P2 Solar (PTOS) 10-Q 2013 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2012

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

Commission File Number:333-91190

P2 SOLAR, INC.

 (Exact name of registrant as specified in its charter)

Delaware	98-0234680
(State or other jurisdiction of incorporation)	(IRS Employer Identification Number)
Unit 204, 13569 – 76 Avenue Surrey, British Columbia, Canada, V3W 2W3
(Address of principal executive offices)
(604) 592-0047
Registrant’s telephone number, including area code:

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 preceding 12 months (or for 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). [X] 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” 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 ]

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange Act).

[  ]Yes   [ X ] No

As of February 14, 2013 the Issuer had 57,838,179 shares of common stock issued and outstanding.

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PART I-FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

The financial statements of P2 Solar, Inc., a Delaware corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company in the Company's Form 10-K for the fiscal year ended March 31, 2012, and all amendments thereto.

P2 SOLAR, INC.

(A DEVELOPMENT STAGE COMPANY)

INTERIM FINANCIAL STATEMENTS

PERIOD ENDED DECBMER 31, 2012

INDEX TO FINANCIAL STATEMENTS:	Page
Balance Sheet	3-4
Statements of Operations	5-6
Statements of Stockholders’ Equity (Deficit)	7-8
Statements of Cash Flows	9-10
Notes to Unaudited Financial Statements	11-15

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	P2 Solar Inc.
	Balance Sheet
	Expressed in U.S Dollars
			December  31, 2012	March 31, 2012
			(Unaudited)	(Audited)
ASSETS
Current Assets
	Cash		$         -	$      4,857
	Prepaid Assets		7,622	7,236
	Performance Bond		-	-
	Interest Receivable on Loan to PVT		-	-
	Loan to PVT		-	-
	Security for Legal Costs PVT		-	-
	Total Current Assets		7,622	12,093
Long Term Assets
	Solar Panel License		-	-
Total Assets			$             7,622	$   12,093
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
	Bank Indebtedness		5,103	$               -
	Accounts Payable		93,236	88,385
	Lassen License Payable		-	-
	Accrued Liabilities		9,981	10,000
	Loan Payable		111,370	111,370
	Loan Payable (Debt converted adjusted)		-	-
	Due to related Parties		232,336	133,447
	Total Current Liabilities		452,025	343,202
		Total Liabilities	452,025		343,202
Stockholders' Equity
		Authorized:
		500,000,000 Common Shares, with a par value $0.001,

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	5,000,000 preferred shares, with a par value $0.001,
	Issued:		-
	Common shares – 57,838,179	$         57,788	57,228
	Additional Paid-in Capital	6,229,883	6,175,240
	Preferred Shares Issued :1,000,000
	Paid in Capital	1,000	1,000
	Additional Paid in Capital Preferred Shares	2,268,900	2,268,900
	Share subscriptions	-	40,375
	Other Comprehensive (Loss)	(306,866)	(307,438)
	Deficit Accumulated during Development Stage	(8,695,108)	(8,566,473)
	Total Stockholders' Equity	(444,403)	(331,109)
Total Liabilities and Stockholders' Equity		$           7,623	$     12,093
The accompanying notes are an integral part of these statements

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	P2 Solar Inc.
	Statements of Operations
	Expressed in U.S Dollars
	Unaudited
			Three Months	Three Months	Nine Months	Nine Months	Since
			Ending	Ending	Ending	Ending	Inception
			Dec. 31	Dec. 31	Dec. 30	Dec. 30	Dec. 30
			2012	2011	2012	2011	2012
Income
	Sales		$                   -	$                   -	$                   -	$                   -	$                 -
	Cost of Sales		-	-	-	-	-
	Gross Profit		$                   -	$                   -	$                   -	$                   -	$                 -
Operating Expenses
	Advertising and Promotion		43	2,409	43	115,462	173,090
	Bank Charges		297	394	1001	1,409	7,675
	Consulting Fees		0	24,077	-	264,208	919,039
	Legal and Accounting		3,894	1,810	31,302	108,578	426,549
	Rent		2,996	2,821	8,836	9,456	54,740
	Salaries and benefits		18,693	18,310	56,227	56,749	340,168
	Office and other		334	1,620	5,866	7,848	39,212
	Telephone and Utilities		635	512	2,657	2,119	15,686
	Travel and trade shows		2,534	7,817	7,246	37,162	128,833
	Warrants & option expenses		0	0	14,768	10,777	491,601
	Currency Exchange Loss (Gain)		106	(64)	106	5,892	6,604
	Impairment Loss		0	1,763,153	-	1,806,502	4,306,356
	Total Expenses		29,533	1,822,859	128,053	2,426,162	6,909,554
Net Loss from Operations			(29,533)	(1,822,859)	(128,053)	(2,426,162	(6,909,554)
Other Items
	Interest on PVT Loan		-	28,725	-	-	-
	Other Income		-	-	-	-	-
	Interest Expense		(278)	107	(581)	(660)	(87,626)
Net Loss before Tax			(29,811)	(1,851,692)	(128,634)	(2,426,822)	(6,997,180
	Income Tax		-	-	-	-	(6,418)
Net  Loss			(29,811)	(1,851,692)	(128,634)	(2,426,822)	(7,003,598)
		Other comprehensive income	3,721	(10.493)	572	(7,194)	125,518

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Net Loss and Comprehensive Loss		$   (26,090)	$  (1,862,185)	$  (128,062)	$(2,434,016)	$ (6,878,080)
Basic and Diluted
	(Loss) per Share	$      (0.00)	$      (0.03)	$      (0.00)	$      (0.05)
Weighted Average
Number of Shares		57,838,179	56,766,168	57,559,997	53,710,870
The accompanying notes are an integral part of these statements

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P2 Solar Inc.
Statements of Shareholders Equity
Expressed in U.S Dollars
		Common	Common	Additional	Preferred	Preferred	Additional	Shares	Other	Deficit	Total
		Shares	Shares	Paid-In	Shares	Shares	Paid-In	Subscribed	Comprehensive
		(Number)	(Amount)	Capital	(Number)	(Amount)	Capital		Income (Loss)
	Balance (deficiency) March 31, 2008	20,447,614	20,447	1,092,740	-	-	-	1,384,277	$  (432,384)	$      (1,908,493)	156,588
	Cancelled share subscription	-	-	-	-	-	-	(1,384,277)	-	-	(1,384,277)
	Shares for services	500,000	500	169,500	-	-	-	-	-	-	170,000
	Change in foreign currency translation adjustment	-	-	-	-	-	-	-	326,276	-	326,276
	Net loss	-	-	-	-	-	-	-	-	(277,592)	(277,592)
	Balance (deficiency)    March 31, 2009	36,881,817	36,881	2,795,722	-	-	-	-	$       (106,108)	(2,186,085)	540,410
	Shares Issued	15,934,203	15,934	1,533,482	-	-	-	-	-	-	1,549,416
	Shares Cancelled	(8,915,871)	(8,916)	-	-	-	-	-	-	-	(8,916)
	Converted Share Equity	3,797,189	3,797	375,922	-	-	-	-	-	-	379,719
	Shares Issued for Service	450,000	450	67,050	-	-	-	-	-	-	67,500
	Warrant and Option expense	-	-	361,426	-	-	-	-	-	-	361,426
	Share subscription	-	-	-	-	-	-	24,000	-	-	24,000
	Change in foreign currency translation adjustment	-	-	-	-	-	-	-	(245,390)	-	(245,390)
	Net loss	-	-	-	-	-	-	-	-	(852,453)	(852,453)
	Balance (deficiency)  Mar.31, 2010	33,097,589	33,097	3,944,571	-	-	-	24,000	(351,498)	(3,038,538)	611,632

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	Shares Issued	884,454	885	344,451	-	-	-	-	-	-	345,336
	Cancelled share subscription	-	-	-	-	-	-	(24,000)	-	-	(24,000)
	Shares Issued	16,257,258	16,257	1,596,613	-	-	-	-	-	-	1,612,870
	Shares for services	2,873,332	2,873	103,509	-	-	-	-	-	-	106,382
	Warrant and Option Expense	-	-	94,627	-	-	-	-	-	-	94,627
	Share Subscription	-	-	-	-	-	-	32,000	-	-	32,000
	Change in foreign currency translation adjustment	-	-	-	-	-	-	-	54,006	-	54,006
	Net loss	-	-	-	-	-	-	-	-	(2,939,535)	(2,939,535)
	Balance (deficiency) March 31, 2011	52,228,179	52,228	5,739,320	1,000,000	1,000	2,268,900	32,000	(297,492)	(5,978,073)	1,817,883
	Cancelled share subscription	-	-	-	-	-	-	(32,000)	-	-	(32,000)
	Shares Issued	520,000	470	45,730	-	-	-	-	-	-	46,200
	Shares for services	4,590,000	4,590	369,410	-	-	-	-	-	-	374,000
	Warrant and Option Expense	-	-	20,780	-	-	-	-	-	-	10,777
	Share Subscription	-	-	-	-	-	-	40,375	-	-	40,375
	Change in foreign currency translation adjustment	-	-	-	-	-	-	-	(9,946)	-	(9,946)
	Net loss	-	-	-	-	-	-	-	-	(2,588,400)	(2,578,397)
	Balance (deficiency) March 31, 2012	57,338,179	57,288	6,175,240	1,000,000	1,000	2,268,900	40,375	(307,438)	(8,566,473)	(331,109)
	Shares Issued	500,000	500	39,875	-	-	-	(40,375)	-	-	-
	Warrant and Option Expense	-	-	14,768	-	-	-	-	-	-	14,768
	Change in foreign currency translation adjustment	-	-	-	-	-	-	-	572	-	572
	Net loss	-	-	-	-	-	-	-	-	(128,634)	(128,634)
	Balance (deficiency) December 31, 2012	57,838,179	57,788	6,229,883	1,000,000	1,000	2,268,900	-	(306,866)	(8,695,108)	(444,403)
The accompanying notes are an integral part of these statements

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	P2 Solar Inc.
	Statements of Cash Flows
	Expressed in U.S Dollars
	Unaudited
				Nine Months		Nine Months
				Ended		Ended		(Inception) to
				Dec. 31		Dec. 31		Dec. 31
				2012		2011		2012
Operating Activities
	Net (Loss)	$	(128,634)		$		(2,426,822)	$	(7,003,598)
	Adjustments to reconcile Net (Loss)
	Shares issued for services		-				359,000		720,382
	Warrants & option expenses		14,768				10,777		491,601
	Loss on loan		-				1,763,837		1,763,837
	Interest due to related parties		-				662		82,601
	Wages accrued to director		56,227				56,749		340,168
	Loss on fixed assets		-				0		2,500,000
	Changes in Current Assets
	(Increase)/Decrease in interest receivable		-				-		(196,580)
	(Increase)/Decrease in prepaid expense		(386)				142,080		(241)
	Changes in Current Liabilities
	Increase/(Decrease) in accounts payable		4,851				24,552		(3,606)
	Increase/(Decrease) in accrued liabilities		(19)				10,000		(70,438)
	Net Cash Provided by Operating Activities		(53,193)				79,165		(1,375,874)
Investment Activities
	Investment in Lassen		-				-		-
	Solar Panel License		-				-		(230,000)
	Loan to PVC		-				-		-
	Net Cash (Used) by Investment Activities		-				-		(230,000)
Financing Activities
	Bank Indebtedness		5,103				-		(12,631)
	Due to Related Party		42,662				(19,118)		(75,021)
	Security for Legal Costs PVT		-				3,415		-
	Loans Payable		-				70,570		(706,578)
	Loans Payable Converted to Shares		-				-		(18,456)
	Performance Bond		-				15,171		-
	Proceeds from Subscriptions Receivable		-				-		96,375
	Conversion of Related Party Debts		-				-		(20,690)
	Issuance of Preferred Shares		-				-		-

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	Proceeds from sale of Common Stock		-		14,200		2,022,682
	Net Cash Provided by Financing Activities		47,765		84,238		1,285,681
	Foreign Exchange		572		(7,194)		320,194
Change in cash and cash equivalents			(4,857)		(2,122)		0
Cash, Beginning of Period			4,857		3,162		-
Cash, End of Period			0		1,040		-
Supplemental Information:					-
	Interest Paid		581		-	$	7,174
	Income Taxes Paid		-		-	$	4,386
Non-cash investing and financing activities
	Common stock issued in connection with:
	Share Subscriptions	$	-	$	-	$	-
	Services	$	-	$	-	$	2,267,298
	Warrants	$	-	$	-	$	466,830
	Conversion of notes payable	$	-	$	-	$	1,082,590
	Director's Debt	$	-	$	-	$	800,000
	Preferred stock issued in connection with in investment	$	-	$	-	$	2,269,900
The accompanying notes are an integral part of these statements

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P2 Solar, Inc.

Development Stage Company

Notes to Interim Financial Statements

For the Six Months Ended December 31, 2012

Expressed in US Dollars

1.

Basis of Presentation, Nature of Operations and Going Concern

The accompanying unaudited condensed financial statements have been prepared in accordance with both generally accepted accounting principles for interim financial information, and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited condensed financial statements reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion of management, considered necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

The condensed financial statements and related disclosures have been prepared with the presumption that users of the interim financial information have read or have access to our annual audited financial statements for the preceding fiscal year. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes thereto contained in the Annual Report on Form 10-K for the year ended March 31, 2012.

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 owns 34% of Solarise.

The company had signed two Option Agreements in Bulgaria to purchase Solar projects.  First project was 7.3 MW located in South western Part of Bulgaria and the second project is 14.35 MW located in North Eastern part of Bulgaria.  The company did its due-diligence on both projects; both project did not meet our due diligence standards so the projects was abandoned.  The company is actively working with groups in India and Canada to acquire projects in those countries.

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

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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

Recent Authoritative Accounting Pronouncements

In May 2011, FASB issued Accounting Standards Update No. 2011-04,“Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”(“ASU 2011-04”).  ASU 2011-04 changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements to ensure consistency between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is to be applied prospectively.  The Company anticipates that the adoption of this standard will not materially expand its financial statement note disclosures.

In June 2011, FASB issued ASU No. 2011-05, “Comprehensive Income (ASC Topic 220): Presentationof Comprehensive Income” (“ASU 2011-05”), which amends current comprehensive income guidance.  This accounting update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders’ equity.  Instead, the Company must report comprehensive income in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements.  ASU 2011-05 will be effective for public companies during the interim and annual periods beginning after December 15, 2011, with early adoption permitted.  The Company is reviewing ASU 2011-05 to ascertain its impact on the Company’s financial position, results of operations or cash flows as it only requires a change in the format of the current presentation.

In September 2011, the FASB issued ASU 2011-08 which provides an entity the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test for goodwill impairment.  If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required.  Otherwise, no further testing is required. The revised standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011.   We do not expect that the adoption of this standard will have a material impact on our results of operations, cash flows or financial condition.

In December 2011, FASB issued Accounting Standards Update 2011-11, “Balance Sheet - Disclosures about Offsetting Assets and Liabilities” to enhance disclosure requirements relating to the offsetting of assets and liabilities on an entity's balance sheet. The update requires enhanced disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. The new disclosure requirements relating to this update are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. The update only requires additional disclosures, as such, we do not expect that the adoption of this standard will have a material impact on our results of operations, cash flows or financial condition.

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

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currently adopted would have a material effect on the accompanying financial statements.

3.

Bank Indebtedness

The company was $5,103 indebted to the Bank

4.

Related Party Transactions

Other than as disclosed elsewhere in these financial statements, the following amounts have been recorded as transactions with related parties:

a)

Amounts due to related parties are as follows:

	Dec.  2012	Dec. 2011
Loans payable to a directors and officers of the company. The loans are unsecured, due on demand and non-interest bearing (2011 - 10%). It is expected that these loans will be repaid within the next 12 months.	45,568	7,504
Wages and bonus payable to a director and officer of the company. This liability is unsecured, due on demand and non-interest bearing (2011 - nil%).	186,768	112,006
Accrued Interest payable	-	6,945
	$ 232,336	126,455
Less: Current portion	(232,336)	(126,455)
Long-term portion	$ -	$ -

b) Interest expense on amounts due to directors and an officer was $nil (2011 - $660).

c) Salaries and benefits include $56,227 (2011 - $56,749) paid to a director and officer of the Company.

d) As at December 31, 2012, a director and officer of the Company held approximately 33.40% of the issued and outstanding shares of the Company.

5.

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

There were no shares issued in the current quarter.

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c) Share Subscriptions

There are no outstanding share subscriptions.

d) Warrants

No new warrants were issued for current quarter.

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 $20,780 and charged as warrants expense for the period ended September 30, 2012. 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		1.57
Expected life (year)		4~5
Risk-free interest rate		0.19~ 0.25%
Dividend yield		-

The following table summarizes stock options and warrants outstanding as of December 31, 2012, as well as activity during the three months then ended:

	Warrants	Options
Balance September 30, 2012	1,420,000	200,000
Issued	0	0
Exercised & expired	0	0

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Balance, December 31, 2012 1,420,000 200,000

The following table provides certain information with respect to the above referenced warrants and options outstanding at December 31, 2012:

	Exercise Price	Number of Outstanding	Weighted Average Exercise Price	Weighted Average Life Years
Warrants	0.42	350,000	0.42	.50
Warrants	0.25	1,070,000	0.25	2.5
Options	0.2	200,000	0.2	6.67

f) Debt Conversion

No debit conversion in this period.

6.

Other Significant and Subsequent Events

There are no other current or subsequent events to report.

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ITEM 2.

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

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-Q 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 solar power plants located in India, and Ontario, Canada.  The Company is currently a development stage company.

Solar Panel Technology

The Company, through its ownership interest in Solarise Power, Inc. (“Solarise”), a privately owned Nevada corporation, is involved in the research and development of solar panel technology.  Solarise specializes in the development of solar panel technology, utilizing the JIL Technology.  The Company, through Solarise, is currently testing the hybrid panel containing the JIL Technology internally.  The Company has had a few issues with inconsistent performance and overheating 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.  

Power Plant Construction Business

During the fiscal year ended March 31, 2012, the Company concentrated a significant amount of its resources and efforts on developing solar PV projects in Bulgaria.  The Company’s management team identified Bulgaria as an emerging market that offered solar PV investment returns superior to other markets.  Our management spent a significant amount of time in Bulgaria reviewing dozens of projects, ultimately settling on two that we believed were worth pursuing.  However, due to financing issues and

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European economic issues, the Company was unable to proceed with its desired projects in Bulgaria.

In addition to the work in Bulgaria, the Company has continued to review projects in India that fall under various state solar PV tariff regimes.  The Company has also devoted time to assessing the returns available under the National Solar Mission's REC (renewable energy credit) regime, where solar PV developers sign PPAs at average wholesale power rates (Rupees 3-5) and are awarded REC credits which can be sold in two trading markets established in India.  The REC trading markets are supported by RPO (renewable power purchase obligations required of established producers) and a trading band that establishes a minimum and maximum price for the REC credits for a set number of years.  

Power trading firms in India are beginning to offer power purchase contracts for long periods of time, whereby they assume some of the risk of wholesale and REC pricing, enabling solar PV developers to seek funding based on these commitments.  During the next several months management anticipates that it will pursue certain REC-based solar PV opportunities in India, as well as certain state-level solar PV opportunities.  

During the fiscal period ending December 31, 2012, 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 December 31, 2012, 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 period ended December 31, 2012 as compared to the fiscal period ended December 31, 2011.

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 nine months ended December 31, 2012. 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 period ended December 31, 2012, the Company did not have any sales or generate any revenues.  As of December 31, 2012, the Company’s balance sheet reflects total assets of $7,622, as compared to total assets of $107,996 during the fiscal period ended December 31, 2011, a decrease of $100,374 or approximately 92.9%.  The decrease was primarily attributable to the fact that in February 2012, the Company signed a settlement agreement with Photo Violation Technologies; no funds were paid as a result of the settlement agreement but $99,720 that was paid to the court as security was returned to the company and money was spent as working capital..  

As of December 31, 2012, the Company’s balance sheet reflects total liabilities of $452,025.  The Company has bank indebtedness of $5,103 and a deficit accumulated during the development stage of $8,695,108.  

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

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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 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.   

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 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4.

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

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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 within 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.  

Changes in Internal Control over Financial Reporting

There was no change in the Company's internal control over financial reporting during the period ended December 31, 2012, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II-OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

None.

ITEM 1A.

 RISK FACTORS.

Not Applicable.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES.

None.

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ITEM 5.    

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

(a)

The following exhibits are filed herewith:

31.1

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101

INS XBRL Instance Document.

101

SCH XBRL Schema Document.

101

CAL XBRL Taxonomy Extension Calculation Linkbase Document.

101

LAB XBRL Taxonomy Extension Label Linkbase Document.

101

PRE XBRL Taxonomy Extension Presentation Linkbase Document.

101

DEF XBRL Taxonomy Extension Definition Linkbase Document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 P2 Solar, Inc.

 By: /s/ Raj-Mohinder S. Gurm

 -----------------------------------

 Name: Raj-Mohinder S. Gurm

 Date: February 13, 2013              

Title: Chief Executive Officer & Chief Financial Officer

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