PART II

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Shenzhen Fuwaysun was formed in 2006 to manufacture plastic injection parts and plastic moulds at its factory in Shenzhen, PRC.  Initially, its business was limited to manufacturing and supplying parts for use in various products, including products used in the automotive industry, in household products, electrical appliances, hospital products, digital products, communication and computer equipment, toys and other industries.  Commencing in 2007, Shenzhen Fuwaysun expanded its business to include development and production of solar products including a solar insect killer, solar mouse & bird repeller, a portable solar power supply system, a solar sprinkling and irrigation system and other solar products.  

After we completed the share exchange transaction with Fuwaysun, in order to acquire its business operations, and with the intent of focusing our business operations exclusively on the operations of Fuwaysun, we sold our interest in V2K Window Fashions, Inc., and V2K Technology, Inc., for nominal consideration to Lotus Holdings, LLC, a Colorado limited liability company, which is an entity controlled by the former officers and directors of the Company.  

We are now engaged primarily in the development, production and sale of solar products, including a solar insect killer and other products designed for agricultural use.  Our manufacturing facility is located in Shenzhen, PRC, and our business operations and sales are in China.   

The following discussion regarding results of operation relates to the business operations of Fuwaysun which are carried on through our operating subsidiary, Shenzhen Fuwaysun.

Critical Accounting Policies and Estimates

The accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

For the year ended March 31, 2011, we experienced negative cash flows from operations of $2,024,095 with an accumulated deficit of $1,669,623 as of that date. Our continuation as a going concern through March 31, 2012 is dependent upon the continuing financial support from our stockholders and credit facilities. We are currently pursuing additional financing for our operations. However, there is no assurance that we will be successful in securing sufficient funds to sustain the operations.

These factors raise substantial doubt about our ability to continue as a going concern. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in our not being able to continue as a going concern.

We have identified the following accounting policies that are important to the presentation of financial information in this report.

Use of Estimates

In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates.

Variable Interest Entity

Our subsidiary, FTHK through Shenzhen Fuwaysun operates its business in the PRC in the form of a VIE.

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FTHK entered into a series of contractual arrangements with Shenzhen Fuwaysun.  Through the contractual arrangements, described below, we have control of Shenzhen Fuwaysun and the right to substantially all of the risks and rewards of ownership.

Agreements that provide us with effective control over Shenzhen Fuwaysun:

1.

Option Agreement, FTHK has the option to purchase all Shenzhen Fuwaysun’s assets and ownership at any time.

2.

Operating Agreement and Exclusive Consulting Services Agreement, FTHK is appointed as the exclusive service provider for Shenzhen Fuwaysun to provide business support and related consulting services. Shenzhen Fuwaysun agrees to pay a consulting and service fee equal to 100% of their net profits to FTHK.

3.

Pledge Agreement, Shenzhen Fuwaysun and its shareholders agreed to pledge their legal interest to FTHK as security for performance of the obligations of Shenzhen Fuwaysun under the Exclusive Consulting Services Agreement.

4.

Proxy Agreement, The shareholders of Shenzhen Fuwaysun agreed to irrevocably grant FTHK all of their voting rights as shareholders of Shenzhen Fuwaysun.

With the above agreements, FTHK demonstrates its ability to control Shenzhen Fuwaysun as the primary beneficiary and the operating results of the VIE was included in the consolidated financial statements for the years presented.

We believe that FTHK’s contractual arrangements with Shenzhen Fuwaysun are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements.

Our ability to control Shenzhen Fuwaysun also depends on the voting power obtained under the Proxy Agreement. As noted above, we believe this Proxy Agreement is legally enforceable but may not be as effective as direct equity ownership.

In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC government could, among other things:

·

revoke our business and operating licenses;

·

require us to discontinue or restrict operations;

·

restrict our right to issue the invoice and collect revenues;

·

block our websites;

·

require us to restructure the operations in such a way as to compel us to establish a new enterprise, re-apply for the necessary licenses or relocate our business, staff and assets;

·

impose additional conditions or requirements with which the Group may not be able to comply; or

·

take other regulatory or enforcement actions against us that could be harmful to our business

The imposition of any of these penalties may result in a material and adverse effect on our ability to conduct our business. In addition, if the imposition of any of these penalties causes us to lose the rights to direct the activities of Shenzhen Fuwaysun or the right to receive its economic benefits, we would no longer be able to consolidate Shenzhen Fuwaysun. We do not believe that any penalties imposed or actions taken by the PRC Government would result in the liquidation of the Company, FTHK or Shenzhen Fuwaysun.

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Revenue Recognition

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition”, we recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured.

Sales of products

Revenue from the sale of solar and plastic products is recognized when the products are delivered to and received by the customers, collectability is reasonably assured and the prices are fixed and determinable.

Revenue represents the invoiced value of goods, net of value-added tax (“VAT”) and sales allowance. Our products that are locally sold in the PRC are subject to VAT which is levied at the rate of 13% to 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by us in addition to the invoiced value of purchases to the extent not refunded for export sales. We experienced returns of $627,253 during the year ended March 31, 2011.  We have recorded no additional reserve for sales returns for the years ended March 31, 2011.

Cost of revenue

Cost of revenue includes cost of raw materials, direct labor, packaging cost, depreciation and production overhead that are directly attributable to the manufacture of solar and other plastic products. Shipping and handling cost are recorded in sales and marketing expense and are recognized when the related product is delivered to the customer.

Advertising expenses

Advertising costs are expensed as incurred under ASC Topic 720, “Advertising Costs”. The Company incurred advertising expense of $79,633 and $20,436 for the years ended March 31, 2011 and 2010, respectively.

Comprehensive income

ASC Topic 220 , “Comprehensive Income” , establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.

Our reporting currency is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, our operating subsidiaries in Hong Kong and the PRC maintain their books and record in their respective local currencies, Hong Kong Dollars (“HK$”) and Renminbi Yuan (“RMB”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830, “ Translation of Financial

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Statement” , using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity.

Translation of amounts from the local currency of our subsidiaries into US$ has been made at the following exchange rates for the respective year:

Stock-based compensation

Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”).  Under the provisions of ASC 718, companies are required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.  The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in our statement of operations.

We use the Black-Scholes option pricing model (“Black-Sholes model”) to determine fair value.  The determination of fair value of shares-based payment awards on the grant using an option-pricing model is affected our stock price as well as assumptions regarding a number of highly complex and subjective variables.  These variables include, but are not limited tom our expected stock price volatility over the term of the awards, and actual and projected employee option exercise behaviors.

Non-employee stock-based compensation is presented in accordance with the guidance ASC Topic 505, “Equity-Based Payments to Non-Employees” , stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with ASC 718.

Fair value measurement

ASC Topic 820, “ Fair Value Measurements and Disclosures” ("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.

Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.

Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine

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the fair value of financial transmission rights.

Our financial instruments consist of cash and cash equivalents, trade receivables, other receivables, payables, line of credit, and long term debt. The carrying values of cash and cash equivalents, trade receivables, other receivables, payables and line of credit approximate their fair value due to their short maturities. The carrying value of long term debt approximates the fair value of debt of similar terms and remaining maturities available to the company.

Recent accounting pronouncements

We have reviewed all recently issued, but no yet effective, accounting pronouncements and do not believe the future adoptions of any such pronouncements may be expected to cause a material impact on our financial condition or the results of operations.

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We had a shift in our philosophy towards a more directed selling effort.  In 2010 our effort was to use general promotional efforts.  In 2011 we increased our direct advertising by $59,197.  We also enlarged our annual convention/exhibition in Shenzhen for our distributors, potential distributors, government officials, and distinguished members of the agricultural community.  Over 338 people attended the convention/exhibition in 2011.

Selling commissions increased $233,252 as a direct result of increased revenue.  Service fees increased $105, 888 also as a direct result of increased revenue.  Travel expenses increase as we were selling in more provinces that in 2010.

General and administrative expenses represent $1,352,869 and $1,787,732, in 2011 and 2010 respectively.  The decrease of $434,863 (24.32%) is primarily due to a number of factors as shown below:

Salaries and benefits increased as a result of additional personnel.  As a result of increased activity we incurred bad debts which we did not experience in the prior year.  We anticipate that our experience will improve in 2012.  In 2010 our professional fees were exceptional high as a result of our reorganization and recapitalization.  We believe that these costs will continue at the present level.  Travel increased as more cost was incurred as a result of a full year relationship between PRC operations and U.S. organization.  Our increase in research and development resulted in introduction of additional products.  The increase in stock related cost and investor relations is a direct result of being a public company.

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Other office expenses increased as a direct result of increased activity in conjunction with increased revenue.

In 2010 we wrote off or disposed of raw materials which we deemed to be worthless.  After evaluation of our current inventory we did not find any obsolete or unusable inventory.  In 2010 we incurred stock based compensation.  We had no stock based compensation in 2011.  In 2010 we incurred offering expenses that were not directly related to a specific offering.  In 2011 all of the offering cost incurred related to specific fund raising efforts and were offset against amounts raised.

Fiscal Year Ended March 31, 2010 Compared to Fiscal Year Ended March 31, 2009

(References to 2010 refer to the fiscal year ended March 31, 2010 and references to 2009 refer to the fiscal year ended March 31, 2009.)

Revenue:  

Revenue for 2010 was $4,607,957, as compared to revenue of $1,523,927 for 2009, an increase of $3,084,030 (202%).  During the year ended March 31, 2010, three models of our line of solar insect killers was approved by the Ministry of Agriculture of the People’s Republic of China (“PRC”) and successfully became one of the items which were subsidized by the PRC government, thus the sales amount increased significantly. Moreover, we employed more sales agent to promote our products in different provinces and granted an increased incentive bonus to the sales agents

Cost of revenue and gross profit:

Cost of revenue for 2010, as a percentage of revenue, was 60.89% as compared to 97.39% for 2009.  Our gross profit increased $1,762,373, from $39,718 in 2009 to $1,802,091 in 2010.  As a percentage of revenue gross profit increased from 2.6% in 2009 to 39.11% in 2010.  The significant increase in our gross profit percentage is mainly due to the fact that in 2009 we were still developing our manufacturing techniques and in 2009 we used reduced pricing and product samples as a sales incentive.  We anticipate continuing to improve our gross profit as we take advantage of our ability to buy raw material in greater volume.

Operating expenses:

Operating expenses increased $2,214,118 (589%) from $375,966 in 2009 to $2,590,084 in 2010.  

Of our operating expenses, $802,352 and $23,555 represent selling expenses in 2010 and 2009 respectively. The increase of $778,797 (3306%) is primarily due to an increase in promotional expenses of approximately $514,000 and increase in sales commissions of approximately $103,000.  The increase in selling expense had a direct affect in the increase in revenue.

General and administrative expenses represent $1,787,732 and $352,411, in 2010 and 2009 respectively.  The increase of $1,435,321 (407%) is primarily due to increased consulting fees of approximately $811,000 and audit fees of approximately $110,000.  The balance of the increase results from our increased activity. We do not anticipate consulting fees to continue at their current level

Other expenses increased $103,709 (342%) to $134,002 in 2010 from $30,293 in 2009.  The increase is primarily due to increased interest expense as a result of increased borrowings in 2010 as compared to 2009.

Our future business will be affected by our continuing ability to offer both environmentally friendly and cost effective solutions to insect control.

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30

See accompanying notes to consolidated financial statements.

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35

See accompanying notes to consolidated financial statements.

36

Agrisolar Solutions, Inc.

Note 1.  Organization and Business Background

AgriSolar Solutions, Inc. (“We” “Us” “AGSO” or the “Company”) was incorporated in the State of Colorado on March 13, 2006. On January 8, 2010, we changed our name from “V2K International, Inc.” to our current name.

Through our variable interest entity, Shenzhen Fuwaysun Technology Company Limited, a Peoples Republic of China (“PRC”) corporation (“Shenzhen Fuwaysun”), we are engaged primarily in the development, production and sale of solar products, including a solar insect killer and other products designed for agricultural and commercial use.  Our manufacturing facility is located in Shenzhen, PRC, and a substantial majority of our current sales and business operations are in China.

Reorganization and recapitalization

On January 8, 2010, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with Fuwaysun Technology, Ltd (“FTUS”). Pursuant to the terms of the Exchange Agreement, we agreed to acquire all of the issued and outstanding shares of common stock in FTUS, in exchange for the issuance of an aggregate of up to 58,055,000 shares of our common stock to the shareholders of FTUS, thereby causing FTUS to become a wholly-owned subsidiary of the Company (the “Share Exchange”). As a result of the Share Exchange, the former shareholders of FTUS own 99.5% of the issued and outstanding shares of the Company. In connection with the Share Exchange, all of the Company’s former directors and officers resigned from their positions and we appointed a new chairman of the Board of Director and Chief Executive Officer.

The Share Exchange has been accounted for as a reverse acquisition and recapitalization of AGSO whereby FTUS is deemed to be the accounting acquirer (legal acquiree) and AGSO to be the accounting acquiree (legal acquirer).  The accompanying consolidated financial statements are in substance those of FTUS, with the assets and liabilities, and revenues and expenses, of AGSO being included effective from the date of stock exchange transaction. AGSO is deemed to be a continuation of the business and operations of FTUS. Accordingly, the accompanying consolidated financial statements include the following:

(1)

 the balance sheet consists of the net assets of the accounting acquirer at historical cost and the net assets of the accounting acquiree at historical cost;

(2)

the financial position, results of operations, and cash flows of the accounting acquirer for all periods presented as if the recapitalization had occurred at the beginning of the earliest period presented and the operations of the accounting acquiree from the date of stock exchange transaction.

AGSO and our subsidiaries and variable interest entity (“VIE”) are hereinafter collectively referred to as (“We” “Us” “AGSO” or the “Company”).

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

Description of its subsidiaries and VIE

# represents variable interest entity (“VIE”)

Note 2.  Going Concern Uncertainties

The accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

For the year ended March 31, 2011, we experienced negative cash flows from operations of $2,024,095 with an accumulated deficit of $1,669,623 as of that date. Our continuation as a going concern through March 31, 2012 is dependent upon the continuing financial support from our stockholders and credit facilities. We are currently pursuing additional financing for our operations. However, there is no assurance that we will be successful in securing sufficient funds to sustain the operations.

These factors raise substantial doubt about our ability to continue as a going concern. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in our not being able to continue as a going concern.

Note 3.  Summary of Significant Accounting Policies

Basis of Presentation

These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and are expressed in United States dollars (US$).

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

Use of Estimates

In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates.

Basis of Consolidation

The consolidated financial statements include the financial statements of AGSO and its subsidiaries and VIE. All inter-company balances and transactions among the companies have been eliminated upon consolidation.

The Company has adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810-10-5-8, “Variable Interest Entities” which requires a variable interest entity or VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIEs or is entitled to receive a majority of the VIE’s residual returns.

Variable Interest Entity

Our subsidiary, FTHK through Shenzhen Fuwaysun operates its business in the PRC in the form of a VIE.

FTHK entered into a series of contractual arrangements with Shenzhen Fuwaysun.  Through the contractual arrangements, described below, we have control of Shenzhen Fuwaysun and the right to substantially all of the risks and rewards of ownership.

Agreements that provide us with effective control over Shenzhen Fuwaysun:

With the above agreements, FTHK demonstrates its ability to control Shenzhen Fuwaysun as the primary beneficiary and the operating results of the VIE was included in the consolidated financial statements for the years presented.

We believe that FTHK’s contractual arrangements with Shenzhen Fuwaysun are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements.

Our ability to control Shenzhen Fuwaysun also depends on the voting power obtained under the Proxy Agreement. As noted above, we believe this Proxy Agreement is legally enforceable but may not be as effective as direct equity ownership.

In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC government could, among other things:

·

revoke our business and operating licenses;

·

require us to discontinue or restrict operations;

·

restrict our right to issue the invoice and collect revenues;

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

·

block our websites;

·

require us to restructure the operations in such a way as to compel us to establish a new enterprise, re-apply for the necessary licenses or relocate our business, staff and assets;

·

impose additional conditions or requirements with which the Group may not be able to comply; or

·

take other regulatory or enforcement actions against us that could be harmful to our business

The imposition of any of these penalties may result in a material and adverse effect on our ability to conduct our business. In addition, if the imposition of any of these penalties causes us to lose the rights to direct the activities of Shenzhen Fuwaysun or the right to receive its economic benefits, we would no longer be able to consolidate Shenzhen Fuwaysun. We do not believe that any penalties imposed or actions taken by the PRC Government would result in the liquidation of the Company, Forboss or Shenzhen Fuwaysun.

Cash and Cash Equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

Accounts receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from shipment. We extend unsecured credit to our customers in the ordinary course of business but mitigate the associated risks by performing credit checks and actively pursuing past due accounts. At the end of each period, we specifically evaluate individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. We will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We do not have any off-balance-sheet credit exposure related to our customers.

As of March 31, 2011 and 2010, the allowance for doubtful accounts was $103,130 and $75,520, respectively.

Inventories

Inventories consist primarily of raw materials, work in process and finished goods of solar products and plastic products and are stated at the lower of cost or net realizable value, with cost being determined on a weighted average basis. Costs include material, direct labor and manufacturing overhead costs. Allowance for obsolescence is an estimated amount based on an analysis of current business and economic risks, the duration of the inventories held and other specific identifiable risks that may indicate a potential loss. The allowance is reviewed regularly to ensure that it adequately provides for all reasonable expected losses.

As of March 31, 2011 and 2010, the allowance for obsolescence was $18,178 and $17,470, respectively.

Advances from Customers

In the normal course of business we may receive advanced payments from customers. Advances from customers are non-interest bearing, unsecured and are recognized in revenue when delivery has occurred.

Intangible Asset

Intangible asset includes patent application fee and is recorded at cost less accumulated amortization. The patent is to be amortized subject to the successful registration from the authority in the United States of America. The patent is being amortized over its estimated useful life of 20 years on a straight-line basis.

Plant and Equipment

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any.  Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

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Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statement of operations.

Long-Lived Assets

In accordance with ASC Topic 360, “Property, Plant and Equipment” ("ASC 360"), long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated Future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined using Forecasted cash flows discounted using an estimated average cost of capital.

All of the judgments and assumptions made in preparing the cash flow projections are consistent with our other financial statement calculations and disclosures. The assumptions used in the cash flow projections are consistent with other forward-looking information prepared by the company, such as those used for internal budgets, discussions with third parties, and/or reporting to management or the board of directors. However, projecting the cash flows for the impairment analysis involves significant estimates with regard to the performance of each restaurant, and it is reasonably possible that the estimates of cash flows may change in the near term.

There has been no impairment as of March 31, 2011 and 2010.

Revenue Recognition

In accordance with the ASC Topic 605, “Revenue Recognition” , the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured.

Sales of products

Revenue from the sale of solar and plastic products is recognized when the products are delivered to and received by the customers, collectability is reasonably assured and the prices are fixed and determinable.

Revenue represents the invoiced value of goods, net of value-added tax (“VAT”) and sales allowance. Our products that are locally sold in the PRC are subject to VAT which is levied at the rate of 13% to 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by us in addition to the invoiced value of purchases to the extent not refunded for export sales. We experienced returns of $627,253 during the year ended March 31, 2011.  We recorded no additional reserve for sales returns for the year ended March 31, 2011.

Interest income

Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable.

Cost of Revenue

Cost of revenue includes cost of raw materials, direct labor, packaging cost, depreciation and production overhead that are directly attributable to the manufacture of solar and other plastic products. Shipping and handling cost are recorded in sales and marketing expense and are recognized when the related product is delivered to the customer.

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

Advertising Expenses

Advertising costs are expensed as incurred under ASC Topic 720, “Advertising Costs”. The Company incurred advertising expense of $79,633 and $20,436 for the years ended March 31, 2011 and 2010, respectively.

Comprehensive Income

ASC Topic 220 , “Comprehensive Income” , establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

Income Taxes

The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, “ Accounting for Income Taxes ” (“ASC 740”). Under this 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 basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any 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.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the years ended March 31, 2011 and 2010, we did not have any interest and penalties associated with tax positions. As of March 31, 2011 and 2010, we did not have any significant unrecognized uncertain tax positions.

We conduct the majority of our business in the PRC and are subject to tax in this jurisdiction. As a result of its business activities, we files tax returns that are subject to examination by the local and foreign tax authorities.

Net Income (Loss) Per Share

We calculate net income (loss) per share in accordance with ASC Topic 260, “Earnings per Share.”  Basic net income (loss) per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period, and diluted earnings per share is computed by including common stock equivalents outstanding for the period in the denominator. Common stock equivalents include shares issuable upon the exercise of outstanding stock options, unvested restricted stock and warrants, net of shares assumed to have been purchased with the proceeds.

Foreign Currencies Translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.

Our reporting currency is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, our operating subsidiaries in Hong Kong and the PRC maintain their books and record in their respective local currencies, Hong Kong Dollars (“HK$”) and Renminbi Yuan (“RMB”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted.

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830, “ Translation of Financial Statement” , using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity.

Translation of amounts from the local currency of our subsidiaries into US$ has been made at the following exchange rates for the respective year:

Retirement Plan Costs

Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the consolidated statements of operation and comprehensive income as and when the related employee service is provided.

Stock-Based Compensation

Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”).  Under the provisions of ASC 718, companies are required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.  The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in our statement of operations.

We use the Black-Scholes option pricing model (“Black-Scholes model”) to determine fair value.  The determination of fair value of shares-based payment awards on the grant using an option-pricing model is affected our stock price as well as assumptions regarding a number of highly complex and subjective variables.  These variables include, but are not limited tom our expected stock price volatility over the term of the awards, and actual and projected employee option exercise behaviors.

Non-employee stock-based compensation is presented in accordance with the guidance ASC Topic 505, “Equity-Based Payments to Non-Employees” , stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with ASC 718.

Related Parties

Parties, which can be a corporation or individual, are considered to be related if we have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Segment Reporting

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with our internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the years ended March 31, 2011 and 2010, we operated in one reportable business segment in the PRC.

Fair Value Measurement

ASC Topic 820, “ Fair Value Measurements and Disclosures” ("ASC 820"), provides a comprehensive framework

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.

Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.

Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

Our financial instruments consist of cash and cash equivalents, trade receivables, other receivables, payables, line of credit, and long term debt. The carrying values of cash and cash equivalents, trade receivables, other receivables, payables and line of credit approximate their fair value due to their short maturities. The carrying value of long term debt approximates the fair value of debt of similar terms and remaining maturities available to the company.

Recent Pronouncements

We have reviewed all recently issued, but no yet effective, accounting pronouncements and do not believe the future adoptions of any such pronouncements may be expected to cause a material impact on our financial condition or the results of operations.

For the year ended March 31, 2011, we provided for an allowance for doubtful accounts of $24,012 and wrote off accounts receivable of $162,012.  There was no reserve or write offs for the year ended March 31, 2010.

Accrued accounts receivable represents revenue from the products that are delivered to, received by and accepted by the customers prior to invoicing, and are presented on the balance sheets in the aggregate with accounts receivable.  The accrual results from delays in completion of required documentation under the governmental procedures.

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

Subsequent to March 31, 2011 we collected approximately $1,513,000 (20%) of the balance of the net accounts receivable and we billed approximately $1,012,000 (19%) of the accrued receivables.

We did not record the allowance for slow-moving and obsolete inventories for the years ended March 31, 2011 and 2010.

Depreciation expense for the years ended March 31, 2011 and 2010 was $283,829 and $276,547, which included $255,801 and $255,473 in cost of revenue, respectively.

As of March 31, 2010, certain plant and equipment with the net book value of $195,969 were pledged as securities in connection with the outstanding long-term borrowings, as described in more details in Note 10.  As of March 31, 2011, no plant and equipment was pledged as security.  

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

Note 8.   Short-Term Borrowings

In December 2009, we received short-term borrowings from several independent parties with an aggregate principal balance of $877,693, which were unsecured, non-interest bearing and repayable within the next twelve months. During the year ended March 31, 2011, we repaid the short-term borrowings totaling $438,847 by cash. We also repaid certain short-term borrowing of $438,846 by converting into 1,253,846 shares of Series AA Preferred Stock at a price of $0.35 per share.

In September 2010, we obtained a short-term loan of $756,224 (equivalent to RMB 5,000,000) from a PRC financial institution, due September 2011, which was unsecured, carried interest at 115% of basic annual rate of the People’s Bank of China, payable monthly. The borrowing is personally guaranteed by an officer and director of the Company and a third party vendor of the Company.  

The interest rate at March 31, 2011 was 6.969% and the effective interest rate for the year ended March 31, 2011 is 6.5825% per annum.

As of March 31, 2010 the aggregate long-term borrowings were jointly and severally guaranteed by certain related parties, the Chief Executive Officer/Director of the Company, the Corporate Secretary/Director of the Company, and a family relative and secured by certain plant and equipment of the Company with an aggregate net book value of $195,969 as of March 31, 2010.  

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

Note 10.  Related Party Transactions

Promissory Note

On December 10, 2009, we issued a promissory note (the “Note”) with a principal amount of $500,000, together with accrued interest in the amount of $100,000 due and payable on May 10, 2010, to a Director of the Company. The Note is in default and accordingly interest is charged at 18% per annum until such time as the note is paid in full. In consideration for the Note, we agreed to issue a warrant to the director to purchase a total of 2,000,000 shares of our common stock at an exercise price of $0.25 per share. These warrants were valued at $73,877 using the Black-Scholes option-pricing model with the following assumptions: applicable risk-free interest rate of 1%; volatility factor of 79%; and the expected life of the warrants of 5 years. The relative fair value of the warrants of $73,877 was recorded as a debt discount. This debt discount is being amortized over the term of the Note using the effective interest method and we recognized $28,730 and $45,147 and as non-cash interest expense for the years ended March 31, 2011 and 2010, respectively.  The debt discount was fully amortized as of March 31, 2011.  Interest expense accrued and or paid was $140,803 and $61,111 for the years ended March 31, 2011 and 2010, respectively.  The effective annual interest rate including both the debt discount and interest expense was 34% for the year ended March 31, 2011.  In March 2011 we made a payment of $100,000 which represented accrued interest.  Subsequent to March 31, 2011 we made an additional payment of $100,000 which also represented accrued interest.  

A mount Due to a Stockholder

As of March 31, 2011 and 2010, the balance represented temporary advances made by one of our stockholders who is also a director of the Company.  The advance is unsecured and interest-free. The stockholder has agreed that he will not request, seek or require repayment of any portion of the outstanding advance until such time as the current operations of the Company becomes profitable (as reflected by financial statements prepared in accordance with U.S. GAAP) and the Company generated gross revenues of in excess of $30,000,000.

Note 11.  Notes Payable

Promissory Note

On January 8, 2010, we issued a promissory note (the “Note”) with a principal amount of $150,000 in connection with a private purchase of our common stock. The Note is non-interest bearing and payable on January 8, 2011. Interest is charged at a default rate of 18% per annum when the entire principal is not repaid in full at the maturity date.  Only a partial payment of $50,000 was made on the Note and accordingly it was in default.  We have accrued interest on the note at the default rate form the date of default.  Interest expense recognized for the note was $5,400 for the year ended March 31, 2011.

Convertible Notes Payable

On April 29, 2010, we entered into a Note Modification Agreement which agreed to reduce the outstanding balance from $160,000 to $150,000, reduced the interest rate to 6% per annum, fixed the conversion price at $0.125 per share and extended the due date to March 31, 2011.  Concurrently, the note holders exercised the option to convert into 1,200,000 shares of our common stock at a price of $0.125 per share. The fair value of this stock conversion was determined as $600,000 at a fair market price of $0.50 per share on the conversion date. We recognized $440,000 as a loss on extinguishment of debt for the year ended March 31, 2011.

Note 12.  Stockholders’ Equity

On May 7, 2010, we approved an amendment to our article of incorporation, as below:

(1)

increasing the number of authorized shares of $0.001 par value common stock from 100,000,000 to 200,000,000 shares, and increasing the number of authorized shares of $0.001 par value preferred stock from 10,000,000 to 30,000,000 shares;

(2)

cancelling the designation of two classes of preferred stock consisting of 5,000,000 shares of Series A preferred stock 1,600,000 shares of Series B preferred stock, and returning such shares to the status of

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Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

authorized but unissued shares of preferred stock; and

(3)

designating a new class of preferred stock consisting of 25,714,286 shares of Series AA Convertible Preferred Stock.

On December 9, 2010, we approved a further amendment to its article of incorporation, as below:

(1)

cancelling the designation of 15,714,286 shares of preferred stock as Series AA Convertible Preferred Stock, returning such shares to the status of authorized but unissued shares of preferred stock and reducing the number of authorized shares Series AA Convertible Preferred Stock from 25,714,286 shares to 10,000,000 shares; and

(2)

designating a new class of preferred stock consisting of 10,000,000 shares of Series AAA Convertible Preferred Stock.

Series AA Convertible Preferred Stock (“Series AA Preferred Stock”)

The Series AA Preferred Stock has a stated value of $0.35 per share and is entitled to one vote for each share held. The holders of Series AA Preferred Stock are entitled to an annual dividend at the rate of 4%, payable in cash, semi-annually, in arrears. In the event of liquidation, the holders of Series AA Preferred Stock are entitled to a preference of $0.35 per share, in cash, equal to 100% of the stated value for each share outstanding, plus an amount equal to all accrued but unpaid dividends thereon, whether or not declared. At the option of the holders, each share of Series AA Preferred Stock may be converted into one (1) share of our common stock one-half (1/2) warrant to purchase common stock, together with the payment of all accrued but unpaid dividends in the form of common stock at a price of $0.35 per share.  Each two warrants will then be convertible into one share of common stock at a price of $0.70 per share for a period of 5 years.

During the period ended March 31, 2011, we offered to sell up to a maximum of 17,142,857 shares of Series AA Preferred Stock at a price of $0.35 per share, on a “best efforts” basis. We issued a total of 5,495,048 shares of Series AA Preferred Stock with the gross proceeds of $1,923,266.  In addition, we issued an additional 1,253,846 shares of Series AA Preferred stock in exchange for the repayment of $438,846 of short-term borrowing. We incurred $217,906 in cost associated with this offering which was deducted from the proceeds.  The net proceeds of $2,144,206, which includes the conversion of debt, were recorded as equity by us.

Under the offering, we agreed to issue an additional number of shares equal to 25% of the number of AA Series Preferred Stock subscribed (“Make Good Shares”), if we do not achieve gross revenue of not less than $22,500,000 or net profit after tax of not less than $5,640,000 for the fiscal year ending March 31, 2011, as confirmed by the audit of the Company’s financial statements.  In that regard, we did not achieve the required goals and accordingly have issued 1,687,225 Make Good Shares.

In connection with this offering, we issued 567,318 warrants to the placement agents and measured their fair value at $0.2919 per share, in accordance with ASC Topic 718, which was recorded in additional paid-in capital in the accompanying consolidated financial statements for the year ended March 31, 2011. The fair value of the warrants was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

The value of the warrants, $165,595, was considered to be a direct cost to this subscription.  

Series AAA Convertible Preferred Stock (“Series AAA Preferred Stock”)

The Series AAA Preferred Stock has a stated value of $0.35 per share and is entitled to one vote for each share held.  The holders of Series AAA Preferred Stock are entitled to an annual dividend at the rate of 4%, payable in cash, semi-annually, in arrears. In the event of liquidation, the holders of Series AAA Preferred Stock are entitled to a preference of $0.35 per share, in cash, equal to 100% of the stated value for each share outstanding, plus an amount equal to all accrued but unpaid dividends thereon, whether or not declared. However, the Series AAA

48

Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

Preferred Stock is subordinate to the Series AA Preferred Stock with respect to dividend rights and rights on liquidation.  At the option of the holders, each share of Series AAA Preferred Stock may be converted into one (1) share of our common stock and one warrant to purchase common stock, together with the payment of all accrued but unpaid dividends in the form of common stock at a price of $0.35 per share.  Each warrant will then be convertible into one share of common stock at a price of $0.70 per share for a period of 5 years.  

During the period ended March 31, 2011, we offered up to a maximum of 5,714,285 shares of Series AAA Preferred Stock at a price of $0.35 per share, on a “best efforts” basis. We issued a total of 2,895,429 shares of Series AAA Preferred Stock with the gross proceeds of $1,013,400.  We incurred $175,236 in cost associated with this offering which was deducted from the proceeds.  The net proceeds of $838,164 were recorded as equity by us.

In connection with this offering, we issued 289,544 warrants to the placement agents and measured their fair value at $0.3996 per share, in accordance with ASC Topic 718, which was recorded in additional paid-in capital in the accompanying consolidated financial statements for the year ended March 31, 2011. The fair value of the warrants was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

The value of the warrants, $115,701, was considered to be a direct cost to this subscription.  

Conversion of Series AA Preferred Stock

During the year ended March 31, 2011 holders of 4,201,678 shares of Series AA Preferred Stock elected to convert the Series AA Preferred Stock into Common Stock.  Accordingly, under the terms of the Series AA Preferred Stock, we cancelled 4,201,678 shares of Series AA Preferred Stock and issued 4,201,678 shares of Common Stock and warrants to purchase 2,100,841 shares of Common Stock.  The carrying value of the Series AA Preferred stock was $0.35 per share.  We measured the fair value of the warrants at $0.3246 per share ($682,008 in total).  The fair value of the warrants was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Common Stock

During the year ended March 31, 2010, pursuant to the Share Exchange, we issued an aggregate 58,055,000 shares of common stock.

Also during the year ended March 31, 2010, we sold 10,180,000 units (the “Units”).  The price per Unit was $0.125.  Each Unit consisted of one share of common stock and one warrant to purchase an additional share of common stock at a price of $0.25 per share, at any time during a period of 36 months from date of issuance.  The gross cash proceeds from the private placement totaled $1,272,500 less estimated transaction cost of $145,000.

We valued the warrants at $0.02 per share, or $230,852, in accordance with ASC Topic 718, which was recorded as offering cost in additional paid-in capital in the accompanying consolidated financial statements for the year ended March 31, 2010. The fair value of the warrants was estimated at the date of grant using the Black-Scholes

49

Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

option-pricing model with the following assumptions:

Common stock issued for services

On November 16, 2009, we granted to a consultant 4,300,000 shares of common stock at a fair value of $0.125 per share. The Company recognized $537,500 as stock-based compensation at the fair value for the year ended March 31, 2010.

Treasury stock

Prior to the Share Exchange, we acquired a total of 172,712 shares of our common stock, or approximately 57.88% of the then issued and outstanding common stock.  These shares were purchased from one of our shareholders for a total purchase price of $350,000, including $200,000 paid in cash and $150,000 in a promissory note due and payable on or before January 8, 2011.

50

Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The companies that operate in various countries: United States, Hong Kong and the PRC that are subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

AGSO and FTUS are registered in the State of Colorado and are subject to the tax laws of the United States of America.

As of March 31, 2011, AGSO and FTUS incurred $1,746,723 of the aggregate net operating losses carry forwards available for federal tax purposes that may be used to offset future taxable income and will begin to expire in 2030, if unutilized. We have provided for a full valuation allowance against the deferred tax assets on the expected future tax benefits from the net operating losses carry forwards as we believe it is more likely than not that these assets will not be realized in the future.

Hong Kong

Our operating subsidiary, FTHK is subject to Hong Kong Profits Tax at the statutory rate of 16.5% for the years ended March 31, 2011 and 2010 on the assessable income for its tax reporting years. As of March 31, 2011, FTHK incurred $720,418 of cumulative operating losses carry forwards available for income tax purposes at no expiration. We have provided for a full valuation allowance against the deferred tax assets on the expected future tax benefits from the net operating losses carry forwards as we believes it is more likely than not that these assets will not be realized in the future.

The PRC

Our subsidiary and VIE, Forboss and Shenzhen Fuwaysun are subject to the Corporate Income Tax Law of the People’s Republic of China (the “New CIT Law”), at a unified income tax rate of 25%. However, for entities operating in special economic zones that previously enjoyed preferential tax rates, the applicable tax rate is increased progressively to 25% over a 5-years’ period under a transitional policy.

Shenzhen Fuwaysun is registered and operates in Shenzhen City, the PRC and is recognized as “Enterprise Located in Special Economic Zone”. Hence, Shenzhen Fuwaysun is entitled to income tax at a preferential tax rate of 15% over the transitional period under the New CIT Law. Shenzhen Fuwaysun is also entitled to the tax holiday at 50%-reduction in its preferential corporate income tax rate for the following three years, expiring through fiscal year 2012.

51

Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

The reconciliation of income tax rate to the effective income tax rate based on income before income taxes from the operation in the PRC for the years ended March 31, 2011 and 2010 are as follows:

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of March 31, 2011 and 2010:

As of March 31, 2011 and 2010, we have provided for a full valuation allowance against the aggregate deferred tax assets of $730,222 and $505,659 on the expected future tax benefits from the net operating losses carry forwards as the management believes it is more likely than not that these assets will not be realized in the future. For the year ended March 31, 2011, the valuation allowance increased by $224,563, primarily relating to net operating losses carry forwards.

Note 15.  Net Income (Loss) Per Share

Earnings per share are based on the weighted average number of shares outstanding during the period after consideration of the dilutive effect, if any, for common stock equivalents, including stock options, restricted stock, and other stock-based compensation. Earnings per common share are computed in accordance with ASC Topic 260, “ Earnings Per Share ” which requires companies to present basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding and dilutive securities outstanding during the year.  

52

Agrisolar Solutions, Inc.

Notes To Consolidated Financial Statements

For the Years Ended March 31, 2011 and 2010

(Continued)

The following table sets forth the computation of basic and diluted net income (loss) per share for the years ended March 31, 2011 and 2010: