for assurance and related services that were related to its audit or review of the Company’s financial statements during the fiscal years ended 2011 and 2010.

Tax Fees

(3)

The aggregate fees billed by Lake & Associates, CPA’s LLC for tax compliance, advice and planning were $0.00 for the fiscal year ended March 31, 2011 and 2010.

All Other Fees

(4)

Lake & Associates, CPA’s LLC did not bill the Company for any products and services other than the foregoing during the fiscal years ended 2011 and 2010.

Audit Committee = s Pre-approval Policies and Procedures

(5)

P2 Solar, Inc. does not have an audit committee per se. The current board of directors functions as the audit committee.

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a)

Exhibits.

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* Filed Herewith

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

By: /s/ Raj-Mohinder S. Gurm

Raj-Mohinder S. Gurm, Chief Executive Officer

Date:  July 14, 2011

In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

By: /s/

Raj-Mohinder S. Gurm

Raj-Mohinder S. Gurm, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Director

Date:  July 14, 2011

By:  /s/ Hans Edblad

Hans Edblad, Director

Date:  July 14, 2011

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