As filed with the Securities and Exchange Commission on November 22, 2006
Registration No. 333-


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
____________________________
 
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________________
 
BIOSOLAR, INC.
(Name of small business issuer in its charter)
 
Nevada  
 
3081
 
20-4754291  
(State or other Jurisdiction
 
(Primary Standard Industrial  
 
(I.R.S. Employer  
of Incorporation or Organization)
 
Classification Code Number)
 
Identification No.)
 
  27936 Lost Canyon Road, Suite 202
Santa Clarita, California 91387
(661) 251-0001
(Address and telephone number of principal executive offices and principal place of business)
 
David Lee
Chief Executive Officer
BIOSOLAR, INC.
27936 Lost Canyon Road, Suite 202
Santa Clarita, California 91387
(661) 251-0001
(Name, address and telephone number of agent for service)

Copies to:
Gregory Sichenzia, Esq.
Eric A. Pinero, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas, 21st Flr.
New York, New York 10018
(212) 930-9700
(212) 930-9725 (fax)

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.

If any securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o ________

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o ________

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o ________
 
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o ________

 



 
        PROPOSED     PROPOSED        
        MAXIMUM     MAXIMUM    AMOUNT OF   
TITLE OF EACH CLASS OF SECURITIES TO BE    AMOUNT TO BE    OFFERING PRICE     AGGREGATE    REGISTRATION   
REGISTERED
  REGISTERED (1)    PER SHARE (2)    OFFERING PRICE     FEE   
 
 
 Common stock, $.0001 par value
   
26,500,000
 
$
.10
 
$
2,650,000
 
$
283.55
 
                                        Total
   
26,500,000
       
$
2,650,000
 
$
283.55
 
 
(1) Includes shares of our common stock, par value $0.0001 per share, held by the selling stockholders which may be offered pursuant to this registration statement.

(2) Estimated solely for the purpose of calculating the registration fee required by Section 6(B) of the Securities Act of 1933, as amended, and computed pursuant to Rule 457 under the Securities Act.
 
(3) Includes 100% of the shares of our common stock which we issued to the selling stockholders under certain Subscription Agreements in May and July 2006.
 
 
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
 

 
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
 
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED NOVEMBER 22, 2006
 
BIOSOLAR, INC.
 
26,500,000 SHARES OF
 
COMMON STOCK
 
This prospectus relates to the resale by the selling stockholders of up to 26,500,000 shares of our common stock presently outstanding. The selling stockholders may sell common stock from time to time in the principal market on which the stock is traded at the prevailing market price or in negotiated transactions. The selling stockholders may be deemed underwriters of the shares of common stock, which they are offering. We will pay the expenses of registering these shares.

We are not selling any shares of common stock in this offering and therefore will not receive any proceeds from this offering. We have paid the expenses of preparing this prospectus and the related registration expenses.

Our common stock is not traded on any national securities exchange and is not quoted on any over-the-counter market. If our shares become quoted on the Over-The-Counter Bulletin Board, sales will be made at prevailing market prices or privately negotiated prices.
 
INVESTING IN THESE SECURITIES INVOLVES SIGNIFICANT RISKS. SEE "RISK FACTORS"
 
BEGINNING ON PAGE 9.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
 
The date of this prospectus is ________, 2006.
 
The information in this Prospectus is not complete and may be changed. This Prospectus is included in the Registration Statement that was filed BioSolar, Inc. with the Securities and Exchange Commission. The selling stockholders may not sell these securities until the registration statement becomes effective. This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the sale is not permitted.
 

 
TABLE OF CONTENTS  
 
 
 
 
 
Cautionary Note Regarding Forward-Looking Statements
 
 
6
Prospectus Summary
 
 
7
Risk Factors
 
 
9
Use Of Proceeds
 
 
12
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
 
 
13
Description Of Business
 
 
16
Description Of Property
 
 
17
Legal Proceedings
 
 
17
Management
 
 
19
Executive Compensation
 
 
20
Certain Relationships And Related Transactions
 
 
20
Security Ownership Of Certain Beneficial Owners And Management
 
 
20
Description Of Securities
 
 
21
Commission’s Position On Indemnification For Securities Act Liabilities
 
 
21
Plan Of Distribution
 
 
22
Selling Stockholders
 
 
24
Legal Matters
   
29
Experts
 
 
29
Available Information
 
 
29
Index to Financial Statements
   
F-1


 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This prospectus and any prospectus supplement contain forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events.
 
In some cases, you can identify forward-looking statements by words such as "may," "should," "expect," "plan," "could," "anticipate," "intend," "believe," "estimate," "predict," "potential," "goal," or "continue" or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under "Risk Factors," that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.
 
Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.
 
 
PROSPECTUS SUMMARY
 
The following summary highlights selected information contained in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the "risk factors" section, the financial statements and the notes to the financial statements.
 
BIOSOLAR, INC.
 
OUR BUSINESS

We are developing new and innovative thin film solar cells produced on bio-based plastic substrates with the intent to provide commercially viable solar cell designs that convert sun light into electrical energy. The process for producing electricity from sunlight is known as Photovoltaics. Photovoltaic ("PV") is the science of capturing and converting sun light into electricity.

We are focusing our research and product development efforts on thin film PV devices in an effort to capitalize on what we perceive as cost and application diversity advantages to current rigid multi-crystalline silicon wafer technologies. Our thin film cell design employs less than 1.5 microns of material thickness as opposed to an approximate 400 microns of material thickness for multi-crystalline cell designs. This significant reduction in cell thickness and flexibility of the completed cell structure leads to the use of "thin film" terminology in describing the solar cell design.

We are focusing our research and product development efforts on thin film PV devices produced on bio-based plastic substrates and the eventual marketing of such products to the building materials, outdoor power, emergency power, mobile computer and communications sectors.
 
We were incorporated in the State of Nevada on April 24, 2006, as BioSolar Labs, Inc. Our name was changed to BioSolar, Inc. on June 8, 2006. Our principal executive offices are located at 27936 Lost Canyon Road, Suite 202, Santa Clarita, California 91387 , and our telephone number is (661) 251-0001 .
 

The Offering    
     
Common stock offered by selling stockholders     Up to 26,500,000 shares, including the following:  
     
   
-    up to 25,000,000 shares of common stock issued to certain of the selling stockholders pursuant to certain Subscription Agreements in May 2006 for an aggregate purchase price of $375,000, and  
     
   
-    1,500,000 shares of common stock issued to certain of the selling stockholders pursuant to certain Subscription Agreements in July 2006, for an aggregate purchase price of $150,000.  
     
   
This number represents 20.6% of our current outstanding stock.  
     
Common stock to be outstanding after the offering     Up to 128,557,777 shares  
     
Use of proceeds   We will not receive any proceeds from the sale  
   
of the common stock.
 
 
The above information regarding common stock to be outstanding after the offering is based on 128,557,777 shares of common stock outstanding as of November 13, 2006 and assumes the subsequent conversion of our issued secured convertible notes and exercise of warrants by our selling stockholders, although there can be no assurances that any warrants will be exercised.
7

 
TRANSACTIONS BEING REGISTERED IN THIS PROSPECTUS
 
ROUND 1 2006 SUBSCRIPTION AGREEMENT*

In May 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $375,000 in shares of our common stock, or a total of 25,000,000 shares.

We granted “piggy-back” registration rights to the investors in our Round 1 2006 Subscription Agreements covering the shares of common stock on registration statements (other than on Form S-8, S-4 or similar Forms) subsequently filed by us.
 
ROUND 2 2006 SUBSCRIPTION AGREEMENT*
 
In July 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $150,000 in shares of our common stock, or a total of 1,500,000 shares.

We granted “piggy-back” registration rights to the investors in our Round 2 2006 Subscription Agreement covering the shares of common stock on registration statements (other than on Form S-8, S-4 or similar Forms) subsequently filed by us.
 
*We claim an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated thereunder since, among other things, the transaction did not involve a public offering, the investors were accredited investors and/or qualified institutional buyers, the investors had access to information about us and their investment, the investors took the securities for investment and not resale, and we took appropriate measures to restrict the transfer of the securities.
8


RISK FACTORS
 
This investment has a high degree of risk. Before you invest you should carefully consider the risks and uncertainties described below and the other information in this prospectus. If any of the following risks actually occur, our business, operating results and financial condition could be harmed and the value of our stock could go down. This means you could lose all or a part of your investment.
 
RISKS RELATED TO OUR BUSINESS AND INDUSTRY

WE HAVE A LIMITED OPERATING HISTORY UPON WHICH YOU CAN BASE AN INVESTMENT DECISION.

Our company was formed on April 24, 2006 and therefore, we have a limited operating history upon which you can make an investment decision, or upon which we can accurately forecast future sales. You should, therefore, consider us subject to the business risks associated with a new business. The likelihood of our success must be considered in light of the expenses, difficulties and delays frequently encountered in connection with the formation and initial operations of a new business.
 
WE HAVE A LIMITED HISTORY OF LOSSES. WE EXPECT TO CONTINUE TO INCUR LOSSES, AND WE MAY NEVER ACHIEVE AND SUSTAIN PROFITABILITY.
 
Since inception, we have incurred losses and have negative cash flows from operations. For the three months ended September 30, 2006, we incurred a net loss of $67,119. From inception through June 30, 2006, we incurred a net loss of $86,005. These factors, among others discussed in Note 1 to the financial statements, raise substantial doubt about the ability to continue as a going concern. We expect to continue to incur net losses until sales generate sufficient revenues to fund our continuing operations. We may fail to achieve significant revenues from sales or achieve or sustain profitability. There can be no assurance of when, if ever, we will be profitable or be able to maintain profitability.

WE MAY BE UNABLE TO MANAGE ITS GROWTH OR IMPLEMENT OUR EXPANSION STRATEGY.  

We may not be able to expand its product and service offerings, our client base and markets, or implement the other features of our business strategy at the rate or to the extent presently planned. Our projected growth will place a significant strain on our administrative, operational and financial resources. If we are unable to successfully manage our future growth, establish and continue to upgrade our operating and financial control systems, recruit and hire necessary personnel or effectively manage unexpected expansion difficulties, our financial condition and results of operations could be materially and adversely affected.

WE MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE OUR TECHNOLOGIES WHICH WOULD RESULT IN CONTINUED LOSSES AND MAY REQUIRE US TO CURTAIL OR CEASE OPERATIONS.

While we have made progress in the development of our products, we have not generated any revenues and we are unable to project when we will achieve profitability, if at all. As is the case with any new technology, we expect the development process to continue. We cannot assure that our engineering resources will be able to modify the product fast enough to meet market requirements. We can also not assure that our product will gain market acceptance and that we will be able to successfully commercialize the technologies. The failure to successfully develop and commercialize the technologies would result in continued losses and may require us to curtail or cease operations.

OUR REVENUES ARE DEPENDENT UPON ACCEPTANCE OF OUR PRODUCTS BY THE MARKET; THE FAILURE OF WHICH WOULD CAUSE TO CURTAIL OR CEASE OPERATIONS.

We believe that virtually all of our revenues will come from the sale or license of our products. As a result, we will continue to incur substantial operating losses until such time as we are able to generate revenues from the sale or license of our products. There can be no assurance that businesses and customers will adopt our technology and products, or that businesses and prospective customers will agree to pay for or license our products. In the event that we are not able to significantly increase the number of customers that purchase or license our products, or if we are unable to charge the necessary prices or license fees, our financial condition and results of operations will be materially and adversely affected.

WE DO NOT MAINTAIN THEFT OR CASUALTY INSURANCE, AND ONLY MAINTAIN MODEST LIABILITY AND PROPERTY INSURANCE COVERAGE AND THEREFORE WE COULD INCUR LOSSES AS A RESULT OF AN UNINSURED LOSS.

We do not maintain theft or casualty insurance and we have modest liability and property insurance coverage. We cannot assure that we will not incur uninsured liabilities and losses as a result of the conduct of our business. Any such uninsured or insured loss or liability could have a material adverse affect on our results of operations.

9

IF WE LOSE KEY EMPLOYEES AND CONSULTANTS OR ARE UNABLE TO ATTRACT OR RETAIN QUALIFIED PERSONNEL, OUR BUSINESS COULD SUFFER.

Our success is highly dependent on our ability to attract and retain qualified scientific, engineering and management personnel. We are highly dependent on our management, including Mr. David Lee who has been critical to the development of our technologies and business. The loss of the services of Mr. Lee could have a material adverse effect on our operations. We do not have an employment agreement with Mr. Lee and do not maintain key man insurance with respect to Mr. Lee. Accordingly, there can be no assurance that he will remain associated with us. His efforts will be critical to us as we continue to develop our technology and as we attempt to transition from a development state company to a company with commercialized products and services. If we were to lose Mr. Lee, or any other key employees or consultants, we may experience difficulties in competing effectively, developing our technology and implementing our business strategies.

THE LOSS OF STRATEGIC RELATIONSHIPS USED IN THE DEVELOPMENT OF OUR PRODUCTS AND TECHNOLOGY COULD IMPEDE OUR ABILITY TO COMPLETE OUR PRODUCT AND RESULT IN A MATERIAL ADVERSE EFFECT CAUSING THE BUSINESS TO SUFFER.

We may rely on strategic relationships with technology development partners to provide personnel, and expertise in the research and development of the technology and manufacturing process underlying our thin film PV product. A loss of these relationships for any reason could cause us to experience difficulties in completing the development of our product and implementing our business strategy. There can be no assurance that we could establish other relationships of adequate expertise in a timely manner or at all.

OUR PATENT APPLICATION FOR OUR TECHNOLOGY IS PENDING AND THERE IS NO ASSURANCE THAT THIS APPLICATION WILL BE GRANTED. FAILURE TO OBTAIN THE PATENT FOR OUR APPLICATION COULD PREVENT US FROM SECURING ROYALTY PAYMENTS IN THE FUTURE, IF APPROPRIATE.

We have filed a patent to protect the intellectual property rights for “A Method for Building Thin Film Flexible Solar Cells on Bio-Based Plastic Substrates”. To date our patent application has not been granted. We cannot be certain that this patent will be granted nor can we be certain that other companies have not filed for patent protection for this technology before us. Even if we are granted patent protection for our technology, there is no assurance that we will be in a position to enforce our patent rights. Failure to be granted patent protection for our technology could result in greater competition or in limited royalty payments. This could result in inadequate revenue and cause us to cease operations.
 
OUR CURRENT AND POTENTIAL COMPETITORS, SOME OF WHOM HAVE GREATER RESOURCES THAN WE DO, MAY DEVELOP PRODUCTS AND TECHNOLOGIES THAT MAY CAUSE DEMAND FOR, AND THE PRICES OF, OUR PRODUCTS TO DECLINE.
 
While there are a number of companies manufacturing thin film PV devices, we do not know of any employing the use of bio-based plastic substrates. Competitors in the thin film PV devices market include Iowa Thin Film Technologies, Inc, United Solar Ovonic and Mitsubishi Heavy Industries. Furthermore, our competitors may combine with each other, and other companies may enter our markets by acquiring or entering into strategic relationships with our competitors. Current and potential competitors have established, or may establish, cooperative relationships among themselves or with third parties to increase the abilities of their thin film PV devices products to address the needs of our prospective customers.
 
Many of our current and potential competitors have longer operating histories, significantly greater financial, technical, product development and marketing resources, greater name recognition and larger customer bases than we do. Our present or future competitors may be able to develop products comparable or superior to those we offer, adapt more quickly than we do to new technologies, evolving industry trends and standards or customer requirements, or devote greater resources to the development, promotion and sale of their products than we do. Accordingly, we may not be able to compete effectively in our markets, competition may intensify and future competition may harm our business.

WE ARE CONTROLLED BY CURRENT OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS.

Our directors, executive officers and principal stockholders and their affiliates will beneficially own approximately 86.7% of the outstanding shares of common stock. Accordingly, our executive officers, directors, principal stockholders and certain of their affiliates will have the ability to control the election of our Board of Directors and the outcome of issues submitted to our stockholders.
 
RISKS RELATING TO OUR COMMON STOCK

THERE IS NO PUBLIC (TRADING) MARKET FOR OUR COMMON STOCK AND THERE IS NO ASSURANCE THAT THE COMMON STOCK WILL EVER TRADE ON A RECOGNIZED EXCHANGE OR DEALER’S NETWORK; THEREFORE, YOU MAY NOT BE ABLE TO SELL YOUR SHARES.

There is no established public trading market for our securities. Hence, there is no central place, such as a stock exchange or electronic trading system, to resell your common stock. If you want to resell your shares, you will have to locate a buyer and negotiate your own sale. It is our plan to utilize a market maker who will apply to have our common stock quoted on the Over-the-Counter Bulletin Board in the United States. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with the National Association of Securities Dealers, which operates the Over-the-Counter Bulletin Board, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor will be unable to liquidate his investment except by private sale.

10

IF YOU PURCHASE SHARES IN THIS OFFERING, YOU WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION.

The $0.10 per share offering price of the common stock being sold under this prospectus has been arbitrarily set. The price does not bear any relationship to our assets, book value, earnings or net worth and it is not an indication of actual value. Accordingly, if you purchase shares in this offering, you will experience immediate and substantial dilution. You may also suffer additional dilution in the future from the sale of additional shares of common stock or other securities.
 
SHOULD OUR STOCK BECOME LISTED ON THE OTC BULLETIN BOARD, IF WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN THE SECONDARY MARKET.

Companies trading on the Over-The-Counter Bulletin Board, such as us we are seeking to become, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get re-listed on the OTC Bulletin Board, which may have an adverse material effect on our Company.

ONCE PUBLICLY TRADING, THE APPLICATION OF THE "PENNY STOCK" RULES COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON SHARES AND INCREASE YOUR TRANSACTION COSTS TO SELL THOSE SHARES.
 
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
 
·  
that a broker or dealer approve a person's account for transactions in penny stocks; and
 
·  
the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
 
In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
 
·  
obtain financial information and investment experience objectives of the person; and
 
·  
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
 
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:
 
·  
sets forth the basis on which the broker or dealer made the suitability determination; and
 
·  
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
 
Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
 
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
 
USE OF PROCEEDS

This prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders. We will not receive any proceeds from the sale of shares of common stock in this offering. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders. Any transfer taxes payable on these shares and any commissions and discounts payable to underwriters, agents, brokers or dealers will be paid by the selling stockholder.

DETERMINATION OF OFFERING PRICE

Since our shares of our common stock are not listed or quoted on any exchange or quotation system, the offering price of the shares of common stock was arbitrarily determined. The facts considered in determining the offering price were our financial condition, prospects, our limited operating history and the general condition of the securities market. The offering price is not an indication of and is not based upon our actual value. The offering price bears no relationship to book value, asset or earnings of our company or any other recognized criteria of value. The offering price should not be regarded as an indicator of the future market price of the securities.

Market for Securities

Our common stock is not traded on any national securities exchange and is not quoted on any over-the-counter market. If our shares become quoted on the Over-The-Counter Bulletin Board, sales will be made at prevailing market prices or privately negotiated prices.
 
HOLDERS
 
As of November 13, 2006, our common stock were held by 117 stockholders of record and we had 128,557,777 shares of common stock issued and outstanding. We believe that the number of beneficial owners is substantially greater than the number of record holders because a significant portion of our outstanding common stock is held of record in broker street names for the benefit of individual investors. The transfer agent of our common stock is U.S. Stock Transfer Corporation, 1745 Gardena Avenue, Glendale, CA 91204.
 
We have not declared any dividends to date. We have no present intention of paying any cash dividends on our common stock in the foreseeable future, as we intend to use earnings, if any, to generate growth. The payment by us of dividends, if any, in the future, rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, our capital requirements and our financial condition, as well as other relevant factors. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends.
 
Equity Compensation Plan Information

The following table shows information with respect to each equity compensation plan under which our common stock is authorized for issuance as from inception (April 24, 2006) through June 30, 2006.
 
EQUITY COMPENSATION PLAN INFORMATION
Plan category
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
Weighted average
exercise price of
outstanding options,
warrans and rights
Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
 
(a)
(b)
(c)
Equity compensation plans approved by security holders
-0-
-0-
-0-
       
Equity compensation plans not approved by security holders
-0-
-0-
-0-
       
Total
-0-
-0-
-0-

12


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 
Some of the information in this prospectus contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as "may," "will," "expect," "anticipate," "believe," "estimate" and "continue," or similar words. You should read statements that contain these words carefully because they:
 
·  
discuss our future expectations;
 
·  
contain projections of our future results of operations or of our financial condition; and
 
·  
state other "forward-looking" information.
 
We believe it is important to communicate our expectations. However, there may be events in the future that we are not able to accurately predict or over which we have no control. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors," "Business" and elsewhere in this prospectus. See "Risk Factors."
 
OVERVIEW
 
We are developing new and innovative thin film solar cells produced on bio-based plastic substrates with the intent to provide commercially viable solar cell designs that convert sun light into electrical energy. The process for producing electricity from sunlight is known as Photovoltaics. Photovoltaic ("PV") is the science of capturing and converting sun light into electricity.

We are focusing our research and product development efforts on thin film PV devices in an effort to capitalize on what we perceive as cost and application diversity advantages to current rigid multi-crystalline silicon wafer technologies. Our thin film cell design employs less than 1.5 microns of material thickness as opposed to an approximate 400 microns of material thickness for multi-crystalline cell designs. This significant reduction in cell thickness and flexibility of the completed cell structure leads to the use of "thin film" terminology in describing the solar cell design.

We are focusing our research and product development efforts on thin film PV devices produced on bio-based plastic substrates and the eventual marketing of such products to the building materials, outdoor power, emergency power, mobile computer and communications sectors.
 
We were incorporated in the State of Nevada on April 24, 2006, as BioSolar Labs, Inc. Our name was changed to BioSolar, Inc. on June 8, 2006. Our principal executive offices are located at 27936 Lost Canyon Road, Suite 202, Santa Clarita, California 91387 , and our telephone number is (661) 251-0001 .
 
Critical Accounting Policies
 
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using the Black Scholes option pricing model. We base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.
 
Revenue Recognition

Revenue on product sales is recognized when persuasive evidence of an arrangement exists, such as when a purchase order or contract is received from the customer, the selling price is fixed, title to the goods has changed and there is a reasonable assurance of collection of the sales proceeds.  We obtain written purchase authorizations from our customers for a specified amount of product at a specified price and consider delivery to have occurred at the time of shipment.  Revenue is recognized at shipment and we record a reserve for estimated sales returns, which is reflected as a reduction of revenue at the time of revenue recognition. We defer revenue on products sold directly to the consumer with a fifteen day right of return. Revenue is recognized upon the expiration of the right of return.

13

Revenues from research and development activities relating to firm fixed-price contracts are generally recognized on the percentage-of-completion method of accounting as costs are incurred (cost-to-cost basis).  Revenues from research and development activities relating to cost-plus-fee contracts include costs incurred plus a portion of estimated fees or profits based on the relationship of costs incurred to total estimated costs.  Contract costs include all direct material and labor costs and an allocation of allowable indirect costs as defined by each contract, as periodically adjusted to reflect revised agreed upon rates. These rates are subject to audit by the other party. 

Use of Estimates

In accordance with accounting principles generally accepted in the United States, management utilizes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions relate to recording net revenue, collectibility of accounts receivable, useful lives and impairment of tangible and intangible assets, accruals, income taxes, inventory realization, stock-based compensation expense and other factors. Management believes it has exercised reasonable judgment in deriving these estimates. Consequently, a change in conditions could affect these estimates.

Fair Value of Financial Instruments

The Company's cash, cash equivalents, investments, accounts receivable and accounts payable are stated at cost which approximates fair value due to the short-term nature of these instruments.

Recently Issued Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board issued two FASB Staff Positions - FSP FAS 109-1, Application of FASB Statement 109 "Accounting for Income Taxes" to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004, and FSP FAS 109-2 Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004. Neither of these affected the Company as it does not participate in the related activities.
 
In May 2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error Corrections.” This new standard replaces APB Opinion No. 20, “Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements,” and represents another step in the FASB’s goal to converge its standards with those issued by the IASB. Among other changes, Statement 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on the new accounting principle, unless it is impracticable to do so. Statement 154 also provides that (1) a change in method of depreciating or amortizing a long-lived non-financial asset be accounted for as a change in estimate (prospectively) that was effected by a change in accounting principle, and (2) correction of errors in previously issued financial statements should be termed a “restatement.” The new standard is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. Early adoption of this standard is permitted for accounting changes and correction of errors made in fiscal years beginning after June 1, 2005. The Company has evaluated the impact of the adoption of Statement 154 and does not believe the impact will be significant to the Company's overall results of operations or financial position

L iquidity and Capital Resources

As of September 30, 2006, we had $1,255,134 of working capital as compared to $320,225 from inception (April 24, 2006) through June 30, 2006. This increase of $934,909 was due primarily to private placements of shares of common stock pursuant to Subscription Agreements which we entered into with accredited and/or institutional buyers.

Cash flow used in operating activities was $63,007 for the three months ended September 30, 2006 as compared to cash used of $86,801 from inception (April 24, 2006) through June 30, 2006. This decrease of $23,794 was primarily attributable to a decrease in professional fees to our patent counsel.

Cash used in investing activities was $1,003,270 for the three months ended September 30, 2006 as compared to cash used of $0 from inception (April 24, 2006) through June 30, 2006. The increase of cash used in investing activities was primarily due to equity financing.
 
Cash provided from financing activities during the three months ended September 30, 2006 was $1,002,028 as compared to $407,000 from inception (April 24, 2006) through June 30, 2006. We received $1,409,028 from the sale of shares of our common stock through private placements of shares of common stock pursuant to Subscription Agreements which we entered into with accredited and/or institutional buyers.

Our financial statements as of September 30, 2006 have been prepared under the assumption that we will continue as a going concern from inception (April 24, 2006) through September 30, 2006. Our independent registered public accounting firm have issued their report dated September 27 , 2006 that included an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern ultimately is dependent on our ability to generate a profit which is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, to achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
14

Financing
 
On May 19, 2006, we issued an aggregate of 93,000,000 shares of our common stock, par value $.0001 per share, to the founders of our company, including our Chief Executive Officer, for an aggregate purchase price of $23,250.

In May 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $375,000 in shares of our common stock, or a total of 25,000,000 shares.
 
In July 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $150,000 in shares of our common stock, or a total of 1,500,000 shares.
 
In October 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to approximately $905,777 in shares of our common stock, or a total of 9,057,777 shares.
 
PLAN OF OPERATION AND FINANCING NEEDS
 
We are engaged in the development of new and innovative thin film solar cells produced on bio-based plastic substrates with the intent to provide commercially viable solar cell designs that convert sun light into electrical energy. We plan to develop our products and thereafter focus our efforts on establishing markets in the building materials, outdoor power, emergency power, mobile computer and communications sectors by 2010.
 
Operating Expenses
 
Operating expenses for the three months ended September 30, 2006 were $73,736 and consisted primarily of $36,000 in salary expense, $12,362 for professional fees, and $13,300 for marketing expenses.
 
Net Loss
 
Our net loss for the three months ended September 30, 2006 was $67,119. We recently began operating our business, including efforts to market and sell our products, and revenues generated were not sufficient to cover our operating costs.
 
Off-Balance Sheet Arrangements
 
We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.
15

 
BUSINESS

INTRODUCTION

We are developing new and innovative thin film solar cells produced on bio-based plastic substrates with the intent to provide commercially viable solar cell designs that convert sun light into electrical energy. The process for producing electricity from sunlight is known as Photovoltaics. Photovoltaic ("PV") is the science of capturing and converting sun light into electricity.

We are focusing our research and product development efforts on thin film PV devices in an effort to capitalize on what we perceive as cost and application diversity advantages to current rigid multi-crystalline silicon wafer technologies. Our thin film cell design employs less than 1.5 microns of material thickness as opposed to an approximate 400 microns of material thickness for multi-crystalline cell designs. This significant reduction in cell thickness and flexibility of the completed cell structure leads to the use of "thin film" terminology in describing the solar cell design.

Thin film PV technology has a further advantage over rigid multi-crystalline silicon wafer technologies in that thin film PV devices can be manufactured using high speed, reel-to-reel processing methods on flexible rolled substrates within vacuum deposition systems. These production methods result in lower manufacturing costs.

We believe that d ue to both cost and environmental concerns, high volume manufacturing of thin film PV devices should be produced on bio-based plastic substrates rather than petroleum-based plastic substrates. Petroleum, the principle component of conventional plastics, is a depleting resource and its supply is highly dependent on a number of geo-political factors, resulting in uncertain costs, For a number of years, the cost of petroleum has been steadily increasing. Bio-based plastics are currently made by a number of manufacturers from renewable resources such as corn and potato starch. The supply and costs of these renewable resources is likely to be far more stable in the future than the supply and costs of petroleum. A further problem with the continued use of petroleum is the damaging effects that production, distribution, and use have on the environment.

We are focusing our research and product development efforts on thin film PV devices produced on bio-based plastic substrates and the eventual marketing of such products to the building materials, outdoor power, emergency power, mobile computer and communications sectors.

Industry Overview  

We believe that the fastest-growing solar technology is “ Photovoltaics ”, which is derived from the words photo, meaning light, and voltaic, meaning voltage producing. Sunlight, not heat, fuels photovoltaic cells. The cells, made mostly of the semiconductor silicon, convert sunlight directly i nto electricity.    

There remains a variety of techniques for manufacturing the coatings needed to create solar cells. Emerging thin film cell manufacturing holds much promise because the coatings use l ess silicon than traditional films and can be manufactured at low cost and in large volume. Many market observers expect thin-film photovoltaics to become the dominant technology.  

The simplest cells power watches and calculators; more complex systems provide power to the electric grid, and provide electricity to pump water, power communications equipment, light homes and run appliances.

In photovoltaics, light particles called photons penetrate the cell and knock electrons free from the silicon atoms, creating an electric current. As long as light flows into the cell, electrons flow out of the cell. The cell does not use up its electrons and lose power, similar to a battery, as it is a converter that turns one kind of energy (sunlight) into another (flowing electrons).

Photovoltaic cells are typically combined into modules that hold about 40 cells. Ten such modules are mounted in photovoltaic arrays. Such arrays can be used to generate electricity for a single building or, in large numbers, for a power plant.  

Stand-alone photovoltaic systems produce power independently of the utility grid. In some off-the-grid locations even one half kilometer from power lines, stand-alone photovoltaic systems can be more cost-effective than extending power lines. They are especially appropriate for remote, environmentally sensitive areas, such as national parks, cabins, and remote homes.  

In rural areas, small stand-alone solar arrays often power farm lighting, fence chargers for electric fences, and solar water pumps, which provide water for livestock. Some hybrid systems combine solar power with other power sources such as wind or diesel. P hotovoltaic technology can be combined with construction materials and be built into a building rather than added on top of a building. In such building-integrated photovoltaics, photovoltaic systems are incorporated into or become elements of a building’s structure.  

Companies are manufacturing solar panels that look like construction materials, such as roof shingles. It is also possible to produce windows that have solar cells integrally constructed as part of the window surface or by placing thin films on the window.

16

Marketing Strategy

We intend to enhance and promote the idea that our thin film technologies, when ready to market, present a compelling and efficient solution for the manufacture of diverse photovoltaic thin films. In order to create a favorable environment for sales, we plan to undertake advertising and promotion efforts. These efforts may be outsourced and will require the services of an advertising relations firm. We plan to interview various firms and select those most capable of assisting us with comprehensive advertising and promotion plans. We intend to commence building and staffing our marketing department to accelerate these efforts in 2007 and 2008. We have not yet finalized the potential costs of our marketing strategy.

We will invest in small test campaigns before committing to large promotions or marketing campaigns. Our initial marketing strategy we will be to market to potential manufacturer partners in our target markets representing solar device manufactures, glass, and building materials manufacturers.

Backlog of Orders

There are currently no orders for sales at this time.

Government Contracts

There are no government contracts at this time.

Compliance with Environmental Laws and Regulations

Our operations are subject to local, state and federal laws and regulations governing environmental quality and pollution control. To date, our compliance with these regulations by has had no material effect on our operations, capital, earnings, or competitive position, and the cost of such compliance has not been material. We are unable to assess or predict at this time what effect additional regulations or legislation could have on our activities.

Manufacturing and Distribution

The Company currently does not have any mechanism for the distribution of its thin film, flexible solar cells produced on bio-based plastic substrates, but, with adequate financing, we plan on addressing this issue with a multi-pronged distribution operation to make our products available concurrently with out marketing campaign.

Intellectual Property

We have filed a patent to protect the intellectual property rights for “A Method for Building Thin Film Flexible Solar Cells on Bio-Based Plastic Substrates”. The inventor listed on the patent application is David Lee, the Company’s Chief Executive Officer. The Company is listed as the assignee.

We rely upon confidentiality agreements signed by our employees, consultants and third parties to protect our intellectual property.

Competition

While there are a number of companies manufacturing thin film PV devices, such as Iowa Thin Film Technologies, Inc, United Solar Ovonic and Mitsubishi Heavy Industries.   We do not know of any employing the use of bio-based plastic substrates.

Technology Development Partners

To assist us in the development of our technology, we intend to seek out and enter into technology development agreements with other entities with thin film PV and bio-based plastics expertise.    
 
DESCRIPTION OF PROPERTY
 
Our headquarters are located at 27936 Lost Canyon Road, Suite 202, Santa Clarita, California 91387. We lease our facility under a lease that expires on May 14, 2007. The size of our office is 144 square feet. Rent expense, net of sublease income, amounted to $1,527 and $1,018 for the three months ended September 30, 2006 and from inception (April 24, 2006) through June 30, 2006, respectively.
 
LEGAL PROCEEDINGS
 
The Company is not currently a party to any legal proceedings. There has been no bankruptcy, receivership or similar proceedings.
 
17

There have been no material reclassifications, mergers, consolidations, or purchase or sale of a significant amount of assets not in the ordinary course of business.

Employees
 
As of the date of this prospectus, we had one (1) employee. We have not experienced any work stoppages and we consider relations with our employees to be good.
 
18


 
MANAGEMENT
 
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
 
The following table sets forth information about our executive officers, key employees and directors as of November 21, 2006.

Name
Age
Position
David Lee
47
Chief Executive Officer and Acting Chief Financial Officer
Steven C. Bartling
44
Director
Dennis LePon
58
Director

Directors serve until the next annual meeting and until their successors are elected and qualified. The Directors of the Company are elected by the vote of a majority in interest of the holders of the voting stock of the Company and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified.  

A majority of the authorized number of directors constitutes a quorum of the Board for the transaction of business. The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the Board may be taken without a meeting if all members of the Board individually or collectively consent in writing to the action.

Directors receive compensation for their services and reimbursement for their expenses as shall be determined from time to time by resolution of the Board. The Company’s directors currently do not receive monetary compensation for their service on the Board of Directors.
 
Officers are appointed to serve for one year until the meeting of the board of directors following the annual meeting of stockholders and until their successors have been elected and qualified.
 
The principal occupations for the past five years (and, in some instances, for prior years) of each of our executive officers and directors, followed by our key employees, are as follows:
 
David Lee - Chief Executive Officer and Acting Chief Financial Officer: David D. Lee has over 20 years of engineering, marketing, sales, and corporate management experience in the areas of military and consumer communication systems, automotive electronics, software development and consulting.  From 2004 to 2006, Mr. Lee was with Ramsey-Shilling Co. in the business of Commercial Real Estate Investment and Brokerage.  From 2000 to 2004, he served as Chief Operating Officer for Applied Reasoning, Inc., a Delaware company engaged in the business of Internet Software Development. From 1994 to 2000, he served as Vice Present and General Manager for RF-Link Technology, Inc., a California company engaged in the business of Wireless Technology Development and Manufacturing. Mr. Lee received a Ph.D. in Electrical Engineering from Purdue University in 1989, a Master of Science in Electrical Engineering from University of Michigan in 1986 and a Bachelor of Science in Electrical Engineering from the University of Texas at Austin in 1984.  

Steven C. Bartling - Director: Steven C. Bartling has over 20 years of engineering and corporate management experience in the areas of ultra high performance digital CMOS (Complementary Metal Oxide Semiconductor) circuit design, high performance microprocessor architecture/design, systems on a chip, packaging, and testing. From 2002 to the present, Mr. Bartling has been employed in ASIC (Application Specific Integrated Circuit) research and development for Texas Instruments, Inc. From 2001 to 2002, he served as Director of Custom Design for Celerence, an Oragon company engaged in the business of Optical Communication Networking. Mr. Bartling received a Master of Science in Electrical Engineering from Georgia Institute of Technology in 1987 and a Bachelor of Science in Electrical Engineering from the University of Texas at Austin in 1985.

Dennis LePon - Director: Dennis LePon has over 35 years of financial, managerial, and business experience working for a bank, real estate finance companies, as well as a start up high tech company. From 1992 to the present, Mr. LePon has served as Chief Financial officer of Catalyst Resource Group, Inc., a real estate finance and consulting firm offering specialized financing for healthcare, C-Store, gasoline station and other varied commercial properties nationwide.  From 2002 to 2004, he served as Chief Financial Officer for FoodMarket Place.com, a California company engaged in the business of Web Based marketing for food and restaurant industry partnered with Hewlett Packard . Mr. LePon received a Bachelor of Arts from California State University at Northridge in 1969 and a Master of Business Administration from the University of Southern California in 1977.
 
COMMITTEES OF THE BOARD
 
We currently have no audit committee, compensation committee, nominations and governance committee of our board of directors.
 
INDEBTEDNESS OF EXECUTIVE OFFICERS AND DIRECTORS
 
No executive officer, director or any member of these individuals' immediate families or any corporation or organization with whom any of these individuals is an affiliate is or has been indebted to us since the beginning of our last fiscal year.
 
FAMILY RELATIONSHIPS
 
There are no family relationships among our executive officers and directors.
 
LEGAL PROCEEDINGS
 
As of the date of this prospectus, there are no material proceedings to which any of our directors, executive officers, affiliates or stockholders is a party adverse to us.
 
CODE OF ETHICS
 
We have not adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-B of the Securities Exchange Act of 1934.
 
EXECUTIVE COMPENSATION
 
The following table sets forth the cash compensation (including cash bonuses) paid or accrued by us to our Chief Executive Officer and our four most highly compensated officers other than the Chief Executive Officer from inception (April 24, 2006) to June 30, 2006.

       
SUMMARY COMPENSATION TABLE 
     
       
Annual Compensation  
 
 Long-term Compensation
     
   
 
 
 
 
 
 
Awards  
 
Payouts  
     
 
 
 
         
Securities 
         
               
Underlying 
 
 LTIP 
 
All Other 
 
   
Fiscal  
 
Salary  
 
 Bonus
 
Options/  
 
Payouts  
 
 Compensation
 
Name and Principal Position    
 Year ($)
 
($) 
 
 ($)
 
SARs (#) 
 
 ($) 
 
($)  
 
David Lee
   
2006
 
$
144,000
   
--
   
--
   
--
   
--
 
Chief Executive Officer and Acting
                                     
Chief Financial Officer
                                     
 
OPTIONS/SAR GRANTS IN THE LAST FISCAL YEAR
 
No individual grants of stock options, whether or not in tandem with stock appreciation rights ("SARs") and freestanding SARs have been made to any executive officer or any director from inception (April 24, 2006) to June 30, 2006.
 
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES
 
No individual exercises of stock options, whether or not in tandem with stock appreciation rights ("SARs") and freestanding SARs have been made by executive officer or any director from inception (April 24, 2006) to June 30, 2006.
 
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
 
We had no long-term incentive plans and made no stock awards from inception (April 24, 2006) to June 30, 2006.
 
EMPLOYMENT AGREEMENTS
 
The Company current has no employment agreements with its executive officers.
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
There were no material related party transactions which we entered into from inception (April 24, 2006) to the date of this prospectus.
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
The following tables sets forth, as of November 21, 2006, the number of and percent of our common stock beneficially owned by:
 
·  
all directors and nominees, naming them,
 
·  
our executive officers,
 
·  
our directors and executive officers as a group, without naming them, and
 
·  
persons or groups known by us to own beneficially 5% or more of our common stock:
 
20

We believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.
 
A person is deemed to be the beneficial owner of securities that can be acquired by him within 60 days from November 21, 2006 upon the exercise of options, warrants or convertible securities. Each beneficial owner's percentage ownership is determined by assuming that options, warrants or convertible securities that are held by him, but not those held by any other person, and which are exercisable within 60 days of November 21, 2006 have been exercised and converted.

Title of Class
 
Name of
Beneficial Owner
 
Number of Shares
Beneficially Owned
 
Prior to Offering as a
Percent of Total
 
Post-Offering as a
Percent of Total
 
Common Stock
   
David Lee
   
49,500,000
   
38.5 %
 
 
38.5 %
 
Common Stock
   
Douglas O’Rear
   
12,500,000
   
9.72 %
 
 
9.72 %
 
Common Stock
   
Robert M. Silverman
   
12,500,000
   
9.72 %
 
 
9.72 %
 
Common Stolck
   
Tommie Kay Riddle
   
12,500,000
   
9.72 %
 
 
9.72 %
 
Common Stock
   
Shane Barr
   
10,000,000
   
7.78 %
 
 
7.78 %
 
Common Stock
   
Wings Fund, Inc.
   
6,250,000
   
4.86 %
 
 
4.86 %
 
Common Stock
   
William E. Beifuss, Jr. and Alice Beifuss
   
6,250,000
   
4.86 %
 
 
4.86 %
 
Common Stock
   
Steven C. Bartling
   
1,000,000
   
0.78 %
 
 
0.78 %
 
Common Stock
   
Dennis LePon
   
1,000,000
   
0.78 %
 
 
0.78 %
 
Common Stock
   
All Executive Officers and Directors as a Group (3 persons )
 
 
51,500,000
   
40.1 %
 
 
40.1 %
 
 
*Less than one percent.  
 
DESCRIPTION OF SECURITIES
 
Our Amended Articles of Incorporation authorize the issuance of 500,000,000 shares of common stock, $.0001 par value per share. Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock have cumulative voting rights. Holders of shares of common stock are entitled to share ratably in dividends, if any, as may be declared, from time to time by the Board of Directors in its discretion, from funds legally available therefor. In the event of a liquidation, dissolution, or winding up of the Company, the holders of shares of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. Holders of common stock have no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to such shares.
 
COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
 
Under the Nevada General Corporation Law and our Articles of Incorporation, as amended, and our Bylaws, our directors will have no personal liability to us or our stockholders for monetary damages incurred as the result of the breach or alleged breach by a director of his "duty of care." This provision does not apply to the directors' (i) acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) acts or omissions that a director believes to be contrary to the best interests of the corporation or its stockholders or that involve the absence of good faith on the part of the director, (iii) approval of any transaction from which a director derives an improper personal benefit, (iv) acts or omissions that show a reckless disregard for the director's duty to the corporation or its stockholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of serious injury to the corporation or its stockholders, (v) acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its stockholders, or (vi) approval of an unlawful dividend, distribution, stock repurchase or redemption. This provision would generally absolve directors of personal liability for negligence in the performance of duties, including gross negligence.
 
The effect of this provision in our Articles of Incorporation and Bylaws is to eliminate the rights of our Company and our stockholders (through stockholder's derivative suits on behalf of our Company) to recover monetary damages against a director for breach of his fiduciary duty of care as a director (including breaches resulting from negligent or grossly negligent behavior) except in the situations described in clauses (i) through (vi) above. This provision does not limit nor eliminate the rights of our Company or any stockholder to seek non-monetary relief such as an injunction or rescission in the event of a breach of a director's duty of care. In addition, our Bylaws provide that if the Nevada General Corporation Law is amended to authorize the future elimination or limitation of the liability of a director, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the law, as amended. The Nevada General Corporation Law grants corporations the right to indemnify their directors, officers, employees and agents in accordance with applicable law.
 
21

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act" or "Securities Act") may be permitted to directors, officers or persons controlling our Company pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
 
PLAN OF DISTRIBUTION
 
The selling stockholders and any of their respective pledgees, donees, assignees and other successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling shares:
 
·  
ordinary brokerage transactions and transactions in which the broker-dealer solicits the purchaser;
 
·  
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
 
·  
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
 
·  
an exchange distribution in accordance with the rules of the applicable exchange;
 
·  
privately-negotiated transactions;
 
·  
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
 
·  
a combination of any such methods of sale; and
 
·  
any other method permitted pursuant to applicable law.
 
The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, or Regulation S, rather than under this prospectus. The selling stockholders shall have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if they deem the purchase price to be unsatisfactory at any particular time.
 
The selling stockholders or their respective pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible that a selling stockholder will attempt to sell shares of common stock in block transactions to market makers or other purchasers at a price per share which may be below the then market price. The selling stockholders cannot assure that all or any of the shares offered in this prospectus will be issued to, or sold by, the selling stockholders. The selling stockholders and any brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus, may be deemed to be "underwriters" as that term is defined under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or the rules and regulations under such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
 
We are required to pay all fees and expenses incident to the registration of the shares, including fees and disbursements of counsel to the selling stockholders, but excluding brokerage commissions or underwriter discounts.
 
The selling stockholders, alternatively, may sell all or any part of the shares offered in this prospectus through an underwriter. No selling stockholder has entered into any agreement with a prospective underwriter and there is no assurance that any such agreement will be entered into.
 
22

The selling stockholders may pledge their shares to their brokers under the margin provisions of customer agreements. If a selling stockholders defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares. The selling stockholders and any other persons participating in the sale or distribution of the shares will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations under such act, including, without limitation, Regulation M. These provisions may restrict certain activities of, and limit the timing of purchases and sales of any of the shares by, the selling stockholders or any other such person. In the event that the selling stockholders are deemed affiliated purchasers or distribution participants within the meaning of Regulation M, then the selling stockholders will not be permitted to engage in short sales of common stock. Furthermore, under Regulation M, persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and certain other activities with respect to such securities for a specified period of time prior to the commencement of such distributions, subject to specified exceptions or exemptions.
 
We have agreed to indemnify the selling stockholders, or their transferees or assignees, against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments the selling stockholders or their respective pledgees, donees, transferees or other successors in interest, may be required to make in respect of such liabilities.
 
If the selling stockholders notify us that they have a material arrangement with a broker-dealer for the resale of the common stock, then we would be required to amend the registration statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements between the selling stockholders and the broker-dealer.
 
PENNY STOCK
 
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
 
·  
that a broker or dealer approve a person's account for transactions in penny stocks; and
 
·  
the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
 
In order to approve a person's account for transactions in penny stocks, the broker or dealer must
 
·  
obtain financial information and investment experience objectives of the person; and
 
·  
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
 
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:
 
·  
sets forth the basis on which the broker or dealer made the suitability determination; and
 
·  
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
 
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
 
23


 
SELLING STOCKHOLDERS
 
The table below sets forth information concerning the resale of the shares of common stock by the selling stockholders. We will not receive any proceeds from the resale of the common stock by the selling stockholders. We will receive proceeds from the exercise of the warrants. Assuming all the shares registered below are sold by the selling stockholders, none of the selling stockholders will continue to own any shares of our common stock.
 
The following table also sets forth the name of each person who is offering the resale of shares of common stock by this prospectus, the number of shares of common stock beneficially owned by each person, the number of shares of common stock that may be sold in this offering and the number of shares of common stock each person will own after the offering, assuming they sell all of the shares offered.  

                           
Percentage
 
           
Shares of 
         
Beneficial
 
of Common
 
       
Total
 
Common Stock
 
Beneficial
 
 Percentage of 
 
Ownership
 
Stock Owned
 
       
Percentage
 
Included in
 
Ownership
 
Common Stock
 
After the
 
After  
 
   
Total Shares
 
of Common
 
Prospectus
 
Before the
 
Owned Before
 
Offering
 
Offering
 
Name
 
of Common Stock
 
Stock
 
(1)
 
Offering
 
Offering**
 
(1)
 
 (1)
 
                               
Adrian Y. Won and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Sylvia J. Won
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
                               
 Amy E. Gibbons
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of  
                 
                                                        
 
       
common stock
                 
 
 Andrew and Anna Yu
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Andrew Berk
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Anthony B. Lee
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Arthur E. and Kelli
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 D. Altounian
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Barry and Linda
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Ewing
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Ben and Maureen
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Hunter
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Brett J. Cohen
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Chris Miller
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Clive and Mari Otsuka
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Dana Henry
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Dana Matsunaga
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Daniel B. Peters and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Elizabeth H. Peters,
 
 
     
15,000
                 
 Trustees of the Peters
 
     
 
shares of
                 
 Family
 Trust dated
 
     
 
common
stock
                 
 April 30, 2004 (2)
 
                           
 
 Daniel J. and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Josephine P. Carlile
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 David Van Middlesworth
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Derek and Susan
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Johansen
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 
24

                   
Percentage
 
           
Shares of 
         
Beneficial
 
of Common
 
       
Total
 
Common Stock
 
Beneficial
 
 Percentage of 
 
Ownership
 
Stock Owned
 
       
Percentage
 
Included in
 
Ownership
 
Common Stock
 
After the
 
After  
 
   
Total Shares
 
of Common
 
Prospectus
 
Before the
 
Owned Before
 
Offering
 
Offering
 
Name
 
of Common Stock
 
Stock
 
(1)
 
Offering
 
Offering**
 
(1)
 
 (1)
 
                           
 Dorothy J. Kim
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Trustee of the Dorothy
 
 
     
15,000
                 
 J. Kim Living Trust
 
     
 
shares of
                 
dated
December 19, 2002 (3)
 
     
 
common
stock
                 
 
 Dorothy Sarkozy
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
           
common
stock
                 

 Douglas C. O'Rear
 
12,500,000
 
9.72
%
Up to
 
12,500,000
 
10.5
%
0
 
--
 
 
 
       
12,500,000
                 
                                                         
 
       
shares of  
                 
                                                        
 
       
common stock
 
               
 
 Dr. and Mrs. Ivan
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Barrett
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Edward and Esther
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Bouryng
 
 
     
15,000
                 
                                                         
 
       
  shares of
                 
                                                        
 
       
common stock
                 
 
 Edward H. Nakamoto
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Edward N. Shen
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
  shares of
                 
                                                        
 
       
common stock
                 
 
 Eloy and Ellen Corona
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Emmanuel C. Vasilomanolakis
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Enrique Clare
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Eric Belusa
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Felix Rodriguez
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Franklyn E. DeFoe
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Fred J. Choy
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Fred Jakobsen
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Gary Stephenson
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Greg Hampson
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of  
                 
                                                        
 
       
common stock
                 
                               

Gregory L. Barnhill
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
                               
 Harinder Dhillon
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of  
                 
                                                        
 
       
common stock
                 
 
Helene Pretsky
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
Michael G. Hoffman, as 
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
trustee of the 
 
       
15,000
                 
Hoffman Family Trust
 
       
shares of
                 
 dated February 8, 1990 (4)
 
       
common stock
                 
 
 Howard K. Brodwin
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 
25

                   
Percentage
 
           
Shares of 
         
Beneficial
 
of Common
 
       
Total
 
Common Stock
 
Beneficial
 
 Percentage of 
 
Ownership
 
Stock Owned
 
       
Percentage
 
Included in
 
Ownership
 
Common Stock
 
After the
 
After  
 
   
Total Shares
 
of Common
 
Prospectus
 
Before the
 
Owned Before
 
Offering
 
Offering
 
Name
 
of Common Stock
 
Stock
 
(1)
 
Offering
 
Offering**
 
(1)
 
 (1)
 
                           
 
 James K. Kahla
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 James Standaert
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Jay and Terry Hartman
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Jeannie Melacon
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Jeff F. Konecke
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Jene Verchick
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Jessica Gordon
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 John Hayward
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Joseph F. Koch
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
 
 
     
 
shares of
                 
 
 
     
 
common
stock
                 
 
 
                           
 
 Justin Gordon
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Karen S. Schneider
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Kari A. Negri
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Kenneth K. Tam
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
 
 
     
 
shares of
                 
 
 
     
 
common
stock
                 
 
 Kenneth Schneider
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
           
common
stock
   
                               
 Kimberly Conlin and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 James LaWare
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
                               
 Larry J. Kaufman
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of  
                 
                                                        
 
       
common stock
                 
 
 Lee A. Chamberlain
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Lora K. Ball
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Luka J. DeKelaita
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Malissa Wise
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Marc E. and Melissa D.
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Royer
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Marilyn Gilbert and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Nathan Rundlett
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Martin N. Gordon
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 
26

                   
Percentage
 
           
Shares of 
         
Beneficial
 
of Common
 
       
Total
 
Common Stock
 
Beneficial
 
 Percentage of 
 
Ownership
 
Stock Owned
 
       
Percentage
 
Included in
 
Ownership
 
Common Stock
 
After the
 
After  
 
   
Total Shares
 
of Common
 
Prospectus
 
Before the
 
Owned Before
 
Offering
 
Offering
 
Name
 
of Common Stock
 
Stock
 
(1)
 
Offering
 
Offering**
 
(1)
 
 (1)
 
                           
 
 Mary E. Falso
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Max and Elizabeth
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Rodriguez
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Michael Brown and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Linda Engelsiepen
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Michael G.S. and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Marianne Diamond
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Mitchell B. Cohen
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
 
 
     
 
shares of
                 
 
 
 
     
 
common
stock
                 
 
 
                           
 
 Mohammadali Vaghar
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Nadereh Salarpour
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Nelson A. Abiva
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Noa Krauss and Erin
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Wilhelm
 
 
     
15,000
                 
 
 
     
 
shares of
                 
 
 
     
 
common
stock
                 
 
 Pamela M. King
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
           
common
stock
 
                               
 Patrick J. Howard and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Vickie E. Howard
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
                               
 Paul W. Ronan
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of  
                 
                                                        
 
       
common stock
                 
 
 Peter Chakos
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Phillip A. and Alice
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 M. Conlin
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Ramin Ramhormozi and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Jennifer E. Romeyn
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Randall and Ruth
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Greenberg
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Richard and Elizabeth
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Weingart
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Richard and Madeline
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Peters
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Robert D. King
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Robert F. DeFoe
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Ronald Belusa
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Ronald D. Hejnal and
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Barbara A. Hejnal
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Royce Shimamoto
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 
27

 
                   
Percentage
 
           
Shares of 
         
Beneficial
 
of Common
 
       
Total
 
Common Stock
 
Beneficial
 
 Percentage of 
 
Ownership
 
Stock Owned
 
       
Percentage
 
Included in
 
Ownership
 
Common Stock
 
After the
 
After  
 
   
Total Shares
 
of Common
 
Prospectus
 
Before the
 
Owned Before
 
Offering
 
Offering
 
Name
 
of Common Stock
 
Stock
 
(1)
 
Offering
 
Offering**
 
(1)
 
 (1)
 
                           
 
 Russell Wong, trustee
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 Russell D. Wong
 
 
     
15,000
                 
 Revocable Trust (5)
 
     
 
shares of
                 
 
 
     
 
common
stock
                 
 
 
                           
 
 Samuel J. Zinberg
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Scott Pansky
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Scott Piwonka-Totten
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Scott Tredennick
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
 
 
     
 
shares of
                 
 
 
     
 
common
stock
                 
 
 Stanley K. Kawanishi
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
           
common
stock
 
                               
 Steve Shakespeare
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
                               
 Steven and Mary Gordon
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of  
                 
                                                        
 
       
common stock
                 
 
 Steven Timmerman
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Susan Iwakoshi Craig
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Tauna Tuokkola
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Theodore Wong
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Tim Kaiser
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Trisha Speer
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
 
     
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Troy A. Smith
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 William E. Beifuss, Jr
 
6,250,000
 
4.86%
 
Up to
 
15,000
 
*
 
0
 
--
 
and Alice Beifuss
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 William E. Boyd
 
15,000
 
*
 
Up to
 
15,000
 
*
 
0
 
--
 
 
 
       
15,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 Wings Fund, Inc. (6)
 
6,250,000
 
4.86%
 
Up to
 
6,250,000
 
*
 
0
 
--
 
 
 
       
6,250,000
                 
                                                         
 
       
shares of
                 
                                                        
 
       
common stock
                 
 
 
  * Less than 1%
 
28

The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares as to which the selling stockholders has sole or shared voting power or investment power and also any shares, which the selling stockholders has the right to acquire within 60 days. The actual number of shares of common stock issuable upon the conversion of the secured convertible notes is subject to adjustment depending on, among other factors, the future market price of the common stock, and could be materially less or more than the number estimated in the table.
 
(1) Assumes that all securities will be sold.

(2) In accordance with rule 13d-3 under the securities exchange act of 1934, Daniel B. Peters and Elizabeth H. Peters, as co-trustees, may be deemed control persons of the shares owned by such entity, with final voting power and investment control over such shares.

(3) In accordance with rule 13d-3 under the securities exchange act of 1934, Dorothy J. Kim, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(4) In accordance with rule 13d-3 under the securities exchange act of 1934, Michael G. Hoffman, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(5) In accordance with rule 13d-3 under the securities exchange act of 1934, Russell Wong, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(6) In accordance with rule 13d-3 under the securities exchange act of 1934, Karen M. Graham may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares
 
LEGAL MATTERS
 
Sichenzia Ross Friedman Ference LLP, New York, New York will issue an opinion with respect to the validity of the shares of common stock being offered hereby.
 
EXPERTS
 
Our financial statements at from inception (April 24, 2006) through June 30, 2006 appearing in this prospectus and registration statement have been audited by HJ Associates & Consultants, LLP , independent registered public accountants, as set forth on their report thereon appearing elsewhere in this prospectus, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.
 
AVAILABLE INFORMATION
 
We have filed a registration statement on Form SB-2 under the Securities Act of 1933, as amended, relating to the shares of common stock being offered by this prospectus, and reference is made to such registration statement. This prospectus constitutes the prospectus of Itronics Inc., filed as part of the registration statement, and it does not contain all information in the registration statement, as certain portions have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission.
 
We are subject to the informational requirements of the Securities Exchange Act of 1934 which requires us to file reports, proxy statements and other information with the Securities and Exchange Commission. Such reports, proxy statements and other information may be inspected at public reference facilities of the SEC at 100 F Street N.E. Washington, D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the SEC at 100 F Street N.E. Washington, D.C. 20549 at prescribed rates. Because we file documents electronically with the SEC, you may also obtain this information by visiting the SEC's Internet website at http://www.sec.gov.
 

 
29

INDEX TO FINANCIAL STATEMENTS
 
BIOSOLAR, INC.
 
FINANCIAL STATEMENTS
 
CONTENTS
 
 

   
Page  
 
       
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
F-1
 
 AUDITED FINANCIAL STATEMENTS: INCEPTION (APRIL 24, 2006) TO
 
 
 
 JUNE 30, 2006
 
 
 
   Balance Sheets
 
F-2
 
   Statements of Operations
 
F-3
 
   Statements of Stockholders' Equity
 
F-4
 
   Statements of Cash Flows
 
F-5
 
   Notes to Financial Statements
 
F-6 - F-7
 
 INTERIM FINANCIAL STATEMENTS: THREE MONTHS ENDED SEPTEMBER 30, 2006
 
 
 
COMPARED TO INCEPTION (APRIL 24, 2006) TO JUNE 30, 2006
 
 
 
  Balance Sheets
 
F-8
 
  Statements of Operations
 
F-9
 
  Statements of Stockholders' Equity
 
F-10
 
  Statements of Cash Flows
 
F-11
 
  Notes to Financial Statements
 
F-12 - F-13
 
 
 


Report of Independent Registered Public Accounting Firm

To the Board of Directors
BioSolar, Inc.
(A Development Stage Company)
Santa Clarita, California

We have audited the balance sheet of BioSolar, Inc. (a development stage company) as of June 30, 2006, and the related statements of operations, stockholders’ equity, and cash flows for the period from inception on April 25, 2006 through June 30, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provided a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BioSolar, Inc. (a development stage company) as of June 30, 2006, and the results of its operations and its cash flows for the period from inception on April 25, 2006 through June 30, 2006, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has not generated any revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern . Management’s plans in regards to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



HJ Associates & Consultants, LLP
Salt Lake City, UT
September 27, 2006


 

BIOSOLAR, INC.
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 2006
ASSETS
     
 
     
CURRENT ASSETS
     
Cash
 
$
320,199
 
Prepaid Expenses
   
1,176
 
         
Total Current Assets
   
321,375
 
         
OTHER ASSETS
       
Deposit
   
770
 
         
TOTAL ASSETS
 
$
322,145
 
         
         
         
LIABILITIES AND SHAREHOLDERS' EQUITY
       
         
TOTAL CURRENT LIABILITIES
       
Accounts Payable
   
1,150
 
         
SHAREHOLDERS' EQUITY
       
Common Stock, $0.0001 par value;
       
500,000,000 authorized common shares
       
118,090,000 shares issued and outstanding
   
11,809
 
Additional Paid in Capital
   
395,441
 
Subscription receivable
   
(250
)
Deficit Accumulated during the Development Stage
   
(86,005
)
         
TOTAL SHAREHOLDERS' EQUITY
   
320,995
 
         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
322,145
 
 
 

The accompanying notes are an integral part of these financial statements
F-2


BIOSOLAR, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
JUNE 30, 2006
   
From Inception
 
   
April 25, 2006
 
   
through
 
   
June 30, 2006
 
       
REVENUE
   
-
 
         
         
OPERATING EXPENSES
       
Salaries
   
12,000
 
Professional fees
   
60,100
 
Rent
   
990
 
Payroll taxes
   
1,212
 
Office expense
   
541
 
Advertising
   
500
 
Taxes & Licenses
   
10,251
 
Telephone expense
   
411
 
         
TOTAL COSTS AND EXPENSES
   
86,005
 
         
NET LOSS
   
(86,005
)
         
         
BASIC AND DILUTED LOSS PER SHARE
 
$
(0.00
)
         
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
       
BASIC AND DILUTED
   
49,957,033
 
         
 
The accompanying notes are an integral part of these financial statements
F-3

 

BIOSOLAR, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS EQUITY

                
Deficit
         
                
Accumulated
         
           
  Additional
 
during the
         
   
Common stock
 
  Paid-in
 
Development
 
Subscription
     
   
Shares
 
Amount
 
  Capital
 
Stage
 
Receivable
 
Total
 
Issuance of common stock in April 2006 for services
                          
(1,000 common shares issued at $0.001 per share )
   
1,000
 
$
1
 
$
-
 
$
-
 
$
-
 
$
1
 
                                       
Issuance of founders shares in May 2006 for cash
                                     
(29,999,000 common shares issued at $0.00025 per share )
   
29,999,000
   
2,999
   
4,500
   
-
         
7,499
 
                                       
Issuance of founders shares in May 2006 for cash
                                     
(20,000,000 common shares issued at $0.00025 per share )
   
20,000,000
   
2,000
   
3,000
   
-
         
5,000
 
                                       
Issuance of founders shares in May 2006 for cash
                                     
(1,000,000 common shares issued at $0.00025 per share )
   
1,000,000
   
100
   
150
   
-
         
250
 
                                       
Issuance of founders shares in May 2006 for cash
                                     
(1,000,000 common shares issued at $0.00025 per share )
   
1,000,000
   
100
   
150
   
-
         
250
 
                                       
Issuance of unregistered shares in May 2006 for cash
                                     
(5,000,000 common shares issued at $0.00025 per share )
   
5,000,000
   
500
   
750
   
-
         
1,250
 
                                       
Issuance of unregistered shares in May 2006 for cash
                                     
(2,000,000 common shares issued at $0.00025 per share )
   
2,000,000
   
200
   
300
   
-
   
(250
)
 
250
 
                                       
Issuance of common stock in May 2006 for cash
                                     
(12,500,000 common shares issued at $0.015 per share )
   
12,500,000
   
1,250
   
186,250
   
-
         
187,500
 
                                       
Issuance of common stock in May 2006 for cash
                                     
(12,500,000 common shares issued at $0.015 per share )
   
12,500,000
   
1,250
   
186,250
   
-
         
187,500
 
                                       
Issuance of founders shares in June 2006 for cash
                                     
(2,000,000 common shares issued at $0.00025 per share )
   
2,000,000
   
200
   
300
   
-
         
500
 
                                       
Issuance of founders shares in June 2006 for cash
                                     
(20,000,000 common shares issued at $0.00025 per share )
   
20,000,000
   
2,000
   
3,000
   
-
         
5,000
 
                                       
Issuance of founders shares in June 2006 for cash
                                     
(10,000,000 common shares issued at $0.00025 per share )
   
10,000,000
   
1,000
   
1,500
   
-
         
2,500
 
                                       
Issuance of founders shares in June 2006 for cash
                                     
(1,000,000 common shares issued at $0.00025 per share )
   
1,000,000
   
100
   
150
   
-
         
250
 
                                       
Issuance of founders shares in June 2006 for cash
                                     
(1,000,000 common shares issued at $0.00025 per share )
   
1,000,000
   
100
   
150
   
-
         
250
 
                                       
Issuance of common shares in June 2006 for cash
                                     
(15,000 common shares issued at $0.10 per share )
   
15,000
   
2
   
1,498
   
-
         
1,500
 
                                       
Issuance of common shares in June 2006 for cash
                                     
(30,000 common shares issued at $0.10 per share )
   
30,000
   
3
   
2,997
   
-
         
3,000
 
                                       
Issuance of common shares in June 2006 for cash
                                     
(15,000 common shares issued at $0.10 per share )
   
15,000
   
2
   
1,498
   
-
         
1,500
 
                                       
Issuance of common shares in June 2006 for cash
                                     
(15,000 common shares issued at $0.10 per share )
   
15,000
   
1
   
1,499
   
-
         
1,500
 
                                       
Issuance of common shares in June 2006 for cash
                                     
(15,000 common shares issued at $0.10 per share )
   
15,000
   
1
   
1,499
   
-
         
1,500
 
                                       
Net Loss
   
-
   
-
         
(86,005
)
       
(86,005
)
                                       
Balance at June 30, 2006
   
118,090,000
 
$
11,809
 
$
395,441
 
$
(86,005
)
$
(250
)
$
320,995
 
                                       
 
The accompanying notes are an integral part of these financial statements
F-4


BIOSOLAR, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
JUNE 30, 2006

       
   
From Inception
 
 
 
April 25, 2006
 
 
 
through
 
 
 
June 30, 2006
 
CASH FLOWS FROM OPERATING ACTIVITIES:
     
Net loss
 
$
(86,005
)
Adjustment to reconcile net loss to net cash
       
used in operating activities
       
(Increase) Decrease in:
       
Prepaid expenses
   
(1,176
)
Deposits
   
(770
)
Increase (Decrease) in:
       
Accrued Expenses
   
1,150
 
         
NET CASH USED IN OPERATING ACTIVITIES
   
(86,801
)
         
         
CASH FLOWS FROM FINANCING ACTIVITIES:
       
Proceeds from issuance of common stock
   
407,000
 
         
NET CASH PROVIDED BY FINANCING ACTIVITIES
   
407,000
 
         
NET INCREASE IN CASH
   
320,199
 
         
CASH, BEGINNING OF YEAR
   
-
 
         
CASH, END OF YEAR
 
$
320,199
 
         
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
       
Interest paid
 
$
-
 
         
 
The accompanying notes are an integral part of these financial statements
F-5

BIOSOLAR, INC.
(A Development Stage Company)
NOTES TO AUDITED FINANCIAL STATEMENTS
JUNE 30, 2006

1.
ORGANIZATION AND LINE OF BUSINESS

Organization

BioSolar, Inc. (the "Company") was incorporated in the state of Nevada on April 24, 2006. The Company, based in Santa Clarita, California, began operations on April 25, 2006 to develop and market a solar cell technology.

Line of Business

The Company is currently in the stage of developing a thin film/flexible photovoltaics, which are solar cells produced on bio-based plastic substrates. The photovoltaics can be marketed in sectors, such as building materials, outdoor power, emergency power, mobile computers and communications.

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of BioSolar, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Going Concern
The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company does not generate significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. The Company has obtained funds from its shareholders since its’ inception through June 2006. Management believes this funding will continue, and has also obtained funding from new investors. Management believes the existing shareholders and the prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core of business.
 
Development Stage Activities and Operations
The Company has been in its initial stages of formation and for the three months ended June 30, 2006, had insignificant revenues. FASB #7 defines a development stage activity as one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.

Revenue Recognition
The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. To date, the Company has had no revenues and is in the development stage.

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash and Cash Equivalent
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Loss per Share Calculations
The Company adopted Statement of Financial Standards (“SFAS”) No. 128 for the calculation of “Loss per Share”. SFAS No. 128 dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings 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. The Company’s diluted loss per share is the same as the basic loss per share for the three months ended June 30, 2006 as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

F-6

3.
CAPITAL STOCK

At June 30, 2006, the Company’s authorized stock consists of 500,000,000 shares of common stock, par value $0.0001 per share. During the three months ended June 30, 2006, the Company issued 93,000,000 founders shares of common stock for $23,250, of which 1,000,000 is a subscription receivable; 25,000,000 shares of common stock at a purchase price of $0.015 per share; 90,000 shares of common stock at a purchase price of $0.10 per share pursuant to a private placement made pursuant to Rule 506 of Regulation D promulgated under section 4(2) of the Securities Act of 1933, as amended.

4.
RENTAL LEASE
 
May 15, 2006, the Company entered into a lease agreement for office space with monthly rents of $509, which expires on November 14, 2006.
 
5.
DEFERRED TAX BENEFIT
 
At June 30, 2006, the Company had net operating loss carry-forwards of approximately $86,000 that may be offset against future taxable income from the year 2006 through 2026. No tax benefit has been reported in the June 30, 2006 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

 
A reconciliation of income tax expense that would result from applying the U.S. Federal and State rate of 40% to pretax income from continuing operations for the three months ended June 30, 2006, with federal income tax expense presented in the financial statements is as follows:
 
 
   
2006
 
Income tax benefit computed at U.S. Federal
 
 
 
statutory rate of 34%
 
$
(29,240
)
State Income taxes, net of benefit of federal taxes
   
(5,160
)
Valuation Allowance
   
34,400
 
Income tax expense
 
$
-
 

5.
DEFERRED TAX BENEFIT (continued)

 
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the difference 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 not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The items as of June 30, 2006, which comprise a significant portion of deferred tax assets and liabilities are approximately as follows:

   
2006
 
Deferred tax assets:
     
  NOL Carryover
 
$
34,400
 
Deferred tax liabilites:
       
  Depreciation
   
-
 
Less Valuation Allowance
   
(34,400
)
Net deferred tax asset
 
$
-
 
 
 
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry-forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

6.
SUBSEQUENT EVENT

On or about July 21, 2006, the Company commenced a private placement of up to fifteen million (15,000,000) shares of its common stock (the “Shares”) at a price of ten cents ($0.10) per Share. The private placement, which was made in reliance upon an exemption from registration under Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933.
 

F-7

BIOSOLAR, INC.
(A Development Stage Company)
BALANCE SHEET
SEPTEMBER 30, 2006
(Unaudited)

       
ASSETS
     
       
CURRENT ASSETS
     
Cash & Cash Equivalents
 
$
255,950
 
Certificates of Deposits
   
1,003,270
 
Prepaid Expenses
   
972
 
         
Total Current Assets
   
1,260,192
 
         
OTHER ASSETS
       
Deposit
   
770
 
         
TOTAL ASSETS
 
$
1,260,962
 
         
         
         
LIABILITIES AND SHAREHOLDERS' EQUITY
       
         
TOTAL CURRENT LIABILITIES
       
Accounts Payable
   
5,058
 
         
         
SHAREHOLDERS' EQUITY EQUITY
       
Common Stock, $0.0001 par value;
       
500,000,000 authorized common shares
       
128,107,777 shares issued and outstanding
   
12,811
 
Additional Paid in Capital
   
1,396,217
 
Deficit Accumulated during the Development Stage
   
(153,124
)
         
TOTAL SHAREHOLDERS' EQUITY
   
1,255,904
 
         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
1,260,962
 
         

The accompanying notes are an integral part of these financial statements
F-8


BIOSOLAR, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
SEPTEMBER 30, 2006
(Unaudited)

   
 
 
From Inception
 
 
 
 
 
April 25, 2006
 
 
 
Quarter Ended
 
through
 
 
 
September 30, 2006
 
September 30, 2006
 
           
REVENUE
   
-
   
-
 
               
OPERATING EXPENSES
             
Salaries
   
36,000
   
48,000
 
Professional fees
   
12,362
   
72,462
 
Rent
   
1,485
   
2,475
 
Payroll taxes
   
2,754
   
3,966
 
Office expense
   
583
   
1,124
 
Advertising
   
-
   
500
 
Insurance
   
204
   
204
 
Marketing expenses
   
13,300
   
13,300
 
Printing & Production expense
   
2,628
   
2,628
 
Professional Development
   
1,640
   
1,640
 
Taxes & Licenses
   
2,325
   
12,576
 
Telephone expense
   
222
   
633
 
Travel expense
   
233
   
233
 
               
TOTAL OPERATING EXPENSES
   
73,736
   
159,741
 
               
LOSS FROM OPERATIONS BEFORE OTHER INCOME
   
(73,736
)
 
(159,741
)
               
TOTAL OTHER INCOME
             
Interest income
   
6,617
   
6,617
 
               
NET LOSS
 
$
(67,119
)
$
(153,124
)
               
               
BASIC AND DILUTED LOSS PER SHARE
 
$
(0.00
)
     
               
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
             
BASIC AND DILUTED
   
124,377,379
       
               

The accompanying notes are an integral part of these financial statements
F-9



BIOSOLAR, INC.
(A Development Stage Company)
STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)

                
Deficit
         
                
Accumulated
         
           
  Additional
 
during the
         
   
Common stock
 
  Paid-in
 
Development
 
Subscription
     
   
Shares
 
Amount
 
  Capital
 
Stage
 
Receivable
 
Total
 
Issuance of common stock in April 2006 for services
                          
(1,000 common shares issued at $0.001 per share )
   
1,000
 
$
1
 
$
-
 
$
-
 
$
-
 
$
1
 
                                       
Issuance of founders shares in May 2006 for cash
                                     
(29,999,000 common shares issued at $0.00025 per share )
   
29,999,000
   
2,999
   
4,500
   
-
         
7,499
 
                                       
Issuance of founders shares in May 2006 for cash
                                     
(20,000,000 common shares issued at $0.00025 per share )
   
20,000,000
   
2,000
   
3,000
   
-
         
5,000
 
                                       
Issuance of founders shares in May 2006 for cash
                                     
(9,000,000 common shares issued at $0.00025 per share )
   
9,000,000
   
900
   
1,350
   
-
   
(250
)
 
2,000
 
                                       
Issuance of common stock in May 2006 for cash
                                     
(25,000,000 common shares issued at $0.015 per share )
   
25,000,000
   
2,500
   
372,500
   
-
         
375,000
 
                                       
Issuance of founders shares in June 2006 for cash
                                     
(34,000,000 common shares issued at $0.00025 per share )
   
34,000,000
   
3,400
   
5,100
   
-
         
8,500
 
                                       
Issuance of common shares in June 2006 for cash
                                     
(90,000 common shares issued at $0.10 per share )
   
90,000
   
9
   
8,991
   
-
         
9,000
 
                                       
Net Loss for the period ended June 30, 2006
   
-
   
-
         
(86,005
)
       
(86,005
)
Balance at June 30, 2006
   
118,090,000
   
11,809
   
395,441
   
(86,005
)
 
(250
)
 
320,995
 
                                       
Stocks subscribed
   
-
   
-
   
-
   
-
   
250
   
250
 
                                       
Issuance of common shares in July 2006 for cash
                                     
(5,760,000 common shares issued at $0.10 per share ) (unaudited)
   
5,760,000
   
576
   
575,424
   
-
   
-
   
576,000
 
                                       
Issuance of common shares in August 2006 for cash
                                     
(2,807,777 common shares issued at $0.10 per share ) (unaudited)
   
2,807,777
   
281
   
280,497
   
-
   
-
   
280,778
 
                                       
Issuance of common shares in September 2006 for cash
                                     
(1,450,000 common shares issued at $0.10 per share ) (unaudited)
   
1,450,000
   
145
   
144,855
   
-
   
-
   
145,000
 
                                       
Net Loss for the period ended September 30, 2006 (unaudited)
   
-
   
-
         
(67,119
)
       
(67,119
)
                                       
Balance at September 30, 2006
   
128,107,777
 
$
12,811
 
$
1,396,217
 
$
(153,124
)
$
-
 
$
1,255,904
 
                                       

 
The accompanying notes are an integral part of these financial statements
F-10


BIOSOLAR, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
SEPTEMBER 30, 2006
(Unaudited)

           
   
 
 
From Inception
 
 
 
 
 
April 25, 2006
 
 
 
Quarter Ended
 
through
 
 
 
September 30, 2006
 
September 30, 2006
 
CASH FLOWS FROM OPERATING ACTIVITIES:
         
Net loss
 
$
(67,119
)
$
(153,124
)
Adjustment to reconcile net loss to net cash
             
used in operating activities
             
(Increase) Decrease in:
             
Prepaid expenses
   
204
   
(972
)
Deposits
   
-
   
(770
)
Increase (Decrease) in:
             
Accounts Payable
   
3,908
   
5,058
 
               
NET CASH USED IN OPERATING ACTIVITIES
   
(63,007
)
 
(149,808
)
               
NET CASH FLOWS USED IN INVESTING ACTIVITIES:
             
Investment in Certificate of Deposits
   
(1,003,270
)
 
(1,003,270
)
               
NET CASH USED BY INVESTING ACTIVITIES
   
(1,003,270
)
 
(1,003,270
)
               
NET CASH FLOWS FROM FINANCING ACTIVITIES:
             
Proceeds from issuance of common stock
   
1,002,028
   
1,409,028
 
               
NET CASH PROVIDED BY FINANCING ACTIVITIES
   
1,002,028
   
1,409,028
 
               
NET INCREASE IN CASH
   
(64,249
)
 
255,950
 
               
CASH AND CASE EQUIVALENTS, BEGINNING OF PERIOD
   
320,199
   
-
 
               
CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
255,950
 
$
255,950
 
               
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
             
Interest paid
 
$
-
 
$
-
 
Taxes paid
 
$
-
 
$
-
 
               
 
The accompanying notes are an integral part of these financial statements
F-11

BIOSOLAR, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2006

1.
ORGANIZATION AND LINE OF BUSINESS

Organization

BioSolar, Inc. (the "Company") was incorporated in the state of Nevada on April 24, 2006. The Company, based in Santa Clarita, California, began operations on April 25, 2006 to develop and market a solar cell technology.

The accompanying interim unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended September 30, 2006 are not necessarily indicative of the results that may be expected for the year ending March 31, 2007. For further information, refer to the audited financial statements for the period ended June 30, 2006 and the notes thereto included in the Company’s Report.

Line of Business

The Company is currently in the stage of developing a thin film/flexible photovoltaics, which are solar cells produced on bio-based plastic substrates. The photovoltaics can be marketed in sectors, such as building materials, outdoor power, emergency power, mobile computers and communications.

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of BioSolar, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Going Concern
The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company does not generate significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. The Company has obtained funds from its shareholders since its’ inception through September 2006. Management believes this funding will continue, and has also obtained funding from new investors. Management believes the existing shareholders and the prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core of business.

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Development Stage Activities and Operations
The Company has been in its initial stages of formation and for the period ended September 30, 2006, had insignificant revenues. FASB #7 defines a development stage activity as one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.

Revenue Recognition
The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. To date, the Company has had no revenues and is in the development stage.

Cash and Cash Equivalent
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Investments
Certificate of Deposits with banking institutions are short-term investments with initial maturities of more than 90 days. The carrying amount of these investments is a reasonable estimate of fair value due to their short-term nature.

F-12

Loss per Share Calculations
The Company adopted Statement of Financial Standards (“SFAS”) No. 128 for the calculation of “Loss per Share”. SFAS No. 128 dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings 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. The Company’s diluted loss per share is the same as the basic loss per share for the period ended September 30, 2006 as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

3.
CAPITAL STOCK

During the period ended September 30, 2006, the Company’s issued 10,017,777 shares of common stock at a purchase price of $0.10 per share pursuant to a private placement made pursuant to Rule 506 of Regulation D promulgated under section 4(2) of the Securities Act of 1933, as amended; the Company received the subscription receivable of $250.

4.
SUBSEQUENT EVENT

During the month of October 2006, the Company issued 300,000 shares of common stock at a purchase price of $0.10 per share pursuant to a private placement.  
F-13

 
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THE INFORMATION CONTAINED IN THIS PROSPECTUS. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL TO SELL THE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE ON THE DATE OF THIS DOCUMENT.
 

     
UP TO 26,500,000 SHARES
     
OF OUR
     
OF COMMON STOCK
 TABLE OF CONTENTS
     
 
Page
   
Cautionary Note Regarding Forward-Looking Statements
6
   
Prospectus Summary
7
   
Risk Factors
11
   
Use of Proceeds
16
 
Biosolar, Inc.
Management's Discussion And Analysis and Results of
     
 Operations
17
   
Business
22
   
Description of Property
25
   
Legal Proceedings
25
   
Management
26
   
Executive Compensation
27
   
Certain Relationships And Related Transactions
29
   
Security Ownership Of Certain Beneficial Owners
     
 And Management
29
 
PROSPECTUS
Description of Securities
30
   
Indemnification for Securities Act Liabilities
30
   
Plan of Distribution
31
   
Selling Stockholders
32
   
Legal Matters
36
   
Experts
36
   
Available Information
37
   
Index To Financial Statements
F-1
 
November 22, 2006


 

PART II
 
INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
Under the Nevada General Corporation Law and our Articles of Incorporation, as amended, and our Bylaws, our directors will have no personal liability to us or our stockholders for monetary damages incurred as the result of the breach or alleged breach by a director of his "duty of care." This provision does not apply to the directors' (i) acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) acts or omissions that a director believes to be contrary to the best interests of the corporation or its stockholders or that involve the absence of good faith on the part of the director, (iii) approval of any transaction from which a director derives an improper personal benefit, (iv) acts or omissions that show a reckless disregard for the director's duty to the corporation or its stockholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of serious injury to the corporation or its stockholders, (v) acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its stockholders, or (vi) approval of an unlawful dividend, distribution, stock repurchase or redemption. This provision would generally absolve directors of personal liability for negligence in the performance of duties, including gross negligence.
 
The effect of this provision in our Articles of Incorporation and Bylaws is to eliminate the rights of our Company and our stockholders (through stockholder's derivative suits on behalf of our Company) to recover monetary damages against a director for breach of his fiduciary duty of care as a director (including breaches resulting from negligent or grossly negligent behavior) except in the situations described in clauses (i) through (vi) above. This provision does not limit nor eliminate the rights of our Company or any stockholder to seek non-monetary relief such as an injunction or rescission in the event of a breach of a director's duty of care. In addition, our Bylaws provide that if the Nevada General Corporation Law is amended to authorize the future elimination or limitation of the liability of a director, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the law, as amended. The Nevada General Corporation Law grants corporations the right to indemnify their directors, officers, employees and agents in accordance with applicable law.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act" or "Securities Act") may be permitted to directors, officers or persons controlling our Company pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
 
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
The following table sets forth an itemization of all estimated expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered:
 
NATURE OF EXPENSE AMOUNT

SEC Registration fee
 
$
283.55
 
Accounting fees and expenses
   
20,000.00
*  
Legal fees and expenses
   
25,000.00
*  
Miscellaneous
   
716.45
*  
                                         TOTAL
 
$
46,000
*  

* Estimated.
 
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
 
Following is a summary of unregistered securities issued from inception (April 24, 2006) through November 2006.
 
On May 19, 2006, we issued an aggregate of 93,000,000 shares of our common stock, par value $.0001 per share, to the founders of our company, including our Chief Executive Officer, for an aggregate purchase price of $23,250.
 
In May 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $375,000 in shares of our common stock, or a total of 25,000,000 shares.
 
In July 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $150,000 in shares of our common stock, or a total of 1,500,000 shares.
 
In October 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to approximately $905,777 in shares of our common stock, or a total of 9,057,777 shares.
 
II-1

* All of the above offerings and sales were deemed to be exempt under rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of Biosolar, Inc. or executive officers of Biosolar, Inc., and transfer was restricted by Biosolar, Inc. in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment. Furthermore, all of the above-referenced persons were provided with access to our Securities and Exchange Commission filings.
 
ITEM 27. EXHIBITS.
 
The following exhibits are included as part of this Form SB-2.
 
Exhibit No. Description
   
3.1
Articles of Incorporation of Biosolar Labs, Inc. filed with 
 
the Nevada Secretary of State on April 24, 2006.*
   
3.2
Articles of Amendment of Articles of Incorporation of Biosolar Labs,
 
Inc. filed with the Nevada Secretary of State on May 25, 2006.*
   
3.3
Articles of Amendment of Articles of Incorporation of Biosolar Labs, Inc.
 
filed with the Nevada Secretary of State on June 8, 2006.* 
   
3.4
 Bylaws of Biosolar, Inc.*
 
MATERIAL CONTRACTS

5.1
 Opinion of Sichenzia Ross Friedman Ference LLP.*
10.1
 Form of Subscription Agreement dated as of May 26, 2006.*
10.2
 Form of Subscription Agreement dated as of July 17, 2006.*
10.3
 Form of Subscription Agreement dated as of October 11, 2006.*
23.1
 Consent of Sichenzia Ross Friedman Ference LLP (included in Exhibit 5.1).*
23.2
 Consent of HJ Associates & Consultants, LLP
 
*Filed herewith.
II-2


ITEM 28. UNDERTAKINGS.
 
The undersigned registrant hereby undertakes to:
 
(1) File, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:
 
(i) Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
 
(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of the securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement, and
 
(iii) Include any additional or changed material information on the plan of distribution.
 
(2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.
 
(3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.
 
(4) For determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned undertakes that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
 
(i) Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424;
 
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer;
 
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and
 
(iv) Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser.
 
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
 
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
 
Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
 

SIGNATURES
 
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Santa Clarita, State of California, on November 22, 2006.
 
 
 
     
  BIOSOLAR, INC.
 
 
 
 
 
 
  By:   /s/ DAVID LEE
 
DAVID LEE
 
CHIEF EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE OFFICER) AND ACTING CHIEF FINANCIAL OFFICER (PRINCIPAL ACCOUNTING AND FINANCIAL OFFICER)

In accordance with the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates stated.
 

SIGNATURE
  TITLE
DATE
       
/S/ DAVID LEE
CHIEF EXECUTIVE OFFICER
NOVEMBER 22, 2006
DAVID LEE
(PRINCIPAL EXECUTIVE OFFICER),
 
 
ACTING CHIEF FINANCIAL OFFICER
 
 
(PRINCIPAL ACCOUNTING AND
 
 
FINANCIAL OFFICER) AND
 
 
CHAIRMAN OF THE BOARD
 
/S/ STEVEN C. BARTLING
DIRECTOR
NOVEMBER 22, 2006
STEVEN C. BARTLING
 
 
 
   
/S/ DENNIS LEPON
DIRECTOR
NOVEMBER 22, 2006
DENNIS LEPON
   
 
   
 
30

 




































































EXHIBIT 5.1
 
SICHENZIA ROSS FRIEDMAN FERENCE LLP
1065 Avenue of the Americas, 21st Flr.
New York, NY 10018
Telephone: (212) 930-9700
Facsimile: (212) 930-9725
November 22, 2006
 
VIA ELECTRONIC TRANSMISSION
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
 
RE: BIOSOLAR, INC.
 
FORM SB-2 REGISTRATION STATEMENT (FILE NO. 333-)
 
Ladies and Gentlemen:
 
We refer to the above-captioned registration statement on Form SB-2 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), filed by Biosolar, Inc., a Nevada corporation (the "Company"), with the Securities and Exchange Commission.
 
We have examined the originals, photocopies, certified copies or other evidence of such records of the Company, certificates of officers of the Company and public officials, and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as certified copies or photocopies and the authenticity of the originals of such latter documents.
 
Based on our examination mentioned above, we are of the opinion that the securities being sold pursuant to the Registration Statement are duly authorized and will be, when issued in the manner described in the Registration Statement, legally and validly issued, fully paid and non-assessable.
 
We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to our firm under "Legal Matters" in the related Prospectus. In giving the foregoing consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Commission.
 

 
/S/ SICHENZIA ROSS FRIEDMAN FERENCE LLP    
Sichenzia Ross Friedman Ference LLP
   
     
 

 

INVESTOR FINANCIAL QUESTIONNAIRE

 
Before you make an investment, you must complete this questionnaire. Please check the appropriate box below and sign this questionnaire before a notary. We require that this be returned with your Subscription Agreement for your purchase of shares of common stock (the “ Common Stock ”), of BioSolar Labs, Inc. (the “ Company ”). Information will be held in strict confidence and used solely to ensure that all prospective investors are qualified under the relevant sections of the Securities Act of 1933.

[ ]   I am a natural person who has had individual income of more than US$200,000 in each of the most recent two years, or joint income with my spouse in excess of US$300,000 in each of the most recent two years and reasonably expect to reach that same income level for the current year (“income” for purposes hereof should be computed as follows: individual adjusted gross income as reported, or to be reported, on a federal income tax return, increased by (i) any deduction of long-term capital gains under section 1202 of the Internal Code of 1936 (the “Code”), (ii) any deduction or depletion under Section 611 et. seq. of the Code, (iii) any exclusion for interest under Section 103 of the Code and (iv) any losses of a partnership as reported in Schedule E of Form 1040;

[ ]   The Subscriber is a natural person whose individual net worth (i.e. total assets in excess of total liabilities), or joint net worth with my spouse, will at the time of purchase of the Common Shares be in excess of $1,000,000;

[ ]   The Subscriber is an investor satisfying the requirements of Section 501(a)(1)(2) or (3) of Regulation D promulgated under the Securities Act of 1933, which includes, but is not limited to, a self-directed employee benefit plan where investment decisions are made solely by persons who are “accredited investors” as otherwise defined in Regulation D;

[ ]   The Subscriber is a trust, which trust has total assets in excess of $5,000,000.00 which was not formed for the specific purpose of acquiring the Common Shares offered hereby and whose purchase is directed by a sophisticated person as described in Rule 506(b)(ii) of Regulation D and who has such knowledge and experience in financial and business matters that he is capable of evaluating the risks and merits of an investment in the Common Shares;

[ ]   The Subscriber is a director or executive officer of the Company;

[ ]   The Subscriber is an entity (other than a trust) in which all of the equity owners meet the requirements of at least one of the above paragraphs; or

[ ]   The Subscriber is not a resident of the United State of America, but acknowledges he/she meets or exceeds at least one of the minimum financial requirements set forth above.

I represent that I understand the merits and the risks involved in this offering , that I have sufficient knowledge and experience in similar programs or investments to evaluate the merits and risks of an investment in the Company (or that I have retained an attorney, accountant, financial advisor or consultant as my purchaser representative); that because of my background, employment experience, family or financial situation or economic bargaining power, I have received and have had access to material and relevant information enabling me to make an informed investment decision, and that all information I have requested has been furnished to me; and that I am able to bear the economic risk of loss of the entire investment which I may make in the Company.

By, _______________

PRINT NAME: ________________________________________
Investor Signature
 
 
 

 

With a current address of___________________________________________________

In the City of____________________________, State/Province of _______________,
Country of_______________

DATE:_________________________________________


IN WITNESS WHEREOF, I have hereunto witnessed the signature of the above Investor;

By,___________________________________________

_________________________
Witness Signature               Date

 
 

 


  BIOSOLAR LABS, INC. SUBSCRIPTION AGREEMENT

 
1. Subscription. Subject to the terms and conditions hereof, ___________________, the undersigned Investor ("Investor") hereby subscribes to purchase __________ shares of BioSolar Labs, Inc.’s Common Stock at a price of $___ per share, representing a total purchase price of $____________.

2. Private Placement. The parties acknowledge that this offering has been made and this Subscription Agreement has been entered into as a private placement negotiated between the parties. The issuance is considered exempt under Section 4(2) of the Securities Act of 1933.

3. Knowledge of Financial and Business Status of Company. Investor acknowledges that he/she has met in person or telephonically with management immediately prior to this investment, and that he/she understand the merits and the risks involved in this offering.

4. Representations and Warranties. In consideration of the sale of such Common Stock, intending to be legally bound and intending the Company to rely thereupon, Investor hereby represents, warrants, and covenants, to the Company as follows:

Neither the Company nor any person acting on behalf of the Company has offered to sell, offered for sale or sold the Common Stock by means of general solicitation or general advertising. Investor has not received, paid or given, directly or indirectly, any commission or remuneration for or because of any sale or the solicitation of any sale of the Common Stock.

Company represents and warrants that the shares of common stock underlying the Common Stock are restricted under SEC Rule 144, and Investor is aware of restricted sale provisions that make up Rule 144.

Investor has been offered full access to all underlying documents in connection with this transaction as well as such other information as Investor has deemed necessary or appropriate for a prudent and knowledgeable investor to evaluate the purchase of the Common Stock. Investor acknowledges that the Company has made available to Investor the opportunity to obtain additional information from, to ask questions of, and receive satisfactory answers from the officers of the Company concerning the terms and conditions of the private placement and to verify the information given. Investor is satisfied that there is no material information concerning the condition, properties, operations and prospects of the Company of which Investor is unaware. In making his or her investment decision, Investor has relied solely upon his or her independent investigation of the investment.

Investor is aware that an investment in the Common Stock is a highly speculative investment that involves a substantial degree of risk. Investor warrants that he/she has such sufficient requisite knowledge and experience in business and financial matters that Investor is capable of evaluating the merits and risks of an investment in the Company. Investor understands that the Company is relying on Investor's representations for the purposes of confirming Investor's suitability as an investor in the Company.

Investor is aware that the Common Stock has not been registered under the Securities Act of 1933 (the "Act"), and that Investor must therefore bear the economic risk of the investment indefinitely because the Common Stock cannot be sold unless subsequently registered under the Act or under an available exemption from registration. Investor agrees not to sell his/her Common Stock without registration under the Act and applicable state securities laws unless in a transaction exempt therefrom.
 
 
 

 
 
The Common Stock for which Investor hereby subscribes are being acquired for investment purposes, solely for Investor's own account and not on behalf of other persons, and not with a view to or for the resale, distribution, subdivision, or fractionalization thereof; Investor has no present plans to enter into any contract, undertaking, agreement, or arrangement for any such resale, distribution, subdivision, or fractionalization thereof. Investor agrees that he or she will not sell, assign, pledge, give, transfer or otherwise dispose of any or all of the Common Stock or any interest therein unless and until Investor has complied with all applicable provisions of federal and state securities laws.

Investor has reviewed his or her financial condition and commitments. Based upon such review, Investor is satisfied that he or she has adequate means of providing for his or her financial needs and possible contingencies as well as those of any dependents, and that he or she does not have any current or foreseeable future need for liquidity of the funds being utilized in the purchase of the Common Stock. Investor is capable of bearing the economic risk of the investment in the Common Stock for the indefinite future. At this time, Investor has assets or sources of income that, if taken together, are more than sufficient so that Investor could bear the risk of loss of its, his or her entire investment in the Common Stock.

Investor is aware that this transaction is a "private placement" and has not been reviewed by the United States Securities and Exchange Commission or by any state securities authorities. No agency, federal or state, has passed upon the fairness or merits of this investment.

Neither this Subscription Agreement nor Investor's rights hereunder, may be assigned, sold or transferred in any manner and this Subscription Agreement may not be altered, amended or revoked without the prior written consent of the Company.

Investor is a bona fide resident as set forth next to Investor's signature, such location is Investor's principal residence, and Investor is at least 18 years of age.

Investor understands and agrees that if Investor's subscription is accepted, Investor will be required to execute such additional documents as may be necessary to effect the issuance of the Company's Common Stock which Investor has purchased.

The foregoing representations, warranties and covenants are true and accurate as of the date hereof and shall be true and accurate as of the date of completion of the Private Placement. If such representations and warranties shall not be true and accurate in any respect prior to completion of the Private Placement, Investor shall give written notice of such fact to the Company, specifying which representations and warranties are not true and accurate and the reasons therefore.

5. Piggy-Back Registration Rights. The Investor will be entitled to “piggy-back” registration rights of the shares of Common Stock pursuant to this Subscription Agreement on registration statements (other than on Form S-8, S-4 or similar Forms) filed by the Company.

6. Indemnification. Investor acknowledges that he understands the meaning and legal consequences of the representations and warranties contained herein, and Investor hereby agrees to indemnify and hold harmless the Company, its directors, officers and representatives, and any person controlling the Company within the meaning of Section 15 of the Act, from and against any and all claim, loss, damage, expense and liability whatsoever (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending any litigation commenced or threatened or any claim whatsoever) based upon, due to or arising out of a breach of any representation or warranty or covenant of the undersigned contained in this Subscription Agreement or in the Financial Questionnaire or of any false representation by Investor.
 
 
 

 
 
7. Miscellaneous.
 
(a)   This Subscription Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations and understandings which are deemed to have been merged herein. No representations were made or relied upon by either party, other than those expressly set forth herein.
 
(b)   This writing shall be amended only by a further writing. No agent, employee, or other representative of any party is empowered to alter any of the terms hereof, including specifically this Paragraph, unless done in writing and signed by both parties.
 
(c)   Whenever required by the context hereof: the masculine gender shall be deemed to include the feminine and neuter; and the singular member shall be deemed to include the plural. Time is expressly declared to be of the essence of this Agreement. This Agreement shall be deemed to have been mutually prepared by all parties and shall not be construed against any particular party as the draftsman. The invalidity of any one or more of the words, phrases, sentences, clauses, sections or subsections contained in this Agreement shall not affect the enforceability of the remaining portions of this Agreement or any part hereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses, sections or subsections contained in this Agreement shall be declared invalid by a court of competent jurisdiction, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, section or sections, or subsection or subsections had not been inserted.
 
(d)   The validity, interpretation, and performance of this Agreement shall be controlled by and construed under the laws of the State of New York. Venue and jurisdiction of any controversy or claim arising out of, or relating to this Subscription Agreement, or the breach thereof, that cannot be resolved by negotiation, shall be in the County of New York, State of New York. In any legal action or other proceeding involving, arising out of or in any way relating to this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs, and expenses of litigation.
 
(e)   The failure of any party to object to, or to take affirmative action with respect to, any conduct of any other party which is in violation of the terms of this Agreement shall not be construed as a waiver of such violation or breach, or of any future breach, violation, or wrongful conduct. No delay or failure by any party to exercise any right under this Agreement, and no partial or single exercise of that right, shall constitute a waiver or exhaustion of that or any other right, unless otherwise expressly provided herein.
 
(f)   Headings in this Subscription Agreement are for convenience only and shall not be used to interpret or construe its provisions.
 
(g)   This Subscription Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
 
(h)   The provisions of this Subscription Agreement shall be binding upon and inure to the benefit of each of the parties and their respective successors and assigns.


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
 

 
 
IN WITNESS WHEREOF , the undersigned has executed and delivered this Subscription Agreement dated this day of______________, in the year 2006.

By, _______________________________________PRINT NAME:
 
______________________
(Signature of Investor)

With a current address of ___________________________________________________

In the City of____________________________, State/Province of _______________,
Country of_______________

ACCEPTED: BIOSOLAR LABS, INC.

By, __________________     Its:____________________________
Signature of Officer       Title: President

DATE,___________________________________________

 
 

 
 

  SECURITIES ISSUANCE INSTRUCTIONS

 
The undersigned, as a condition to purchase up ________ shares of Common Stock of BioSolar Labs, Inc., a Nevada corporation (the "Company"), hereby certifies to the Company as follows:

1. I, ___________ (Purchaser Name) am purchasing the Common Stock on this ________day of May, in the year 2006, in my own name and for my own account (or for a trust account if I am a trustee), and no other person has any interest in or right with respect to the Common Stock, nor have I agreed to give any person any such interest or right in the future.

2. I am acquiring the Common Stock for investment and not with a view to or for sale in connection with any distribution of the Common Stock. I recognize that the Common Stock have not been registered under the Securities Act of 1933, that any disposition of the Common Stock is subject to restrictions imposed by federal and state law and that the certificates representing the Common Stock will bear a restrictive legend. I also recognize that I cannot dispose of the Common Stock absent registration and qualification, or an available exemption from registration and qualification, and that no undertaking has been made with regard to registering or qualifying the Common Stock in the future. I understand that the availability of an exemption in the future will depend in part on circumstances outside my control and that I may be required to hold the Common Stock for a substantial period. I understand that the United States Securities and Exchange Commission has made no finding or determination relating to the fairness for investment of the Common Stock offered by the Company and that the Commission has not and will not recommend or endorse the Common Stock.

3. I have not seen or received any advertisement or general solicitation with respect to the sale of the Common Stock.

4. I believe, by reason of my business or financial experience that I am capable of evaluating the merits and risks of this investment and of protecting my own interests in connection with this investment.

5. I acknowledge that during the course of this transaction and prior to purchasing the Common Stock I have been provided with financial and other written information about the Company, I have been given the opportunity by the Company to obtain such information and ask such questions concerning the Company, the Common Stock, and my investment as I felt necessary, and to the extent I availed myself of such opportunity, I received satisfactory information and answers. If I requested any additional information, which the Company possessed or could acquire without unreasonable effort or expense and which was necessary to verify the accuracy of the financial and other written information furnished to me by the Company, that additional information was provided to me. In reaching the decision to invest in the Common Stock, I have carefully evaluated my financial resources and investment position and the risks associated with this investment, and I acknowledge that I am able to bear the economic risks of this investment. I further acknowledge that my financial condition is such that I am not under any present necessity or constraint to dispose of the Common Stock to satisfy any existent or contemplated debt or undertaking.

 
 

 

Please PRINT below the exact information regarding the Purchaser:

INDIVIDUAL
____________
_________________________________________________________________________________
Individual Name(s)

_________________________________________________________________________________
Street Address, City, State/Province and Postal Code

_________________________________________________________________________________
Signature (All record holders should sign)

(____)____________Telephone Number   (____)_______________Fax Number

___________________________ Email Address

CORPORATION, PARTNERSHIP, TRUST, OR OTHER ENTITY

_________________________________________________________________________________
Name of Entity

_________________________________________________________________________________
Address to Which Correspondence should be Directed

_________________________________________________________________________________
Type of Entity (i.e., corporation, partnership etc)

_________________________________________________________________________________
State/Province of Formation of Entity

By:____________________________________Printed:____________________________________

Its:____________________________________
Title

(____)____________Telephone Number   (____)_______________Fax Number

___________________________ Email Address

If Common Stock are being subscribed for by an entity, the Certificate of Signatory below must be completed.

CERTIFICATE OF SIGNATORY

To be completed if Common Stock are being subscribed for by an entity.

I, ____________________________________, am the ________________________________ of _________________________________________________________(the "Entity ").
 
 
 

 
 
I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement to purchase and hold the Common Stock, and certify that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitute legal and binding obligations of the Entity.

IN WITNESS WHEREOF, I have hereto set my hand this _______day of ________________, 20_____.

__________________________________ Signature
 
 
 

 

SUBSCRIPTION AGREEMENT
 
SUBSCRIPTION AGREEMENT (this “Agreement”) made as of the last date set forth on the signature page hereof between BioSolar, Inc. (the “Company”), and the undersigned (the “Subscriber”).
 
W I T N E S S E T H:
WHEREAS, the Company is conducting a private offering (the “Offering”) consisting of up to 1,500,000 shares of common stock, par value $.0001 per share (“Shares”); and
 
WHEREAS, the Subscriber desires to purchase that number of Shares set forth on the signature page hereof on the terms and conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:
 
I.
SUBSCRIPTION FOR SHARES AND REPRESENTATIONS BY SUBSCRIBER
 
1.1   Subject to the terms and conditions hereinafter set forth and in the Confidential Offering Memorandum dated June 26, 2006 (such memorandum, together with all amendments thereof and supplements and exhibits thereto, the “Memorandum”), the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such number of Shares, and the Company agrees to sell to the Subscriber as is set forth on the signature page hereof, at a per share price equal to $0.10 per Share. The purchase price is payable by personal or business check or money order made payable to “BioSolar, Inc.” contemporaneously with the execution and delivery of this Agreement by the Subscriber. Subscribers may also pay the subscription amount by, wire transfer of immediately available funds to:
 
  Name: BioSolar, Inc
     
Bank:
Bank of America
19120 Soledad Canyon Road
Santa Clarita, California 91350
     
  Account: 10234-69102
     
  ABA: 121000358
 
1.2   The Subscriber recognizes that the purchase of the Shares involves a high degree of risk including, but not limited to, the following: (a) the Company remains a development stage business with limited operating history and requires substantial funds in addition to the proceeds of the Offering; (b) an investment in the Company is highly speculative, and only investors who can afford the loss of their entire investment should consider investing in the Company and the Shares; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of the Shares (sometimes hereinafter collectively referred to as the “Securities”) is extremely limited; (e) in the event of a disposition, the Subscriber could sustain the loss of its entire investment; (f) the Company has not paid any dividends since its inception and does not anticipate paying any dividends; and (g) the Company may issue additional securities in the future which have rights and preferences that are senior to those of the Common Stock. Without limiting the generality of the representations set forth in Section 1.5 below, the Subscriber represents that the Subscriber has carefully reviewed the section of the Memorandum captioned “Risk Factors.”
 

 
1.3   The Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as indicated by the Subscriber’s responses to the questions contained in Article VII hereof, and that the Subscriber is able to bear the economic risk of an investment in the Shares.
 
1.4   The Subscriber hereby acknowledges and represents that (a) the Subscriber has knowledge and experience in business and financial matters, prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national securities exchange nor on the National Association of Securities Dealers, Inc. (the “NASD”) automated quotation system (“NASDAQ”), or the Subscriber has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Subscriber and to all other prospective investors in the Shares to evaluate the merits and risks of such an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature of this investment; and (c) the Subscriber is able to bear the economic risk that the Subscriber hereby assumes.
 
1.5   The Subscriber hereby acknowledges receipt and careful review of this Agreement, the Memorandum (which includes the Risk Factors), including all exhibits thereto, and any documents which may have been made available upon request as reflected therein (collectively referred to as the “Offering Materials”) and hereby represents that the Subscriber has been furnished by the Company during the course of the Offering with all information regarding the Company, the terms and conditions of the Offering and any additional information that the Subscriber has requested or desired to know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms and conditions of the Offering.
 
1.6   a)   In making the decision to invest in the Shares the Subscriber has relied solely upon the information provided by the Company in the Offering Materials. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Shares hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course of Subscriber’s consideration of an investment in the Shares other than the Offering Materials.
 
2

 
(b)   The Subscriber represents that (i) the Subscriber was contacted regarding the sale of the Shares by the Company (or an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Shares were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.
 
1.7   The Subscriber hereby represents that the Subscriber, either by reason of the Subscriber’s business or financial experience or the business or financial experience of the Subscriber’s professional advisors (who are unaffiliated with and not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Subscriber’s own interests in connection with the transaction contemplated hereby.
 
1.8   The Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission (the “SEC”) nor any state regulatory authority since the Offering is intended to be exempt from the registration requirements of Section 5 of the Securities Act pursuant to Regulation D promulgated thereunder. The Subscriber understands that the Securities have not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Securities unless they are registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless an exemption from such registration is available.
 
1.9   The Subscriber understands that the Securities comprising the Shares have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act that depends, in part, upon the Subscriber’s investment intention. In this connection, the Subscriber hereby represents that the Subscriber is purchasing the Securities for the Subscriber’s own account for investment and not with a view toward the resale or distribution to others. The Subscriber, if an entity, further represents that it was not formed for the purpose of purchasing the Securities.
 
1.10   The Subscriber understands that there is no public market for the Common Stock and that no market may develop for any of such Securities. The Subscriber understands that even if a public market develops for such Securities, Rule 144 (“Rule 144”) promulgated under the Securities Act requires for non-affiliates, among other conditions, a one-year holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. The Subscriber understands and hereby acknowledges that the Company is under no obligation to register any of the Securities under the Securities Act or any state securities or “blue sky” laws other than as set forth in Article V.
 
1.11   The Subscriber consents to the placement of a legend on any certificate or other document evidencing the Securities that such Securities have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Subscriber is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Securities. The legend to be placed on each certificate shall be in form substantially similar to the following:
 
3

 
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”
 
1.12   The Subscriber understands that the Company will review this Agreement and is hereby given authority by the Subscriber to call Subscriber’s bank or place of employment or otherwise review the financial standing of the Subscriber; and it is further agreed that the Company, at its sole discretion, reserves the unrestricted right, without further documentation or agreement on the part of the Subscriber, to reject or limit any subscription, to accept subscriptions for fractional Shares and to close the Offering to the Subscriber at any time and that the Company will issue stop transfer instructions to its transfer agent with respect to such Securities.
 
1.13   The Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the Subscriber’s principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity.
 
1.14   The Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver this Agreement and to purchase the Shares. This Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.
 
1.15   If the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so.
 
1.16   The Subscriber acknowledges that if he or she is a Registered Representative of an NASD member firm, he or she must give such firm the notice required by the NASD’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in Section 7.4 below.
 
1.17   The Subscriber acknowledges that at such time, if ever, as the Securities are registered (as such term is defined in Article V hereof), sales of the Securities will be subject to state securities laws.
 
1.18 (a )   The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.
 
4

 
(b)   The Company agrees not to disclose the names, addresses or any other information about the Subscribers, except as required by law; provided, that the Company may use the name of the Subscriber for any offering or in any registration statement filed pursuant to Article V in which the Subscriber’s shares are included.
 
1.19   The Subscriber agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of (a) any sale or distribution of the Securities by the Subscriber in violation of the Securities Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach or failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor Questionnaire contained in Article VII herein) or any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.
 
II.
REPRESENTATIONS BY AND COVENANTS OF THE COMPANY
 
The Company hereby represents and warrants to the Subscriber that:
 
2.1   Organization, Good Standing and Qualification . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority to conduct its business.
 
2.2   Capitalization and Voting Rights . The Company has authorized 500,000,000 shares of Common Stock, par value $.0001 per share, of which 118,000,000 shares are outstanding as of the date hereof. Except as set forth in the Offering Materials, there are no outstanding options, warrants, agreements, convertible securities, preemptive rights or other rights to subscribe for or to purchase any shares of capital stock of the Company. Except as set forth in the Offering Materials and as otherwise required by law, there are no restrictions upon the voting or transfer of any of the shares of capital stock of the Company pursuant to the Company’s Articles of Incorporation (the “Articles of Incorporation”), By-Laws or other governing documents or any agreement or other instruments to which the Company is a party or by which the Company is bound.
 
2.3   Authorization; Enforceability . The Company has all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. All corporate action on the part of the Company, its directors and stockholders necessary for the (i) authorization execution, delivery and performance of this Agreement by the Company; and (ii) authorization, sale, issuance and delivery of the Securities contemplated hereby and the performance of the Company’s obligations hereunder has been taken. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy. The Common Stock, when issued and fully paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable. The issuance and sale of the Common Stock contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person which have not been waived in connection with this offering.
 
5

 
2.4   No Conflict; Governmental Consents .
 
(a)   The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not result in the violation of any material law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound, or of any provision of the Articles of Incorporation or By-Laws of the Company, and will not conflict with, or result in a material breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company.
 
(b)   No consent, approval, authorization or other order of any governmental authority is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the Shares, except such filings as may be required to be made with the SEC, NASD, NASDAQ and with any state or foreign blue sky or securities regulatory authority.
 
2.5   Licenses . Except as otherwise set forth in the Memorandum, the Company has sufficient licenses, permits and other governmental authorizations currently required for the conduct of its business or ownership of properties and is in all material respects in compliance therewith.
 
2.6   Litigation . The Company knows of no pending or threatened legal or governmental proceedings against the Company which could materially adversely affect the business, property, financial condition or operations of the Company or which materially and adversely questions the validity of this Agreement or any agreements related to the transactions contemplated hereby or the right of the Company to enter into any of such agreements, or to consummate the transactions contemplated hereby or thereby. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which could materially adversely affect the business, property, financial condition or operations of the Company. There is no action, suit, proceeding or investigation by the Company currently pending in any court or before any arbitrator or that the Company intends to initiate.
 
2.7   Disclosure . The information set forth in the Offering Materials as of the date hereof contains no untrue statement of a material fact nor omits to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
 
6

 
2.8   Investment Company . The Company is not an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.
 
2.9   Intellectual Property .
 
(i)   To the best of its knowledge, the Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now conducted and as presently proposed to be conducted, without any known infringement of the rights of others. Except as disclosed in the Memorandum, there are no material outstanding options, licenses or agreements of any kind relating to the foregoing proprietary rights, nor is the Company bound by or a party to any material options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of “off the shelf” or standard products. The Company has not received any written communications alleging that the Company has violated or, by conducting its business as presently proposed to be conducted, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity.
 
(ii)   Except as disclosed in the Memorandum, the Company is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company’s business as presently conducted.
 
(iii)   Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as presently conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any employee is now obligated.
 
(iv)   To the Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has contracted, is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company because of the nature of the business conducted by the Company; and to the Company’s knowledge the continued employment by the Company of its present employees, and the performance of the Company’s contracts with its independent contractors, will not result in any such violation. The Company has not received any written notice alleging that any such violation has occurred. Except as described in the Memorandum, no employee of the Company has been granted the right to continued employment by the Company or to any compensation following termination of employment with the Company except for any of the same which would not have a material adverse effect on the business of the Company. The Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company, nor does the Company have a present intention to terminate the employment of any officer, key employee or group of employees.
 
7

 
2.10   Title to Properties and Assets; Liens, Etc . The Company has good and marketable title to its properties and assets, including the properties and assets reflected in the most recent balance sheet included in the Financial Statements, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes which have not yet become delinquent; (b) liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company; and (c) those that have otherwise arisen in the ordinary course of business. The Company is in compliance with all material terms of each lease to which it is a party or is otherwise bound.
 
2.11   Obligations to Related Parties . Except as described in the Memorandum, there are no obligations of the Company to officers, directors, stockholders, or employees of the Company other than (a) for payment of salary or other compensation for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and (c) for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company). Except as may be disclosed in the Memorandum, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.
 

III.
TERMS OF SUBSCRIPTION
 
3.1   There is no requirement that any minimum number of Shares be sold and therefore no escrow will be established for subscription funds. Subscription funds may be deposited by the Company directly into its operating account for use as described in this Confidential Offering Memorandum.
 
3.2   Certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber within 15 business days following the Closing at which such purchase takes place. The Subscriber hereby authorizes and directs the Company to deliver the certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement directly to the Subscriber’s residential or business address indicated on the signature page hereto.
 

IV.
CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS
 
4.1   The Subscriber’s obligation to purchase the Shares at the Closing at which such purchase is to be consummated is subject to the fulfillment on or prior to such Closing of the following conditions, which conditions may be waived at the option of each Subscriber to the extent permitted by law:
 
8

 
(a)   Covenants . All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of such Closing shall have been performed or complied with in all material respects.
 
(b)   No Legal Order Pending . There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement.
 
(c)   No Law Prohibiting or Restricting Such Sale . There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Securities (except as otherwise provided in this Agreement).
 
V.
REGISTRATION RIGHTS
 
5.1   Definitions . As used in this Agreement, the following terms shall have the following meanings.
 
(a)   The term “Holder” shall mean any person owning or having the right to acquire Registrable Securities or any permitted transferee of a Holder.
 
(b)   The terms “register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or order of effectiveness of such registration statement or document.
 
(c)   The term “Registrable Securities” shall mean: (i) the Common Stock; and (ii) any other shares of Common Stock with respect to which the Company has granted or may in the future grant registration rights pursuant to separate agreements; provided, however, that securities shall only be treated as Registrable Securities if and only for so long as they (A) have not been disposed of pursuant to a registration statement declared effective by the SEC; (B) have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale; (C) are held by a Holder or a permitted transferee of a Holder pursuant to Section 5.10; and (D) may not be disposed of under Rule 144(k) under the Securities Act without restriction.
 
5.2   Piggy-Back Registration . The Holders will be entitled to “piggy-back” registration rights of the shares of Common Stock on registration statements (other than on Form S-8, S-4 or similar Forms) filed by the Company. The Company shall use its best efforts to cause such Registration Statement to become effective as soon as possible.
 
5.3   Registration Procedures . Whenever required under this Article V to include Registrable Securities in a Company registration statement, the Company shall, as expeditiously as reasonably possible:
 
9

 
(a)   Use best efforts to (i) cause such registration statement to become effective, and (ii) cause such registration statement to remain effective until the earliest to occur of (A) such date as the sellers of Registrable Securities (the “Selling Holders”) have completed the distribution described in the registration statement and (B) such time that all of such Registrable Securities are no longer, by reason of Rule 144(k) under the Securities Act, required to be registered for the sale thereof by such Holders. The Company will also use its best efforts to, during the period that such registration statement is required to be maintained hereunder, file such post-effective amendments and supplements thereto as may be required by the Securities Act and the rules and regulations thereunder or otherwise to ensure that the registration statement does not contain any untrue statement of material fact or omit to state a fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they are made, not misleading; provided, however, that if applicable rules under the Securities Act governing the obligation to file a post-effective amendment permits, in lieu of filing a post-effective amendment that (i) includes any prospectus required by Section 10(a)(3) of the Securities Act or (ii) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the Company may incorporate by reference information required to be included in (i) and (ii) above to the extent such information is contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement.
 
(b)   Prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.
 
(c)   Make available for inspection upon reasonable notice during the Company’s regular business hours by each Selling Holder, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such Selling Holder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Selling Holder, underwriter, attorney, accountant or agent in connection with such registration statement.
 
(d)   Furnish to the Selling Holders such numbers of copies of a prospectus, including a preliminary prospectus as amended or supplemented from time to time, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.
 
(e)   Use best efforts to register and qualify the securities covered by such registration statement under such other federal or state securities laws of such jurisdictions as shall be reasonably requested by the Selling Holders; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act.
 
(f)   In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Selling Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.
 
10

 
(g)   Notify each Holder of Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, (i) when the registration statement or any post-effective amendment and supplement thereto has become effective; (ii) of the issuance by the SEC of any stop order or the initiation of proceedings for that purpose (in which event the Company shall make every effort to obtain the withdrawal of any order suspending effectiveness of the registration statement at the earliest possible time or prevent the entry thereof); (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose; and (iv) of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.
 
(h)   Cause all such Registrable Securities registered hereunder to be listed on each securities exchange or quotation service on which similar securities issued by the Company are then listed or quoted or, if no such similar securities are listed or quoted on a securities exchange or quotation service, apply for qualification and use best efforts to qualify such Registrable Securities for inclusion on the New York Stock Exchange, American Stock Exchange or listing on a quotation system of the National Association of Securities Dealers, Inc.
 
(i)   Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.
 
(j)   Cooperate with the Selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold, which certificates will not bear any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, shall request at least two business days prior to any sale of the Registrable Securities to the underwriters.
 
(k)   In connection with an underwritten offering, cause the officers of the Company to provide reasonable assistance in the preparation of, any “road show” presentation to potential investors as the managing underwriter may determine.
 
(l)   Comply with all applicable rules and regulations of the SEC and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 50 calendar days after the end of any 3-month period (or 105 calendar days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or best efforts underwritten offering, and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company, after the effective date of a registration statement, which statements shall cover said period.
 
11

 
(m)   If the offering is underwritten and at the request of any Selling Holder, use its best efforts to furnish on the date that Registrable Securities are delivered to the underwriters for sale pursuant to such registration: (i) opinions dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters and the transfer agent for the Registrable Securities so delivered, respectively, to the effect that such registration statement has become effective under the Securities Act and such Registrable Securities are freely tradable, and covering such other matters as are customarily covered in opinions of issuer’s counsel delivered to underwriters and transfer agents in underwritten public offerings and (ii) a letter dated such date from the independent public accountants who have certified the financial statements of the Company included in the registration statement or the prospectus, covering such matters as are customarily covered in accountants’ letters delivered to underwriters in underwritten public offerings.
 
5.4   Furnish Information . It shall be a condition precedent to the obligation of the Company to take any action pursuant to this Article V with respect to the Registrable Securities of any Selling Holder that such Holder shall furnish to the Company such information regarding the Holder, the Registrable Securities held by the Holder, and the intended method of disposition of such securities as shall be reasonably required by the Company to effect the registration of such Holder’s Registrable Securities.
 
5.5   Registration Expenses . The Company shall bear and pay all Registration Expenses incurred in connection with any registration, filing or qualification of Registrable Securities with respect to registration pursuant to Section 5.2 for each Holder, but excluding underwriting discounts and commissions relating to Registrable Securities and excluding any professional fees or costs of accounting, financial or legal advisors to any of the Holders.
 
5.6   Underwriting Requirements . In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under Section 5.2 to include any of the Holders’ Registrable Securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling stockholders according to the total amount of securities entitled to be included therein owned by each selling stockholder or in such other proportions as shall mutually be agreed to by such selling stockholders). For purposes of the preceding parenthetical concerning apportionment, for any selling stockholder who is a holder of Registrable Securities and is a partnership or corporation, the partners, retired partners and stockholders of such holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling stockholder,” and any pro-rata reduction with respect to such “selling stockholder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling stockholder,” as defined in this sentence.
 
12

 
5.7   Delay of Registration . No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article.
 
5.8   Indemnification . In the event that any Registrable Securities are included in a registration statement under this Article V:
 
(a)   To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation by the Company of the Securities Act, the Exchange Act, or any rule or regulation promulgated under the Securities Act, or the Exchange Act, and the Company will pay to each such Holder, underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section 5.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person.
 
(b)   To the extent permitted by law, each Selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this Section 5.8(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided , however , that the indemnity agreement contained in this Section 5.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided , further, that, in no event shall any indemnity under this Section 5.8(b) exceed the greater of the cash value of the (i) gross proceeds from the Offering received by such Holder or (ii) such Holder’s investment pursuant to this Agreement as set forth on the signature page attached hereto.
 
13

 
(c)   Promptly after receipt by an indemnified party under this Section 5.8 of notice of the commencement of any action (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 5.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified, to assume the defense thereof with counsel selected by the indemnifying party and approved by the indemnified party (whose approval shall not be unreasonably withheld); provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 5.8, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5.8.
 
(d)   If the indemnification provided for in this Section 5.8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.
 
(e)   Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in an underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.
 
14

 
(f)   The obligations of the Company and Holders under this Section 5.8 shall survive the completion of the Offering.
 
5.9   Reports Under Securities Exchange Act of 1934 . With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:
 
(a)   make and keep public information available, as those terms are understood and defined in Rule 144, at all times after 90 days after the effective date of the registration statement;
 
(b)   file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
 
(c)   furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.
 
5.10   Permitted Transferees . The rights to cause the Company to register Registrable Securities granted to the Holders by the Company under this Article V may be assigned in full by a Holder in connection with a transfer by such Holder of its Registrable Securities if: (a) such Holder gives prior written notice to the Company; (b) such transferee agrees to comply with the terms and provisions of this Agreement; (c) such transfer is otherwise in compliance with this Agreement; and (d) such transfer is otherwise effected in accordance with applicable securities laws. Except as specifically permitted by this Section 5.10, the rights of a Holder with respect to Registrable Securities as set out herein shall not be transferable to any other Person, and any attempted transfer shall cause all rights of such Holder therein to be forfeited.
 
VI.
MISCELLANEOUS
 
6.1   Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:
 
if to the Company, to it at:
 
BioSolar, Inc.
27936 Lost Canyon Road, Suite 202
Santa Clarita, California 91387
Attn: David Lee, Chief Executive Officer
 
15

 
With a copy to:

Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, NY 10018
Attn: Gregory Sichenzia, Esq.

if to the Subscriber, to the Subscriber’s address indicated on the signature page of this Agreement.
 
Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received.
 
6.2   Except as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
 
6.3   Subject to the provisions of Section 5.10, this Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
 
6.4   Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Common Stock as herein provided, subject, however, to the right hereby reserved by the Company to enter into the same agreements with other subscribers and to add and/or delete other persons as subscribers.
 
6.5   NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE SUPREME COURT OF THE STATE OF NEW YORK IN AND FOR THE COUNTY OF NEW YORK OR THE FEDERAL COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.
 
6.6   In order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.
 
16

 
6.7   The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein.
 
6.8   It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.
 
6.9   The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.
 
6.10   This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.
 
6.11   Nothing in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement, except (a) for the holders of Registrable Securities.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
17


VII.
CONFIDENTIAL INVESTOR QUESTIONNAIRE
 
7.1   The Subscriber represents and warrants that he, she or it comes within one category marked below, and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.
 
Category A      
The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.

Explanation. In calculating net worth you may include equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.
   
Category B        The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.
   
Category C         The undersigned is a director or executive officer of the Company which is issuing and selling the Securities.
   
Category D       The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors. (describe entity)
   
   
   
Category E        The undersigned is a private business development company as defined in section 202(a)(22) of the Investment Advisors Act of 1940. (describe entity)
   
Category F       The undersigned is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Common Stock and with total assets in excess of $5,000,000. (describe entity)
   
   
 
18

 
   
Category G          The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, where the purchase is directed by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act.
   
Category H          The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories. If relying upon this Category alone, each equity owner must    complete a separate copy of this Agreement. (describe entity)
   
   
   
Category I        The undersigned is not within any of the categories above and is therefore not an accredited investor.
 
The undersigned agrees that the undersigned will notify the Company at any time on or prior to the Closing Date in the event that the representations and warranties in this Agreement shall cease to be true, accurate and complete.
 
7.2   SUITABILITY (please answer each question)
 
(a)   For an individual Subscriber, please describe your current employment, including the company by which you are employed and its principal business:
 
   
   
   
   
 
(b)   For an individual Subscriber, please describe any college or graduate degrees held by you:
 
   
   
   
   
 
(c)   For all Subscribers, please list types of prior investments:
 
   
   
   
   
 
 
19

 
(d)   For all Subscribers, please state whether you have participated in other private placements before:
 
YES_______       NO_______
(e)   If your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements of:
 
   
Public
Companies
 
Private
Companies
 
Public or Private VoIP or other
Communications Companies
Frequently
           
Occasionally
           
Never
           

(f)   For individual Subscribers, do you expect your current level of income to significantly decrease in the foreseeable future:
 
YES_______       NO_______
(g)   For trust, corporate, partnership and other institutional Subscribers, do you expect your total assets to significantly decrease in the foreseeable future:
 
YES_______       NO_______
(h)   For all Subscribers, do you have any other investments or contingent liabilities which you reasonably anticipate could cause you to need sudden cash requirements in excess of cash readily available to you:
 
YES_______       NO_______
(i)   For all Subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the securities for which you seek to subscribe?
 
YES_______       NO_______
(j)   For all Subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?
 
YES_______       NO_______
7.3   MANNER IN WHICH TITLE IS TO BE HELD . (circle one)
 
(a)   Individual Ownership
(b)   Community Property
(c)   Joint Tenant with Right of Survivorship (both parties must sign)
(d)   Partnership*
(e)   Tenants in Common
(f)   Company*
(g)   Trust*
(h)   Other*
 
*If Securities are being subscribed for by an entity, the attached Certificate of Signatory must also be completed.
 
20

 
7.4   NASD AFFILIATION .
 
Are you affiliated or associated with an NASD member firm (please check one):
Yes _________     No __________
 
If Yes, please describe:
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________

*If Subscriber is a Registered Representative with an NASD member firm, have the following acknowledgment signed by the appropriate party:
 
The undersigned NASD member firm acknowledges receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
 
_________________________________
Name of NASD Member Firm

By: ______________________________
Authorized Officer

Date: ____________________________

7.5   The undersigned is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential Investor Questionnaire contained in this Article VII and such answers have been provided under the assumption that the Company will rely on them.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
21


NUMBER OF SHARES _________ X $0.10 = $_________ (the “Purchase Price”)  
 
     
     
Signature   Signature (if purchasing jointly)
     
     
Name Typed or Printed   Name Typed or Printed
     
     
Title (if Subscriber is an Entity)         Title (if Subscriber is an Entity)
     
     
Entity Name (if applicable)       Entity Name (if applicable)
     
     
     
     
Address             Address
     
     
City, State and Zip Code         City, State and Zip Code
     
     
Telephone-Business         Telephone-Business
     
     
Telephone-Residence           Telephone-Residence
     
     
Facsimile-Business           Facsimile-Business
     
     
Facsimile-Residence           Facsimile-Residence
     
     
Email               Email
     
     
Tax ID # or Social Security #        Tax ID # or Social Security #
     
Name in which securities should be issued:      
 
 
Dated:       , 2006

This Subscription Agreement is agreed to and accepted as of ________________   , 2006.
 
BIOSOLAR, INC.


By:____________________________________
Name:
Title:  
 
22

 
CERTIFICATE OF SIGNATORY

(To be completed if Shares are
being subscribed for by an entity)


I, ____________________________, am the ____________________________ of __________________________________________ (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Common Stock, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ________ day of _________________, 2006


_______________________________________
(Signature)

23




SUBSCRIPTION AGREEMENT
 
SUBSCRIPTION AGREEMENT (this “Agreement”) made as of the last date set forth on the signature page hereof between BioSolar, Inc. (the “Company”), and the undersigned (the “Subscriber”).
 
W I T N E S S E T H:
WHEREAS, the Company is conducting a private offering (the “Offering”) consisting of up to 15,000,000 shares of common stock, par value $.0001 per share (“Shares”); and
 
WHEREAS, the Subscriber desires to purchase that number of Shares set forth on the signature page hereof on the terms and conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:
 
I.  
SUBSCRIPTION FOR SHARES AND REPRESENTATIONS BY SUBSCRIBER
 
1.1    Subject to the terms and conditions hereinafter set forth and in the Confidential Offering Memorandum dated July 21, 2006 (such memorandum, together with all amendments thereof and supplements and exhibits thereto, the “Memorandum”), the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such number of Shares, and the Company agrees to sell to the Subscriber as is set forth on the signature page hereof, at a per share price equal to $0.10 per Share. The purchase price is payable by personal or business check or money order made payable to “BioSolar, Inc. ” contemporaneously with the execution and delivery of this Agreement by the Subscriber. Subscribers may also pay the subscription amount by, wire transfer of immediately available funds to:

 
Bank:
Bank of America
   
19120 Soledad Canyon Road
   
Santa Clarita, California 91350
     
 
Account:
10234-69102
     
 
ABA:
121000358
1.2    The Subscriber recognizes that the purchase of the Shares involves a high degree of risk including, but not limited to, the following: (a) the Company remains a development stage business with limited operating history and requires substantial funds in addition to the proceeds of the Offering; (b) an investment in the Company is highly speculative, and only investors who can afford the loss of their entire investment should consider investing in the Company and the Shares; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of the Shares (sometimes hereinafter collectively referred to as the “Securities”) is extremely limited; (e) in the event of a disposition, the Subscriber could sustain the loss of its entire investment; (f) the Company has not paid any dividends since its inception and does not anticipate paying any dividends; and (g) the Company may issue additional securities in the future which have rights and preferences that are senior to those of the Common Stock. Without limiting the generality of the representations set forth in Section 1.5 below, the Subscriber represents that the Subscriber has carefully reviewed the section of the Memorandum captioned “Risk Factors.”
 
 
 

 
 
1.3    The Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as indicated by the Subscriber’s responses to the questions contained in Article VII hereof, and that the Subscriber is able to bear the economic risk of an investment in the Shares.
 
1.4    The Subscriber hereby acknowledges and represents that (a) the Subscriber has knowledge and experience in business and financial matters, prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national securities exchange nor on the National Association of Securities Dealers, Inc. (the “NASD”) automated quotation system (“NASDAQ”), or the Subscriber has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Subscriber and to all other prospective investors in the Shares to evaluate the merits and risks of such an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature of this investment; and (c) the Subscriber is able to bear the economic risk that the Subscriber hereby assumes.
 
1.5    The Subscriber hereby acknowledges receipt and careful review of this Agreement, the Memorandum (which includes the Risk Factors), including all exhibits thereto, and any documents which may have been made available upon request as reflected therein (collectively referred to as the “Offering Materials”) and hereby represents that the Subscriber has been furnished by the Company during the course of the Offering with all information regarding the Company, the terms and conditions of the Offering and any additional information that the Subscriber has requested or desired to know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms and conditions of the Offering.
 
1.6    (a) In making the decision to invest in the Shares the Subscriber has relied solely upon the information provided by the Company in the Offering Materials. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Shares hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course of Subscriber’s consideration of an investment in the Shares other than the Offering Materials.
 
(b)    The Subscriber represents that (i) the Subscriber was contacted regarding the sale of the Shares by the Company (or an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Shares were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.
 
 
2

 
 
1.7    The Subscriber hereby represents that the Subscriber, either by reason of the Subscriber’s business or financial experience or the business or financial experience of the Subscriber’s professional advisors (who are unaffiliated with and not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Subscriber’s own interests in connection with the transaction contemplated hereby.
 
1.8    The Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission (the “SEC”) nor any state regulatory authority since the Offering is intended to be exempt from the registration requirements of Section 5 of the Securities Act pursuant to Regulation D promulgated thereunder. The Subscriber understands that the Securities have not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Securities unless they are registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless an exemption from such registration is available.
 
1.9    The Subscriber understands that the Securities comprising the Shares have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act that depends, in part, upon the Subscriber’s investment intention. In this connection, the Subscriber hereby represents that the Subscriber is purchasing the Securities for the Subscriber’s own account for investment and not with a view toward the resale or distribution to others. The Subscriber, if an entity, further represents that it was not formed for the purpose of purchasing the Securities.
 
1.10    The Subscriber understands that there is no public market for the Common Stock and that no market may develop for any of such Securities. The Subscriber understands that even if a public market develops for such Securities, Rule 144 (“Rule 144”) promulgated under the Securities Act requires for non-affiliates, among other conditions, a one-year holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. The Subscriber understands and hereby acknowledges that the Company is under no obligation to register any of the Securities under the Securities Act or any state securities or “blue sky” laws other than as set forth in Article V.
 
1.11    The Subscriber consents to the placement of a legend on any certificate or other document evidencing the Securities that such Securities have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Subscriber is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Securities. The legend to be placed on each certificate shall be in form substantially similar to the following:
 
 
3

 
 
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”
 
1.12    The Subscriber understands that the Company will review this Agreement and is hereby given authority by the Subscriber to call Subscriber’s bank or place of employment or otherwise review the financial standing of the Subscriber; and it is further agreed that the Company, at its sole discretion, reserves the unrestricted right, without further documentation or agreement on the part of the Subscriber, to reject or limit any subscription, to accept subscriptions for fractional Shares and to close the Offering to the Subscriber at any time and that the Company will issue stop transfer instructions to its transfer agent with respect to such Securities.
 
1.13    The Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the Subscriber’s principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity.
 
1.14    The Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver this Agreement and to purchase the Shares. This Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.
 
1.15    If the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so.
 
1.16    The Subscriber acknowledges that if he or she is a Registered Representative of an NASD member firm, he or she must give such firm the notice required by the NASD’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in Section 7.4 below.
 
1.17    The Subscriber acknowledges that at such time, if ever, as the Securities are registered (as such term is defined in Article V hereof), sales of the Securities will be subject to state securities laws.
 
1.18    (a) The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.
 
(b)    The Company agrees not to disclose the names, addresses or any other information about the Subscribers, except as required by law; provided, that the Company may use the name of the Subscriber for any offering or in any registration statement filed pursuant to Article V in which the Subscriber’s shares are included.
 
1.19    The Subscriber agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of (a) any sale or distribution of the Securities by the Subscriber in violation of the Securities Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach or failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor Questionnaire contained in Article VII herein) or any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.
 
 
4

 

II.  
REPRESENTATIONS BY AND COVENANTS OF THE COMPANY
 
The Company hereby represents and warrants to the Subscriber that:
 
2.1    Organization, Good Standing and Qualification . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority to conduct its business.
 
2.2    Capitalization and Voting Rights . The Company has authorized 500,000,000 shares of Common Stock, par value $.0001 per share, of which 119,500,000 shares are outstanding as of the date hereof. Except as set forth in the Offering Materials, there are no outstanding options, warrants, agreements, convertible securities, preemptive rights or other rights to subscribe for or to purchase any shares of capital stock of the Company. Except as set forth in the Offering Materials and as otherwise required by law, there are no restrictions upon the voting or transfer of any of the shares of capital stock of the Company pursuant to the Company’s Articles of Incorporation (the “Articles of Incorporation”), By-Laws or other governing documents or any agreement or other instruments to which the Company is a party or by which the Company is bound.
 
2.3    Authorization; Enforceability . The Company has all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. All corporate action on the part of the Company, its directors and stockholders necessary for the (i) authorization execution, delivery and performance of this Agreement by the Company; and (ii) authorization, sale, issuance and delivery of the Securities contemplated hereby and the performance of the Company’s obligations hereunder has been taken. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy. The Common Stock, when issued and fully paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable. The issuance and sale of the Common Stock contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person which have not been waived in connection with this offering.
 
 
5

 
 
2.4    No Conflict; Governmental Consents .
 
(a)    The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not result in the violation of any material law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound, or of any provision of the Articles of Incorporation or By-Laws of the Company, and will not conflict with, or result in a material breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company.
 
(b)    No consent, approval, authorization or other order of any governmental authority is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the Shares, except such filings as may be required to be made with the SEC, NASD, NASDAQ and with any state or foreign blue sky or securities regulatory authority.
 
2.5    Licenses . Except as otherwise set forth in the Memorandum, the Company has sufficient licenses, permits and other governmental authorizations currently required for the conduct of its business or ownership of properties and is in all material respects in compliance therewith.
 
2.6    Litigation . The Company knows of no pending or threatened legal or governmental proceedings against the Company which could materially adversely affect the business, property, financial condition or operations of the Company or which materially and adversely questions the validity of this Agreement or any agreements related to the transactions contemplated hereby or the right of the Company to enter into any of such agreements, or to consummate the transactions contemplated hereby or thereby. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which could materially adversely affect the business, property, financial condition or operations of the Company. There is no action, suit, proceeding or investigation by the Company currently pending in any court or before any arbitrator or that the Company intends to initiate.
 
2.7    Disclosure . The information set forth in the Offering Materials as of the date hereof contains no untrue statement of a material fact nor omits to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
 
 
6

 
 
2.8    Investment Company . The Company is not an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.
 
2.9    Intellectual Property .
 
(i)    To the best of its knowledge, the Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now conducted and as presently proposed to be conducted, without any known infringement of the rights of others. Except as disclosed in the Memorandum, there are no material outstanding options, licenses or agreements of any kind relating to the foregoing proprietary rights, nor is the Company bound by or a party to any material options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of “off the shelf” or standard products. The Company has not received any written communications alleging that the Company has violated or, by conducting its business as presently proposed to be conducted, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity.
 
(ii)    Except as disclosed in the Memorandum, the Company is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company’s business as presently conducted.
 
(iii)    Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as presently conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any employee is now obligated.
 
(iv)    To the Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has contracted, is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company because of the nature of the business conducted by the Company; and to the Company’s knowledge the continued employment by the Company of its present employees, and the performance of the Company’s contracts with its independent contractors, will not result in any such violation. The Company has not received any written notice alleging that any such violation has occurred. Except as described in the Memorandum, no employee of the Company has been granted the right to continued employment by the Company or to any compensation following termination of employment with the Company except for any of the same which would not have a material adverse effect on the business of the Company. The Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company, nor does the Company have a present intention to terminate the employment of any officer, key employee or group of employees.
 
 
7

 
 
2.10    Title to Properties and Assets; Liens, Etc . The Company has good and marketable title to its properties and assets, including the properties and assets reflected in the most recent balance sheet included in the Financial Statements, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes which have not yet become delinquent; (b) liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company; and (c) those that have otherwise arisen in the ordinary course of business. The Company is in compliance with all material terms of each lease to which it is a party or is otherwise bound.
 
2.11    Obligations to Related Parties . Except as described in the Memorandum, there are no obligations of the Company to officers, directors, stockholders, or employees of the Company other than (a) for payment of salary or other compensation for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and (c) for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company). Except as may be disclosed in the Memorandum, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.
 

III.  
TERMS OF SUBSCRIPTION
 
3.1    There is no requirement that any minimum number of Shares be sold and therefore no escrow will be established for subscription funds. Subscription funds may be deposited by the Company directly into its operating account for use as described in this Confidential Offering Memorandum.
 
3.2    Certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber within 15 business days following the Closing at which such purchase takes place. The Subscriber hereby authorizes and directs the Company to deliver the certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement directly to the Subscriber’s residential or business address indicated on the signature page hereto.
 

IV.  
CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS
 
4.1    The Subscriber’s obligation to purchase the Shares at the Closing at which such purchase is to be consummated is subject to the fulfillment on or prior to such Closing of the following conditions, which conditions may be waived at the option of each Subscriber to the extent permitted by law:
 
 
8

 
 
(a)    Covenants . All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of such Closing shall have been performed or complied with in all material respects.
 
(b)    No Legal Order Pending . There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement.
 
(c)    No Law Prohibiting or Restricting Such Sale . There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Securities (except as otherwise provided in this Agreement).
 
V.  
LOCK-UP AGREEMENT
 
5.1    The Subscriber understands that the Company may file with the Securities and Exchange Commission (" SEC") a registration statement on Form SB-2 (the "Registration Statement") to register certain shares of the Company’s common stock and to exercise its reasonable best efforts to cause the Registration Statement to become effective. The Company may also request a broker-dealer to file with the National Association of Securities Dealers (the "NASD") to secure the listing or quotation of its Common Stock on the Over the Counter Bulletin Board market maintained by the National Association of Securities Dealers, Inc.
 
5.2    As an inducement to NASD market makers to establish a public market for the common stock, the Subscriber hereby agrees that from the date of the Confidential Offering Memorandum and until one (1) year after the Registration Statement is declared effective by the SEC, the Subscriber will not exercise any rights to sell any unregistered shares of the Company's Common Stock as may be permitted under SEC Rule 144.
 
VI.  
MISCELLANEOUS
 
6.1    Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:
 
if to the Company, to it at:
BioSolar, Inc.
27936 Lost Canyon Road, Suite 202
Santa Clarita, California 91387
Attn: David Lee, Chief Executive Officer

With a copy to:

Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, NY 10018
Attn: Gregory Sichenzia, Esq.

 
9

 
if to the Subscriber, to the Subscriber’s address indicated on the signature page of this Agreement.
 
Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received.
 
6.2    Except as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
 
6.3    Subject to the provisions of Section 5.10, this Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
 
6.4    Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Common Stock as herein provided, subject, however, to the right hereby reserved by the Company to enter into the same agreements with other subscribers and to add and/or delete other persons as subscribers.
 
6.5    NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE SUPREME COURT OF THE STATE OF NEW YORK IN AND FOR THE COUNTY OF NEW YORK OR THE FEDERAL COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.
 
6.6    In order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.
 
6.7    The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein.
 
 
10

 
6.8    It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.
 
6.9    The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.
 
6.10    This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.
 
6.11    Nothing in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement, except (a) for the holders of Registrable Securities.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
11

 
VII.  
CONFIDENTIAL INVESTOR QUESTIONNAIRE
 
7.1    The Subscriber represents and warrants that he, she or it comes within one category marked below, and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.
 
Category A     The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.

Explanation. In calculating net worth you may include equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.

Category B     The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.

Category C     The undersigned is a director or executive officer of the Company which is issuing and selling the Securities.

Category D     The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors. (describe entity)
 

 

 
Category E     The undersigned is a private business development company as defined in section 202(a)(22) of the Investment Advisors Act of 1940. (describe entity)
 

 

 
Category F     The undersigned is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Common Stock and with total assets in excess of $5,000,000. (describe entity)
 
 
12

 
 
Category G     The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, where the purchase is directed by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act.
 
Category H     The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories. If relying upon this Category alone, each equity owner must complete a separate copy of this Agreement. (describe entity)
 

 

 
Category I     The undersigned is not within any of the categories above and is therefore not an accredited investor.
 
The undersigned agrees that the undersigned will notify the Company at any time on or prior to the Closing Date in the event that the representations and warranties in this Agreement shall cease to be true, accurate and complete.
 
7.2    SUITABILITY (please answer each question)
 
(a)   For an individual Subscriber, please describe your current employment, including the company by which you are employed and its principal business:
 

 

 
(b)   For an individual Subscriber, please describe any college or graduate degrees held by you:
 

 

 
(c)   For all Subscribers, please list types of prior investments:
 

 

 
 
13

 
 
(d)   For all Subscribers, please state whether you have participated in other private placements before:
 
YES_______       NO_______
 
(e)   If your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements of:
 
 
Public
Companies
Private
Companies
Public or Private VoIP or other
Communications Companies
Frequently
     
Occasionally
     
Never
     

(f)   For individual Subscribers, do you expect your current level of income to significantly decrease in the foreseeable future:
 
YES_______       NO_______
(g)   For trust, corporate, partnership and other institutional Subscribers, do you expect your total assets to significantly decrease in the foreseeable future:
 
YES_______       NO_______
(h)   For all Subscribers, do you have any other investments or contingent liabilities which you reasonably anticipate could cause you to need sudden cash requirements in excess of cash readily available to you:
 
YES_______       NO_______
(i)   For all Subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the securities for which you seek to subscribe?
 
YES_______       NO_______
(j)   For all Subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?
 
YES_______       NO_______
 
7.3    MANNER IN WHICH TITLE IS TO BE HELD . (circle one)
 
(a)   Individual Ownership
(b)   Community Property
(c)   Joint Tenant with Right of
 Survivorship (both parties must sign)
(d)   Partnership*
(e)   Tenants in Common
(f)   Company*
 
 
14

 
 
(g)   Trust*
(h)   Other*
*If Securities are being subscribed for by an entity, the attached Certificate of Signatory must also be completed.
 
7.4    NASD AFFILIATION .
 
Are you affiliated or associated with an NASD member firm (please check one):
Yes _________     No __________
 
If Yes, please describe:
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________

*If Subscriber is a Registered Representative with an NASD member firm, have the following acknowledgment signed by the appropriate party:
 
The undersigned NASD member firm acknowledges receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
 
_________________________________
Name of NASD Member Firm

By: ______________________________
Authorized Officer

Date: ____________________________

7.5    The undersigned is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential Investor Questionnaire contained in this Article VII and such answers have been provided under the assumption that the Company will rely on them.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 

 
 
15

 
 
NUMBER OF SHARES _________ X $0.10 = $_________ (the “Purchase Price”)  


   
 
Signature
 
Signature (if purchasing jointly)
     
   
 
Name Typed or Printed
 
Name Typed or Printed
     
   
 
Title (if Subscriber is an Entity)
 
Title (if Subscriber is an Entity)
     
   
 
Entity Name (if applicable)
 
Entity Name (if applicable
     
     
     
Address
 
Address
     
   
 
City, State and Zip Code
 
City, State and Zip Code
     
   
 
Telephone-Business
 
Telephone-Business
     
   
 
Telephone-Residence
 
Telephone-Residence
     
   
 
Facsimile-Business
 
Facsimile-Business
     
   
 
Facsimile-Residence
 
Facsimile-Residence
     
   
 
Email
 
Email
     
   
 
Tax ID # or Social Security #
 
Tax ID # or Social Security #
 
 
Dated: _____________ , 2006

This Subscription Agreement is agreed to and accepted as of ________________   , 2006.
 
     
  BIOSOLAR, INC.
 
 
 
 
 
 
  By:    
 
Name:
  Title:  
 
 
16

 
 
CERTIFICATE OF SIGNATORY

(To be completed if Shares are
being subscribed for by an entity)


I, ____________________________, am the ____________________________ of __________________________________________ (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Common Stock, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ________ day of _________________, 2006


 
  (Signature)
 

 
 
17

 

 
EXHIBIT 23.1
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT


We consent to the use in this Registration Statement of BioSolar, Inc. on Form SB-2, of our report, dated September 27, 2006, which includes an emphasis paragraph relating to an uncertainty as to the Company’s ability to continue as a going concern, appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to our Firm under the caption “Experts” in the Prospectus.

/s/ HJ Associates & Consultants, LLP
 
HJ Associates & Consultants, LLP
Salt Lake City, Utah
November 21, 2006