**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**




**Washington,
      D.C. 20549**









**FORM
      10-KSB**




ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934




**For
                  the fiscal year ended December 31, 2006**
              **Commission
                  file number:
                  333-138910**







**BIOSOLAR,
      INC.**




(Exact
      name of small business issuer as specified


in
      its
      charter)




**Nevada**
            **20-4754291**(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer
              Identification
                No.)**27936
                Lost Canyon Road, Suite 202****Santa
                Clarita, California**
            **91387**(Address
                of principal
              executive
                offices)
            (Zip
                Code)







Issuer’s
      telephone number, including area code: (661) 251-0001




Securities
      registered under Section 12(b) of the Exchange Act: None




Securities
      registered pursuant to Section 12(g) of the Exchange Act: None







Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act.  ̈





Check
      whether the issuer filed all reports required to be filed by Section 13 or
      15(d)
      of the Exchange Act during the preceding 12 months (or for such shorter period
      that the issuer was required to file such reports), and (2) has been subject
      to
      the filing requirements for the past 90 days. Yes o No  x




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B and no disclosure will be contained, to the best of the issuer’s
      knowledge, in definitive proxy or information statements incorporated by
      reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  ̈




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




The
      issuer’s revenues for the fiscal year ended December 31, 2006 were
      $0.




The
      aggregate market value of the Common Stock held by non-affiliates of the issuer
      as of March 14, 2007 was $16,182,133.17.




The
      number of shares outstanding of the issuer’s Common Stock as of March 14, 2007
      was 128,557,777 shares.




**DOCUMENTS
      INCORPORATED BY REFERENCE: NONE**





Transitional
      Small Business Disclosure Format (check one): Yes o No x









**BIOSOLAR,
      INC.**




**2006
      FORM 10-KSB ANNUAL REPORT**




**TABLE
      OF CONTENTS**




PagePART
                  I
              
              3Item
                  1.
              Description
                  of Business
              3Item
                  2.
              Description
                  of Property
              6Item
                  3.
              Legal
                  Proceedings
              6Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders.
              6PART
                  II
              
              7Item
                  5.
              Market
                  for Common Equity and Related Stockholder Matters.
              7Item
                  6.
              Management’s
                  Discussion and Analysis or Plan of Operation.
              8Item
                  7.
              Financial
                  Statements.
              F-1Item
                  8.
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure.
              17Item
                  8A
              Controls
                  and Procedures.
              17Item
                  8B
              Other
                  Information
              17PART
                  III
              
              18Item
                  9
              Directors,
                  Executive Officers, Promoters and Control Persons: Compliance with
                  Section
                  16(a) of the Exchange Act
              18Item
                  10
              Executive
                  Compensation
              19Item
                  11
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholders
              20Item
                  12
              Certain
                  Relationships and Related Transactions, and Director
                  Independence
              20Item
                  13.
              Exhibits
              20Item
                  14.
              Principal
                  Accountant Fees and Services.
              21





**PART** **I**




Item1.Description
      of Business




**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.





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 due 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.





**Corporate
      Information and History**





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. Our fiscal year
      end is December 31.





**Industry
      Overview**





The
      solar
      industry relies on two distinctly different solar energy technologies. Solar
      energy can be converted directly into electricity using photovoltaic devices
      or
      into heat by solar thermal devices. Photovoltaic devices convert sunlight
      directly into electricity through a photovoltaic (PV) cell, commonly called
      a
      solar cell, a non-mechanical device usually made from silicon alloys. Solar
      thermal devices, on the other hand, are typically used for directly heating
      swimming pools, heating water for domestic use, and space heating of buildings.




3





Our
      product development focus is based on photovoltaic technology, thus we are
      currently a part of the photovoltaic segment of the industry. "Photovoltaics"
      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 into 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 less silicon than traditional films and can be manufactured
      at
      low cost and in large volume.





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 electons and lose power, similar to a battery, as it is a converter
      that
      turns one kind of energy (sun light) 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-along
      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. Photovoltaic 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.





**Research
      and Development**





We
      plan
      to develop our new and innovative thin film solar cells produced on bio-based
      plastic substrates that convert sun light into electrical energy. To achieve
      this goal, we plan to further develop our bio-based substrate, commence a test
      program to determine the physical properties and characteristics that will
      be
      most suitable for the further development of specific thin film solar cell
      devices, and build prototype thin film solar cells.





We
      are
      currently developing our bio-based substrate. We believe that one problem with
      the use of bio-based plastic substrates to build thin film solar cells is that
      these bio-based materials have much lower melting and degassing temperature
      points than those of conventional petroleum based plastic substrates. Most
      existing chemical vapor deposition chambers used to build thin film solar cells
      on conventional petroleum-based substrates require processing temperatures
      in
      excess of 120 degrees Celsius. Therefore, we believe that existing bio-based
      plastics are not suitable for the manufacture of thin film solar cells.




4




Our
      primary bio-based substrate development effort is to overcome the processing
      temperature problem of degassing and deformation of the bio-based substrate
      material during the thin film solar cell manufacturing. We believe that lowering
      the processing temperature alone will not result in solar cells with desirable
      characteristics. Therefore, we are developing various ways to correct or
      overcome certain undesirable material properties at this lower temperature.





Our
      secondary bio-based substrate development effort is to satisfy the durability
      and environmental requirements established by conventional petroleum-based
      plastic substrates. This includes certain electromagnetic properties, mechanical
      strength, and absence of pin holes, good dimensional stability, high opacity
      and
      reflectivity, good moisture protection, weatherability, adhesion, flame
      resistance, as well as the ability to withstand chemical vapor deposition
      chamber processing temperatures.





Additional
      bio-based substrate development efforts will address the special handling or
      pre-processing requirements to deal with hydroscopic properties, removal of
      cleaning or manufacturing agents, surface suitability to the application of
      reflective coatings or its present properties for delivering additional light
      bouncing features, temperature sensitivity and uniformity once heated to
      maintain processing parameters, and reaction to the sun's spectrum and the
      ability to resist break down over time.





**Marketing
      Strategy**





We
      are
      developing thin film solar cells produced on bio-based plastic substrates.
      This
      technology is in the research and development stage.





Once
      we
      complete our product development, we intend to market our thin film solar cells
      produced on bio-based plastic substrates. In order to create a favorable
      environment for sales, we plan to undertake advertising and promotion efforts.
      These efforts will be outsourced and will require the services of advertising
      and public relations firms. We plan to interview various firms and select those
      most capable of assisting us with comprehensive advertising and promotion plans.
      We have not yet finalized the potential costs of our marketing
      strategy.





Our
      initial marketing strategy we will be to market to potential manufacturing
      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**




We
      currently do not have any mechanism for the manufacture and distribution of
      its
      thin film solar cells produced on bio-based plastic substrates, nor do we have
      adequate financing to undertake these efforts on our own. We intend to outsource
      manufacturing and distribution efforts to existing manufacturing and
      distributions firms.





5




**Intellectual
      Property**





On
      June
      27, 2006, we filed a patent to protect the intellectual property rights for
“A
      Method for Building Thin Film Flexible Solar Cells on Bio-Based Plastic
      Substrates”, application number 11/476,518. The inventor listed on the patent
      application is David Lee, our Chief Executive Officer. We are listed as the
      assignee. As of the date of this prospectus, we are awaiting the US Patent
      and
      Trademark Office to complete their review of our application.





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. ****





**Employees**




As
      of
      March 14, 2007 we had one (1) employee. We have not experienced any work
      stoppages and we consider relations with our employees to be good.




**Item
      2.**  **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
      $3,960 and from
      inception (April 24, 2006) through December 31, 2006.




**Item** **3.**  **Legal
      Proceedings**




We
      are
      not currently a party to any legal proceedings. There has been no bankruptcy,
      receivership or similar proceedings.





**Item** **4.**  **Submission
      of Matters to a Vote of Security Holders.**





None.




6




**PART** **II**




**Item** **5.**  **Market
      for Common Equity and Related Stockholder Matters.**




On
      February 22, 2007, our common stock became eligible for quotation on the NASD's
      OTC Bulletin Board under the symbol "BSRC."





For
      the
      periods indicated, the following table sets forth the high and low bid prices
      per share of common stock. These high and low bid prices represent prices quoted
      by broker-dealers on the OTC Bulletin Board. These prices represent inter-dealer
      quotations without retail markup, markdown, or commission and may not
      necessarily represent actual transactions.




Year
                  Ending December 31, 2007*:
              
              High
              
              LowFirst
                  Quarter**
              
              $
              .22
              
              $
              .10





*Our
      common stock became eligible for quotation on the NASD's OTC Bulletin Board
      on
      February 22, 2007.




**From
      February 22, 2007 through March 14, 2007.




**Common
      Stock**





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 our 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.





As
      of
      March 14, 2007, our common stock was held by 135 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.





**Dividend
      Policy**




We
      have
      never declared or paid any cash dividends on our common stock. We do not
      anticipate paying any cash dividends to stockholders in the foreseeable future.
      In addition, any future determination to pay cash dividends will be at the
      discretion of the board of directors and will be dependent upon our financial
      condition, results of operations, capital requirements, and such other factors
      as the Board of Directors deem relevant. 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 December 31, 2006.




7




**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-





**Unregistered
      Sales of Equity Securities**




Following
      is a summary of unregistered securities issued from inception (April 24, 2006)
      through December 31, 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.





*
      All of
      the above offerings and sales were deemed or determined by Biosolar, Inc. 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.





**Item****6.****Management’s
      Discussion and Analysis or Plan of Operation.**




**Special
      Note on Forward-Looking Statements.** Certain
      statements in “Management’s Discussion and Analysis or Plan of Operation” below,
      and elsewhere in this annual report, are not related to historical results,
      and
      are forward-looking statements. Forward-looking statements present our
      expectations or forecasts of future events. You can identify these statements
      by
      the fact that they do not relate strictly to historical or current facts. These
      statements involve known and unknown risks, uncertainties and other factors
      that
      may cause our 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.
      Forward-looking statements frequently are accompanied by such words such as
      “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative
      of such terms or other words and terms of similar meaning. Although we believe
      that the expectations reflected in the forward-looking statements are
      reasonable, we cannot guarantee future results, levels of activity, performance,
      achievements, or timeliness of such results. Moreover, neither we nor any other
      person assumes responsibility for the accuracy and completeness of such
      forward-looking statements. We are under no duty to update any of the
      forward-looking statements after the date of this annual report. Subsequent
      written and oral forward looking statements attributable to us or to persons
      acting in our behalf are expressly qualified in their entirety by the cautionary
      statements and risk factors set forth below and elsewhere in this annual report,
      and in other reports filed by us with the SEC.




8




You
      should read the following description of our financial condition and results
      of
      operations in conjunction with the financial statements and accompanying notes
      included in this report beginning on page F-1.




**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. Our fiscal
      year end is December 31.





**Application
      of 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.




9





**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**





Our 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.




In
      December 2004, the FASB issued Statement of Financial Accounting Standards
      No.
      123R, Share-based Payment. SFAS 123R revises SFAS 123 and supersedes APB 25.
      SFAS 123R will be effective for the year ending December 31, 2006, and applies
      to transactions in which an entity exchanges its equity instruments for goods
      or
      services and also applies to liabilities an entity may incur for goods or
      services that are to follow a fair value of those equity instruments. Under
      SFAS
      123R, we will be required to follow a fair value approach using an
      option-pricing model, such as the Black Scholes option valuation model, at
      the
      date of a stock option grant. The deferred compensation calculated under the
      fair value method would then be amortized over the respective vesting period
      of
      the stock option. The adoption of SFAS 123R will not have a material impact
      on
      our results of operations.





**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 us 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. We
      have
      evaluated the impact of the adoption of Statement 154 and do not believe the
      impact will be significant to our overall results of operations or financial
      position.




10





**Liquidity
      and Capital Resources**




As
      of
      December 31, 2006, we had $1,177,315 of working capital as compared to $320,225
      from inception (April 24, 2006) through June 30, 2006. This increase of $857,090
      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 $235,407 for year ended December 31, 2006
      as
      compared to cash used of $86,801 from inception (April 24, 2006) through June
      30, 2006. This increase of $148,606 was primarily attributable to a increase
      in
      professional fees.





Cash
      used
      in investing activities was $1,017,882 for the year ended December 31, 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
      investments in certificates of deposits and purchase of office equipment.




Cash
      provided from financing activities during year ended December 31, 2006 was
      $1,454,028 as compared to $407,000 from inception (April 24, 2006) through
      June
      30, 2006. We received $1,454,028 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 December 31, 2006 have been prepared under the
      assumption that we will continue as a going concern from inception (April 24,
      2006) through December 31, 2006. Our independent registered public accounting
      firm has issued their report dated March 1, 2007 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.




**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 $905,778 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.




11




Our
      plan
      of operation within the next twelve months is to utilize our cash balances
      to
      develop our new and innovative thin film solar cells produced on bio-based
      plastic substrates that convert sun light into electrical energy. In addition,
      during the next twelve months we plan to further develop our bio-based
      substrate, intend to commence a test program to determine the physical
      properties and characteristics that will be most suitable for the further
      development of specific thin film solar cell devices, and build prototype thin
      film solar cells, as we attempt to validate the commercial viability of our
      product. We believe that our current cash and investment balances will be
      sufficient to support development activity and general and administrative
      expenses for the next twelve months. Management estimates that it will require
      additional cash resources during 2008, based upon its current operating plan
      and
      condition. We will be investigating additional financing alternatives, including
      equity and/or debt financing. There is no assurance that capital in any form
      would be available to us, and if available, on terms and conditions that are
      acceptable. If we are unable to obtain sufficient funds during the next fifteen
      months, we may be forced to reduce the size of our organization, which could
      have a material adverse impact on, or cause us to curtail and/or cease, the
      development of our products.




**Operating
      Expenses**




Operating
      expenses for the year ended December 31, 2006 were $295,765 and consisted
      primarily of $84,000 in salary expense, $143,349 for professional fees, and
      $15,843 for marketing expenses. The professional fees incurred during the year
      ended December 31, 2006 consisted primarily of fees paid for bookkeeping
      services and to our independent registered public accounting firm for
      audit-related fees and attorney fees. The marketing expense incurred during
      the
      year ended December 31, 2006 consisted primarily of fees paid to a marketing
      firm to investigate the potential market for our bio-based thin film substrate
      and solar cells produced on bio-based thin film substrates.




**Net
      Loss**




Our
      net
      loss for the year ended December 31, 2006 was $274,361.




**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.





**RISK
      FACTORS**





In
      addition to other information contained in this Form 10-KSB, the following
      Risk
      Factors should be considered when evaluating the forward-looking statements
      contained in this Form 10-KSB:





**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.




12




**WE
      HAVE A LIMITED HISTORY OF LOSSES AND HAVE NEVER REALIZED REVENUES TO DATE.
      WE
      EXPECT TO CONTINUE TO INCUR LOSSES AND NO ASSURANCE CAN BE GIVEN THAT WE WILL
      REALIZE REVENUES.  ACCORDINGLY, WE MAY NEVER ACHIEVE AND SUSTAIN
      PROFITABILITY.**




Since
      inception, we have incurred losses and have negative cash flows from operations
      and have never realized revenues. From inception through December 31, 2006,
      we
      incurred a net loss of $274,361. 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 we are able to realize revenues to fund
      our
      continuing operations. We may fail to achieve any or significant revenues from
      sales or achieve or sustain profitability. Accordingly, there can be no
      assurance of when, if ever, we will be profitable or be able to maintain
      profitability.





**WE
      ARE A DEVELOPMENT STAGE COMPANY AND MAY BE UNABLE TO MANAGE OUR GROWTH OR
      IMPLEMENT OUR EXPANSION STRATEGY IF WE ARE ABLE TO LAUNCH OUR PRODUCT AND
      SERVICE OFFERINGS.**





We
      are a
      development stage company and may not be able to launch our 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. If
      we
      are able to launch our product and service offerings, 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 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 OUR FINANCIAL CONDITION AND RESULTS OF
      OPERATION COULD BE MATERIALLY AND ADVERSELY AFFECTED.**





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 are a development stage company
      and expect the development process to continue. We may not be able to create
      our
      product offering, develop a customer base and markets, or implement the other
      features of our business strategy at the rate or to the extent presently
      planned. Growth beyond the product development stage will place a significant
      strain on our administrative, operational and financial resources. In
      addition, our operations will not be able to move out of the development
      stage without additional funding. If we are unable to successfully finance
      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
      operation could be materially and adversely affected.




**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.




13





**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.





**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.




14




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 86.6% 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.





**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.




15





**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.




16




**Item
      7.**  **Financial Statements.**





**BIOSOLAR,
      INC.**




(A
      Development Stage Company)




Financial
      Statements




December
      31, 2006




CONTENTSPageReport
                  of Independent Registered Public Accounting Firm
              F-1FINANCIAL
                  STATEMENTSBalance
                  Sheet - From April 24, 2006 (Inception) through December 31,
                  2006
              F-2Statement
                  of Operations - From April 24, 2006 (Inception) through December
                  31,
                  2006
              F-3Statement
                  of Stockholders’ Equity - From April 24, 2006 (Inception) through December
                  31, 2006
              F-4Statement
                  of Cash Flows - From April 24, 2006 (Inception) through December
                  31,
                  2006
              F-5NOTES
                  TO FINANCIAL STATEMENTS
              F-6-11




REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 Board
        of
        Directors and Shareholders of
 BioSolar,
        Inc.
 (A
        Development Stage Company)
 Santa
        Clarita, CA
 
 We
        have
        audited the accompanying balance sheet of BioSolar, Inc. at December 31,
        2006,
        and the related statement of operations, stockholders' equity and cash flows
        for
        the year ended December 31, 2006. These financial statements are the
        responsibility of the Company’s management. Our responsibility is to express an
        opinion on these consolidated financial statements based on our
        audits.
 
 We
        conducted our audit in accordance with the auditing 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
        consolidated financial statements are free of material misstatement. An audit
        includes examining, on a test basis, evidence supporting the amounts and
        disclosures in the consolidated financial statements. An audit also includes
        assessing the accounting principles used and significant estimates made by
        management, as well as evaluating the overall consolidated financial statement
        presentation. We believe that our audits provide 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) at December 31, 2006, and the results of its operations and its
        cash
        flows for the year ended December 31, 2006, and in conformity with United
        States
        generally accepted accounting principles.
 
   HJ
        Associates & Consultants, LLP
 Salt
        Lake
        City, Utah
 March
        1,
        2007


F
          - 1




BIOSOLAR,
                  INC.(A
                  Development Stage Company)BALANCE
                  SHEETDECEMBER
                  31, 2006




ASSETSCURRENT
                  ASSETSCash
              
              $
              200,739Certificates
                  of Deposits
              
              
              1,015,904Prepaid
                  Expenses
              
              
              768Total
                  Current Assets
              
              
              1,217,411PROPERTY
                  & EQUIPMENTComputer
              
              
              1,978Less:
                  Accumulated Depreciation
              
              
              (396
              )Net
                  Property and Equipment
              
              
              1,582OTHER
                  ASSETSDeposit
              
              
              770TOTAL
                  ASSETS
              
              
              1,219,763LIABILITIES
                  AND SHAREHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  Payable
              
              
              37,179Credit
                  Card Payable
              
              
              2,917TOTAL
                  CURRENT LIABILITIES
              
              
              40,096SHAREHOLDERS'
                  EQUITY EQUITYCommon
                  Stock, $0.0001 par value;500,000,000
                  authorized common shares128,557,777
                  shares issued and outstanding
              
              
              12,856Additional
                  Paid in Capital
              
              
              1,441,172Deficit
                  Accumulated during the Development Stage
              
              
              (274,361
              )TOTAL
                  SHAREHOLDERS' EQUITY
              
              
              1,179,667TOTAL
                  LIABILITIES AND SHAREHOLDERS' EQUITY
              
              
              1,219,763
  The
                  accompanying notes are an integral part of these financial
                  statements




F
          - 2




BIOSOLAR,
                    INC.(A
                    Development Stage Company)STATEMENT
                    OF OPERATIONSDECEMBER
                    31, 2006
  From
                    InceptionApril
                    24, 2006throughDecember
                    31, 2006REVENUE
                
                -COST
                    & ADMINISTRATIVE EXPENSESSalaries
                
                
                84,000Professional
                    fees
                
                
                143,349Research
                    & Development
                
                
                16,690Depreciation
                
                
                396Rent
                
                
                3,960Payroll
                    taxes
                
                
                6,720Office
                    expense
                
                
                1,834Advertising
                
                
                500Automobile
                    expense
                
                
                473Insurance
                
                
                408Marketing
                    expenses
                
                
                15,843Meals
                    & Entertainment
                
                
                209Printing
                    & Production expense
                
                
                2,628Professional
                    Development
                
                
                1,640Taxes
                    & Licenses
                
                
                14,704Telephone
                    expense
                
                
                829Travel
                    expense
                
                
                1,582TOTAL
                    OPERATING EXPENSES
                
                
                295,765LOSS
                    FROM OPERATIONS BEFORE OTHER INCOME
                
                
                (295,765
                )TOTAL
                    OTHER INCOMEInterest
                    income
                
                
                21,404NET
                    LOSS
                
                $
                (274,361
                )BASIC
                    AND DILUTED LOSS PER SHARE
                
                $
                (0.00
                )WEIGHTED-AVERAGE
                    COMMON SHARES OUTSTANDINGBASIC
                    AND DILUTED
                
                
                110,953,304




The
                  accompanying notes are an integral part of these financial
                  statements




F
          - 3




BIOSOLAR,
                  INC.(A
                  Development Stage Company)STATEMENT
                  OF SHAREHOLDERS' EQUITYDECEMBER
                  31, 2006




DeficitAccumulatedAdditional
              
              during
                  theCommon
                  stock
              
              Paid-in
              
              Development
              
              SubscriptionShares
              
              Amount
              
              Capital
              
              Stage
              
              Receivable
              
              TotalIssuance
                  of common stock in April 2006 for services(1,000
                  common shares issued at $0.001 per share )
              
              
              1,000
              
              $
              1
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              1Issuance
                  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
              
              
              -
              
              
              
              
              
              7,499Issuance
                  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
              
              
              -
              
              
              
              
              
              5,000Issuance
                  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
              )
              
              2,000Issuance
                  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
              
              
              -
              
              
              
              
              
              375,000Issuance
                  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
              
              
              -
              
              
              
              
              
              8,500Issuance
                  of common shares in June 2006 for cash(90,000
                  common shares issued at $0.10 per share )
              
              
              90,000
              
              
              9
              
              
              8,991
              
              
              -
              
              
              
              
              
              9,000Stocks
                  subscribed
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              250
              
              
              250Issuance
                  of common shares in July 2006 for cash(5,760,000
                  common shares issued at $0.10 per share )
              
              
              5,760,000
              
              
              576
              
              
              575,424
              
              
              -
              
              
              -
              
              
              576,000Issuance
                  of common shares in August 2006 for cash(2,807,777
                  common shares issued at $0.10 per share )
              
              
              2,807,777
              
              
              281
              
              
              280,497
              
              
              -
              
              
              -
              
              
              280,778Issuance
                  of common shares in September 2006 for cash(1,450,000
                  common shares issued at $0.10 per share )
              
              
              1,450,000
              
              
              145
              
              
              144,855
              
              
              -
              
              
              -
              
              
              145,000Issuance
                  of common shares in October 2006 for cash(450,000
                  common shares issued at $0.10 per share )
              
              
              450,000
              
              
              45
              
              
              44,955
              
              
              -
              
              
              -
              
              
              45,000Net
                  Loss from Inception through December 31, 2006
              
              
              -
              
              
              -
              
              
              
              
              
              (274,361
              )
              
              
              
              
              (274,361
              )Balance
                  at December 31, 2006
              
              
              128,557,777
              
              $
              12,856
              
              $
              1,441,172
              
              $
              (274,361
              )
              $
              -
              
              $
              1,179,667


The
                  accompanying notes are an integral part of these financial
                  statements




F
          - 4




BIOSOLAR,
                    INC.(A
                    Development Stage Company)STATEMENT
                    OF CASH FLOWSDECEMBER
                    31, 2006
  From
                    InceptionApril
                    24, 2006throughDecember
                    31, 2006CASH
                    FLOWS FROM OPERATING ACTIVITIES:Net
                    loss
                
                $
                (274,361
                )Adjustment
                    to reconcile net loss to net cashused
                    in operating activitiesDepreciation
                    expense
                
                
                396(Increase)
                    Decrease in:Prepaid
                    expenses
                
                
                (768
                )Deposits
                
                
                (770
                )Increase
                    (Decrease) in:Accounts
                    Payable
                
                
                37,179Credit
                    Card Payable
                
                
                2,917NET
                    CASH USED IN OPERATING ACTIVITIES
                
                
                (235,407
                )NET
                    CASH FLOWS USED IN INVESTING ACTIVITIES:Purchase
                    of Equipment
                
                
                (1,978
                )Investment
                    in Certificate of Deposits
                
                
                (1,015,904
                )NET
                    CASH USED BY INVESTING ACTIVITIES
                
                
                (1,017,882
                )NET
                    CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds
                    from issuance of common stock
                
                
                1,454,028NET
                    CASH PROVIDED BY FINANCING ACTIVITIES
                
                
                1,454,028NET
                    INCREASE IN CASH
                
                
                200,739CASH,
                    BEGINNING OF PERIOD
                
                
                -CASH,
                    END OF PERIOD
                
                $
                200,739SUPPLEMENTAL
                    DISCLOSURES OF CASH FLOW INFORMATIONInterest
                    paid
                
                $
                -Taxes
                    paid
                
                $
                -


The
                  accompanying notes are an integral part of these financial
                  statements




F
          - 5




BIOSOLAR,
      INC.


(A
      Development Stage Company)


NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 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 the period ended December 31, 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 period ended
      December 31, 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.




F
          - 6


BIOSOLAR,
      INC.


(A
      Development Stage Company)


NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2006





2.
            SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES
                (Continued)





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.





Use
      of
      Estimates


The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the amounts reported in the accompanying financial statements.
      Significant estimates made in preparing these financial statements include
      the
      estimate of useful lives of property and equipment, the deferred tax valuation
      allowance, and the fair value of stock options. Actual results could differ
      from
      those estimates.





Property
      and Equipment


Property
      and equipment are stated at cost, and are depreciated using the modified
      accelerated cost recovery system (macrs) method over 3-10 years.





Fair
      Value of Financial Instruments


SFAS
      No.
      107, “Disclosures About Fair Value of Financial Instruments”, requires
      disclosure of the fair value information, whether or not recognized in the
      balance sheet, where it is practicable to estimate that value. As of December
      31, 2006, the amounts reported for cash, accounts receivable, accounts payable,
      accrued interest and other expenses, and notes payable approximate the fair
      value because of their short maturities.





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 December 31, 2006 as the inclusion
      of any potential shares would have had an anti-dilutive effect due to the
      Company generating a loss.




Income
      Taxes




The
      Company uses the liability method of accounting for income taxes. Deferred
      tax
      assets and liabilities are recognized for the future tax consequences
      attributable to financial statements carrying amounts of existing assets and
      liabilities and their respective tax bases and operating loss and tax credit
      carry-forwards. The measurement of deferred tax assets and liabilities is based
      on provisions of applicable tax law. The measurement of deferred tax assets
      is
      reduced, if necessary, by a valuation allowance based on the amount of tax
      benefits that, based on available evidence, is not expected to be
      realized.




Recently
      Issued Accounting Pronouncements




In
      December 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS
      148, Accounting for Stock-Based Compensation - Transition and Disclosure. This
      Statement amends SFAS 123, Accounting for Stock-Based Compensation, to provide
      alternative methods of transition for a voluntary change to the fair value
      based
      method of accounting for stock-based employee compensation. In addition, this
      Statement amends the disclosure requirements of Statement 123 to require
      prominent disclosures in both annual and interim financial statements about
      the
      method of accounting for stock-based employee compensation and the effect of the
      method used on the reported results.




F
          - 7


BIOSOLAR,
      INC.


(A
      Development Stage Company)


NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2006





2.
            SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES
                (Continued)




Recently
      Issued Accounting Pronouncements (Continued)




In
      November 2004, the FASB issued SFAS No. 151 "Inventory Costs, an amendment
      of
      ARB No. 43, Chapter 4. The amendments made by Statement 151 clarify that
      abnormal amounts of idle facility expense, freight, handling costs, and wasted
      materials (spoilage) should be recognized as current-period charges and require
      the allocation of fixed production overheads to inventory based on the normal
      capacity of the production facilities. The guidance is effective for inventory
      costs incurred during fiscal years beginning after June 15, 2005. Earlier
      application is permitted for inventory costs incurred during fiscal years
      beginning after November 23, 2004. The Company has evaluated the impact of
      the
      adoption of SFAS 151, and does not believe the impact will be significant to
      the
      Company's overall results of operations or financial position.




In
      December 2004, the FASB issued Statement of Financial Accounting Standards
      No.
      123R, Share-based Payment. SFAS 123R revises SFAS 123 and supersedes APB 25.
      SFAS 123R will be effective for the period ending December 31, 2006, and applies
      to transactions in which an entity exchanges its equity instruments for goods
      or
      services and also applies to liabilities an entity may incur for goods or
      services that are to follow a fair value of those equity instruments. Under
      SFAS
      123R, we will be required to follow a fair value approach using an
      option-pricing model, such as the Black Scholes option valuation model, at
      the
      date of a stock option grant. The deferred compensation calculated under the
      fair value method would then be amortized over the respective vesting period
      of
      the stock option. The adoption of SFAS 123R is expected to have a material
      impact on our results of operations.




In
      December 2004, the FASB issued SFAS No.153, "Exchanges of Nonmonetary Assets,
      an
      amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions."The
      amendments made by Statement 153 are based on the principle that exchanges
      of
      nonmonetary assets should be measured based on the fair value of the assets
      exchanged. Further, the amendments eliminate the narrow exception for
      nonmonetary exchanges of similar productive assets and replace it with a broader
      exception for exchanges of nonmonetary assets that do not have commercial
      substance. Previously, Opinion 29 required that the accounting for an exchange
      of a productive asset for a similar productive asset or an equivalent interest
      in the same or similar productive asset should be based on the recorded amount
      of the asset relinquished. Opinion 29 provided an exception to its basic
      measurement principle (fair value) for exchanges of similar productive assets.
      The Board believes that exception required that some nonmonetary exchanges,
      although commercially substantive, be recorded on a carryover basis. By focusing
      the exception on exchanges that lack commercial substance, the Board believes
      this Statement produces financial reporting that more faithfully represents
      the
      economics of the transactions. The Statement is effective for nonmonetary asset
      exchanges occurring in fiscal periods beginning after June 15, 2005. Earlier
      application is permitted for nonmonetary asset exchanges occurring in fiscal
      periods beginning after the date of issuance. The provisions of this Statement
      shall be applied prospectively. The Company has evaluated the impact of the
      adoption of SFAS 153, and does not believe the impact will be significant to
      the
      Company's overall results of operations or financial position.




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.




F
          - 8




BIOSOLAR,
      INC.


(A
      Development Stage Company)


NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2006




2.
            SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES
                (Continued)





Recently
      Issued Accounting Pronouncements (Continued)




In
      March
      2005, the SEC released Staff Accounting Bulletin No. 107, “Share-Based Payment”
(“SAB 107”), which provides interpretive guidance related to the interaction
      between SFAS 123(R) and certain SEC rules and regulations. It also provides
      the
      SEC staff’s views regarding valuation of share-based payment arrangements. In
      April 2005, the SEC amended the compliance dates for SFAS 123(R), to allow
      companies to implement the standard at the beginning of their next fiscal year,
      instead of the next reporting period beginning after June 15, 2005. Management
      is currently evaluating the impact SAB 107 will have on our consdensed financial
      statements.





In
      March
      2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional
      Asset Retirement Obligations” (“FIN 47”). FIN 47 provides guidance relating to
      the identification of and financial reporting for legal obligations to perform
      an asset retirement activity. The Interpretation requires recognition of a
      liability for the fair value of a conditional asset retirement obligation when
      incurred if the liability’s fair value can be reasonably estimated. FIN 47 also
      defines when an entity would have sufficient information to reasonably estimate
      the fair value of an asset retirement obligation. The provision is effective
      no
      later than the end of fiscal years ending after December 15, 2005. The Company
      will adopt FIN 47 beginning the first quarter of fiscal year 2006 and does
      not
      believe the adoption will have a material impact on its financial position
      or
      results of operations or cash flows.





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.







In
      February of 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments”, which is intended to simplify the accounting and improve
      the financial reporting of certain hybrid financial instruments (i.e.,
      derivatives embedded in other financial instruments). The statement amends
      SFAS
      No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and
      SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities—a replacement of FASB Statement No. 125.” SFAS
      No. 155 is effective for all financial instruments issued or acquired after
      the
      beginning of an entity's first fiscal year that begins after September 15,
      2006.. The Company is currently evaluating the impact SFAS No. 155 will have
      on
      its financial statements, if any.




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.




F
          - 9




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.




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.




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.




During
      the period ended December 31, 2006, the Company issued 450,000 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




The
      Company renewed its lease for a six month term expiring on May 14, 2007. The
      rent paid through December 31, 2006 was $3,960.




5.
            DEFERRED
                TAX BENEFIT




Deferred
      taxes are provided on a liability method whereby deferred tax assets are
      recognized for deductible temporary differences and operating loss and tax
      credit carry-forwards and deferred tax liabilities are recognized for taxable
      temporary differences. Temporary differences are the differences between the
      reported amounts of assets and liabilities and their tax bases. Deferred tax
      assets are reduced by a valuation allowance when, in the opinion of management,
      it is more likely than not that some portion or all of the deferred tax assets
      will 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.




F
          - 10


BIOSOLAR,
      INC.


(A
      Development Stage Company)


NOTES
      TO
      FINANCIAL STATEMENTS


DECEMBER
      31, 2006




5.  DEFERRED
      TAX BENEFIT (Continued)




Net
      deferred tax liabilities consist of the following components as of December
      31,
      2006:




2006Deferred
                  tax assets:NOL
                  carryover
              
              $
              106,500R
                  & D credit
              
              
              500Deferred
                  tax liabilities:Depreciation
              
              
              -Valuation
                  allowance
              
              
              (107,000
              )Net
                  deferred tax asset
              
              $
              -




The
      income tax provision differs from the amount of income tax determined by
      applying the U.S federal income tax rate to pretax income from continuing
      operations for the years ended December 31, 2006 due to the
      following:




2006Book
                  income
              
              $
              (107,000
              )State
                  taxes
              
              
              300R
                  & D credit
              
              
              200Valuation
                  allowance
              
              
              106,500$
              -




At
      December 31, 2006, the Company had net operating loss carryforwards of
      approximately $270,000 that may be offset against future taxable income from
      the
      year 2006 through 2026. No tax benefit has been reported in the December 31,
      2006 financial statements since the potential tax benefit is offset by a
      valuation allowance of the same amount.




Due
      to
      the change in ownership provisions of the Tax Reform Act of 1986, net operating
      loss carryforwards 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.




The
      amount of deferred income tax expense (benefit) is impacted by the difference
      between the estimated Federal and State statutory income tax rates used to
      estimate deferred tax assets and liabilities and actual rates utilized when
      determining income taxes due or the application of net operating losses which
      are impacted by lower rates for taxable income less than $100,000 along with
      differences in state tax rates. In addition, other estimates utilized in
      determining deferred income tax expense (benefit) resulting from the anticipated
      timing differences may differ from amounts initially determined when the timing
      differences are realized.




F
          - 11


**Item** **8.**  **Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure.**




None.




**Item
      8A.**  **Controls
      and Procedures.**




(a) *Evaluation
      of Disclosure Controls and Procedures.* Based on
      an evaluation of our disclosure controls and procedures (as defined in
      Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of
      1934, as amended) required by paragraph (b) of Rule 13a-15 or
      Rule 15d-15, as of December 31, 2006, our Chief Executive Officer and
      Acting Chief Financial Officer has concluded that our disclosure controls and
      procedures were effective in ensuring that information required to be disclosed
      by us in the reports that we file or submit under the Exchange Act is recorded,
      processed, summarized and reported within the time periods specified in the
      Commission’s rules and forms. Our Chief Executive Officer and Acting Chief
      Financial Officer also concluded that, as of December 31, 2006, our disclosure
      controls and procedures were effective in ensuring that information required
      to
      be disclosed by us in the reports that we file or submit under the Exchange
      Act
      is accumulated and communicated to our management, including our Chief Executive
      Officer and Acting Chief Financial Officer, to allow timely decisions regarding
      required disclosure.





(b) *Changes
      in Internal Controls.* During
      the year ended December 31, 2006, there were no changes in our internal control
      over financial reporting identified in connection with the evaluation required
      by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially affected,
      or
      is reasonably likely to materially affect, our internal control over financial
      reporting.





**Item
      8B. Other Information**





None.




17


**PART** **III**




**Item
      9**.**Directors,****Executive
      Officers, Promoters and Control Persons; Compliance with Section 16(a) of the
      Exchange Act.**





The
      following table sets forth information about our executive officers, key
      employees and directors as of December 31, 2006.





**Name**
            **Age**
            **Position**David
                Lee
            47
            Chief
                Executive Officer and Acting Chief Financial OfficerSteven
                C. Bartling
            44
            DirectorDennis
                LePon
            58
            Director





Directors
      serve until the next annual meeting and until their successors are elected
      and
      qualified. The Directors of our company are elected by the vote of a
      majority in interest of the holders of the voting stock of our 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. Our
      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.




18




**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.





**Section
      16(a) Beneficial Ownership Compliance**





Section
      16(a) of the Securities Exchange Act of 1934 requires our directors and
      executive officers and persons who beneficially own more than ten percent of
      a
      registered class of our equity securities to file with the SEC initial reports
      of ownership and reports of change in ownership of common stock and other equity
      securities of our company. Officers, directors and greater than ten percent
      stockholders are required by SEC regulations to furnish us with copies of all
      Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4
      and
      amendments thereto furnished to us under Rule 16a-3(e) during the fiscal year
      ended December 31, 2006, and Forms 5 and amendments thereto furnished to us
      with
      respect to the fiscal year ended December 31, 2006, we believe that during
      the
      year ended December 31, 2006, our executive officers, directors and all persons
      who own more than ten percent of a registered class of our equity securities
      complied with all Section 16(a) filing requirements.




**Item
      10.**  **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 December 31, 2006.




Name
                & Principal Position
            
            Year
            
            Salary
              ($)
            
            Bonus
              ($)
            
            Stock
              Awards
              ($)
            
            Option
                Awards
              ($)
            
            Non-Equity
                Incentive Plan Compensation ($)
            
            Change
                in Pension Value and Non-Qualified Deferred Compensation
                Earnings
              ($)
            
            All
                Other Compensation ($)
            
            Total
              ($)David
                Lee
              CEO
              and
                Acting CFO
            
            
            
            
            2006
            
            
            84,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            84,000





**Outstanding
      Equity Awards at Fiscal Year-End Table.**





The
      following table sets forth information with respect to grants of options to
      purchase our common stock to the named executive officers from inception (April
      24, 2006) to December 31, 2006.





Option
                Awards
            
            Stock
                AwardsName
            
            NumberofSecuritiesUnderlyingUnexercisedOptions
              (#)Exercisable
            
            NumberofSecuritiesUnderlyingUnexercised
              Options(#)Unexercisable
            
            EquityIncentivePlan
              Awards:Numberof
              Securities
                Underlying
              UnexercisedUnearned
              Options(#)
            
            OptionExercise
              Price($)
            
            OptionExpiration
              Date
            
            Numberof
                Sharesor
                Units
              of
                StockThat
                HaveNotVested(#)
            
            MarketValue
                ofShares
                orUnits
                of
              StockThat
                HaveNotVested($)
            
            EquityIncentivePlan
                Awards:NumberofUnearnedShares,Units
                orOther
                RightsThat
                HaveNotVested(#)
            
            Equity
                IncentivePlan
                Awards:Market
                or PayoutValueofUnearned
              Shares,Units
                orOtherRightsThat
                HaveNotVested($)-
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -





**Director
      Compensation**





The
      following table sets forth with respect to the named directors, compensation
      information inclusive of equity awards and payments made from inception (April
      24, 2006) to December 31, 2006.




Name
              (a)
            Fees
                Earned or Paid in Cash
              ($)
              (b)
            Stock
                Awards
              ($)
              (c)
            Option
              Awards
                ($)
              (d)
            Non-Equity
                Incentive Plan Compensation ($)
              (e)
            Change
                in Pension Value and Nonqualified Deferred Compensation Earnings
              (f)
            All
                Other Compensation
              ($)
              (g)
            Total
              ($)
              (h)-
            -
            -
            -
            -
            -
            -
            -




**EMPLOYMENT
      AGREEMENTS**




19




We currently
      have no employment agreements with our executive officers.





**Item** **11.**  **Security
      Ownership of Certain Beneficial Owners and Management and Related Stockholder
      Matters.**




The
      following table sets forth, as of March 14, 2007, 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:





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 March 14, 2007 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 March 14, 2007 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
            
            
            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.





(1)
      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.





**Item** **12.**  **Certain
      Relationships and Related Transactions, and Director
      Independence**




There
      were no material related party transactions which we entered into from
      inception (April 24, 2006) to December 31, 2006.





**Item** **13.**  **Exhibits.**




(a)
      Exhibits:




20




Exhibit
                No.
            
            Description3.1
            
            Articles
                of Incorporation of Biosolar Labs, Inc. filed with the Nevada
                Secretary of State on April 24, 2006. (1)3.2
            
            Articles
                of Amendment of Articles of Incorporation of Biosolar Labs, Inc.
                filed
                with the Nevada Secretary of State on May 25, 2006. (1)3.3
            
            Articles
                of Amendment of Articles of Incorporation of Biosolar Labs, Inc.
                filed
                with the Nevada Secretary of State on June 8, 2006.
                (1)3.4
            
            Bylaws
                of Biosolar, Inc. (1)





**MATERIAL
      CONTRACTS**





10.1
            
            Form
                of Subscription Agreement dated as of May 26, 2006. (1)10.2
            
            Form
                of Subscription Agreement dated as of July 17, 2006.
                (1)10.3
            
            Form
                of Subscription Agreement dated as of October 11, 2006.
                (1)31.1
            
            Certification
                by Chief Executive Officer and Acting Chief Financial Officer pursuant
                to
                Sarbanes-Oxley Section 302 (filed herewith).32.1
            
            Certification
                by Chief Executive Officer and Acting Chief Financial Officer pursuant
                to
                18 U.S.C. Section 1350 (filed
                herewith).




(1)
      Incorporated by reference to the Company’s Registration Statement on Form SB-2
      filed with the SEC on November 22, 2006





**Item** **14.**  **Principal
      Accountant Fees and Services.**




**Audit
      Fees**




The
      aggregate fees billable to us by HJ Associates & Consultants, LLP during
      2006 for the audits of our annual financial statements for the fiscal year
      totaled approximately $21,095.





**Audit-Related
      Fees**





We
      incurred assurance and audit-related fees during 2006 of $0 to HJ Associates
      & Consultants, LLP in connection with the audit of the financial statements
      of Biosolar, Inc. from April 24, 2006 (Inception) through December 31, 2006
      and
      for the reviews of registration statements and issuance of related consents
      and
      assistance with SEC comment letters.




**Tax
      Fees**




We
      incurred fees of $ 0
      billed
      to us by HJ Associates & Consultants, LLP for services rendered to us for
      tax compliance, tax advice, or tax planning for the fiscal year ended December
      31, 2006.




**All
      Other Fees**




There
      were no fees billed to us by HJ Associates & Consultants, LLP for services
      rendered to us during the last fiscal year, other than the services described
      above under “Audit Fees” and “Audit-Related Fees.”




As
      of the
      date of this filing, our current policy is to not engage HJ Associates &
Consultants, LLP to provide, among other things, bookkeeping services, appraisal
      or valuation services, or international audit services. The policy provides
      that
      we engage HJ Associates & Consultants, LLP to provide audit, tax, and other
      assurance services, such as review of SEC reports or filings.




21


**SIGNATURES**




Pursuant
      to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant
      has duly caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.




****BIOSOLAR,
              INC.****By:
            /s/ DAVID
              LEEDAVID
                LEECHIEF
              EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE OFFICER) AND ACTING CHIEF FINANCIAL
              OFFICER (PRINCIPAL ACCOUNTING AND FINANCIAL OFFICER)Date: March
              19, 2007




In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated:




SIGNATURE
            
            TITLE
            
            DATE/S/
                DAVID LEE
            
            CHIEF
                EXECUTIVE OFFICER
            
            MARCH
                19, 2007DAVID
                LEE
            
            (PRINCIPAL
                EXECUTIVE OFFICER),
              ACTING
                CHIEF FINANCIAL OFFICER(PRINCIPAL
                ACCOUNTING ANDFINANCIAL
                OFFICER) ANDCHAIRMAN
                OF THE BOARD




DIRECTORSTEVEN
                C. BARTLING




/S/
                DENNIS LEPON
            
            DIRECTOR
            
            MARCH
                19, 2007DENNIS
                LEPON


23