Form 10-Q

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, 2013

[] 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 250, 2411 – 160 Street Surrey, British Columbia, Canada, V3S 0C8
(Address of principal executive offices)
(778) 371-3571
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 19, 2014 the Issuer had 60,338,179 shares of common stock issued and outstanding.

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, 2013 and all amendments thereto.

P2 SOLAR, INC.

(A DEVELOPMENT STAGE COMPANY)

INTERIM FINANCIAL STATEMENTS

PERIOD ENDED DECEMBER 31, 2013


INDEX TO FINANCIAL STATEMENTS:	Page

Balance Sheet	3

Statements of Operations	4-5

Statements of Stockholders’ Equity (Deficit)	6

Statements of Cash Flows	7-8

Notes to Unaudited Financial Statements	9-15

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

P2 SOLAR INC.

(A development stage company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

NINE MONTHS ENDED DECEMBER 31, 2013

BASIS OF PRESENTATION, 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 Natco International Inc. to P2 Solar, Inc. The Company’s current business operations are focused on the construction of solar and hydro power plants located in Canada, and India.

Interim financial statements

The financial statements included in this Form 10-Q are unaudited and have been prepared in accordance with generally accepted accounting principles of the United States for the nine months ended December 31, 2013 and 2012 and with the instructions to Form 10-Q. Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such SEC rules and regulations. The interim period financial statements should be read together with the audited financial statements and accompanying notes included in the Company's audited financial statements for the year ended March 31, 2013. In the opinion of the Company, the unaudited financial statements contained herein contain all adjustments (consisting of a normal recurring nature) necessary to present a fair statement of the results of the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Fair value of financial instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market.

The Company uses a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:


Level 1:	Observable inputs such as quoted prices in active markets;

Level 2:	Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3:	Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Cash is measured at level 1 input of the fair value hierarchy.

P2 SOLAR INC.

(A development stage company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

NINE MONTHS ENDED DECEMBER 31, 2013

BASIS OF PRESENTATION, NATURE OF OPERATIONS AND GOING CONCERN (cont’d…)

A development stage company

The accompanying financial statements have been prepared in accordance with FASB ASC Topic 915 Development Stage Entities. A development stage enterprise is one in which planned principal operations have not commenced; or if its operations have commenced, there have been no significant revenues derived there from. As of December 31, 2013, the Company has not fully commenced operations nor has it received significant revenues from its planned principal operations.

Going concern

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. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company's continued existence is dependent upon its ability to raise additional capital and to achieve profitable operations through building of power plants in India and elsewhere.

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recent authoritative accounting pronouncements

We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial position and cash flows.

RELATED PARTY TRANSACTIONS

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

Amounts due to related parties are as follows:


	December 31, 2013	March 31, 2013

Loans payable to directors and officers of the Company. The loans are unsecured, due on demand and non-interest bearing. It is expected that these loans will be repaid within the next twelve months.	$ 35,372	$ 57,665

Wages and bonus payable to a director and officer of the Company. This liability is unsecured, due on demand and non-interest bearing.	245,111	207,814

	$ 280,483	$ 265,479

P2 SOLAR INC.

(A development stage company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

NINE MONTHS ENDED DECEMBER 31, 2013

RELATED PARTY TRANSACTIONS (cont’d…)

As at December 31, 2013, a director and officer of the Company held approximately 33.40% of the issued and outstanding shares of the Company.

Salaries and benefits include $54,145 (2012 - $56,227) paid or accrued to a director and officer of the Company.

CAPITAL STOCK

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.

Share issuances

During the nine-month period ended December 31, 2013 the Company issued 2,500,000 shares with a value of $100,000 as consideration for consulting services rendered during the period.

Share subscriptions

At December 31, 2013 there were no outstanding share subscriptions

Warrants

No warrants were issued in this period.

Stock options

No stock options were issued in this period.

Pursuant to a consulting agreement, 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. No options have been granted under this agreement.

P2 SOLAR INC.

(A development stage company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

NINE MONTHS ENDED DECEMBER 31, 2013

CAPITAL STOCK (cont’d…)

The following table summarizes stock options and warrants outstanding as of December 31, 2013, as well as activity during the nine months then ended:


	Warrants	Options

Balance, March 31, 2013	1,340,000	200,000

Issued	-	-
Expired	(320,000)	-

Balance, December 31, 2013	1,020,000	200,000

The following table provides certain information with respect to the above referenced warrants and options outstanding at December 31, 2013:


	Exercise Price	Number of Options	Weighted Average Exercise Price	Weighted Average Life Years

Warrants	$ 0.25	1,020,000	$ 0.25	1.0
Options	$ 0.20	200,000	$ 0.20	6.0

UNEARNED INCOME

In March 2013, the Company was engaged to undertake the construction of a 53 KWp solar PV facility for a company based in Canada. The customer advanced $80,721 (Cdn$79,450) to the Company during the year ended March 31, 2013, and further Cdn$80,000 during the period ended September 30, 2013. The Company had recorded $80,721 as Unearned Revenue as at March 31, 2013 as the project was not completed and hence the revenue has not yet been earned. The Company has recorded all the revenue as income during the period ended December 31, 2013.

LOANS PAYABLE

During the period ended December 31, 2013, the Company entered into promissory note agreements whereby it borrowed an aggregate of $133,405, resulting in total loans payable of $330,687 (March 31, 2013 - $197,282). These notes bear interest between 5% to 10% per annum, are unsecured and are payable between on demand and two years.

P2 SOLAR INC.

(A development stage company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

NINE MONTHS ENDED DECEMBER 31, 2013

OTHER SIGNIFICANT EVENTS

Prior to May 10, 2013, the Company, through its partial ownership interest in Solarise Power, Inc. (“Solarise”), a privately owned Nevada corporation, was involved in the research and development of solar panel technology. The Company and Solarise have been, for the last two years, working on creating a working prototype of a high efficiency Solar Panel. All efforts have been unsuccessful. As a result, subsequent to the fiscal year ended March 31, 2013, effective as of May 10, 2013, the Company and Solarise have agreed in principal to cancel the Company’s 1,000,000 preferred shares owned by Solarise in exchange for 1,004,999 Solarise common shares owned by the Company, effectively reversing the transaction that was consummated on September 6, 2010. The agreement in principal has been approved at a meeting of the shareholders of Solarise, and is subject to approval by the Company’s board of directors. Once the agreement in principal is approved and finalized the Company will have no further ties with Solarise or the panel it was trying to develop.

In April 2013, the Company, through an affiliated entity, Jagat Energy Pvt. Ltd. (“Jagat”), an Indian corporation, acquired the rights to develop and construct two hydro projects located in Ludhiana, Punjab, India, and, as of the date of this Form 10-Q is also negotiating with the Indian government officials to acquire the additional solar project identified below. Costs incurred by the Company totalled $77,049 (March 31, 2013 - $65,024) as of December 31, 2013.

On August 7^th 2013, the Company signed a memorandum of understanding with an Indian company to acquire a hydro project. The power plant is already commissioned and revenue producing.

The closing of the sale is scheduled to be in May 2014.

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 corporation (hereinafter referred as “We”, “Us”, the “Company”, “P2”, 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 construction of solar and hydro power plants located in India, and Canada. The Company is currently a development stage company.

Canada

On March 1, 2013, Canada Ticket, Inc., (“Canada Ticket”) a Canadian company, engaged the Company to design and install a 53 kilowatt solar photovoltaic system (the “PV System”) on the roof top of Canada Ticket’s office located in Langley British Columbia. The PV System designed by the Company is based on the equipment standards of the Ontario feed-in-tariff program. The contract with Canada Ticket was for approximately $158,900 and in July 2013, we installed and commissioned the PV System. The contract was payable in two installments, 50% upfront and 50% at completion; both installments have been paid. The Company will continue to provide operations and maintenance service over time under the terms of a maintenance agreement to be negotiated and signed. We anticipate that the majority of the power generated by the PV System will be used by Canada Ticket, but any day to day surplus of power will be fed into British Columbia Hydro’s grid under the latter’s net-metering program. This project marks a significant milestone for P2 Solar as it is our first project in Canada. The project itself is notable as we estimate it is the largest single solar photovoltaic project connected to the provincial grid, operated by British Columbia Hydro.

India

During the past 12 to 18 months, the Company concentrated a significant amount of its resources and efforts on developing solar Photo Voltaic (“PV”) and hydro projects in India. The Company’s management team identified India as an emerging market that offered solar PV and hydro investment returns superior to other markets. Our management spent a significant amount of time in India reviewing dozens of projects, ultimately settling on two hydro projects and one solar project that we determined were worth pursuing. As discussed in detail below, The Company, through an affiliated entity, Jagat Energy Pvt. Ltd., an Indian corporation, acquired the rights to two hydro projects located in Ludhiana, Punjab, India. On August 7^th 2013, the Company signed a Memorandom of Understanding (“MOU”) with an Indian company to acquire two small hydro projects, 9.5 MWp and 5.7 MWp. The 9.5 MWp power plant is already commissioned and revenue producing, and the 5.7 MWp power plant will be commissioned in March 2014. Both of these project are located on Yamana river in the State of Uttarakhanda in Northern India. Following a period of due diligence the Company elected not to pursue the 5.7 MW project and continue the due diligence, on 9.5 MW project. The anticipated closing on the sale of the 9.5 MW project is scheduled to be in May 2014.

The Company, through an affiliated entity, Jagat Energy Pvt. Ltd. (“Jagat”), an Indian corporation, acquired the rights to develop and construct two hydro projects located in Ludhiana, Punjab, India, and, as of the date of this Form 10-Q is also negotiating with the Indian government officials to acquire the additional solar project identified below. At the present time, we do not have a direct ownership interest in Jagat. However, through contractual arrangements between the Company, Jagat and two shareholders of Jagat, we control Jagat and it is considered to be our operating affiliate because we are able to exert effective control over it and to receive all of the economic benefits derived from its business operations. In the interest of acquiring the equity of Jagat, the Company has sent money to Jagat for the acquisition of new shares of capital stock in Jagat. These shares are in the process of being issued. Once issued, the company will own approximately 93% of the outstanding capital stock of Jagat Energy. Additionally, following the acquisition of the shares of capital stock in Jagat, the two other shareholders of Jagat will transfer their shares of capital stock in Jagat to the Company so that Jagat will become a wholly owned subsidiary of the Company. Subsequent to the period ended December, 31, 2013, the shares of Jagat were issued to the Company. Additionally, the other two shareholders in Jagat are in the process of transferring their shares to the Company.

Details of the two hydro projects and the one solar project are as follows:

(i)

Construction of a 700 kilowatt hydro project on an irrigation canal:

Purchase price: 1.55 million INR (approx. $32,000)

Location: Sidhwan irrigation canal in Rajgarh located in Ludhiana, Punjab, India

(ii)

Construction of an additional 500 kilowatt project a few kilometers downstream from the 700 kilowatt project on irrigation canal:

Purchase price: 1.55 million INR (approx. $32,000)

Location: Sidhwan irrigation canal in Tibba located in Ludhiana, Punjab, India

(iii)

1 Megawatt solar project on top of irrigation canal:

Purchase Price: To be determined

Location: Sidhwan irrigation canal in Ludhiana, Punjab, India

The 1MW canal solar project is the first phase of a project that will ultimately expand to 7-10 MW at the same site. The technology to be deployed in all projects is standard off the shelf equipment. There is no technology risk. Based on current timelines, the Company anticipates that it will commission the solar project in India during the fourth quarter of 2014. The hydro projects have a longer build time, approximately 10 months, as such, the Company anticipates that they will be operational spring of 2015.

Additionally, prior to May 10, 2013, the Company, through its partial ownership interest in Solarise Power, Inc. (“Solarise”), a privately owned Nevada corporation, was involved in the research and development of solar panel technology. Solarise specializes in the development of solar panel technology, specifically the manufacturing of solar panels utilizing a technology referred to as the JIL Technology. The Company and Solarise have been, for the last two years, working on creating a working prototype of the high efficiency Solar Panel. All efforts have been unsuccessful. As a result, effective as of May 10, 2013, the Company and Solarise agreed in principal to cancel the Company’s 1,000,000 preferred shares owned by Solarise in exchange for 1,004,999 Solarise common shares owned by the Company, effectively reversing the transaction that was consummated on September 6, 2010. The agreement in principal has been approved at a meeting of the shareholders of Solarise, and is subject to approval by the Company’s board of directors. Once the agreement in principal is approved and finalized the Company will have no further ties with Solarise or the panel it was trying to develop.

Results of Operation

The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our results of operation and financial condition for the three and nine months ended December 31, 2013, as compared to the three and nine months ended December 31, 2012. The following discussion should be read in conjunction with the Financial Statements and related Notes appearing elsewhere in this Form 10-Q. Our financial statements are stated in US Dollars and are prepared in accordance with generally accepted accounting principles of the United States (“GAAP”).

Results of Operations for the Three Months Ended December 31, 2013 Compared to the Three Months Ended December 31, 2012.

Revenue

During the three months ended December 31, 2013, the Company had revenues of $nil as compared to revenues of $nil during the three months ended December 31, 2012.

Operating Expenses

During the three months ended December 31, 2013 the Company had operating expenses of $72,105 as compared to operating expenses of $29,532 during the three months ended December 31, 2012, an increase of $42,573 or approximately 144%. The decrease in operating expenses experienced by the Company was primarily attributable to a decrease in general and administrative expenses.

Net Loss

The Company had a net loss of $72,105 for the three months ended December 31, 2013, as compared to a net loss of $29,810 for the three months ended December 31, 2012, a change of $42,295 or approximately 142%. The change in net loss experienced by the Company was primarily attributable to the fact that the Company travel expenses were much lower in this quarter.

Results of Operations for the Nine Months Ended December 31, 2013 Compared to the Nine Months Ended December 31, 2012.

Revenue

During the nine months ended December 31, 2013, the Company had revenues of $154,936 as compared to revenues of $nil during the nine months ended December 31, 2012, an increase of $154,936. The increase in revenue experienced by the Company was attributable to the fact that the revenue received by the Company from its work on the Canada Ticket Project in Langley.

Operating Expenses

During the nine months ended December 31, 2013, the Company had operating expenses of $260,965 as compared to operating expenses of $128,052 during the nine months ended December 31, 2012, an increase of $132,913 or approximately 104%. The increa in operating expenses experienced by the Company was primarily attributable to a expenses incurred by the Company relating to the work performed on the Canada Ticket Project in Langley.

Net Loss

The Company had a net loss of $232,723 for the nine months ended December 31, 2013, as compared to a net loss of $128,633 for the nine months ended December 31, 2012, a change of $104,090 or approximately 81%. The change in net loss experienced by the Company was primarily attributable to the fact that the Company experienced an increase in operating expenses during the nine months ended December 31, 2013.

Liquidity and Capital Resources

As of December 31, 2013, the Company’s unaudited balance sheet reflects total assets of $145,741, as compared to total assets of $101,375 during the fiscal year ended March 31, 2013, an increase of $44,366 or approximately 44%. The increase was primarily attributable to the fact that in this quarter the Company invested more money into the two projects in India, as compared to the fiscal year ended March 31, 2013.

Our unaudited balance sheet reflects that as of December 31, 2013, we have total current liabilities of $744,322, as compared to total current liabilities of $602,818 at March 31, 2013, an increase of $141,504. The increase was primarily attributable to the fact that during the quarter ended December 31, 2013, the Company received a loan of $165,000 from unrelated parties to be used to fund operating expenses and ongoing expenses related to projects in India.

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 proceed with the development of power plants 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. The Langley project that was built for a client was paid for by that client and provided the first income for the Company. Currently, our estimated fixed costs at this time are approximately $4,500 per month; that figure includes $500 for utilities, $3,000 for loan interest and principle payments, and $1,000 for miscellaneous expenses. We will have to raise approximately $4,500 per month to cover operating expenses, and additional funds to cover expenses of the two acquired projects in India to establish the two power plants.

The Company estimates that the total aggregate costs for the construction of the two hydro projects will be approximately $3.7 million dollars. The hydro project in Rajgarh located in Ludhiana, Punjab, India is estimated to cost $2.2 million and the hydro project in Tibba located in Ludhiana, Punjab, India Tibba is estimated to cost $1.5 million. The Company anticipates that it will attempt to raise the money from local individual investors by selling convertible preferred shares. We are currently working on the terms of the preferred shares. Furthermore, we have had preliminary discussions with a number of groups regarding the 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 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 were not effective as of the end of the period covered by this report due to the existence of several material weaknesses in our internal controls over financial reporting.

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, 2013, 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.

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 19, 2014

Title: Chief Executive Officer & Chief Financial Officer


	December 31, 2013	March 31, 2013


ASSETS

Current
Cash	$ 29,343	$ 2,894
Receivables	31,407	26,221
Prepaid expenses	7,942	7,236

	68,692	36,351

Hydro projects (Note 7)	77,049	65,024

	$ 145,741	$ 101,375


LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

Current
Accounts payable	$ 130,898	$ 117,409
Unearned income (Note 5)	-	80,721
Accrued liabilities	2,254	17,839
Loan payable (Note 6)	330,687	121,370
Due to related parties (Note 3)	280,483	265,479

	744,322	602,818

Shareholders' equity (deficiency)
Capital stock
Authorized
500,000,000 common shares, with a par value of $0.001
5,000,000 preferred shares, with a par value of $0.001
Issued
60,338,179 (March 31, 2013 – 57,838,179) common shares	60,288	57,788
Additional paid-in capital	6,327,383	6,229,883
1,000,000 (March 31, 2013 – 1,000,000) preferred shares issued	1,000	1,000
Additional paid in capital preferred shares	2,268,900	2,268,900
Other comprehensive loss	(276,011)	(311,596)
Deficit accumulated during the development stage	(8,980,141)	(8,747,418)

	(598,581)	(501,443)

	$ 145,741	$ 101,375


	Three Months Ended December 31, 2013	Three Months Ended December 31, 2012	Nine Months Ended December 31, 2013	Nine Months Ended December 31, 2012	Cumulative Period From Start of Current Development Stage to December 31, 2013

Revenue	$ -	$ -	$ 154,936	$ -	$ 154,936
Cost of revenue	-	-	126,684	-	126,684

Gross profit	-	-	28,252	-	28,252

EXPENSES
Advertising and promotion	(19)	43	3,063	43	178,189
Bank charges	593	297	2,017	1,001	10,133
Consulting fees	54,407	-	172,997	-	1,092,036
Legal and accounting	23,383	3,894	40,570	31,302	483,480
Rent	(29)	2,996	4,821	8,836	62,565
Salaries and benefits	17,836	18,693	55,612	56,227	414,527
Office and other	(5)	334	2,070	5,866	45,506
Telephone and utilities	42	635	1,202	2,657	17,614
Travel and trade shows	9	2,534	1,511	7,246	136,758
Warrants and option expenses	-	-	-	14,768	491,601
Foreign exchange loss (gain)	(24,112)	106	(22,898)	106	(16,130)
Impairment loss	-	-	-	-	4,306,356

	72,105	29,532	260,965	128,052	7,222,635

Loss from operations	(72,105)	(29,532)	(232,713)	(128,052)	(7,194,383)

OTHER ITEMS
Interest expense	-	(278)	(10)	(581)	(87,831)

Loss before income tax	(72,105)	(29,810)	(232,723)	(128,633)	(7,282,214)
Income tax	-	-	-	-	(6,418)

Net loss	(72,105)	(29,810)	(232,723)	(128,633)	(7,288,632)

Other comprehensive income (loss)	10,954	3,721	35,585	572	156,373

Net loss and comprehensive loss	$ (61,151)	$ (26,089)	$ (197,138)	$ (128,061)	$ (7,132,259)

Basic and diluted loss per share	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)

Weighted average number of common shares outstanding (basic and diluted)	60,338,179	57,501,222	60,338,179	57,420,146


	Common Shares (Number)	Common Shares (Amount)	Additional Paid-In Capital	Preferred Shares (Number)	Preferred Shares (Amount)	Additional Paid-In Capital	Treasury Stock Preferred Shares (Number)	Treasury Stock Preferred Shares (Amount)	Other Comprehensive Income (Loss)	Deficit	Total

Balance (deficiency) March 31, 2013	57,838,179	$ 57,788	$ 6,229,883	1,000,000	$ 1,000	$ 2,268,900	-	$ -	$ (311,596)	$ (8,747,418)	$ (501,443)

Shares issued for services	2,500,000	2,500	97,500	-	-	-	-	-	-	-	100,000
Change in foreign currency translation adjustment	-	-	-	-	-	-	-	-	35,585	-	35,585
Repurchase of treasury shares (Note 6)	-	-	-	-	-	-	(1,000,000)	-	-	-	-
Net loss	-	-	-	-	-	-	-	-	-	(232,723)	(232,723)

Balance (deficiency) December 31, 2013	60,338,179	$ 60,288	$ 6,327,383	1,000,000	$ 1,000	$ 2,268,900	(1,000,000)	$ -	$ (276,011)	$ (8,980,141)	$ (598,581)


	Nine Months Ended December 31, 2013	Nine Months Ended December 31, 2012	Cumulative Period From Start of Current Development Stage to December 31, 2013

OPERATING ACTIVITIES
Net loss	$ (232,723)	$ (128,634)	$ (7,288,632)
Adjustments to reconcile net loss:
Shares issued for services	100,000	-	820,382
Warrants and option expenses	-	14,768	491,601
Loss on loan	-	-	1,763,837

Interest due to related parties	-	-	82,601
Wages accrued to director	54,146	56,227	413,061
Loss on fixed assets	-	-	2,500,000
Changes in current assets:
Receivables	(5,186)	-	(5,186)
Interest receivable	-	-	(196,580)
Prepaid expense	(812)	(386)	(667)

Changes in current liabilities
Accounts payable	15,309	4,851	9,655
Accrued liabilities	(15,585)	(19)	(78,165)
Unearned income	(80,721)	-	-

Net cash used in operating activities	(165,572)	(53,193)	(1,488,093)

INVESTING ACTIVITIES
Investment in Hydro project	(16,876)	-	(81,900)
Solar panel license	-	-	(230,000)

Net cash used by investing activities	(16,876)	-	(311,900)

FINANCING ACTIVITIES
Bank indebtedness	-	5,102	(17,734)
Due to related party	(19,335)	42,662	(79,959)
Loans payable	209,317	-	(487,261)
Loans payable converted to shares	-	-	(18,456)
Proceeds from subscriptions receivable	-	-	96,375
Conversion of related party debts	-	-	(20,690)
Proceeds from sale of common stock	-	-	2,022,682

Net cash provided by financing activities	189,982	47,764	1,494,957

Foreign exchange	18,915	572	334,379

Change in cash	26,449	(4,857)	29,343
Cash, beginning of period	2,894	4,857	-

Cash, end of period	$ 29,343	$ -	$ 29,343


	Nine Months Ended December 31, 2013	Nine Months Ended December 31, 2012	Cumulative Period From Inception to December 31, 2013


Supplemental information:
Interest paid	$ -	$ -	$ 7,369
Income taxes paid	-	-	4,386


Non-cash investing and financing activities common stock issued in connection with:
Share subscriptions	$ -	$ -	$ -
Services	100,000	-	2,267,298
Warrants	-	-	466,830
Conversion of notes payable	-	-	1,082,590
Director’s debt	-	-	800,000
Preferred stock issued in connection with an investment	-	-	2,269,900