GRSR/Form 10QSB/Q3-07

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

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

For the Quarter Ended September 30, 2007

Commission File Number 000-50502

GiraSolar, Inc.
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(Exact name of Registrant as specified in its charter)

Delaware

68-0526359
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(State of Incorporation)

(I.R.S. Employer Identification Number)

173 Parkland Plaza, Ste B, Ann Arbor MI 48103
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(Address of principal executive offices)

(734) 418-3004
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Registrant's telephone number

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(Former name, address or fiscal year if changed since last report)

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 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. Yes [X ] No[ ]

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

Number of shares of the registrant's common stock outstanding as of December 21, 2007 is: 39,113,700

CAUTIONARY LEGEND REGARDING FORWARD-LOOKING STATEMENTS

Some of the information in this Quarterly Report on Form 10-QSB may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended. These forward-looking statements are subject to various risks and uncertainties. The forward-looking statements include, without limitation, statements regarding our future business plans and strategies and our future financial position or results of operations, as well as other statements that are not historical. You can find many of these statements by looking for words like "will", "may", "believes", "expects", "anticipates", "plans" and "estimates" and for similar expressions. Because forward-looking statements involve risks and uncertainties, there are many factors that could cause the actual results to differ materially from those expressed or implied. These include, but are not limited to, economic conditions. This Quarterly Report on Form 10-QSB contains important cautionary statements and a discussion of many of the factors that could materially affect the accuracy of our forward-looking statements and such statements and discussions are incorporated herein by reference. Any subsequent written or oral forward-looking statements made by us or any person acting on our behalf are qualified in their entirety by the cautionary statements and factors contained or referred to in this section. We do not intend or undertake any obligation to update any forward-looking statements to reflect events or circumstances after the date of this document or the date on which any subsequent forward-looking statement is made or to reflect the occurrence of unanticipated events.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

GIRASOLAR, INC.

UNAUDITED INTERIM FINANCIAL STATEMENTS

September, 2007


GiraSolar, Inc.
Consolidated Balance Sheets

			(Unaudited)		(Audited)
			September 30,		December 31,
			2007		2006

Assets

Current assets
	Cash	$	297,475	$	861,574
	Accounts receivable, net		903,411		4,720,686
	Inventory		1,785,638		738,879
	Prepayments		1,311,007		409,107
	Investments, held for resale		2,698		2,502

	Total current assets		4,300,229		6,732,748

Furniture and vehicles, net			27,279		24,249
Goodwlll			3,334,625		3,334,625
Customer list, net			1,966,220		2,329,810
Due from related parties			432,564		426,854
Tax refunds receivable			204,386		63,414
Other receivables			402,447		29,423

Total assets		$	10,667,750	$	12,941,123


GiraSolar, Inc,
Consolidated Balance Sheets (continued)

			(Unaudited)		(Audited)
			September 30,		December 31,
			2007		2006

Liabilities and stockholders' equity

Current liabilities
	Bank overdraft	$	551,720	$	---
	Notes payable		1,293,263		1,422,298
	Current derivative liability		262,475		82,817
	Accounts payable		356,821		390,085
	Customer pre-payments		3,541,681		5,816,336
	Other accruals		587,209		675,555
	Accrued interest		443,870		299,273
	Provision for warranty claims		311,225		290,214
	Due to related party		4,338		4,024

	Total current liabilities		7,352,602		8,980,602

Minority interest			--		20,868

Commitments and contingencies			---

Stockholders' equity
	Preferred stock, $,001 par value, 5,000,000 shares authorized,
	1,250,000 Class A shares issued and outstanding		1,250		2,500
	Common stock, $,01 par value, 1,000,000,000 shares authorized,
	39,113,700 shares issued and outstanding
	at September 30, 2007 and December 31, 2006		397,187		355,987
	Subordinated loan		107,553		128,679
	Additional paid-in capital		7,350,520		7,303,120
	Accumulated deficit		(4,797,694)		(3,784,577)
	Other comprehensive income (loss)		(46,780)		(64,556)

	Total stockholders' equity		3,315,148		3,939,653

Total liabilities and stockholders' equity		$	10,667,750	$	12,941,123

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


GiraSolar, Inc.
Consolidated Statement of Operations
(Unaudited)
		Three months ended				Nine months ended
		September 30,				September 30,
			2007		2006		2007		2006

Revenue		$	2,740,787	$	15,264,326	$	15,813,757	$	51,901,980

Cost of revenue			2,352,240		15,200,766		14,649,537		50,860,788

Gross profit			388,547		63,560		1,164,220		1,041,192

Operating expenses
	Selling, general and administrative		657,077		362,725		1,669,906		1,133,509
	Research and development		61,540		---		183,549		---

Total operating expenses			718,617		362,725		1,853,455		1,133,509

Income (loss) from operations			(330,070)		(299,165)		(689,235)		(92,317)

Other income (expense)
	Interest income		145		4		12,891		363
	Loss on derivative liability		(123,304)		---		(179,658)		---
	Interest expense		(52,095)		(40,386)		(166,791)		(137,251)

Total other income (expense)			(175,254)		(40,382)		(333,558)		(136,888)

Loss before provision for income taxes			(505,324)		(339,547)		(1,022,793)		(229,205)

Provision for income taxes			(22,233)		(48,889)		(9,676)		54,254

Loss before minority interest			(483,091)		(290,658)		(1,013,117)		(283,459)

Minority interest			590		84,995		--		(37,725)

Net loss		$	(482,501)	$	(205,663)	$	(1,013,117)	$	(321,184)

Basis and diluted loss per share		$	(0.01)	$	(0.02)	$	(0.03)	$	(0.02)
Weighted average number of common
shares outstanding - Basic and diluted			39,113,700		13,629,382		39,113,700		13,629,382


GiraSolar, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
		Nine months ended
		September 30,
			2007		2006

Cash flows from operating activities:
	Net loss	$	(1,013,117)	$	(321,184)
	Adjustments to reconcile net loss to net cash provided by
	(used in) operating activities
	Depreciation and amortization		368,556		5,484
	Issuance of common stock for services		70,600		41,800
	Change in derivative liability		179,658
	Notes payable issued for salaries		152,764		150,000
	Minority interest		(20,868)		74,031
	Other comprehensive income		17,776		--

	Changes in operating assets
	and liabilities
	Accounts receivable		3,817,275		(13,326,265)
	Inventory		(1,046,759)		(1,092,440)
	Prepayments to vendors		(901,900)		(1,407,602)
	Tax refund receivable		(140,972)		(176,293)
	Other receivables		(373,024)		(74,394)
	Accounts payable and accrued
	expenses		43,998		4,591,635
	Prepayments from customers		(2,274,655)		12,425,728
	Provision for warranty claims				280,252

Net cash provided by (used in)
operating activities			(1,120,668)		1,170,752

Cash flows from investing activities
	Notes receivable				--
	Investments		(196)		--
	Advances to related parties		(5,710)		(1,193,320)
	Property and equipment
	additions		(7,996)		(1,788)

Net cash provided by (used in)
investing activities			(13,902)		(1,195,108)


GiraSolar, Inc.
Consolidated Statements of Cash Flows (continued)
(Unaudited)
		Nine months ended
		September 30,
			2007		2006

Cash flows from financing
activities
	Advances from related party, net		314		177,380
	Bank overdraft		551,720
	Proceeds from notes payable		39,563		72,346
	Decrease in subordinated loan		(21,126)

Net cash provided by (used in)
financing activities			570,471		249,726

Increase (decrease) in cash			(564,099)		225,370

Cash, beginning			861,574		91

Cash, ending		$	297,475	$	225,461

Supplemental information:
	Interest paid	$	22,194	$	99,025
	Income taxes paid	$	--	$	--

Non-cash financing activities:
	Notes payable converted to common stock	$	18,000		--

Note 1 – Organization and Significant Accounting Policies

Organization and Line of Business

GiraSolar, Inc. is a broad based solar energy company with business activities in several segments of the solar value chain ranging from silicon raw material supply to system integration. The Company’s core business consists of the supply of solar modules and accompanying balance of system components through business-to-business channels. GiraSolar Inc. was established after Legend Investment Corp. acquired a majority of the Dutch GiraSolar BV group in February 2006 and consequently changed its name to GiraSolar Inc. and abandoned all its previous business activities not related to solar energy. GiraSolar BV, the majority owned subsidiary of GiraSolar Inc. which is operating in the field of solar energy and related products, was established in 2003 in Deventer, the Netherlands by W.M. Koornstra, H.J.M. Keijzer and K.H.J.M. Dirven, three seasoned solar energy entrepreneurs. W.M. Koornstra has been involved in on-grid and off-grid solar and R&D activities since 1993. GiraSolar BV operates two fully owned subsidiaries in the Netherlands (DutchSolar BV and GiraMundo BV) and a 51% owned subsidiary in Turkey (GiraSolar Turkey Ltd. Ste.). We also have a presence in Spain where we have a sales support office and recently established a joint-venture in Addis Ababa (Ethiopia) in which have a 60% interest.

These financial statements include the Company and its subsidiary, GiraSolar, B.V. and its subsidiaries. The primary activities of GiraSolar, B.V. consist of the production of solar energy equipment; the sale of solar energy applications and equipment; and consultancy of solutions in the field of solar energy applications and equipment. In addition, we derive a part of our revenue from the supply of half-fabricates and raw materials.

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company incurred a net loss for the nine months ended September 30, 2007 of $1,013,117 and at September 30, 2007, had an accumulated deficit of $4,797,694 and a working capital deficit of $3,052,373. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Principles of Consolidation

The consolidated financial statements include the accounts of GiraSolar, B.V. and its two wholly owned subsidiaries and one 51% owned subsidiary, of which the Company has the ability to exercise control and direct operations. All material intercompany balances and transactions have been eliminated on consolidation.

Revenue Recognition

Revenue is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements”. The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations, including factors such as when there has been evidence of a sales arrangement, the performance has occurred, or service have been rendered, the price to the buyer is fixed or determinable, and collectability is reasonably assured.

Revenues from the sale of solar energy equipment are recognized upon delivery.

Revenues from services are recognized in proportion to the services rendered.

Government operating grants are included in the statement of operations in the year to which the subsidized expenses are charged, in which the loss of income is incurred, or in which the operating loss has occurred.

Stock Based Compensation

SFAS No. 123, “Accounting for Stock-Based Compensation,” establishes and encourages the use of the fair value based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. The statement also permits companies to elect to continue using the current intrinsic value accounting method specified in Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” to account for stock-based compensation. The Company has elected to use the intrinsic value based method and has disclosed the pro forma effect of using the fair value based method to account for its stock-based compensation issued to employees. For options granted to employees where the exercise price is less than the fair value of the stock at the date of grant, the Company recognizes an expense in accordance with APB 25. For non-employee stock based compensation the Company recognizes an expense in accordance with SFAS No. 123 and values the equity securities based on the fair value of the security on the date of grant. For stock-based awards the value is based on the market value for the stock on the date of grant and if the stock has restrictions as to transferability a discount is provided for lack of tradability. Stock option awards are valued using the Black-Scholes option-pricing model.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents, other current assets, accounts payable, accrued interest and due to related party, the carrying amounts approximate fair value due to their short maturities.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid debt instruments purchased with a maturity of three months or less, plus all certificates of deposit.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents and accounts receivables. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $100,000 insurance limit. The Company extends credit based on an evaluation of the customer’s financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required.

Furniture and Vehicles, net

Acquisitions of furniture and vehicles are recorded at cost. Improvements and replacements of furniture and vehicles are capitalized. Maintenance and repairs that do not improve or extend the lives of furniture and vehicles are charged to expense as incurred. When furniture and vehicles are retired, their cost and related accumulated depreciation are removed from the accounts and any gain or loss is reported in the statements of operations. Depreciation is computed using the straight-line method based on the estimated useful life of each class of depreciable assets as follows:

Furniture and fixtures

5 -10 years

Vehicles

3 - 5 years

Impairment of Long-Lived Assets

SFAS No. 144 requires that long-lived assets to be disposed of by sale, including those of discontinued operations, be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. SFAS No. 144 broadens the reporting of discontinued operations to include all components of an entity with operations that can be distinguished from the rest of the entity and that will be eliminated from the ongoing operations of the entity in a disposal transaction. SFAS No. 144 also establishes a “primary-asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. The Company has no impairment issues to disclose.

Accrued Product Warranties

The Company’s product warranty accrual reflects management’s estimate of probable liability as a percentage of product sales. Management establishes product warranty accruals based on historical experience and currently available information. During the current year the Company increased the provision by $21,000 from that established during the year ended December 31^st, 2005, which is

based on a percentage of the sales of GiraSolar B.V., GiraMundo B.V. and DutchSolar B.V. The provision is short-term in nature. The Company continues to assess its accruals on an ongoing basis and will make adjustments as it deems necessary.

Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes”. Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Earnings (Loss) Per Share

The Company reports earnings (loss) per share in accordance with SFAS No. 128, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of options and warrants to purchase common shares would have an anti-dilutive effect.

All common stock shares are presented to reflect a five for 2 forward stock split approved by the Board of Directors on April 12, 2006. All share and per share information has been retroactively restated to reflect this stock split.

Comprehensive Loss

SFAS No. 130, “Reporting Comprehensive Loss,” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Total comprehensive loss consists of the net income for the respective periods, the foreign currency translation adjustments, and the unrealized loss on available for sale securities.

Recently Issued Accounting Pronouncements

In July 2006, the Financial Accounting Standards Board issued FASB Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109”. FIN 48 provides guidance for the recognition, measurement, classification and disclosure of the financial statement effects of a position taken or expected to be taken in a tax return (“tax position”). The financial statement effects of a tax position must be recognized when there is a likelihood of more than 50 percent that, based on the technical merits, the position will be sustained upon examination and resolution of the related appeals or litigation processes, if any. A tax position that meets the recognition threshold must be measured initially and subsequently as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a

taxing authority. The interpretation is effective for fiscal years beginning after December 15, 2006. The Company does not expect its adoption of FIN 48 to have a material impact on its consolidated financial portion, results of operations or cash flows.

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 (“SFAS No. 157”), “Fair Value Measurements”. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. The Statement applies under other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, or the Company’s fiscal year ending December 31, 2007. The Company does not expect the adoption of this new standard to have a material impact on its consolidated financial position, results of operations or cash flow.

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”. This Statement improves financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The effective date to initially recognize the funded status and to provide the required disclosures is for fiscal years ending after December 15, 2006, or the Company’s fiscal year ending December 31, 2007. The requirement to measure plan assets and benefit obligations is effective for fiscal years ending after December 15, 2008, or the Company’s fiscal year ending September 30, 2009. The Company does not expect the adoption of this new standard to have a material impact on its consolidated financial position, results of operations or cash flows.

In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” and is effective for fiscal years beginning after November 15, 2007. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The Company is currently assessing the impact the adoption of this pronouncement will have on the financial statements.

Foreign Currency Translation

GiraSolar, B.V. maintains its books and records in Euros, the currency of the Netherlands. The Euro is the Company’s functional currency, as the Company’s business activities are located in the Netherlands and dominated in Euros. For practical purposes, assets and liabilities are translated into United States Dollars at the midyear exchange rate of $1.3627 (US$), the exchange rate prevailing at June 30, 2007. Revenue and expenses are translated into United States Dollars at the rate of $1.32961, the midyear average exchange rate on June 30, 2007. No representation is made that the Euro amount could have been, or could be converted into US$ at that rate or at any other rate. Foreign currency translation gains or losses are recorded as other comprehensive income in the stockholders’ equity section of the balance sheet.

Note 2 – Inventories

Inventories of raw materials, consumables, and finished goods are valued at the lower of cost or market, on a first-in, first-out basis. The market value is determined by individual assessment of the inventories.

Inventory consists of the following at September 30, 2007:

Finished goods

$ 1,785,638

Note 3 – Accounts Receivable and Allowance For Doubtful Accounts

Trade accounts receivable are presented net of an allowance for doubtful accounts. The Company estimates the allowance based on an analysis of specific customers, taking into consideration the age of accounts and an assessment of the customer’s ability to pay. The Company has determined, based upon these considerations, that no allowance for doubtful accounts is required at September 30, 2007.

Note 4 – Furniture and Vehicles

Property and equipment consists of the following at September 30, 2007:


Furniture and fixtures	$ 30,526
Vehicles	9,651
	40,177
Less - Accumulated depreciation	(12,898)
	$ 27,279

Note 5 – Notes Payable (Including Related Party)

Notes payable consist of the following at September 30, 2007:


Notes payable to a Dutch entity supporting renewable energy and sustained agricultural development (the “Dutch Entity”) is currently non-interest bearing (the “New Note”). The New Note is not in default and is convertible into shares of the Company’s common stock at a 25% discount to average of the closing price of previous ten trading days. The New Note replaces notes that were held by Mr. Peter Klamka, a Company Officer (the “Old Notes”). The Dutch Entity acquired the Old Notes pursuant to the terms of a purchase agreement which provided that, the Dutch Entity would make certain specified payments to Mr. Klamka at certain specified times. We have agreed to pay the Dutch Entity interest on the amount of each payment made by the Dutch entity to Mr. Klamka until such time as the Dutch Entity is reimbursed for all amounts it paid to Mr. Klamka. Upon a default of the terms of the purchase agreement, the Old Notes may revert to Mr. Klamka. The Old Notes issued to the Company officer bear interest upon default at a rate of 21% per annum are unsecured, are due on demand, and were in default at December 31, 2006 and 2005. These notes were issued for past due compensation for 2002, 2003, and 2004 salary to a company officer; debt convertible into shares of the Company’s common stock at .02 per share.	$ 466,665
Notes payable to a former employee of the Company. Notes bear interest upon default at 21% per annum. These notes are unsecured and are due on demand, and are in default at December 31, 2006 and 2005. These notes were issued for past due compensation.	127,500
Notes payable to a Company Officer, currently non-interest bearing, bears interest only upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.02 per share. This note was issued for 2005 salary past due compensation.	250,000
Notes payable to Peter Klamka, bears interest only upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.35 per share. This note was issued for 2006 salary past due compensation.	175,000
Notes payable to Peter Klamka, bears interest only upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at$.35 per share. This note was issued for 2007 salary past due compensation.	50,000
Notes payable to Peter Klamka, bears interest only upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at$.35 per share. This note was issued for 2007 salary past due compensation.	50,000
Notes payable to Peter Klamka, currently bears interest at 8%, upon default bears interest at 21%, per annum unsecured and due on demand. Convertible into common stock at$.10 per share. This note was issued for expenses advanced.	66,985
Notes payable to Peter Klamka, currently bears interest at 8%, upon default bears interest at 21% per annum, unsecured and due on demand. Convertible into common stock at $.10 per share. This note was issued for legal fees advanced.	29,000
Notes payable to an individual, non-interest bearing, unsecured and due on demand.	3,000
Notes payable to an individual, non-interest bearing, unsecured and due on demand.	3,550

	$1,221,700

Events that occurred during the quarter ended September 30, 2007 that had an impact on our notes payable as reflected above were as follows:

(a) We entered into an agreement with Peter Klamka, an individual who was, but no longer is, a Company Officer, resulting in, among other things, elimination of a note payable of $303,362. The eliminated note was bearing 21% interest per annum and convertible into common stock at $0.02 per share;

(b)

An agreement was entered into between Peter Klamka and the Dutch Entity, which effectively transferred the title to a note held by Mr. Klamka to the Dutch Entity and the Dutch Entity agreed to make certain specified payments to Mr. Klamka at certain specified times. The transferred note (the “Old Note”) of $466,665 was bearing 21% interest per annum and was convertible into common stock at $0.02 per share. Upon transfer of title this note (the “New Note”) is convertible into shares of the Company’s common stock at a 25% discount to the average closing price of the previous 10 trading days of our stock. In addition, we are obligated to pay the Dutch entity interest in the amount of 8% on all amounts paid to Mr. Klamka by the Dutch Entity until such time as the Dutch Entity is reimbursed for all amounts that it paid to Mr. Klamka.

Events that occurred after the end of the quarter that have an impact on our notes payable

We entered into an agreement with Peter Klamka pursuant to which Mr. Klamka agreed to transfer notes in the principal amounts of $175,000, $50,000, $50,000, $66,985 and $29,000 to the Dutch Entity in exchange for certain cash payments which include payments of $250,000 to be made by us prior to December 31, 2008 and December 31, 2009. The notes are being held in escrow pending fulfillment of the payment obligations in the agreement. In addition, we agreed to issue an aggregate of 3,500,000 shares of common stock in exchange for a note that was previously transferred from Mr. Klamka to the Company.

Note 6 – Related Party Transactions

A total of $58,066 is due from three companies that are controlled by a related Company. These advances are non-interest bearing and the Company can demand payment at any time.

A total of $374,498 is due from seven companies that are related to GiraSolar, B.V. These advances are non-interest bearing.

Notes payable to related parties consist of the following at September 30, 2007:


Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.02 per share. This note was issued for 2005 salary past due compensation.	$250,000
Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.35 per share. This note was issued for 2006 salary past due compensation.	175,000
Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.35 per share. This note was issued for 2007 salary past due compensation	50,000
Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.35 per share. This note was issued for 2007 salary past due compensation.	50,000
Notes payable to Peter Klamka, currently bears interest at 8%, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.10 per share. This note was issued for expenses advanced.	66,985
Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.10 per share. This note was issued for legal fees advanced.	29,000
	$620,985

Subsequent event having an effect on our related party transactions.

In November the Company’s Board of Directors and management experienced changes such that the officer who holds many of the notes listed in this section is no longer an officer of the Company or a related party. See Note 16 “Subsequent Event” for a more detailed discussion of this event.

Note 7 – Common Stock Transactions

All share and per share data has been adjusted to reflect our recapitalization in which each two share of common stock outstanding were converted into five shares of common stock.

During the first quarter, 2005, the Company issued 587,500 common shares for cash totaling $15,925.

During the second quarter, 2005, the Company issued 1,475,000 common shares for services rendered totaling $65,300.

During the first quarter, 2006, the Company issued 5,000,000 common shares to purchase 51% of the outstanding common shares of GiraSolar, B.V. The shares were valued at market and totaled $580,000.

During the first quarter, 2006, the Company issued 8,905,000 common shares for services rendered totaling $826,000.

During the first quarter, 2006, the Company issued 937,500 common shares to retire approximately $50,000 of debt.

During the second quarter, 2006, the Company issued 940,000 common shares for services rendered totaling $158,200.

During the third quarter, 2006, the Company issued 120,000 common shares for services rendered totaling $33,600.

During the fourth quarter, 2006, the Company issued an additional 7,500,000 common shares to complete the purchase of 51% of the outstanding shares common of GiraSolar, B.V. The shares were valued at market and totaled $5,250,000.

During the fourth quarter, 2006, the Company issued 500,000 common shares for services rendered totaling $350,000.

There were no common stock transactions for the three months ended March 31, 2007

During the three months ending June 30, 2007, the Company issued 20,000 common shares for services rendered totaling $13,600.

During the three months ending September 30, 2007, the Company issued 260,000 common shares for debt retirement totaling $18,000, and 150,000 common shares for services totaling $57,000.

Note 8 – Notes Receivable

On April 6, 2005 the Company entered into an agreement with a Michigan limited liability corporation to advance funds totaling $500,000 in exchange for a demand promissory note bearing interest at the rate of 6% per annum. As of December 31, 2006, the Company has only advanced $10,000 on the agreement. The Company has deemed that this note receivable is uncollectible, and has recorded the balance as a bad debt at December 31, 2006

On June 24, 2005 the Company advanced $10,000 to an information technology company for a period of 120 days. The Company has deemed that this note receivable is uncollectible, and has recorded the balance as a bad debt at December 31, 2006

Note 9 – Investments

On September 12, 2005 the Company entered into an agreement to invest a total of $400,000 in a combination of stock and cash into a company owning interests in various oil and gas wells situated in Texas. The investment is to be made over a 60 day period from the date of the signing of the agreement. The Company as result of the investment will be entitled to receive 30% of the future revenues derived from the properties. Up to December 31, 2006, the Company has advanced $30,000. At December 31, 2006, the Company has written-off this investment to operations in the amount of $30,000.

On June 24, 2005 the Company invested $10,000 in QRS/HandMade Recordings Inc. The agreement calls for a total commitment of $1,000,000 for all of the issued capital stock in HandMade, of which $300,000 is to be funded by June 10, 2005. The Company is presently in default of its obligations under this agreement. At December 31, 2006, the Company has written-off this investment to operations in the amount of $10,000.

The Company has adopted SFAS 130 as required by the Financial Accounting Standards Board. SFAS 130 requires that securities that are available for sale be presented at market value on the balance sheet date. Unrealized gains and losses are recognized as a separate component of stockholders’ equity. The specific identification method is used in calculating realized gains and losses. SFAS 130 also requires a statement of comprehensive income which adjusts net income for the unrealized activity. At December 31, 2006 the fair market value of common equity securities with a cost of $111,753 was $2,502. The unrealized loss of $109,251 at December 31, 2006 was included as a component of other comprehensive income.

Note 10 – Contingent liabilities

The Company is not aware of any material contingent liabilities involving the Company.

Note 11 – Income taxes

Income taxes are accounted for in accordance with SFAS 109, Accounting for Income Taxes, 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 tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year 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.

Dutch income taxes have been recorded on the net income of the consolidating entities which are not a fiscal unity for the Dutch income tax. In addition, an income tax refund receivable has been recorded for one of the consolidating Dutch entities, which has a net operating loss. The receivable is recorded as an other asset since it will not be received until that Company has taxable income.

Substantially all of the undistributed earnings of foreign subsidiaries are considered permanently invested and, accordingly, no federal income taxes thereon have been provided. Should those earnings be distributed, foreign tax credits would reduce the federal income tax that would be payable. Availability of credits is subject to limitations; accordingly, it is not practicable to estimate the amount of the ultimate deferred tax liability, if any, on accumulated earnings.

Note 12 – Acquisitions

On February 21, 2006, the Company completed the acquisition of 51% of the capital stock of GiraSolar, B.V., a Netherlands corporation, in exchange for a private placement transaction of five million shares of the Company’s restricted common stock (as adjusted for the five for two forward stock split), with an additional 7,500,000 shares issued on October 12, 2006.

The fair market value of the Company’s common stock on February 21, 2006 and October 12, 2006, was used to determine the purchase price of $5,830,000. The purchase price was allocated to tangible and intangible assets and liabilities at the date of acquisition as follows:


Current assets	$ 1,068,935
Property and equipment	6,978
Other assets	217,843
Customer list	2,423,936
Goodwill	3,334,625

Total assets	$ 7,025,317

Less – Total liabilities	(1,222,317)

	$ 5,830,000

The acquisition was accounted for as a purchase transaction, and accordingly, the assets and liabilities of GiraSolar, B.V. were recorded at their estimated fair values at the date of acquisition.

Intangible assets consisting of the customer list will be amortized on a straight-line basis over the estimated useful life of six years. The fair value of the customer list was based on the estimated discounted net cash flows after income taxes over the estimated life of the customer list. Amortization of the customer list included in selling, general and administrative expenses for the nine months ended September 30, 2007 totaled $242,394. Amortization expense related to the customer list of GiraSolar, B.V. for the each of the years ending December 31, 2007, through 2011, is estimated to be $403,989, and for the year ending December 31, 2012 is estimated to be $309,865.

Goodwill represents the excess of the cost of the GiraSolar, B.V. acquisition over the fair value of the related net assets at February 21, 2006. Under SFAS No. 142, “Goodwill and Other Intangible Assets”, goodwill is subject to annual impairment testing or more frequent testing if an event occurs or circumstances change that would more likely than not reduce the carrying value of the 51% ownership in GiraSolar, B.V. below its fair value. The impairment testing involves determining the fair market value of the 51% ownership of the issued capital stock of GiraSolar, B.V. Based upon this assessment, the Company has determined that there has been no required adjustment to the carrying value of the goodwill associated with the acquisition of GiraSolar, B.V. any future impairment of goodwill could have a material impact on the Company’s financial position and its results of operations.

The results of operations for the nine months ended September 30, 2006 include the results of GiraSolar, B.V. from its acquisition date of February 21, 2006.

Note 13 – Segment Information

The Company adopted SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information”, in respect of its operating segments. The Company’s reportable segment is production, sale and consultancy in the field of solar energy applications and equipment.

The segment is managed separately because it requires different technology and marketing strategies. The Company evaluates performance based on the operating earnings of the business unit. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The segment assets include cash, accounts receivable, inventory, and other receivables. There were no significant intercompany transactions during any of the reported periods. In determining operating income by reportable segment, general corporate expenses and other income and expense items of a non-operating nature are not considered, as such items are not allocated to the Company’s segments. Segment information for the nine months period ended September 30, 2007 is as follows:


(A)	Net revenues	$ 15,813,757
(B)	Net income for the reportable segment	28,302
	Net loss for the Company	(1,013,117)
	Reconciliation – Unallocated corporate expense	984,815

(C)	Assets for reportable segment	$ 5,308,764


	Other corporate assets	5,358,986

Note 14 – Concentrations

The Company sells its solar products and services to customers in Europe, South East Asia, Canada, the United States and other countries. For the three months period ended September 30, 2007 our revenues were derived approximately as follows:

Europe

88.00%

Asia

12.00%

Note 15 – Foreign Operations

The Company’s operating segment is located in the Netherlands. Foreign operations are subject to risks inherent in operating under different legal systems and various political economic environments. Among the risks are changes in existing tax laws, possible limitations on foreign investment and income repatriation, government price or foreign exchange and income repatriation, government price or foreign exchange controls, and restrictions on currency exchange. Net assets of foreign operations are 49% of the Company’s total net assets.

Note 16 – Subsequent Event

The Company has recently gone through significant changes in its management and Board of Directors. The current management and Board are in process of reviewing past actions and transactions under the Company’s former leadership, in order to become fully acquainted with the Company’s history.

The Company entered into an agreement with Peter Klamka, pursuant to which Mr. Klamka agreed to transfer notes in the principal amounts of $175,000, $50,000, $50,000, $66,985 and $29,000 to the Dutch Entity in exchange for certain cash payments which include payments of $250,000 to be made by us prior to December 31, 2008 and December 31, 2009. The notes are being held in escrow pending fulfillment of the payment obligations in the agreement. In addition, we agreed to issue an aggregate of 3,500,000 shares of common stock in exchange for a note that was previously transferred from Mr. Klamka to the Company.

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with our financial statements and the related notes included in this Form 10-QSB.

OVERVIEW

GiraSolar Inc. is a broad based solar energy company, operating on the basis of virtual chain integration, following a business model by Prof. R. Pieper, which is well suited for young companies in fast changing markets in which flexibility and agility are of paramount importance.

Our company is primarily focused on solar energy and related business activity. Through GiraSolar BV, our operational hub in the Netherlands (EU), we are involved in solar energy product manufacturing, component and system engineering and project development, as well as specific R&D activities. We build on the unique, high quality engineering skills of our team members in GiraSolar BV, who together accumulated decades of solar experience. GiraSolar BV – our subsidiary in the Netherlands – was established in 2003 and acquired by GiraSolar Inc. in 2006.

Since the acquisition of GiraSolar BV and its subsidiaries, the Company continues to move from an entrepreneurial operating mode to that of a growth company. In this respect, significant effort is being made towards the development of policies, procedures and processes to bring greater efficiency and effectiveness to all areas of our business, with an emphasis on technical, commercial and financial evaluation, and of internal procedures and company management.

Prior to this year,, GiraSolar BV's business focus was exclusively on gaining a recognized market position in business-to-business supply of solar energy related products and solutions. Since it has achieved a recognized market position, the Company has placed increased emphasis on value adding market segments, principally in Spain, Greece and Belgium, as well as Africa, the USA and the Netherlands, which will also deploy an incentive program for solar application in 2008. The Company possesses extensive engineering skills which we want to capitalize on now that a broad base for the Company has been achieved and the Company is recognized in the market. We will maintain our focus on volume development through our business-to-business channels, but also address value adding rural electrification needs in developing countries and intensify project development in markets with a favorable incentive program for solar energy. The Company has submitted and will continue to submit proposals under various programs in various countries, both for on-grid electrification projects in the developed countries, as for off-grid applications in developing countries, making use of our engineering skills for solar power plants and systems and exclusive technology such as BattMan, SolAlert and PowerBox for rural electrification projects.

In the past few years, solar energy as a technology has become a more accepted energy generation and supply alternative to conventional sources and continuously more promising markets emerge. We believe GiraSolar is well positioned to profit from significantly rising energy prices and related shortages in developed countries as well as lacking infrastructure in high electricity demand growth areas in developing countries. Regions with an attractive and functional incentive program are the Company's highest priority for high value adding activities.

Operating Results for the Three Months Ended September 30, 2007 and 2006

Revenues. Revenue for the third quarter for 2007 was mainly generated through business to business channels in the EU, which is the world largest solar market with 66% market share on yearly installed system basis. Our revenue for the three months ended September 30, 2007 amounted to $2,740,787 compared to revenue of $15,264,326 for the quarter ended September 30, 2006. The significant decrease in revenue is partly attributed to decreased sales of silicon and derivate products as well as slower than expected market development in key markets like Spain and Greece and generally reducing sales in Germany, which formerly was the driving force behind solar market growth. Additionally the Company has chosen to divert working capital to infrastructural improvements in target areas, to R&D and to legal and accounting, which - due to the nature of our presently available funds – leads to less available working capital for revenue generation.

Grant Revenue. The Company recognized no grant revenue in the three months ended September 30, 2007. The company has been awarded an investment subsidy of approximately $600,000 for the execution of a rural electrification project. The subsidy was acquired through the Dutch Government financed PSOM-program, which is executed under the authority of the EVD by SenterNovem. Revenue recognition will take place when deemed appropriate following progress of the project, which is in its start-up phase. Further grant revenue has been realized under the Dutch Government sponsored WBSO-program which stimulates R&D and Innovation within small and medium enterprises. These grants however consist of tax benefits on labor costs, which will not be recognized separately.

Gross Profit (Loss). The Company generated gross profit for the quarter ending September 30, 2007 of $388,547, or approximately 14.2% of revenue. Gross profit as a percent of revenue for the third quarter of 2006 was approximately 0.42%, which represents an increase of approximately 3,288% as compared with the same period in 2006. We attribute the increased gross profit to an increased percentage of revenue derived from end-products such as solar modules and BOS components, to improved product and procurement costs as a result of the improved market position of the Company overall and less low margin silicon based business activity. Compared to absolute gross profit of the third quarter 2006, which amounted to $63,560, gross profit for the third quarter however increased approximately 511.3% to $388,547. The Company attributes this increase to the higher percentage of sales derived from end-products such as solar modules and BOS components and to its lower volume of silicon and derivates sales.

Operating Expenses. Our operating expenses during the three months ended September 30, 2007 increased with approximately 98% to $718,617 as compared to $362,725 for the 3 months ended September 30, 2006. This significant increase is mainly the result of an increase in Selling, General & Administrative cost and increase in direct R&D expenses and increased management related costs in the USA and in general.

Net Income (Loss). Our net loss during the three months ended September 30, 2007 was ($482,501) as compared to ($205,663) during the three months ended September 30, 2006. The increase in net loss was mainly caused by the Company’s decrease in revenue, increase in selling, general and administrative expenses, increase in direct R&D expenses to $61,540 and a loss of $123,304 on a derivative liability and decreased gross profit resulting from lower sales volume. R&D expenses

were mainly incurred for the Company’s ‘GiraSi’ project, which entails the development of a novel silicon production process and renewal of the Company’s stake in the ClickFit patenting.

Operating Results for the Nine Months Ended September 30, 2007 and 2006

Revenues. Revenue for the nine months ended September 30, 2007 amounted to $15,813,757. Revenue was generated 98.50% in the EU, which is the world largest solar market, and 1.5% in South-East Asia and other regions, mainly through business to business channels. The revenue for the nine months ended September 30, 2006 was $51,901,980. The current decrease in revenue compared to the same period of 2006 is almost fully attributed to decreased sales of silicon and derivate products to industry partners in South East Asia. A large part of the revenue for the same period of 2006 consisted of supply of goods intended for supply in 2007, which revenue has not been replaced significantly.

Grant Revenue. The Company recognized no grant revenue in the nine months ended September 30, 2007. The Company has been awarded an investment subsidy of approximately $600,000 for the execution of a rural electrification project. The subsidy was acquired through the Dutch Government financed PSOM-program, which is executed under the authority of the EVD by SenterNovem. Revenue recognition will take place when deemed appropriate following progress of the project, which is in its start-up phase. Further grant revenue has been realized under the Dutch Government sponsored WBSO-program which stimulates R&D and Innovation within small and medium enterprises. These grants however consist of tax benefits on labor costs, which will not be recognized separately.

Cost of revenue. Cost of revenue primarily consist of component procurement costs, including raw materials, intermediate products, half-fabricates, solar modules and BOS components, for realization of projects and project supply.

Gross Profit (Loss). The Company generated a gross profit for the nine months ending September 30, 2007 of $1,164,220, or approximately 7.4% of revenue, which represents a growth of approximately 270% over the same period in 2006. This can be attributed to improved production and procurement costs as a result of our improved strategic position overall and less silicon based business activity with generally low margins and a relatively increased share of revenue generated from more value adding end-products such as solar modules and BOS components. Compared to the absolute gross profit over the same period in 2006 of $1,041,192, gross profit generated increased to 11.81%. The increase is fully attributed to a higher volume of sales derived from end-products during the nine months ended September 30, 2007 and less high volume but low margin silicon and derivate sales.

Operating Expenses. Our operating expenses during the nine months ended September 30, 2007 increased by approximately 63.5% to $1,853,455 as compared to $1,133,509 for the nine months ended September 30, 2006. The significant increase is the result of our expanded team and facilities, intensified marketing efforts which include expenses for the establishment of a support office in Logroño (Spain), preparations for a joint-venture in Greece, frequent trade fairs and exhibitions, as well as increased direct R&D expenses born by the Company. Direct R&D expenses born by the Company increased from none in the prior year comparable period to $183,549 and are mostly attributable to the Company’s GiraSi- project. The operating expenses also include Selling, General and Administrative expenses in the EU, the USA and Africa, which increased by $536,397 to

$1,669,455 from $ 1,133,509 in the same period in 2006, which include costs incurred by our subsidiary in efforts to streamline its activities with GiraSolar Inc.

Net Income (Loss). Our net loss during the nine months ended September 30, 2007 was ($1,013,117) as compared to ($321,184) during the nine months ended September 30, 2006. The increase in the loss was mainly caused by the Company’s decrease in revenue, increased operating expenses including selling, general and administrative expenses and R&D, increases in interest payable and a loss on a derivative liability of ($179,658).

Changes in the Balance Sheet

At September 30, 2007, we had current assets of $4,300,229 as compared to $6,732,748 at December 31, 2006, a decrease of approximately 36%. Total assets were $10,667,750 at September 30, 2007 as compared to $12,941,123 at December 31, 2006, representing a decrease of almost 17.6%. Decreases in assets are in line with the execution of prepaid procurement contracts. Total liabilities were to $7,352,602 at September 30, 2007 as compared to $9,001,470 at December 31, 2006 and stockholders' equity at September 30, 2007 was $3,011,786 as compared to $3,939,653 at December 31, 2006. The decrease in liabilities is in line with the execution of prepaid supply contracts; further the decrease in stockholders' equity is significantly attributable to losses incurred, significantly attributed management and directly related costs in the USA.

Liquidity, Capital Resources and Cash Requirements.

We have historically financed our public company’s operations through the sale of stock and loans from an officer. During the three month period ending September 30, 2007 we have been able to attract debt financing up to $200,000 from a) an officer of one of our subsidiaries, b) one of our subsidiaries and c) an independent third party. Financing has been on terms the Company deems acceptable. The terms of the agreement do not require the Company to make immediate repayments and provide that the Company, at its option, may repay the principal and/or interest in shares of restricted stock at a moderate discount to market pricing or in cash or a combination of both. It is anticipated that the proceeds derived from the financing will be used to cover backlog and future legal counsel and accounting costs.

For the nine months ended September 30, 2007 net cash decreased ($564,099) from $861,574 at the beginning of the year to $297,475 at the end of the nine months as compared to an increase of $225,370 for the prior year comparable period with $225,461 as of September 30, 2006. The increase in cash ending balance as of September 30, 2007 as compared to the nine month ended September 30, 2006 is primarily attributable to a more efficient use of cash in higher gross profit generating operations, despite a general drop in revenue. The increase in cash used in operations for the nine months ended September 30, 2007 is in line with execution of (partly) pre-paid supply contracts to customers in 2006 and our higher gross profit on revenue realized. Cash provided by financing increased as of September 30, 2007 as compared to the same period in 2006. Group wide consolidated increases or decreases in net cash of our public company do not necessarily reflect equal increases or decreases in cash of our subsidiary.

Operations of our subsidiary are fully financed through its income generating business activities, supported by bank credit from ING Bank, an internationally operating, major Dutch banking and insurance conglomerate.

Item 3.

Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) 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 in company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), as appropriate to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, the Certifying Officers carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2007. Their evaluation was carried out with the participation of other members of the Company’s management. Based upon their evaluation, the Certifying Officers concluded that the Company’s disclosure controls and procedures were effective.

The Company’s internal control over financial reporting is a process designed by, or under the supervision of, the Certifying Officers and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of the Company’s financial statements in accordance with generally accepted accounting principles, and that the Company’s receipts and expenditures are being made only in accordance with the authorization of the Company’s Board of Directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements. There has been no change in the Company’s internal control over financial reporting that occurred in the quarter ended September 30, 2007 , that has materially affected, or is reasonably likely to affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

GiraSolar, Inc. is not a party to any material legal proceedings. GiraSolar BV is part of a legal proceeding pertaining to GiraSolar BV – together with other parties - accusing a previous business partner of diverting revenue away from GiraSolar BV and withholding payments to third parties. Reservations pertaining to legal costs have been incorporated since 2004.

Item 2 .

Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3.

Defaults Upon Senior Securities

N/A

Item 4.

Submission of Matters to a Vote of Security Holders

None

Item 5.

Other Information

Inasmuch as the holders of shares of the Series A Convertible Preferred Stock are entitled to appoint two members of our Board of Directors, the Company’s Bylaws specify that the Board of Directors is to consist of no more than three members and the Company’s Certificate of Incorporation provides that any amendment to any provision of the Company’s Bylaws relating to size of the Board of Directors must be approved by a majority of the outstanding shares of common stock and Series A Convertible Preferred Stock voting together as a class and voting separately, which results in ISA BV, which is fully controlled by Mr. Koornstra, being in a position to appoint a majority of the members of the Board of Directors and therefore to control the management of the Company.

On November 6^th, 2007, and in connection with its ongoing reorganization of its corporate structure, the holders of Series A Convertible Preferred Stock, which consisted solely of Mr. Koornstra, voted to appoint Mr. F.A. Gerwig, to be member of the Board of Directors of the Company, effective immediately and therewith replacing Mr. D. Brody as a valued long term member of the Board of Directors. This action was taken in an effort to create a more diversified board with additional skills in the fields of financial and general management as well as organization, which are deemed necessary to take our company through its next phase of development. More specifically, during his appointment, Mr. Gerwig will assist us in our registration of our stock on the OTCBB, the reorganization of our corporate structure and a review of the administration of, past and present events within, the Company. Mr. Gerwig, age 45, is a Dutch national with international experience. He is engaged as consultant with Ordina, an internationally operating consultancy company. Prior thereto, he worked with several consultancy firms and his work has involved projects for the Dutch equivalent of the IRS and major banks. Mr. Gerwig has held and/or holds security clearances for certain Dutch Government ministries as well as financial and other high profile institutions. Mr. Gerwig further holds the Dutch title of ‘Ingenieur’ obtained from the Van Hall-Larenstein Institute and a MSc. degree in Finance & Control.

The current Board of Directors of GiraSolar Inc. as at November 6^th, 2007, consists of:

Mr. W.M. Koornstra (Chairman)

Mr. J. Tilton

Mr. F.A. Gerwig

Following to the appointment of Mr. Gerwig, the Board of Directors of the Company assembled in a Special Board Meeting on November 12^th, 2007, in this meeting reviewed events in the Company’s recent history and - based on preliminary conclusions - decided to relieve Mr. P. Klamka of all his remaining duties and temporarily appointed Mr. James Miller to all vacant positions until a suitable replacement is found.

Other members of management will be actively sought and appointed as soon as possible.

Item 6.

Exhibits and Reports on Form 8-K


31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer
32.1	Section 1350 Certification of Chief Executive Officer

SIGNATURES

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

Girsolar, Inc.

Dated: December 21, 2007

s/s James Miller

President

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

I, James Miller, certify that:

I have reviewed this Quarterly Report on Form 10-QSB for the quarter ending September 30, 2007 of GiraSolar, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any changes in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting.

I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

December 21, 2007

/s/ James Miller

____________________ James Miller, Principal Executive Officer and

Principal Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of GiraSolar Inc., a Delaware corporation (the "Company"), on Form 10-QSB for the quarter ending September 30, 2007 as filed with the Securities and Exchange Commission (the "Report"), I, James Miller, President, of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ James Miller

James Miller

Principal Executive Officer and

Principal Financial Officer

Date: December 21, 2007