UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 20-F





(Mark One)[   ]
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended July 31, 2009[   ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from __________ to __________[   ]
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report: _______________





000-51747Commission File NumberVIOSOLAR INC.(Exact name of registrant as specified in its charter)n/a(Translation of Registrant’s name into English)Alberta, Canada(Jurisdiction of incorporation or organization)Kolokotroni 2A, 17563 Paleo Faliro, Athens, Greece(Address of principal executive offices)Jacqueline Danforth

1530 – 9th Avenue SE, Calgary, AB  T2G 0T7

Tel: (403) 693-8004   Fax:  (403) 272-3620(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)








Securities registered pursuant to Section 12(b) of the Exchange Act:Title of each class
Name of each exchange on which registeredn/a
n/a





Securities registered pursuant to Section 12(g) of the Exchange Act:Title of  classCommon Shares











Securities for which there is a reporting obligation pursuant to Section 15(d) of the Exchange Act:Title of  classn/a





Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the close of the period covered by the annual report.





22,000,000 common shares outstanding as of July 31, 2009





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.





Yes
[   ]
No
[X]





If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.





Yes
[   ]
No
[X]





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.





Yes
[X]
No
[   ]





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).





Yes
[   ]
No
[  ]





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definitions of “large accelerated filer,” “accelerated filer” in Rule 12b-2 of the Exchange Act.





Large accelerated filer
[   ]
Accelerated filer
[   ]Non-accelerated filer
[X]





Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:





U.S. GAAP
[X]
Other
[   ]International Financial Reporting Standards as issued  by the International Accounting Standards Board
[   ]





If  “Other”  has been checked in response to the previous questions, indicate by check mark which financial statement item the registrant has elected to follow.





Item 17
[   ]
Item 18
[  ]





If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).





Yes
[  ]
No
[X]










APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST 5 YEARS:





Indicate by check mark whether the issuer has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.





Yes
[   ]
No
[   ]








TABLE OF CONTENTS




PagePART IForward Looking StatementsItem 1.
Identity of Directors, Senior Management and Advisors
4Item 2.
Offer Statistics and Expected Timetable
4Item 3.
Key Information
4Item 4.
Information on our Company
11Item 4A.
Unresolved Staff Comments
14Item 5.
Operating and Financial Review and Prospects
15Item 6.
Directors, Senior Management and Employees
17Item 7.
Major Stockholders and Related Party Transactions
22Item 8.
Financial Information
23Item 9.
The Offer and Listing
23Item 10.
Additional Information
24Item 11.
Quantitative and Qualitative Disclosures about Market Risk
28Item 12.
Description of Securities other than Equity Securities
28PART IIItem 13.
Defaults, Dividend Arrearages and Delinquencies
29Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds.
29Item 15T.
Controls and Procedures
29Item 16.
[Reserved]
30Item 16A.
Audit Committee Financial Expert
30Item 16B.
Code of Ethics
30Item 16C.
Principal Accountant Fees and Services
30Item 16D.
Exemptions from the Listing Standards for Audit Committees
31Item 16E
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
31Item 16F
Change in Registrant’s Certifying Accountant
31Item 16G
Corporate Governance
31PART IIIItem 17.
Financial Statements
32Item 18.
Financial Statements
32Item 19.
Exhibits
33Signatures
34






i




PART I








Cautionary Notice Regarding Forward-Looking Statements





Except for the statements of historical fact contained herein, some information presented in this annual report constitutes forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934.  These statements relate to future events or our future financial performance.  When used in this annual report, the words "estimate", "project", "believe", "anticipate", "intend", "expect", "predict", "may", "should", the negative thereof or other variations thereon or comparable terminology are intended to identify forward-looking statements.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of our company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include those discussed in the section entitled "Risk Factors".  Although we have attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause actual results not to be as anticipated, estimated or intended.  There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, prospective investors should not place undue reliance on forward-looking statements.  The forward-looking statements in this annual report speak only as to the date hereof.  We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.





As used in this annual report, the terms "we", "us", "our" and the “Company” mean Viosolar Inc., unless otherwise indicated.





ITEM 1.   IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS





Not applicable for annual reports.





ITEM 2.   OFFER STATISTICS AND EXPECTED TIMETABLE





Not applicable for annual reports.





ITEM 3.   KEY INFORMATION





A. Selected Financial Data





The financial statements and summaries of financial information contained in this annual report are reported in United States dollars unless otherwise stated.  All such financial statements have been prepared in accordance with United States generally accepted accounting principles.





The financial statements of Viosolar Inc. for the fiscal years ended July 31, 2009, 2008 and 2007 have been audited by ABBM Group, Ltd LLP.  ABBM Group, Ltd LLP is a registered public accounting firm that assumed the practice and PCAOB registration of Bateman McDuffie, Inc. (formerly known as Bateman & Co., Inc., P.C.), the auditors of the Company since inception.  The shareholders of Bateman McDuffie, Inc. are partners in ABBM Group, Ltd LLP.





The following tables summarize selected financial data for our Company prepared in accordance with United States generally accepted accounting principles for the years ended July 31, 2009, 2008, 2007, 2006 and 2005.  The information in the table was extracted from the financial statements and related notes included in this annual report and the reports that were previously filed and should be read in conjunction with such financial statements.




4





For the Years Ended July 31,

(US$)2009
2008
2007
2006
2005Operating Revenues
Nil
Nil
Nil
Nil
NilIncome (loss) from Operations
(2,374,694)
(964,829)
(154,552)
(24,649)
(13,151)Net Income (loss)
(2,394,047)
(973,429)
(153,844)
(23,666)
(12,966)Net Income (loss) from Operations per share
(0.13)
(0.05)
(0.01)
(0.00)
(0.00)





As at July 31,

(US$, except number of common shares issued and outstanding)2009
2008
2007
2006
2005Total Assets
1,770,442
3,462
11,218
52,836
67,394Total Stockholders' Equity (Deficit)
(375,690)
(540,552)
(112,221)
52,836
66,502Attributable to Viosolar Shareholders
(445,393)
(540,552)
(112,221)
52,836
66,502Attributable to Subsidiary Minority Interest
69,703
-
-
-
-Capital Stock
437,637
68,797
68,797
80,010
80,010Number of Common Shares
22,000,000
18,000,000
18,000,000
18,000,000
18,000,000





Exchange Rates





Certain of the transactions undertaken by the Company for fiscal years 2009, 2008, and 2007 were in Euros and certain of the transactions for fiscal years 2006 and 2005 were in Canadian dollars (“CDN”).  Therefore this annual report contains conversions of certain amounts from both Euros and Canadian dollars into United States dollars based upon the exchange rate in effect at the end of the month or of the fiscal year to which the amount relates, or the exchange rate on the date specified.  For such purposes, the exchange rate means the nominal rate for the United States dollar from the Bank of Canada and the nominal rate for the United States dollar from the European Central Bank.  These translations should not be construed as representations that the Canadian dollar or Euro amounts actually represent such United States dollar amounts or that Canadian dollars or Euros could be converted into United States dollars at the rate indicated or at any other rate.  These exchange rate tables illustrate the US dollar equivalent of one Canadian dollar or one Euro.





The nominal rate for a Canadian dollar as of February 26, 2010 was US$0.9500, and the nominal rate in Euros as of February 26, 2010 was US$1.357





The high and low noon nominal exchange rates in Canadian (“CDN”) dollars and Euros for each month during the previous six months:





February

2010
January

2010
December

2009
November

2009
October

2009
September

2009High for period ($CDN)
0.9597
0.9755
0.9611
0.9560
0.9716
0. 9422Low for period ($CDN)
0.9316
0.9384
0.9334
0.9282
0.9221
0. 9038High for period (Euros)
1.3984
1.4563
1.5120
1.5083
1.5020
1.4783Low for period (Euros)
1.3489
1.3966
1.4276
1.4658
1.4537
1.4220





The average noon nominal rate for each of the five years ended July 31, calculated by using the average of the exchange rates on the last day of each month during the period:





July 31,2009
2008
2007
2006
2005$CDN Average for period
0.8505
0.9959
0.9749
0.8707
0.8090Euros Average for period
1.3585
1.5007
1.3190
1.2227
1.2755





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D.  Risk Factors




The information included in this annual report includes, or is based upon, estimates, projections or other forward-looking statements.  Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations.  While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes significantly, from any estimates, predictions, projections, assumptions or other future performance suggested herein.





Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below.  We caution the reader that important factors in some cases have affected and could affect actual results in the future, and cause actual results to differ from the results expressed in any such estimates, projections or other forward looking statements.  Prospective investors should consider carefully the risk factors set out below.





Risks Relating to Our Financial Condition and Business





We are a development stage company, subject to all the risks of a new business, which may include failure and the loss of your investment.





Our Company has a limited operating history.  Our prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies seeking to acquire or establish new business opportunities.  We are an international renewable energy source company.  Our Company is based in Athens, Greece. Viosolar’s planned operations involve large-scale investments in grid-connected photovoltaic Parks with photovoltaic (“PV”) arrays for production of electricity, in suitable locations in South and South East European Union Countries.  We are in the process of attempting to secure licenses for these solar parks through in-house applications and land leases/acquisitions, purchasing of existing licenses or companies holding such licenses, or joint ventures with existing license holders. Our initial objective is to build and operate photovoltaic parks of up to 20MW total installed capacity, commencing in Greece.  In addition to Greece, our target markets are Bulgaria, Romania, Kosovo, Cyprus, Italy, Spain, Portugal, and France.   Our Company also continues to assess the viability of other alternative energy projects to complement our green energy mandate. During the fiscal year ended July 31, 2009, we acquired an 85% interest in a Greek company that is involved in the operations of solar parks, holds licenses for further development of solar parks and consults to other potential licensees for solar parks in Greece.    As the interest was acquired during the month of July, 2009 and requires ongoing financing, we have not been in operations for any sufficient period to determine the ongoing viability and value of the project.





Since we have not yet generated any significant revenue, and may never do so, investors take the risk that our new business may never be able to make a profit or take a very long time to do so.





These risks include, but are not limited to:  (a) the risk that we may have insufficient funds to effectively execute our business plan, in which case our Company would likely fail and investors would lose all of their investment; (b) the risk that our Company secures an insufficient number of leased properties for our solar energy modules and that insufficient revenues are generated to ever make our Company profitable, in which case, our Company would likely fail and investors would lose all of their investment; (c) the risk that our management proves ineffective at marketing solar energy, in which case, our Company would likely fail and investors would lose all of their investment; and (d) the risk that our management does not effectively manage cash flows and that our Company goes out of business as a result, in which case, our Company would likely fail and investors would lose all of their investments.





We have limited contracts as a solar energy provider and have recorded minimal sales activities for the provision of solar energy; we expect that obtaining significant contracts for the provision of solar energy will not occur for some time.





On July 23, 2009, we acquired Energeiaki E.P.E. of Tripoli, Greece (“E.P.E.”), an operating photovoltaic solar company, and with such acquisition we have minimal historical sales of solar energy and certain contracts for such sales.  Two other photovoltaic solar parks are under construction, and six are pending government approval.  Because of the nature of the projects in which such energy may be provided, we expect that the sales cycle will be quite long; therefore, we believe that it will be at least 18 months from the date of the acquisition before we record any substantial solar energy sales.  As a result, we expect that it will be some time before we can determine whether our expectations relating to the provision of solar energy and their target markets are justified.  Also, as a result, we will be required to invest substantial resources in pursuing these


6


markets and completing construction of existing and planned parks, in advance of any significant revenue stream that may result from such investments.  An unanticipated or longer than expected delay revenue ramp-up could put a strain on our capital resources and require us to seek additional capital.





Contracts involving government agencies are subject to the government's authority to unilaterally cancel or modify the contracts.





Contracts involving government agencies may be terminated or modified at the convenience of the agency.  Other risks include potential disclosure of our confidential information to third parties and the exercise of "march-in" rights by the government.  March-in rights refer to the right of a government agency to require us to grant a license to the technology to a responsible applicant or, if we refuse, the government may grant the license itself. The government can exercise its


march-in rights if it determines that action is necessary because we fail to achieve practical application of the technology or because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations or to give Greece industry preference.





A significant reduction or elimination of government subsidies and economic incentives or change in government policies may have a material adverse effect on our business and prospects.





Demand for our products depends substantially on government incentives aimed to promote greater use of solar power. In many countries in which we are currently, or intend to become, active, the PV markets, particularly the market of on-grid PV systems, would not be commercially viable without government incentives. This is because the cost of generating electricity from solar power currently exceeds, and we believe will continue to exceed for the foreseeable future, the costs of generating electricity from conventional or certain non-solar renewable energy sources.





The scope of the government incentives for solar power depends, to a large extent, on political and policy developments relating to environmental concerns in a given country, which could lead to a significant reduction in or a discontinuation of the support for renewable energies in such country. Federal, state and local governmental bodies in many of our key potential markets, most notably Greece, Germany, and Spain, have provided subsidies and economic incentives in the form of rebates, tax credits and other incentives to end users, distributors, system integrators and manufacturers of solar power products to promote the use of solar energy in on-grid applications and to reduce dependency on other forms of energy. These government economic incentives could be reduced or eliminated altogether. In particular, political changes in a particular country could result in significant reductions or eliminations of subsidies or economic incentives. Electric utility companies that have significant political lobbying powers may also seek changes in the relevant legislation in their markets that may adversely affect the development and commercial acceptance of solar energy. A significant reduction in the scope or discontinuation of government incentive programs, especially those in our target markets, could cause demand for our products and our revenue to decline, and have a material adverse effect on our business, financial condition, results of operations and prospects.





The state of the political and economic environment, particularly in Greece, significantly affects our performance.





The initial focus of the implementation of our business plan is in Greece. As a result, the state of the Greek economy significantly affects our future financial performance and our ability to raise additional capital. Additionally, our future performance may be affected by the economic conditions and levels of economic activity in other countries in which we plan to operate particularly Portugal and Spain. Consequently, an economic slowdown, a deterioration of conditions in Greece or other adverse changes affecting the Greek economy or the economies of other countries in which we plan to operate, could result in, among other things, higher costs associated with and/or greater difficulty in obtaining financing, which could adversely impact our business, financial condition, cash flows and results of operations. Moreover, the political environment both in Greece and in other countries in which we plan to operate may be adversely affected by events outside our control, such as changes in government policies, EU Directives in the energy sector and other areas, political instability or military action affecting Europe and/or other areas abroad and taxation and other political, economic or social developments in or affecting Greece and the countries in which we may plan to expand. Finally, global economic conditions such as the level and liquidity of the global financial and other assets markets, investor sentiment and the availability and cost of credit may adversely affect our business, results of operations or financial condition.


7


Failure to build or operate our solar energy parks successfully would adversely impact our business and financial condition.





We plan to operate and further develop solar energy parks.  Purchasing and leasing land, acquisition of licenses, construction, management, operations and testing of solar energy parks, which have not yet been built, will require a substantial investment of capital, currently estimated by us to be approximately $40 million Euros (approximately USD$54 million as at February 2010), which we intend to fund with the net proceeds from debt or equity offerings, or other funding avenues that our Company may deem acceptable.  The successful completion and operation of solar energy parks will require substantial engineering resources and will be subject to significant risks, including risks of cost overruns and delays, and the possibility that the solar energy parks may never be completed or operational.  We may never be able to operate our solar energy parks in high volume, make planned process and equipment improvements, attain projected manufacturing yields or desired annual capacity, obtain timely delivery of equipment to build the solar energy parks or hire and train the additional employees and management needed to operate the solar energy parks.  We also may face insurmountable challenges or incur unforeseen expense as when we try to achieve performance results from our planned solar energy parks.  Failure to meet our development objectives could materially and adversely affect our business, results of operations and financial condition.





Our future success depends on retaining our existing management and hiring and assimilating new key employees and our inability to attract or retain key personnel would materially harm our business and results of operations.





Our success depends on the continuing efforts and abilities of our current officers and directors.  Our success also will depend, in part, on our ability to attract and retain additional highly skilled employees, including management, technical and sales personnel, both at our Company and E.P.E. The loss of services of any of our key personnel, the inability to attract, retain or assimilate key personnel in the future, or delays in hiring required personnel could materially harm our business.





As a public company, we will be required to disclose detailed aspects of our business on a regular and ongoing basis that our competitors might use against us.





The United States Securities and Exchange Commission requires that all public companies disclose certain detailed financial information including the discussion of known trends, demands, events and uncertainties with specific disclosure about liquidity, capital resources, and critical accounting estimates.  In the course of conducting our business, it may on occasion be necessary to publicly disclose certain financial, market, production, technology, product, or other material information that we would otherwise consider proprietary and competitively sensitive.  As a result, our competitors may use this information in ways that would adversely affect our earnings, growth and revenues and hamper our ability to adequately protect our intellectual property and carry out our strategic plans.





We may be party to confidentiality agreements that the breach of which may lead to termination of important contracts, injunctive relief or damages.





In the course of our business, we enter into nondisclosure and other types of agreements whereby we, and typically the other party to the agreements, agree not to disclose confidential information.  We have instituted internal procedures to ensure that we do not violate nondisclosure covenants, but we cannot assure that these procedures will be effective in protecting sensitive information.  Moreover, our disclosure obligations as a public company may create a conflict between our duty to disclose material information to the public and our obligation to keep certain proprietary information confidential.  Our failure to abide by our confidentiality obligations may lead to termination of our relationship with contracting parties, imposition of injunctive relief against us or damages.  While we intend to take all reasonable measures to protect confidential information of parties with whom we contract, there can be no assurance that our procedures will be effective and that we will not breach our confidentiality agreements.





Lack of management experience in the proposed business of our Company may result in unsatisfactory performance or complete failure of our Company, which may result in the loss of your investment.





Because our management lacks direct experience in the development and marketing of solar energy, investor funds may be at high risk of loss due to the inexperience of the officers and directors of our Company who will be making business decisions.  This lack of experience may result in their inability to run a successful business.  There is no assurance that our Company will ever produce earnings.


8


Our business may not generate sufficient revenues and profits to cover expected expenditures in the foreseeable future.  Additional funds may be needed and may not be available under reasonable terms, or at all.





As of the date of this annual report, our Company has received minimal revenues from its proposed business and significant revenues are not expected in the next 12 months or longer.  On a going-forward basis and until we either generate significant revenues or conduct some sort of financing, we expect our operating expenses to average approximately USD$25,000 per month. We do not presently have sufficient funds to be able to fund our operating costs.  We have to date relied predominantly on loans from related parties to fund operations.  We will be required to continue to raise funds for operations either by way of loans or by equity financings.  We have no certainty of raising any such funds and our Company could fail as a result.





We have a history of losses and fluctuating operating results, which raise substantial doubt about our ability to continue as a going concern.





Since inception through July 31, 2009, we have incurred aggregate net losses of $3,560,200.  We also incurred a loss from operations for each of the years ended July 31, 2009 through 2004.  There is no assurance that we will operate profitably or will generate positive cash flow in the future.  In addition, our operating results in the future may be subject to significant fluctuations due to many factors not within our control, such as the unpredictability of when customers will order solar energy, the size of customers’ orders, the demand for solar energy, and the level of competition and general economic conditions.





Although we anticipate that we will earn significant revenues upon the successful implementation of our business plan, we expect to continue to incur development costs and operating costs.  Consequently, we expect to incur operating losses and negative cash flow until our solar energy production is of sufficient quantity to generate a commercially viable and sustainable level of sales, so that we are operating in a profitable manner.  These circumstances raise substantial doubt about our ability to continue as a going concern, as described in the explanatory paragraph in our independent registered public accounting firm’s report on the July 31, 2009, financial statements.  Our audited financial statements do not include any adjustments that might result from the outcome of that uncertainty.





Other companies are already engaged in our proposed business of solar parks and we expect that more companies may enter this market in the future, which may make it difficult for us to compete or survive.





We intend to further develop and construct solar energy parks in the immediate future in Greece.  It is reasonable to expect that most of our competitors may be better capitalized and perhaps better established and connected in the industries we may seek to market in and regulatory circles which may be involved in the ultimate sales process.  As a result, it may be very difficult for our Company to compete and make a profit in our proposed business.





We may be liable for the defect in or failure of the energy sources we attempt to sell, resulting in possible legal action and costs or judgments that could put us out of business, for which we presently have no insurance.





Although we will not be involved in manufacturing products, will not take ownership of a product at any point during its sales cycle, and will not be a party in agreements related to the purchase and sale of any licensed products, it is possible that disputes could arise between buyers and sellers which could result in us being named as a party in litigation.  Presently, we have no liability insurance coverage for such contingencies and we do not anticipate acquiring any in the future.  If we are involved in any litigation resulting from our participation in product sales, it is possible that we could be forced to expend substantial sums on legal fees even if there is no basis for naming us as a defendant and even if we ultimately win in any such litigation.  There can be no assurance that any decision will not result in consequent loss to us and, therefore, to our investors and shareholders.





We do not know how to market the solar energy and this may make it difficult, or impossible, for us to compete and make a profit from solar energy parks.





Since our management has limited knowledge as to how to market solar energy, and it does not know how to acquire such knowledge, it is possible that we may never acquire such knowledge with the result being that no profits are generated from the sale of solar energy.


9


Risks Related to Investment in Our Securities





As a public company, we are subject to complex legal and accounting requirements that require us to incur substantial expense and expose us to risk of non-compliance.





As a public company, we are subject to numerous legal and accounting requirements that do not apply to private companies.  The cost of compliance with many of these requirements is substantial, not only in absolute terms but, more importantly, in relation to the overall scope of the operations of a small company.   The current limitation on available funds and timing of receipt of working capital may increase the cost of compliance and may also increase the risk that we will fail to comply.  Failure to comply with these requirements can have numerous adverse consequences including, but not limited to, our inability to file required periodic reports on a timely basis, loss of market confidence, delisting of our securities and/or governmental or private actions against us.  We cannot assure you that we will be able to comply with all of these requirements or that the cost of such compliance will not prove to be a substantial competitive disadvantage vis-à-vis our privately held and larger public competitors.





If we seek additional capital in the future, your investment could be diluted.





If we are successful in obtaining additional capital in pursuit of our business objectives, such additional capital, if available, could substantially dilute our then-existing investors.





Future sales or the potential for future sales of our securities may cause the trading price of our common stock to decline and could impair our ability to raise capital through subsequent equity offerings.





Sales of a substantial number of shares of our common stock or other securities in the public markets, or the perception that these sales may occur, could cause the market price of our common stock or other securities to decline and could materially impair our ability to raise capital through the sale of additional securities.





We have never paid any cash dividends and none are anticipated in the foreseeable future, so you may never realize any return on your investment unless you sell your shares.





Since we do not anticipate paying dividends in the foreseeable future (which action is solely within our discretion), investors will only profit by the increase in the value of their shares.  Our profits, if any, during the next several years are expected to be used to develop and possibly expand our business.  There is no assurance that there will be any increase in the value of the shares or that a liquid trading market will develop for the shares or that our investors will be able to sell their shares in our common stock.





There is a limited market for the common stock so you may lack a market for and liquidity in the shares.





Our common stock is quoted on the OTC Bulletin Board under the symbol "VIOSF".  Even though the stock is quoted, there is no assurance a liquid market will develop.  If a market does develop for the common stock, at best, it may offer very minimal liquidity for the shares.  If a market for our common shares does not develop, our shareholders may not be able to resell the shares of our common stock that they have purchased and they may lose all of their investment.  Public announcements regarding our Company, changes in government regulations, conditions in our market segment and changes in earnings estimates by analysts may cause the price of our common stock to fluctuate substantially.  In addition, the OTC Bulletin Board is not an exchange and, because trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a national exchange, our shareholders may have difficulty reselling their shares.





10


Our stock is low priced, and therefore, may not be liquid.





Our common stock trades below $5.00 per share, and as a result, we would be subject to theSecurities Enforcement and Penny Stock Reform Act of 1990(the "Penny Stock Rules").  The Penny Stock Rules may adversely affect the market liquidity for our common stock by limiting the ability of broker-dealers to sell our common stock and the ability of those receiving shares in this offering to sell their shares in the secondary market, if one should develop.  For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of penny stock securities and have received the purchaser's written consent to the transaction prior to the purchase.  Additionally, for any transaction involving a penny stock, unless exempt, the penny stock rules require the delivery, prior to the transaction, of a disclosure schedule prescribed by the Commission relating to the penny stock market.  The broker-dealer also must disclose the sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities.  Monthly statements must be sent by the broker-dealer disclosing recent price information on the limited market in penny stocks.





The Financial Industry Regulatory Authority (FINRA) has adopted sales practice requirements which may limit an investor’s ability to buy and sell our shares.





In addition to the "penny stock" rules described above, the FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.  Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information.  Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers.  The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common shares, which may limit your ability to buy and sell our shares and have an adverse effect on the market for our shares.





Potential anti-takeover effect of authorized Class “E” preferred stock could adversely impact the rights of holders of common stock because it may discourage investment in our shares by potential investors and make removal of management more difficult.





Our Articles of Incorporation authorize the issuance of an unlimited number of shares of Class “A”, voting common stock, Class “B”, voting common stock, Class “C”, non-voting common stock, Class “D”, non-voting common stock and five million (5,000,000) shares of Class “E”, non-voting preferred stock (“Preferred Stock”) with the rights, preferences, privileges and restrictions thereof to be determined by our board of directors.  Preferred Stock can thus be issued without the vote of the holders of our common stock.  Rights could be granted to the holders of Preferred Stock that could reduce the attractiveness of our Company as a potential takeover target, make the removal of management more difficult, or adversely impact the rights of holders of our common stock.  No Preferred Stock is currently outstanding, and we have no present plans for the issuance of any shares of Preferred Stock.





ITEM 4.   INFORMATION ON THE COMPANY




A. History and Development of the Company





Viosolar Inc. (formerly Sprout Development Inc.) was incorporated on July 19, 2004, under the laws of the Province of Alberta, Canada.





We operate pursuant to the laws of the Province of Alberta, Canada, relating to corporations. We have also established a place of business in Greece, and effective July 24, 2008 have registered our Company with the local government to undertake business in this jurisdiction.  Our principal place of business is located at Kolokotroni 2A, 17563 Paleo Faliro, Athens, Greece.  Our telephone contact is +30 210 983 1450.  Our email contact is info@Viosolar.com.  Our website is www.Viosolar.com.





Our registered agent in the Province of Alberta, Canada is International Securities Group, Inc., of 1530 – 9th Ave SE, Calgary, Alberta, Canada T2G 0T7.


11


Our Company was originally incorporated with the intention of selling access to software that delivers a web enabled, collaborative approach to child custody communications for divorced parents to foster a non-confrontational environment.  We were unsuccessful in marketing our products and management determined to look for other business opportunities.





As a result, after a review of business opportunities in the European Union it was determined that there was a potential market for the development of solar parks, from which a change in focus of the Company ensued, as well as a change in the name of the Company.  On June 22, 2007, we filed Articles of Amendment in the Alberta Corporate Registry to effect a name change from Sprout Development Inc. to Viosolar Inc.  Our plan of business is to become a global marketer of electricity generated from solar energy.




On July 23, 2009, the acquisition of Energeiaki E.P.E. of Tripoli, Greece (“E.P.E.”), an operating photovoltaic solar company, was completed with 85% of the shares acquired. Upon the acquisition of E.P.E.by Viosolar, the Company reserved an aggregate of 4,000,000 shares of the common stock of Viosolar, which were subsequently issued on August 25, 2009. E.P.E. currently has one photovoltaic solar park of 100kw in operation, and also has two other parks of 100kw each under construction and six other applications at various stages of government approval representing a total of 1.1MV. E.P.E. has made applications for various clients representing over 10MW of potential production. As a result of the acquisition, Viosolar is expected to enter into the photovoltaic marketplace in Greece.




The aggregate fair value of the stock consideration in respect of the acquisition was $368,840, based on 85% of the independent appraisal of $433,929 (see Note 3 of the Financial Statements for additional details on the valuation method). This acquisition opens the door for Viosolar into the photovoltaic marketplace in Greece.   As a result, Energeiaki E.P.E is an 85% owned subsidiary of the Company.





Our current principal capital expenditures include the costs completing the construction of the two photovoltaic parks (“PV Park”) presently under construction by EPE, as well costs associated with the furthering of the other six applications pending with the Greek government by EPE.  All these capital expenditures are focused in Greece, and to date have been funded by loans from related parties, together with short-term notes and long-term notes through EPE. Additional funds for future capital expenditures are anticipated to be raised in part through the selling of the stock of the Company or other similar methods of finance.




B.  Business Overview




Nature of Operations and Principal Activities





In March 2007, there was a change of control in our Company and the new management determined not to pursue this business and to pursue the development of solar parks in the European Union and particularly in Greece.  The new company structure was established, and a base of operations was established in Greece together with the initial implementation of our business plan.





Viosolar, as an alternative energy company, with activities in the Solar Energy sector has a business plan that includes the construction, management and operation of solar parks in Greece and throughout other South and South Eastern European Union countries. Viosolar Inc. intends to take advantage of the numerous incentives in this sector offered by various European countries, following the general policy decided by the European Union and the relevant directives forwarded to all European Union members.





Viosolar’s vision is aligned with two pressing global needs, those being the reduction of the Greenhouse Gases (GHG) generated by traditional hydrocarbon-based energy sources and the reduction of reliance on energy sources which are either about to be exhausted or located in regions rife with political and economic instabilities. Viosolar’s mission is to make renewable energy, and specifically solar energy, a commercially viable prospect on a large scale.





In fiscal year 2008, in support of the further execution of the Viosolar business plan, certain activities were undertaken.   We executed two Options to Purchase Land Agreements with the option to purchase the lands within 6 months, and we executed five Options to Lease Land Agreements.  These agreements expired unexercised during the fiscal year ended July 31, 2008.


12


Through to the fiscal year ending in July 2009, several opportunities for the acquisition of existing third party licenses for specific generation capacities, as well as entering into strategic joint ventures with firms holding licenses, have been explored and evaluated. For viable opportunities, confidentiality and other preliminary agreements were entered into during and subsequent to the fiscal year.





To that end, on July 23, 2009, the acquisition of 85% of Energeiaki E.P.E., an operating photovoltaic solar company based in Tripoli, Greece, was completed. The company currently has one photovoltaic solar park of 100kw in operation. Energeiaki also has two other parks of 100kw each under construction and six other applications at various stages of government approval representing a total of 1.1 MW. Energeiaki has also made applications for various clients representing over 10MW of potential production.





The basic premise of our plan includes the construction, management, and operation of solar energy parks.  We plan to take advantage of the numerous incentives in this sector offered by the Greek government, following the general policy decided by the European Union and the relevant directives forwarded to all European Union members.





Product Summary





Photovoltaic (“PV”) devices convert sunlight into the electricity needed to reliably power instruments, communications systems and the like.  An aggregation of PV devices, or panels, together with the related land, structures, support equipment and electrical gear, form what is called a Solar park, which are generally intended for larger scale electrical generation, as opposed to providing power for a single item.





Solar cells are the most elementary component of a PV device; they absorb light and convert it into electrical power.  Solar cells traditionally consist of a light-absorbing layer mounted on a substrate, together with top and back electrical contact points, much like a household battery.  There are three materials currently considered by the PV industry as candidates for thin-film production: amorphous silicon ("a-Si"), cadmium telluride.  An absorbing layer can be deposited on a substrate that is either rigid or flexible.  A majority of companies currently use rigid glass substrates.  The few companies that incorporate flexible substrates in their devices typically opt for stainless steel (or other metal) foil.





We do not presently have any proprietary products and intend to use conventional “off the shelf” solar panels for our solar parks.





Principal Markets





We intend to develop solar energy parks with PV arrays for the production of electricity in suitable, locations in Greece and throughout other South and South Eastern European Union countries, particularly Bulgaria, Kosovo, Romania, Cyprus, Italy, Spain, Portugal, and France. We will take full advantage, wherever possible, of incentives in the solar energy sector offered by various European Union countries, following the general policy decided by the European Union and the relevant directives forwarded to all European Union members.





Seasonality of our Business





In Greece the average sunlight per year is about 1450 hours.  Because of the close proximity to the equator the daily sunrise to sunset may vary from 14 hours in the summer to 9 hours in the winter.  Seasonality is not considered by management to be issue for our business, as one key evaluation point for determining the economic viability of a given PV project is the total sunlight hours, and we are only seeking out projects in locations which meet these basic criteria.





Sources and Availability of Raw Materials





We will be buying conventional panels that are readily available from a number of conventional solar panel manufacturers.  We have not yet made a final determination as to which products we will be purchasing but we do not generally foresee any problems with the source or availability of raw materials for the manufacture of these products or with the supply of products as required for our business. At such point in time as we undertake the detailed components of the project planning for the first of our solar parks, we will work with the relevant suppliers to ensure that the necessary materials, particularly the PV panels, are secured according to the requirements of the construction schedule established.  This will address potential supply discrepancies that could occur if the overall quantity of planned developments exceeds the then available supply of components in the global market.


13


Marketing Channels





We do not currently have any products which we market.  We intend to market electricity generated by solar power once we have raised sufficient funds to undertake the construction of solar parks as defined in our business plan.  In Greece, where we intend to construct our first solar parks we are mandated by the Government of Greece to sell to the state run power company at a fixed pre-determined price.




Dependency on Patents or Licenses, Industrial, Commercial or Financial Contracts, New Manufacturing Processes




Our Company must rely on the ability of management to apply and obtain licenses for new parks or the ability to purchase licenses already granted.  This is a difficult and time consuming process and there are no assurances that licenses will be granted for all applications.





Competitive Position





Our Company will be competing with governments, domestic and international companies and private individuals that that have more expertise and funds available to them. Although the ‘solar park’ industry is in early stages of development the Company has noticed a great interest from other entities that will be a direct competition.




Regulatory Matters




Currently all licenses and subsidies are regulated by the Government of Greece and all power generated must be sold to the Government of Greece.  We must comply with these laws.  Should the Greek government change its policy on granting licenses or change its mandate on subsidies and grants this will have a large impact on our ability to be profitable.




C.  Organizational Structure





On July 23, 2009, we acquired 85% of the total issued and outstanding shares of Energeiaki E.P.E. of Tripoli, Greece, an operating photovoltaic solar company in Greece, by the issuance of 4,000,000 shares of our common stock.




D.  Property, Plants and Equipment




On September 15, 2008, the Company entered into a two (2) year lease for office space in a property located in Athens, Greece. The lease called for monthly rent in the amount of $3,365 (€2,540) plus applicable taxes and was to expire September 14, 2010. During the fiscal year 2009, the company paid total $27,983 (€20,320) plus applicable taxes and utilities. The lease was terminated on April 14, 2009.  On April 15, 2009, the Company entered into a four (4) year lease agreement for office space in a property located in Athens, Greece.  The lease calls for monthly rent in the amount of $1,383 (€1,000) plus applicable taxes, increasing to €1,150 in year 2 and escalating by 5% per annum for the final two years. The lease commenced on May 1, 2009 and expires on April 30, 2013. During the fiscal year 2009, the company paid total $4,150 (€3,000) plus applicable taxes and utilities.





EPE, as part of its portfolio of land for solar park development projects, together with equipment acquired for the first operating plant and plants under construction, has land assets valued at $39,648 and equipment and & leasehold improvements valued at a net of $528,738.





ITEM 4A.  UNRESOLVED STAFF COMMENTS





Not Applicable.


14


ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS





The information set forth below in this Item is presented in accordance with United States generally accepted accounting principles.  The following discussion and analysis should be read in conjunction with Item 3A "Selected Financial Data" and our Company’s audited financial statements, the notes thereto and other financial information appearing elsewhere in this annual report.  In addition to historical information, the following discussion and analysis and other parts of this annual report contain forward-looking statements that reflect our plans, estimates, intentions, expectations and beliefs.  Actual results could differ materially from these discussed in the forward-looking statements.  See Item 3D "Risk Factors" for a discussion of some, but not all, factors that could cause or contribute to such differences.





Overview





We believe that our Company will have insufficient cash resources to operate at the present level of operations and expenditures for the next 12 months and, as a result, will need to obtain financing from either a debt or equity issue, or a business combination with a third party that has sufficient cash flow to allow us to continue our operations.  Our average operating costs are expected to be approximately $25,000 per month and are not expected to exceed this level within the next 12 months, subject to additional operating costs that ensue as a result of the EPE acquisition.  At this time we cannot be assured of any business opportunities being concluded as we do not have sufficient capital to progress our business plan.  To date, we have been funding our Company primarily by way of related party loans.  There can be no assurance that we will be able to continue to do so or that we will be able to find other means of financing for operations.





These general operating costs include:





MONTHLY EXPENSESOffice

$
3,500Management Fees


8,000Travel & Entertainment


4,200Legal


1,100Accounting


1,100Consulting


1,000Miscellaneous


6,100TOTAL MONTHLY EXPENSES

$
25,000





Milestones





We intend to build a portfolio of land opportunities and acquisitions required for the permitting process to establish solar parks in Greece.





We will actively pursue license holders, permit holders and solar park operators with the view of purchasing available licenses, permits and solar parks in Greece, as part of our EPE acquisition.  We will also entertain additional joint ventures with license holders and solar park operators.  The corporate goal is to have 20MW applied for, granted, in the pipeline and/or purchased in the fiscal year ending 2010.





The Company will also continue discussions with various existing funding mediums looking for equity, debt and joint venture opportunities, focused on the funding of specific projects as they develop. We anticipate a funding requirement in the US$54,000,000 range in order to fund our medium term goals, that being the initial 20MW production level.  We will require a minimum of $300,000 just to meet operational overhead for the next twelve months without taking into account any funds available for pursuing our business plan.





Aside from operational overhead, the Company will look to construct up to 9 additional parks on existing lands and under the terms of both existing and pending licenses with anticipated total output upon project completion of up to 1.1 MW.   In order to complete these plans the Company will be required to raise approximately $4.8M of which the Company expects to receive credits back from the Greek government totalling $2.2M.


15


Our Company will also require additional management and expertise, going forward.  We expect to add qualified individuals to our board and management team in order to best implement our business plan and corporate mandate. We will be required to setup the necessary subsidiaries in order to best suit the corporate needs.





Our Company also intends to diligently monitor energy policies in other European countries with a view of expanding our business model into other geographic locations.





We cannot be assured that we will be able to enter into agreements to meet our milestones or that if we should be able to enter into such agreements that we will be able to continue to raise sufficient capital to fund operations.





A.
Operating Results





There have been revenues totaling $13,041 from the date of incorporation on July 19, 2004, to the fiscal year ended July 31, 2009.  These revenues occurred in the fiscal year ending July 31, 2009, and were a result of the EDE acquisition, and came from the first operating solar park, selling generated electricity under contact to the Greek government utility company.  Viosolar realized net losses for the 12-month period ended July 31, 2009, of $2,394,694 as compared to net losses of $973,429 for the 12-month period ended July 31, 2008 and net losses of $153,844 for the 12-month period ended July 31, 2007.  In 2009 compared to 2008, the increase in the loss from operations was almost entirely attributable to an increase of stock compensations expenses from $544,067 to $2,105,782.  The loss was offset somewhat due to a decrease in professional fees in 2009 compared to 2008, from $106,686 to $55,134, a decrease in rent and utilities from $79,606 to $44,960, and a decrease in investor relations from $56,841 to $662.  The decreases were a result of management’s efforts to reduce expenses, and the ending of an investor relations contract.





Viosolar had total assets of $1,770,442 at July 31, 2009, as compared $3,462 at July 31, 2008 and $11,218 on July 31, 2007.  The substantial increase in assets was a result of the EDE acquisition, notably in regards to net property and equipment and net intangible assets, which increased from prior periods of $0 to $601,801 and $908,038 respectively.  Prepaid expenses increased year over year from $3,390 to $166,137, and net accounts receivable from $0 to $58,862, again as a result of the integration of EBE’s current assets.  Cash balance was $34,496 on July 31, 2009, compared to $172 in the prior year, and $11,218 in the year ending July 31, 2007.





Viosolar had total current liabilities of $1,310,437 as at July 31, 2009, compared to $466,108 at July 31, 2008 and $123,439 at July 31, 2007.  The increase at the parent company level is due primarily to an increase in the management fees payable to related parties, and loans from related parties, year over year.  Other increases are due to the EDE acquisition, whereby short-term notes of $363,379, customer deposits of $66,284 and current portion of long terms notes of $111,082 did not exist in prior years.  Additional, non-current liabilities increased from $77,906 in 2008, to $835,695 in 2009, primarily due to long term notes payables at the EDE operational level.





B.  Liquidity and Capital Resources





At July 31, 2009, Viosolar had a working capital deficit of $1,049,834, compared to a working capital deficit of $462,646, as of July 31, 2008 and a working capital deficit of $112,221 at July 31, 2007. In the three years prior to the EDE acquisition, we have relied on loans from third parties, loans from related parties, and advances and other payables to related parties to fund our operations. With the acquisition, the balance sheet also incorporates certain short and long term bank lending facilities, totaling $1,080,262.  We do not expect to expend more than $300,000 on general overhead over the twelve -month period beginning August 1, 2009. However, additional debt servicing and repayment in the forthcoming fiscal year will increase the amount of funds required, including a loan maturing on May 23, 2010, estimated to be $85,000 and current portions of long term bank debt, totaling $111,082.  There can be no assurance that financing, in the form of loans, other related party transactions or bank lending will be available to our Company in an amount and/or on terms acceptable to us, as and when required, or at all.





In order to continue developing the solar park licenses in EDE, the Company will look to construct up to 9 additional parks on existing lands and under the terms of both existing and pending licenses with anticipated total output upon project completion of up to 1.1 MW.   In order to complete these plans the Company will be required to raise approximately $4.8M of which the Company expects to receive credits back from the Greek government totalling $2.2M.  The Company will also continue discussions with various existing funding mediums looking for equity, debt and joint venture opportunities, focused on the funding of specific projects as they develop. We anticipate a funding requirement in the US$54,000,000 range in order to fund our medium term goals, that being the initial 20MW production level.


16


C.  Research and Development, Patents and Licenses, etc.




We do not currently, and did not previously, have research and development policies in place.  Over the past three fiscal years no funds were expended by our Company on research and development activities.




D.  Trend Information




We are not currently aware of any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on its financial condition.




E.  Off-Balance Sheet Arrangements




We do not currently have any off-balance arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.




F.  Tabular Disclosure of Contractual Obligations




Payments due by periodTotal


Less than

one year


1-3 years


3-5 years


More than

5 yearsLong-Term Debt Obligations (1)

$
1,026,453


$
111,082


$
222,164


$
222,164


$
471,043Capital (Finance) Lease Obligations (2)


23,290



6,240



12,480



5,200



-Operating Lease Obligations (3)


72,607



17,218



39,606



15,783



-Purchase Obligations


-



-



-



-



-Other Long-Term Liabilities Reflected on the Company’s Balance SheetTotal

$
1,122,350


$
134,540


$
274,270


$
243,147


$
471,043


(1)
Ten-year term, bearing interest at Euribor Rate plus 2%, with quarterly payments on interest and principal.


(2)
On June 02, 2008, E.P.E entered into a sixty (60) month car lease agreement. The lease called for monthly lease fee in the amount of $520 (€370) including tax.


(3)
On April 15, 2009, the Company entered into a four (4) year lease agreement for office space in a property located in Athens, Greece.  The lease calls for monthly rent in the amount of $1,383 (€1,000) plus applicable taxes, increasing to €1,150 in year 2 and escalating by 5% per annum for the final two years. The lease commenced on May 1, 2009 and expires on April 30, 2013.


G.  Safe Harbor




The safe harbor provided in Section 27A of the Securities Act and Section 21E of the Exchange Act shall apply to forward-looking information provided pursuant to Item 5.E and F.  All information set out in Item 5.E.1 and 5.E.2 is deemed to be a forward-looking statement as that term is defined in the statutory safe harbors, except for historical facts.





ITEM 6.   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES




A.  Directors and Senior Management


The following table sets forth certain information in respect of our directors and executive officers, as of the date hereof:


17


Name

Age

Position
Date ElectedRick Walchuk

Suite 6, 8 Metamorfoseos Street

17466 Alimos, Athens, Greece


53

President, Chief Executive Officer, Director
March 14, 2007Michael Soursos

13 Theotoki

17455 Alimos, Athens, Greece


45

Secretary/Treasurer, Director
March 14, 2007Jacqueline Danforth

79 Heritage Cove

Calgary, Alberta, Canada  T0L 0X0


37

Chief Financial Officer, Director
March 14, 2007David Little

208 Whispering Woods Terrace

Calgary, Alberta, Canada   T3Z 3C8


59

Director
April 27, 2007Mr. Jonathan Bradley

25 Woodstock Avenue

Redland, Bristol, UK  8S6 6EW


58

Director
March 7, 2008





Rick Walchuk


Mr. Walchuk has been President, Chief Executive Officer and a director of our Company since March 14, 2007.  Mr. Walchuk has over 24 years of experience as a stockbroker.  He has devoted most of his professional career to domestic and international business transactions.  In April, 2004, Mr. Walchuk was appointed Chief Executive Officer of a startup biotech company in Athens, Greece, a position he held until July, 2004.  Mr. Walchuk then served as a consultant to various public companies.  Mr. Walchuk is serving as the President and Chief Executive Officer of our Company and is responsible for overseeing our business development.





Mr. Michael Soursos


Mr. Soursos has been the Secretary and a director of our Company since March 14, 2007.  Mr. Soursos is   a private businessman located in Athens, Greece.  From April 2004 to June 2006, he was President of a private research and development laboratory located in Athens, Greece.





Jacqueline Danforth


Ms. Danforth has been a director and the Chief Financial Officer of our Company since March 14, 2007. Over the past fourteen years, Ms. Danforth has worked for both private and publicly traded companies providing management services and corporate governance programs.  Ms. Danforth has extensive experience working with start up operations, including direct involvement with public and private corporations listed on both Canadian and US exchanges participating in all aspects of public reporting, corporate governance, corporate finance and shareholder communications.  She has worked in a broad range of industry sectors including natural resources, food services and technology, and manufacturing and has filled such roles as vice president, president, CEO and CFO.





Currently, Ms. Danforth is also the President and Chief Executive Officer of FACT Corporation, a publicly traded US corporation which has commercialized their proprietary food technologies in the form of more nutritious bake mixes to manufacturers and wholesale clients in the food industry.  Ms. Danforth is responsible for sales and marketing, complex financial reporting, intellectual property management, and overseeing the business and product development and R&D initiatives.





Ms. Danforth continues to provide consulting services to other private and public corporations, and serves as an independent director and/or officer on several private and public boards.  Ms. Danforth is Canadian-born and educated, well traveled and currently resides in Alberta, Canada.





David Little


Mr. Little has been a director of our Company since April 27, 2007.  In addition, Mr. Little was appointed Chairman of the Finance Committee on April 27, 2007.  Mr. Little was the founder of Avery Resources Inc., where he served as Chairman and Chief Executive Officer until February 2008.  He holds a MBA from York University and a Bachelor of Science from the University of Western Ontario.  Previously an investment advisor with Yorkton Securities Inc., he has over 20 years of financial experience in the public markets.  Mr. Little serves on the Board of Directors of several oil companies including Trophy Resources Ltd., Resolution Energy Inc. and Energy North Inc.


18


Mr. Jonathan Bradley


Mr. Bradley is currently Dean of Students, University of the West of England, Bristol. Since 1990, he has been a principal lecturer in International Business Economics Bristol Business School, University of the West of England. Mr. Bradley is also director of several publicly listed companies (AIM of London Stock Exchange, Dublin Stock Exchange, and London Stock Exchange), as well as various private companies.





Mr. Bradley’s areas of expertise include: business, economics and politics of post-Communist states of Central and Eastern Europe and the former Soviet Union, and especially the Balkan States; investment management; corporate governance and international business economics. He is also a speaker and publisher on topics of economics and investments.





James Korovilas (Advisory Board)


Mr. Korovilas is an economist with an MSc from Bristol University, United Kingdom.  He specializes in economic development in the Balkan region and his main academic activities focus on the areas of international economic development and international energy markets, including hydrocarbons and renewables.  Recently, Mr. Korovilas collaborated with the World Bank in Kosovo, co-authoring a review of the domestic energy sector with recommendations on how to meet future energy needs.  He has also worked on three European Union funded projects, examining economic developments in Serbia, Bosnia, Kosovo and Greece.





There are no family relationships among our officers, directors, or persons nominated for such positions.





There are no arrangements or understandings between our directors and/or executive officers and any other person pursuant to which that director/executive officer was selected.





No officer or director, and no promoter or significant employee of our Company, has been involved in legal proceedings that would be material to an evaluation of our management.





None of our directors has been involved in any bankruptcy or criminal (excluding traffic violations and other minor infractions) proceedings.  None of our directors is subject to any order, judgment or decree related to his involvement in any type of business, securities or banking activities or has been found to have violated a federal or state securities or commodities law.




B. Compensation




The following table sets forth the compensation paid to our directors and members of our management group for the last fiscal year.  With the exception of those noted below, no executive officer of Viosolar Inc. earned a salary and bonus for such fiscal year in excess of $100,000.





Name

FeesEarned

orPaid in

Cash

($)


Stock Options

($)


Option Stock Awards

($)


Non-Equity

Incentive Plan

Compensation

($)


Nonqualified

Deferred Compensation

Earnings

($)


All Other

Compensation

($)


Total

($)Rick Walchuk

President & Director


60,000
(1)


510,446
(2)


450,000
(3)


-0-



-0-



-0-



1,020,446Jacqueline Danforth

Director and CFO


-0-



59,707
(4)


52,000
(5)


-0-



-0-



-0-



111,707David Little

Director


-0-



306,268
(6)


-0-



-0-



-0-



-0-



306,268Michael Soursos

Director and Secretary


36,000
(7)


510,446
(8)


450,000
(9)


-0-



-0-



-0-



1,116,467Jonathan Bradley

Director


-0-



102,089
(10)


180,000
(11)


-0-



-0-



-0-



282,089


(1)
These amounts were accrued and remain outstanding in the amount of $120,000 as at the date of this report.


19


(2)
500,000 five year stock options granted May 26, 2008 exercisable at $2.25 with 250,000 vesting May 26, 2009 and 250,000 vesting May 26, 2010. On May 26, 2009, the Company’s Board of Directors approved that the stock options as previously granted under the 2007 Plan be re-priced at $0.40 per share.  The Company recognized stock-based expenses of $117,045 and $358,179 in 2008 and 2009, respectively. Unrecognized compensation expense related to outstanding stock options of July 31, 2009 was $35,222 and is expected to be recognized in 2010.


(3)
250,000 shares awarded May 26, 2008, with 125,000 vesting May 26, 2009 and 125,000 vesting May 26, 2010. The Company recognized stock-based expenses of $28,125 and $318,750 in 2008 and 2009, respectively. Unrecognized compensation expense was $103,125 and is expected to be recognized of in 2010.


(4)
50,000 five year stock options granted May 26, 2008 exercisable at $2.25 with 25,000 vesting May 26, 2009 and 25,000 vesting May 26, 2010. On May 26, 2009, the Company’s Board of Directors approved that the stock options as previously granted under the 2007 Plan was re-priced at $0.40 per share. The Company recognized stock-based expenses of $11,704 and $35,818 in 2008 and 2009, respectively. Unrecognized compensation expense related to outstanding stock options of July 31, 2008 was $3,522 and is expected to be recognized in 2010. International Corporate Support Services Ltd., of which Jacqueline Danforth is an officer and minority shareholder, received 50,000 five year stock options granted May 26, 2009 exercisable at $0.40 with 25,000 vested immediately and 25,000 vesting May 26, 2010. The Company recognized stock-based expenses of $4,966 in 2009. Unrecognized compensation expense related to outstanding stock options of July 31, 2009 was $3,697 and is expected to be recognized in 2010.


(5)
20,000 shares awarded May 26, 2008, with 10,000 vesting May 26, 2009 and 10,000 vesting May 26, 2010. The Company recognized stock-based expenses of $2,250 and $25,500 in 2008 and 2009, respectively. Unrecognized compensation expense was $ 8,250 and is expected to be recognized in 2010. International Corporate Support Services Ltd., of which Jacqueline Danforth is an officer and minority shareholder, received 80,000 shares awarded May 26, 2009, with 40,000 vested immediately and 40,000 vesting May 26, 2010. The Company recognized stock-based expenses of $9,447 in 2009. Unrecognized compensation expense was $6,553 and is expected to be recognized of in 2010.


(6)
300,000 five year stock options granted May 26, 2008 exercisable at $2.25 with 150,000 vesting May 26, 2009 and 150,000 vesting May 26, 2010. On May 26, 2009, the Company’s Board of Directors approved that the stock options as previously granted under the 2007 Plan was re-priced at $0.40 per share. The Company recognized stock-based expenses of $70,227 and $214,908 in 2008 and 2009, respectively. Unrecognized compensation expense related to outstanding stock options of July 31, 2008 was $21,133 and is expected to be recognized in 2010.


(7)
Of this amount a total of $57,059 remained unpaid as of July 31, 2009.


(8)
500,000 five year stock options granted May 26, 2008 exercisable at $2.25 with 250,000 vesting May 26, 2009 and 250,000 vesting May 26, 2010. On May 26, 2009, the Company’s Board of Directors approved that the stock options as previously granted under the 2007 Plan was re-priced at $0.40 per share.  The Company recognized stock-based expenses of $117,045 and $358,179 in 2008 and 2009, respectively. Unrecognized compensation expense related to outstanding stock options of July 31, 2008 was $35,222 and is expected to be recognized in 2010.


(9)
250,000 shares awarded May 26, 2008, with 125,000 vesting May 26, 2009 and 125,000 vesting May 26, 2010. The Company recognized stock-based expenses of $28,125 and $318,750 in 2008 and 2009, respectively. Unrecognized compensation expense was $103,125 and is expected to be recognized of in 2010.


(10)
100,000 five year stock options granted May 26, 2008 exercisable at $2.25 with 50,000 vesting May 26, 2009 and 50,000 vesting May 26, 2010. On May 26, 2009, the Company’s Board of Directors approved that the stock options as previously granted under the 2007 Plan was re-priced at $0.40 per share. The Company recognized stock-based expenses of $23,409 and $71,636 in 2008 and 2009, respectively. Unrecognized compensation expense related to outstanding stock options of July 31, 2008 was $7,044 and is expected to be recognized in 2010.


(11)
100,000 shares awarded May 26, 2008, with 50,000 vesting May 26, 2009 and 50,000 vesting May 26, 2010. The Company recognized stock-based expenses of $11,250 and $127,500 in 2008 and 2009, respectively. Unrecognized compensation expense was $41,250 and is expected to be recognized of in 2010.





We have not paid any other compensation to any other members of its management, administrative or supervisory bodies.





No directors receive any form of compensation in their capacity as directors of Viosolar Inc. beyond that identified above in the form of fees, stock awards or stock options.




C.  Board Practices




Our directors are elected to serve until the next annual meeting of shareholders and until their successors have been elected.  Our executive officers are elected annually by our board of directors and hold such positions until the following year or until his successor is duly elected by our board of directors, at its discretion.  Mr. Walchuk, Mr. Soursos and Ms. Danforth have each served as a director of our Company since March 14, 2007.  Mr. Little has served as a director of our Company since April 27, 2007, and Mr. Bradley has served as a director since March 7,2008.


20


There are no service contracts between our Company and any of our officers providing for benefits upon termination of employment.





As of the date hereof, we do not have an audit, nominating, or compensation committee of our board of directors, however, we do have a finance committee comprised of Mr. David Little, Mr. Michael Soursos and Mr. Rick Walchuk.  Mr. David Little is the appointed Chairman of the Committee, the purpose of which is to review potential financing opportunities for the Company and make recommendations regarding same to the Board of Directors.




D.  Employees




The Company does not have any employees apart from senior management previously identified.




E.  Share Ownership




The following table sets forth information, as of February 26, 2010, with respect to the beneficial ownership (on a fully diluted basis) of our common stock by each of our officers and directors, and by the officers and directors of the Company as a group.





Title of Class of Stock
Beneficial Owner

Number of Shares Held


Percentage of Class (1)Class A Common
Rick Walchuk


5,795,400
(2)


25.95
%Class A Common
Jacqueline Danforth


10,000
(3), (4)


0.04
%Class A Common
David Little


200,000
(5)


0.99
%Class A Common
Michael Soursos


677,500
(6)


3.0
%Class A Common
Jonathan Bradley


50,000
(7)


0.2
%


(1)  Based on 22,332,500 shares of common stock outstanding.


(2) Mr. Walchuk has also been granted 500,000 five year stock options on May 26, 2008 originally exercisable at $2.25, exercisable at $0.40 as at May 26, 2009, with 250,000 vested May 26, 2009 and 250,000 vesting May 26, 2010.  A further 250,000 share stock award was granted  on May 26, 2008, with 125,000 vested May 26, 2009 (included in Mr. Walchuk’s ownership) and 125,000 vesting May 26, 2010.


(3) Ms. Danforth has been granted 50,000 five year stock options on May 26, 2008 originally exercisable at $2.25, exercisable at $0.40 as at May 26, 2009, with 25,000 vested May 26, 2009 and 25,000 vesting May 26, 2010.  A further 20,000 share stock award was granted on May 26, 2008, with 10,000 vested May 26, 2009 (included in Ms. Danforth’s ownership) and 10,000 vesting May 26, 2010.


(4) International Corporate Support Services Ltd. has been granted 50,000 five year stock options on May 26, 2009 exercisable at $0.40, with 25,000 vested immediately on grant, and 25,000 vesting May 26, 2010.  A further 80,000 share stock award was granted on May 26, 2009, with 40,000 vesting immediately on grant, and 40,000 vesting May 26, 2010. As of the date of this report, the 40,000 stock award that vested on May 26, 2009, had not been issued by the Company, but was expensed in the fiscal year, and is disclosed as part of the ownership. Ms. Danforth is a director, officer and minority shareholder of International Corporate Support Services Ltd.


(5) Mr. Little has also been granted 300,000 five year stock options on May 26, 2008 originally exercisable at $2.25, exercisable at $0.40 as at May 26, 2009, with 150,000 vested May 26, 2009 and 150,000 vesting May 26, 2010.


(6) Mr. Soursos has also been granted 500,000 five year stock options on May 26, 2008 exercisable at $2.25, exercisable at $0.40 as at May 26, 2009, with 250,000 vested May 26, 2009 and 250,000 vesting May 26, 2010. A further 250,000 share stock award was granted on May 26, 2008, with 125,000 vested May 26, 2009 (included in Mr. Soursos’s ownership) and 125,000 vesting May 26, 2010.


(7) Mr. Bradley has been granted 100,000 five year stock options on May 26, 2008 exercisable at $2.25, exercisable at $0.40 as at May 26, 2009, with 50,000 vested May 26, 2009 and 50,000 vesting May 26, 2010. A further 100,000 share stock award was granted on May 26, 2008, with 50,000 vested May 26, 2009 (included in Mr. Bradley’s ownership) and 50,000 vesting May 26, 2010.


21


Stock Option Plans





In the fiscal year ending July 31, 2007, (the “2007 Plan”) the Company’s Board of Directors and shareholders approved a Stock Option and Award plan for up to 2,700,000 options.





Subsequent to the fiscal year ending July 31, 2009, the Company’s Board of Directors and shareholders approved a Stock Option and Award plan for up to 2,700,000 options at a price to be determined by the Board of Directors.





During the year ended July 31, 2008, the Company granted 1,715,000 non-qualified stock options and 685,000 stock awards under the Company’s 2007 Stock Option and Stock Award Plan for a total of 2,400,000 shares of Class A common stock.  Of these, 1,450,000 non-qualified stock options and 620,000 stock awards were issued to directors and management, and the remainder to consultants to the Corporation. During the current fiscal year ended July 31, 2009, a total of 150,000 non-qualified stock options and 10,000 non-vested stock awards issued to consultants under the 2007 Stock Option Plan were cancelled pursuant to the respective stock option agreements.





Additionally, the Board of Directors determined that pursuant to the regulations for amendments to pricing, the Board of Directors authorized that all remaining options granted pursuant to the 2007 Stock Option Plan be re-priced at $ 0.40 per share based on the then last trade of the Company at $0.20 per share and the illiquid market for the shares of the Corporation at the time.





The Board of Directors also authorized the grant of 450,000 additional non-qualified stock options at an exercise price of $0.40 per share and 80,000 stock awards to consultants of the Corporation. Together with the cancellations noted above, as at February 26, 2010, a total of 2,700,000 shares of Class A common stock had been granted under the 2007 Stock Option Plan, and 70,000 stock options have been granted under the 2009 Stock Option Plan.





ITEM 7.   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS




A.  Major Shareholders




The following table sets forth information, as of January 22, 2010,with respect to the beneficial ownership of our common stock by each person known to be the beneficial owner of more than 5% of our outstanding common stock.





Title of Class of Stock
Beneficial Owner
Number of Shares Held
Percentage ofClass (1)Common
Rick Walchuk
5,795,400
25.95%


(1)  Based on 22,332,500 shares of common stock outstanding.





On March 14, 2007, Mr. Daryl Cozac sold a total of 13,990,000 Class A common shares of the Issuer to Neranion Holdings Ltd.  On September 20, 2007, Neranion Holdings gifted 8,990,000 to 44 individuals. On November 26, 2008, Neranion Holdings Ltd. sold 5,000,000 shares of the Company’s Class A common stock, representing 28% of the total issued and outstanding shares to Rick Walchuk, a director and officer of the Company.





The Company’s major shareholders do not have any voting rights that differ from any of the other existing shareholders.


We have one class of securities issued and outstanding being Class A common shares.





We have a total of 3 record holders known to the Company, holding a total of 101,000 Class A common shares in the United States.




There are no arrangements known to us that could at a subsequent date result in a change of control of our Company.





B.  Related Party Transactions





During the most recently completed fiscal year ended July 31, 2009 and to the date of this report where practicable, transactions in which a director or executive officer or nominee for election as a director, or any member of the immediate family of any director or executive officer of Viosolar had, or is to have a direct or indirect material interest, are as follows:


22


On November 26, 2008, Neranion Holdings Ltd. sold 5,000,000 shares of the Company’s Class A common stock, representing 28% of the total issued and outstanding shares to Rick Walchuk, a director and officer of the Company.





As at July 31, 2009 the Company owed $487,522 including accrued interest, to a director of the Company for funds advanced for operations. On July 31, 2008, the Board of Directors approved a series of promissory notes bearing interest at 5% per annum. As a result of the agreements, the Company has accrued interest totaling $25,352 in respect of amounts advanced to the close of the fiscal year.





During the fiscal year ended July 31, 2009, the Company accrued management fees totaling $96,000 to two directors of the Company, being Rick Walchuk and Michael Soursos.  The Company paid a total of $29,941 towards outstanding fees payable to Michael Soursos from the prior period.





During fiscal year ended July 31, 2009 the Company accrued invoices for services totaling $13,554 from a Company for which a director acts as a consultant.  This amount is included in accounts payable – related party.





During the years ended July 31, 2008 and 2007 respectively, we incurred $72,000 and $36,000 in rent under a month to month sublease for office space with Bruca Trading, Limited.  Two directors of the Company also act as consultants to Bruca Trading Ltd. The lease agreement was terminated on September 15, 2008. At July 31, 2009, $36,000 was unpaid under the agreement, and is included in Loans from Related Parties on the accompanying balance sheets.




C.  Interests of Experts and Counsel




Not applicable.





ITEM 8.   FINANCIAL INFORMATION




A.  Consolidated Statements, and Other Financial Information




The required audited financial statements for the fiscal year ended July 31, 2008 are provided at the end of this annual report starting on Page F-1.





B.  Significant Changes





Other than as disclosed herein, no significant change has occurred in our financial statements since the fiscal year ended July 31, 2009.





ITEM 9.   THE OFFER AND LISTING





Our common stock is quoted for trading on the OTC Bulletin Board under the symbol "VIOSF", and as at February 18 2010, to the date of the filing of this report, “VIOSE”.  Our Class A common stock was initially quoted on January 3, 2006.  We also trade on the Frankfurt exchange under the symbol “SDE.F” and have traded on this exchange since June 13, 2007.


We have no other classes of stock quoted on any markets.





There were no trades of our Class A common stock during fiscal 2006.





Following are the annual high and low market closing bid prices for our common stock presented for the three most recent fiscal years.  There was no trading in our Class A common stock in the prior fiscal years.





Period

High


LowFiscal Year 2007 (Aug 06 – Jul 07)

$
2.75


$
0.10Fiscal Year 2008 (Aug 07 – Jul 08)

$
2.65


$
1.25Fiscal Year 2009 (Aug 08 – Jul 09)

$
1.30


$
0.15





Following are the high and low market prices for our common stock presented for each full financial quarter for the two most recent fiscal years and subsequent periods.


23


Period

High


LowAugust 1, 2007 to October 31, 2007

$
2.60


$
1.95November 1, 2007 to January 31, 2008

$
2.50


$
1.70February 1, 2008 to April 30, 2008

$
2.45


$
1.30May 1, 2008 to July 31, 2008

$
1.95


$
1.01August 1, 2008 to October 31, 2008

$
1.30


$
0.51November 1, 2008 to January 31, 2009

$
0.75


$
0.25February 1, 2009 to April 30, 2009

$
0.40


$
0.10May 1, 2009 to July 31, 2009

$
0.40


$
0.16August 1, 2009 to October 31, 2009

$
0.65


$
0.35November 1, 2009 to January 31, 2010

$
0.55


$
0.15





Following are the high and low closing bid prices for each of the most recent full six months.





Month

High


LowSeptember 2009

$
0.65


$
0.35October, 2009

$
0.65


$
0.35November 2009

$
0.55


$
0.15December 2009

$
0.31


$
0.25January 2010

$
0.45


$
0.25February 2010

$
0.29


$
0.22





ITEM 10.  ADDITIONAL INFORMATION




A. Share Capital




Not applicable.




B.  Memorandum and Articles of Association




Incorporated by reference in Form F-1/A filed on August 9, 2005.




C. Material Contracts




EPE has power purchase agreement (“PPA”) with the Hellenic Transmission System Operator (“HTSO”), in regards to the Ksidi solar park, whereby the HTSO will purchase all produced power over a 20 year period, commenced September 1 2008. The PPA has a 10 year duration, with a unilateral option by the Company to extend for a further 10 years.  The feed-in tariff rate commences at 0.45E/KWh ($0.60), with estimated rate increases of 25% of the prior years’ CPI, according to provisions under L.3734/2009 art. 27A.  The Company also has PPAs with the HTSO for their Ampeli – Ksidi and Mpekiraga parks, though these are not expected to commence operations until September 2010, under similar terms to the Ksidi park.




D.  Exchange Controls




As of the date hereof, there are no governmental laws, decrees or regulations in Canada on the export or import of capital, or which impose foreign exchange controls or affect the remittance of interest, dividends or other payments to non-resident holders of our common stock.  However, dividends paid to U.S. residents, are subject to a 15% withholding tax or a 5% withholding tax for dividends if the shareholder is a corporation owning at least 10% of the outstanding voting shares of our Company pursuant to Article X of the reciprocal tax treaty between Canada and the U.S. (see Item 10E "Taxation" below).





Except as provided in the Investment Canada Act, which has provisions that restrict the holding of voting shares by non-Canadians, there are no limitations specific to the rights of non-Canadians to hold or vote our common shares under the laws of Canada or Alberta, or in our charter documents.  The following summarizes the principal features of the Investment Canada Act for non-Canadian residents proposing to acquire our common shares.


24


This summary is of a general nature only and is not intended to be, and should not be construed to be, legal advice to any holder or prospective holder of our common shares, and no opinion or representation to any holder or prospective holder of our common shares is hereby made.  Accordingly, holders and prospective holders of our common shares should consult with their own legal advisors with respect to the consequences of purchasing and owning our common shares.





The Investment Canada Act governs the acquisition of Canadian businesses by non-Canadians.  Under the Investment Canada Act, non-Canadian persons or entities acquiring "control" (as defined in the Investment Canada Act) of a corporation carrying on business in Canada are required to either notify, or file an application for review with, Industry Canada.  Industry Canada may review any transaction which results in the direct or indirect acquisition of control of a Canadian business, where the gross value of corporate assets exceeds certain threshold levels (which are higher for investors from members of the World Trade Organization, including United States residents, or World Trade Organization member-controlled companies) or where the activity of the business is related to Canada’s cultural heritage or national identity.  No change of voting control will be deemed to have occurred, for purposes of the Investment Canada Act, if less than one-third of the voting control of a Canadian corporation is acquired by an investor.





If an investment is reviewable under the Investment Canada Act, an application for review in the form prescribed is normally required to be filed with Industry Canada prior to the investment taking place, and the investment may not be implemented until the review has been completed and the Minister responsible for the Investment Canada Act is satisfied that the investment is likely to be of net benefit to Canada.  If the Minister is not satisfied that the investment is likely to be of net benefit to Canada, the non-Canadian applicant must not implement the investment, or if the investment has been implemented, may be required to divest itself of control of the Canadian business that is the subject of the investment.


Certain transactions relating to our common stock would be exempt from the Investment Canada Act, including:





(a)
the acquisition of our common stock by a person in the ordinary course of that person’s business as a trader or dealer in securities;


(b)
the acquisition of control of our Company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Canada Act; and


(c)
the acquisition of control of our Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of our Company, through ownership of our common stock, remains unchanged.





E.
Taxation





Material Canadian Federal Income Tax Consequences





We consider that the following general summary fairly describes the principal Canadian federal income tax consequences applicable to a holder of our common stock who is a resident of the United States, who is not, will not be and will not be deemed to be a resident of Canada for purposes of the Income Tax Act(Canada) and any applicable tax treaty and who does not use or hold, and is not deemed to use or hold, his common stock in the capital of our Company in connection with carrying on a business in Canada (a "non-resident holder").





This summary is based upon the current provisions of the Income Tax Act, the regulations thereunder (the "Regulations"), the current publicly announced administrative and assessing policies of the Canada Revenue Agency and the Canada - United States Tax Convention (1980), as amended (the "Treaty").  This summary also takes into account the amendments to the Income Tax Act and the Regulations publicly announced by the Minister of Finance (Canada) prior to the date hereof (the "Tax Proposals") and assumes that all such Tax Proposals will be enacted in their present form.  However, no assurances can be given that the Tax Proposals will be enacted in the form proposed, or at all.  This summary is not exhaustive of all possible Canadian federal income tax consequences applicable to a holder of our common stock and, except for the foregoing, this summary does not take into account or anticipate any changes in law, whether by legislative, administrative or judicial decision or action, nor does it take into account provincial, territorial or foreign income tax legislation or considerations, which may differ from the Canadian federal income tax consequences described herein.




25


This summary is of a general nature only and is not intended to be, and should not be construed to be, legal, business or tax advice to any particular holder or prospective holder of our common stock, and no opinion or representation with respect to the tax consequences to any holder or prospective holder of our common stock is made.  Accordingly, holders and prospective holders of our common stock should consult their own tax advisors with respect to the income tax consequences of purchasing, owning and disposing of our common stock in their particular circumstances.





Dividends





Dividends paid on our common stock to a non-resident holder will be subject under the Income Tax Act to withholding tax which tax is deducted at source by our Company.  The withholding tax rate for dividends prescribed by the Income Tax Act is 25% but this rate may be reduced under the provisions of an applicable tax treaty. Under the Treaty, the withholding tax rate is reduced to 15% on dividends paid by our Company to residents of the United States and is further reduced to 5% where the beneficial owner of the dividends is a corporation resident in the United States that owns at least 10% of the voting stock of our Company.





The Treaty provides that the Income Tax Act standard 25% withholding tax rate is reduced to 15% on dividends paid on stock of a corporation resident in Canada (such as our Company) to residents of the United States, and also provides for a further reduction of this rate to 5% where the beneficial owner of the dividends is a corporation resident in the United States that owns at least 10% of the voting stock of the corporation paying the dividend.





Capital Gains





A non-resident holder is not subject to tax under the Income Tax Act in respect of a capital gain realized upon the disposition of a common share of our Company unless such share is "taxable Canadian property" (as defined in the Income Tax Act) of the non-resident holder.  Our common stock generally will not be taxable Canadian property of a non-resident holder unless the non-resident holder alone or together with non-arm’s length persons owned, or had an interest in an option in respect of, not less than 25% of the issued stock of any class of our capital stock at any time during the 60 month period immediately preceding the disposition of the stock.  In the case of a non-resident holder resident in the United States for whom stock of our Company are taxable Canadian property, no Canadian taxes will generally be payable on a capital gain realized on such stock by reason of the Treaty unless the value of such stock is derived principally from real property situated in Canada.





Material United States Federal Income Tax Consequences





The following is a general discussion of certain possible United States Federal foreign income tax matters under current law, generally applicable to a U.S. Holder (as defined below) of our common stock who holds such stock as capital assets.  This discussion does not address all aspects of United States Federal income tax matters and does not address consequences peculiar to persons subject to special provisions of Federal income tax law, such as those described below as excluded from the definition of a U.S. Holder.  In addition, this discussion does not cover any state, local or foreign tax consequences.  See "Certain Canadian Federal Income Tax Consequences" above.





The following discussion is based upon the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations, published Internal Revenue Service ("IRS") rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time.  In addition, this discussion does not consider the potential effects, both adverse and beneficial, of any recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.  No assurance can be given that the IRS will agree with such statements and conclusions, or will not take, or a court will not adopt, a position contrary to any position taken herein.





The following discussion is for general information only and is not intended to be, nor should it be construed to be, legal, business or tax advice to any holder or prospective holder of our common stock, and no opinion or representation with respect to the United States Federal income tax consequences to any such holder or prospective holder is made.  Accordingly, holders and prospective holders of common shares are urged to consult their own tax advisors with respect to Federal, state, local, and foreign tax consequences of purchasing, owning and disposing of our common shares.


26


U.S. Holders





As used herein, a "U.S. Holder" includes a holder of less than 10% of our common shares who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States or of any political subdivision thereof, any entity which is taxable as a corporation for United States tax purposes and any other person or entity whose ownership of our common stock is effectively connected with the conduct of a trade or business in the United States.  A U.S. Holder does not include persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals or foreign corporations whose ownership of our common stock is not effectively connected with the conduct of a trade or business in the United States and shareholders who acquired their stock through the exercise of employee stock options or otherwise as compensation.





Distributions





The gross amount of a distribution paid to a U.S. Holder will generally be taxable as dividend income to the U.S. Holder for United States federal income tax purpose to the extent paid out of our current or accumulated earnings and profits, as determined under United States federal income tax principles.  Distributions which are taxable dividends and which meet certain requirements will be "unqualified dividend income" and taxed to U.S. Holders at a maximum United States federal rate of 15%.  Distributions in excess of our current and accumulated earnings and profits will be treated first as a tax-free return of capital to the extent the U.S. Holder’s tax basis in the common stock and, to the extent in excess of such tax basis, will be treated as a gain from a sale or exchange of such stock.





Capital Gains





In general, upon a sale, exchange or other disposition of common stock, a U.S. Holder will generally recognize a capital gain or loss for United States federal income tax purposes in an amount equal to the difference between the amounts realized on the sale or other distribution and the U.S. Holder’s adjusted tax basis in such stock.  Such gain or loss will be a United States source gain or loss and will be treated as a long-term capital gain or loss if the U.S. Holder’s holding period of the stock exceeds one year.  If the U.S. Holder is an individual, any capital gain will generally be subject to United States federal income tax at preferential rates if specified minimum holding periods are met.  The deductibility of capital losses is subject to significant limitations.





Foreign Tax Credit





A U.S. Holder who pays (or has had withheld from distributions) Canadian income tax with respect to the ownership of our common stock may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld.  Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax.  This election is made on a year-by-year basis and generally applies to all foreign income taxes paid by (or withheld from) the U.S. Holder during that year.  There are significant and complex limitations which apply to the tax credit, among which is an ownership period requirement and the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign source income bears to his or its worldwide taxable income.





In determining the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources.  Complex rules govern this classification process.  There are further limitations on the foreign tax credit for certain types of income such as "passive income", "high withholding tax interest", "financial services income", "shipping income", and certain other classifications of income.  The availability of the foreign tax credit and the application of these complex limitations on the tax credit are fact specific and holders and prospective holders of our common stock should consult their own tax advisors regarding their individual circumstances.





Passive Foreign Investment Corporation





We do not believe that we are a passive foreign investment corporation (a "PFIC") because we have realized no income, domestic or foreign.  However, since PFIC status depends upon the composition of a company’s income and assets and the market value of its assets and stock from time to time, there is no assurance that we will not be considered a PFIC for any taxable year.  If we were treated as a PFIC for any taxable year during which a U.S. Holder held stock, certain adverse tax consequences could apply to the U.S. Holder.


27


If we are treated as a PFIC for any taxable year, gains recognized by such U.S. Holder on a sale or other disposition of stock would be allocated ratably over the U.S. Holder’s holding period for the stock.  The amount allocated to the taxable year of the sale or other exchange and to any year before we became a PFIC would be taxed as ordinary income.  The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as applicable, and an interest charge would be imposed on the amount allocated to such taxable year.  Further, any distribution in respect of stock in excess of 125% of the average of the annual distributions on stock received by the U.S. Holder during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, would be subject to taxation as described above.  Certain elections may be available to U.S. Holders that may mitigate some of the adverse consequences resulting from PFIC status.  However, regardless of whether such elections are made, dividends paid by a PFIC will not be "qualified dividend income" and will generally be taxed at the higher rates applicable to other items of ordinary income.





We will establish an office for the Company in the U.S. and engage in a U.S. trade or business for U.S. tax purposes.  Therefore, future foreign source income should not result in the Company being classified as a PFIC.





U.S. Holders and prospective holders should consult their own tax advisors regarding the potential application of the PFIC rules to their ownership of our common stock.




F.  Dividends and Paying Agents




Not applicable.




G.  Statements by Experts




Not applicable.




H.  Documents on Display




Documents and agreements concerning our Company may be viewed by appointment during regular business hours atKolokotroni 2A, 17563 Paleo Faliro, Athens, Greece.





I.  Subsidiary Information





As disclosed in the notes to our Financial Statements.





ITEM 11.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not applicable.





ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES





Not applicable.





28


PART II





ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES





Not applicable.





ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS





Not applicable.





ITEM 15T.CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and Procedures





As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this annual report, being July 31, 2009, we have carried out an evaluation of the effectiveness of the design and operation of our Company’s disclosure controls and procedures.  This evaluation was carried out under the supervision and with the participation of our Company’s management, including our Chief Executive Officer and our Chief Financial Officer.  Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective as at the end of the period covered by this annual report.  There have been no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.





Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management including our Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.





Evaluation of Disclosure Controls and Procedures





Our management, under supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e).  Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of July 31, 2009, the disclosure controls and procedures were effective to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and forms.





Management’s Report on Internal Control over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 14d-14(f).  Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.





Management assessed the effectiveness of the Company’s internal control over financial reporting as of July 31, 2009.  In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.   Based on its assessment, management concluded that, as of July 31, 2008, the Company’s internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.





This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.


29


Changes in Internal Control over Financial Reporting





There have been no changes in our internal controls over financial reporting that occurred during the period covered by this annual report to the filing of this annual report that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.





ITEM 16.  [RESERVED]





ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT





We presently do not have an audit committee and accordingly, we do not have an audit committee member who qualifies as an "audit committee financial expert" or who is "independent" as that is defined by Rule 4200(a)(15) of the NASDAQ Market Place Rules.  Our board of directors performs the same functions as an audit committee.  Due to our limited operations, we have determined it is not feasible at this time to have an audit committee.





ITEM 16B.           CODE OF ETHICS





We have not adopted a written code of ethics.  We have not seen any need to adopt a written code of ethics on the basis that our corporate culture effectively deters wrongdoing and promotes honest and ethical conduct, full, fair and accurate, timely, and understandable disclosure in reports and documents, the compliance with applicable governmental laws, rules and regulations, the prompt internal reporting.





ITEM 16C.          PRINCIPAL ACCOUNTANT FEES AND SERVICES





Our board of directors appointed ABBM Group, Ltd LLP.   as our principal accountant to audit our financial statements for the fiscal year ended July 31, 2009, 2008 and 2007.  ABBM Group, Ltd LLP is a registered public accounting firm that assumed the practice and PCAOB registration of Bateman McDuffie, Inc. (formerly known as Bateman & Co., Inc., P.C.), the auditors of the Company since inception.  The shareholders of Bateman McDuffie, Inc. are partners in ABBM Group, Ltd LLP.





Audit Fees





We incurred audit fees for audits of our financial statements, billed by ABBM Group, Ltd LLP of $10,596 during the fiscal year ended July 31, 2009 and $8,270 during the fiscal year ended July 31, 2008.





Audit Related Fees





The fees billed for assurance and related services by ABBM Group, Ltd LLP relating to the performance of the audit or review of our financial statements, which are not reported under the heading "Audit Fees" above, for the fiscal years ended July 31, 2009 and 2008, were Nil.





Tax Fees





For the fiscal years ended July 31, 2009, and 2008, the aggregate fees billed for tax compliance, tax advice and tax planning by ABBM Group, Ltd LLP were Nil.





All Other Fees





For the fiscal years ended July 31, 2009, and 2008, the aggregate fees billed by ABBM Group, Ltd LLP, as applicable, for products and services, other than the services set out above, were Nil.


30


Audit Committee Pre-Approved Procedures





Our board of directors pre-approves all services provided by our principal accountant.  All of the services and fees described under the heading "Audit Fees", "Audit Related Fees", "Tax Fees" and "All Other Fees" above were reviewed and approved by our board of directors before the respective services were rendered and none of such services were approved by our board of directors pursuant to paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X.





ITEM 16D.         EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES





Not applicable.





ITEM 16E.          PURCHASES OF EQUITY SECURITIES BY OUR COMPANY AND AFFILIATED PURCHASERS





Not applicable.




ITEM 16F.
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT





Our accountants since inception have been ABBM Group, Ltd. LLP. ABBM Group, Ltd LLP is a registered public accounting firm that assumed the practice and PCAOB registration of Bateman McDuffie, Inc. (formerly known as Bateman & Co., Inc., P.C.), the auditors of the Company since inception.  The shareholders of Bateman McDuffie, Inc. are partners in ABBM Group, Ltd LLP.  We do not consider this to be a change in our certifying accountant as it was a successor to our prior audit firm; however, we have included the information here for informational purposes only.





ITEM 16G.
CORPORATE GOVERNANCE




Not applicable.


31


PART III





ITEM 17.            FINANCIAL STATEMENTS





See Item 18 "Financial Statements" below.





ITEM 18.            FINANCIAL STATEMENTS





Our audited financial statements for the fiscal years ended July 31, 2009, 2008, and 2007are provided herein starting on page F-1.




32





VIOSOLAR INC.


(a development stage enterprise)


FINANCIAL STATEMENTS


With Report of Independent Registered Public Accounting Firm


FOR THE FISCAL YEARS END JULY 31, 2009, 2008 and 2007


REPORTED IN UNITED STATES DOLLARS




PageAudited Financial Statements
F-1Report of Independent Registered Public Accounting Firm
F-2Consolidated Balance Sheets
F-3Consolidated Statements of Operations and Comprehensive Income (Loss)
F-4Consolidated Statements of Stockholders’ Deficit
F-5Consolidated Statements of Cash Flows
F-6Notes to Financial Statements
F-7 to F-19


F-1
 ABBM Group, Ltd LLPCertified Public Accountants19 Briar Hollow Lane, Suite 263Houston, Texas 77027(713) 552-9800FAX (713) 552-9700www.abbmgroup.com


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To The Board of Directors and Stockholders


of Viosolar Inc.





We have audited the accompanying consolidated balance sheets of Viosolar Inc., (an Alberta, Canada corporation and a development stage enterprise) as of July 31, 2009, 2008, and 2007, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity (deficit), and cash flows for the each of the three years in the period ended July 31, 2009, and for the period from inception, July 19, 2004, through July 31, 2009. These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall 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 consolidated financial position of Viosolar Inc. (a development stage enterprise) as of July 31, 2009, 2008, and 2007, and the results of its consolidated operations and its consolidated cash flows for each of the three years in the period ended July 31, 2009, and for the period from inception, July 19, 2004, through July 31, 2009, in conformity with U.S. generally accepted accounting principles.







The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company is engaged in the development stage of a business and has suffered losses from development stage activities to date approximating $3,600,000, and has negative stockholders’ equity of approximately $400,000, all of which raise substantial doubt about its ability to continue as a going concern.  Management's plans in regard to these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.











ABBM Group, Ltd LLP


(Incorporating the practice formerly conducted by


Bateman & Co., Inc., P.C.)


Houston, Texas


March 15, 2010





International Associate
 UK 200 GROUP
 Affiliated Offices in Principal Cities Around The World
 F-2


VIOSOLAR INC.(A development stage enterprise)Consolidated Balance SheetsJuly 31,


July 31,


July 31,2009


2008


2007ASSETSCurrent assets:Cash

$
34,496


$
172


$
11,218Accounts receivable, net of unearned income totaling $78,669


58,862



-



-Prepaid expenses


166,137



3,290



-Other current assets


1,108



-



-Total current assets


260,603



3,462



11,218Property and equipment, net


601,801



-



-Intangible assets, net


908,038



-



-Total assets

$
1,770,442


$
3,462


$
11,218LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)Current liabilities:Short-term notes

$
363,379


$
-


$
-Current portion of long term notes


111,082



-



-Loans from related parties


524,021



329,777



76,604Accounts payable and accrued expenses


7,186



12,091



1,956Accounts payable to related parties


31,735



18,181



4,879Management fees payable to related parties


202,059



106,059



40,000Customer deposits


66,284



-



-Payroll tax payable


4,691



-



-Total current liabilities


1,310,437



466,108



123,439Noncurrent liabilities:Note payable,  long term , net of $111,082 due within one year


684,308



77,906



-Long-term deferred tax liabilities


151,387



-



-Total noncurrent liabilities:


835,695



77,906



-Total liabilities


2,146,132



544,014



123,439Stockholders’ equity(deficit)Common stock, Class A voting shares, no par value, unlimited authorized, 22,000,000, 18,000,000 and 18,000,000 shares issued and outstanding, July 31, 2009, 2008 and  2007, respectively


437,637



68,797



68,797Additional paid in capital


2,659,848



554,067



10,000Deficit accumulated during the development stage


(3,560,200
)


(1,164,447
)


(191,018
)Accumulated other comprehensive income


17,322



1,031



-Total stockholders' equity (deficit) attributable to shareholdersof Viosolar Inc.


(445,393
)


(540,552
)


(112,221
)Minority interest in subsidiaries


69,703



-



-Total stockholders’ equity


(375,690
)


(540,552
)


(112,221
)Total liabilities and stockholders' equity

$
1,770,442


$
3,462


$
11,218





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


F-3


VIOSOLAR INC.(A development stage enterprise)Consolidated Statements of Operations and Comprehensive Income (Loss)CumulativeYear


Year


Year


Inception,Ended


Ended


Ended


July 19, 2004July 31,


July 31,


July 31,


Through2009


2008


2007


July 31, 2009Revenues

$
13,041


$
-


$
-


$
13,041General and administrative expenses:Stock-based compensation


2,105,782



544,067



-



2,649,849Professional fees


55,134



106,686



49,561



237,425Investor relations


662



56,841



-



57,503Rent and utilities


44,960



79,606



39,394



163,960Travel


25,669



31,404



16,068



73,141Management fees


96,000



96,000



40,797



242,797Depreciation and amortization


1,941



-



-



3,801Other general and administrative expenses


57,587



50,225



8,732



116,982Total operating expenses


2,387,735



964,829



154,552



3,545,458Income (loss) from operations


(2,374,694
)


(964,829
)


(154,552
)


(3,532,417
)Other income (expense):Interest income


-



-



708



1,876Interest expense


(25,610
)


(8,028
)


-



(33,638
)Foreign exchange gain (loss)


6,257



(572
)


-



5,685Total other income (expense)


(19,353
)


(8,600
)


708



(26,077
)Income (loss) before taxes


(2,394,047
)


(973,429
)


(153,844
)


(3,558,494
)Provision (credit) for taxes on income


-



-



-



-Net income (loss)


(2,394,047
)


(973,429
)


(153,844
)


(3,558,494
)Other comprehensive income, net of tax:Net change in foreign currency exchange adjustments


19,199



1,031



-



20,230Comprehensive income (loss)

$
(2,374,848
)

$
(972,398
)

$
(153,844
)

$
(3,538,264
)Net income (loss) attributable to:Controlling interest

$
(2,395,753
)

$
(973,429
)

$
(153,844
)

$
(3,560,200
)Noncontrolling interest


1,706



-



-



1,706Net income (loss)

$
(2,394,047
)

$
(973,429
)

$
(153,844
)

$
(3,558,494
)Comprehensive income (loss) attributable to:Controlling interest

$
(2,379,462
)

$
(972,398
)

$
(153,844
)

$
(3,542,878
)Noncontrolling interest


4,614



-



-



4,614Net income (loss)

$
(2,374,848
)

$
(972,398
)

$
(153,844
)

$
(3,538,264
)Basic and diluted Earnings (loss) per common share – basic

$
(0.13
)

$
(0.05
)

$
(0.01
)Weighted-average shares outstanding, basic


18,087,912



18,000,000



18,000,000





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


F-4




VIOSOLAR INC.(A development stage enterprise)Consolidated Statements of Stockholders' Equity (Deficit)DeficitAccuated


Accumulated


SubtotalCommon Stock


Additional


During the


Other


BeforeClass A


Paid


Development


Comprehensive


Noncontrolling


NoncontrollingShares


Amount


In Capital


Stage


Income


Interest


Interest


TotalInception, July 19, 2004




$
-


$
-


$
-


$
-


$
-


$
-


$
-Shares issued for cash and software license


18,000,000



80,010



-



-



-



80,010



-



80,010Development stage net income (loss)


-



-



-



(542
)


-



(542
)


-



(542
)Balances, July 31, 2004


18,000,000



80,010



-



(542
)


-



79,468



-



79,468Development stage net income (loss)


-



-



-



(12,966
)


-



(12,966
)


-



(12,966
)Balances, July 31, 2005


18,000,000



80,010



-



(13,508
)


-



66,502



-



66,502Contributed services


-



-



10,000



-



-



10,000



-



10,000Development stage net income (loss)


-



-



-



(23,666
)


-



(23,666
)


-



(23,666
)Balances, July 31, 2006


18,000,000



80,010



10,000



(37,174
)


-



52,836



-



52,836Deferred financing costs charged against proceeds from sale of stock


-



(11,213
)


-



-



-



-



-



-Development stage net income (loss)


-



-



-



(153,844
)


-



(153,844
)


-



(153,844
)Balances, July 31, 2007


18,000,000



68,797



10,000



(191,018
)


-



(112,221
)


-



(112,221
)Stock-based compensation


-



-



544,067



-



-



544,067



-



544,067Development stage net income (loss)


-



-



-



(973,429
)


-



(973,429
)


-



(973,429
)Other Comprehensive Income


-



-



-



-



1,031



1,031



-



1,031Balances, July 31, 2008


18,000,000



68,797



554,067



(1,164,447
)


1,031



(540,552
)


-



(540,552
)Stock-based compensation


-



-



2,105,781



-



-



2,105,781



-



2,105,781Investment in Energeiaki EPE


4,000,000



368,840



-



-



-



368,840



65,089



433,929Development stage net income (loss)


-



-







(2,395,753
)


-



(2,395,753
)


1,706



(2,394,047
)Other Comprehensive Income


-



-



-



-



16,291



16,291



2,908



19,199Balances, July 31, 2009


22,000,000


$
437,637


$
2,659,848


$
(3,560,200
)


17,322



(445,393
)


69,703



(375,690
)





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





F-5


VIOSOLAR INC.(A development stage enterprise)Consolidated Statements of Cash FlowsCumulativeYear


Year


Year


Inception,Ended


Ended


Ended


July 19, 2004July 31,


July 31,


July 31,


Through2009


2008


2007


July 31, 2009Cash flows from operating activities:Net income (loss) before noncontrolling interest

$
(2,394,047
)

$
(973,429
)

$
(153,844
)

$
(3,588,494
)Adjustments to reconcile net income (loss) to cashprovided (used) by development stage activities:Income tax timing difference


6,594



-



-



6,594Non-cash management fees


-



-



-



10,000Depreciation  and amortization


1,941



-



797



4,598Stock-based compensation


2,105,782



544,067



-



2,649,849Changes in current assets and liabilities:Accounts receivable


(46,773
)


-



-



(46,773
)Deferred revenue


78,669











78,669Other receivables


1,321



-



-



1,321Prepaid expenses


42,102



(3,290
)


-



38,812Other payables


(969
)










(969
)Accounts payable and accrued expenses


(48,242
)


10,135



1,956



(6,151
)Customer deposits


(46,109
)










(46,109
)Net cash flows from operating activities


(299,731
)


(422,517
)


(151,091
)


(898,653
)Cash flows from investing activities:Cash and cash equivalents acquired from acquisitions of consolidated companies


38,203



-



-



38,203Acquisition of computer equipment


-



-



-



(2,657
)Net cash flows from investing activities


38,203



-



-



35,546Cash flows from financing activities:Proceeds from sale of common stock






-



-



80,010Change in deferred registration costs






-



-



(11,213
)Proceeds from short-term notes


6,978



77,906



-



84,884Increase (decrease) in loans payable,  related parties


297,076



332,534



121,483



751,093Net cash flows from financing activities


304,054



410,440



121,483



904,774Effect of foreign exchange on cash flows


(8,202
)


1,031



-



(7,171
)Net cash flows


34,324



(11,046
)


(29,608
)


34,496Cash and equivalents, beginning of period


172



11,218



40,826



-Cash and equivalents, end of period

$
34,496


$
172


$
11,218


$
34,496Supplemental cash flow disclosures:Cash paid for interest

$
-


$
-


$
-


$
-Cash paid for income taxes

$
-


$
-


$
-


$
-Non cash transactions :Deferred registration costs charged against proceeds from sale of stock

$
-


$
-


$
11,213


$
11,213





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


F-6


VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007


Note 1 - Organization and summary of significant accounting policies:





Following is a summary of our organization and significant accounting policies:





Organization and nature of business –Viosolar Inc. (formerly Sprout Development Inc., identified in these footnotes as “we” or the Company) was incorporated on July 19, 2004, under the laws of the Province of Alberta, Canada. On June 22, 2007, we filed Articles of Amendment in the Alberta Corporate Registry to effect a name change from Sprout Development Inc. to Viosolar Inc.





We operate pursuant to the laws of the Province of Alberta, Canada.  We operate a business and corporate office in Canada.  We have also established a place of business in Greece, and effective July 24, 2008 have registered our Company with the local government to undertake business in this jurisdiction.  We use a July 31 fiscal year for financial reporting purposes.





The Company was incorporated with the intention of selling access to software that delivers a web enabled, collaborative approach to child custody communications for divorced parents to foster a non-confrontational environment.  We were unsuccessful in implementing that business plan, and management determined to look for other business opportunities during the fiscal year ended July 31, 2007.





On March 14, 2007 Mr. Daryl Cozac, the President and a director and Mr. Jim Balsara, the Secretary, Treasurer and a director resigned as both officers and directors.  Three new directors were appointed to fill the available vacancies and appointments to the offices of President and Secretary/Treasurer were also completed.  Mr. Cozac, the controlling shareholder of our Company at March 14, 2007, sold a total of 13,990,000 Class A common shares of the Company to Neranion Holdings Ltd. for cash consideration of $104,940.00.  The 13,990,000 Class A common shares represented 78% of our then total issued and outstanding shares.  Subsequent to the year ended July 31, 2007, Neranion Holdings Ltd. gifted a total of 8,990,000 of the Class A common shares to 44 individuals leaving Neranion Holdings Ltd. with a total of 5,000,000 Class A common shares.  On November 26, 2008, Neranion Holdings Ltd. sold 5,000,000 shares of the Company’s Class A common stock, representing 28% of the total issued and outstanding shares, to Rick Walchuk, a director and officer of the Company.





Concurrent with the change of control noted above, the succeeding board of directors undertook a review of business opportunities in the European Union and determined that there was a potential market for the development of solar parks.  The Company’s current business plan is to become a global marketer of solar energy.





On July 23, 2009, the Company completed the purchase of eight-five percent of the outstanding shares of Energeiaki E.P.E. of Tripoli, Greece (the “E.P.E”). Upon the acquisition of E.P.E by Viosolar, the Company issued an aggregate of 4,000,000 shares of common stock of Viosolar. This acquisition opens the door for Viosolar into the photovoltaic marketplace in Greece.   As a result, Energeiaki E.P.E is the subsidiary of the Company.





Energeiaki E.P.E. is an operating photovoltaic solar company based in Tripoli, Greece. The company currently has one photovoltaic solar park of 100kw in operation. Energeiaki also has two other parks of 100kw each under construction and six other applications at various stages of government approval representing a total of 1.1 MW.




F-7


VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 1 - Organization and summary of significant accounting policies (cont’d):





Our plan of business is to become a global marketer of electricity generated from solar energy. The basic premise of our plan includes the construction, management, and operation of solar energy parks. Our immediate plans are to pursue the establishment of solar energy parks within Greece. We plan to take advantage of the numerous incentives in this sector offered by the Greek government, following the general policy decided by the European Union and the relevant directives forwarded to all European Union members. Viosolar Inc. will concurrently pursue cutting edge technology in the research and development of new, more cost efficient and energy efficient solar modules.





Principles of presentation -The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles applicable to development stage enterprises.  The financial statements have been presented in U.S. dollars, which is our functional currency. Certain items in previous years have been reclassified to conform to the current year presentation.





Basis of consolidation –The Consolidated Financial Statements include the accounts of Viosolar Inc. and its subsidiary.





Accounting for subsidiaries – A subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiary acquired of during the year are included in the income statement from the effective date of acquisition. Where necessary, adjustments are made to the financial statements of subsidiary to bring its accounting policies into line with those used by the Company. All intra-company transactions, balances, income and expenses are eliminated on consolidation. Minority interest in the net assets of consolidated subsidiary are identified separately from the Company’s equity therein. Minority interests consist of the amount of those interests at the date of original business combination and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s share of changes in equity are allocated against the interests of the Company except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.





Business combinations –All business combinations are accounted for under the purchase method. The cost of an acquisition is measured at the fair value of the assets given and liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities assumed in a business combination (including contingent liabilities) are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Company’s share of the identifiable net assets acquired is recorded as goodwill. At July 31, 2009, we had no recorded goodwill. The interest of minority shareholders in the acquisition is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognized.





Intangible assets – Identifiable intangible assets are recognized when the Company controls the assets, it is probable that future economic benefits attributed to the asset will flow to the Company and the cost of the asset can be reliably measured. The estimate useful lives of the intangible assets are as follows: Power purchase agreement and licenses are 20 years.


F-8


VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 1 - Organization and summary of significant accounting policies (cont’d):





Foreign currency translation –The consolidated financial statements are presented in US Dollars, which is the parent Company’s functional and presentation currency. Each entity determines its own functional currency and items including in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transactions dates. Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated. For the purpose of presenting consolidated financial statements, the assets and liabilities of entities with a functional currency other than US Dollars are expressed in US Dollars using exchange rates prevailing on the balance sheet date. Income and expense items and cash flows are translated at the average exchange rates for the period and exchange differences arising are recognized directly in equity.





Revenue recognition–We follow FASB standards regarding revenue recognition, which generally require that revenue be recognized when the following conditions are met:





a.             Amounts are realized or realizable (that is, they are converted or convertible into cash or claims to cash).





b.             Amounts are earned (that is, the activities prerequisite to obtaining benefits have been completed).





Revenue from the sale of electricity is metered automatically onsite when delivered into the power grid, and is recorded and recognized at the contractual price on a monthly basis.  Payment is made by DESMIE, the Greek utility, directly into an account at our bank, which is dedicated for use in repaying bank loans.





Revenue from consulting services rendered to other entities in connection with solar licensing is recorded at the time of invoicing, but is deferred until the invoice has been finally approved by the governmental agency.  This process can take six months or more.  Invoices are not finally paid until such approval is received.  Under Greek law, invoices, when issued, must include VAT (value added tax), and the VAT must be paid to the government regardless of whether the invoice is ultimately collected.  Therefore, only the portion of the invoice applicable to revenue is reflected in the accompanying balance sheet at Deferred Revenue, while the liability for VAT is reflected as a liability.





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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.





Cash and cash equivalents -For purposes of the statement of cash flows, we consider all cash in banks, money market funds, and certificates of deposit with a maturity of less than three months to be cash equivalents. Cash and cash equivalents are measured at cost.


F-9


VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 1 - Organization and summary of significant accounting policies (cont’d):





Property, plant and equipment–Property, plant and equipment is valued at cost less accumulated depreciation and impairment losses. If the costs of certain components of an item of property, plant and equipment are significant in relation to the total cost of the item, they are accounted for and depreciated separately. Depreciation expense is recognized using the straight-line method. Costs of construction of qualifying assets, i.e. assets that require a substantial period of time to be ready for its intended use, include capitalized interest, which is amortized over the estimated useful life of the related asset. The following useful lives are assumed:





Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......20 years


Technical machinery & equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 5 years


Furniture & office equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 - 5 years





Deferred registration costs– Legal and other expenses related to the filing of a registration statement with the Securities and Exchange Commission, as described in Note 3 below, have been charged against the proceeds of the stock offering.





Fair Values–We follow FASB ASC 820-10-20 regarding determination of Fair Values.  Certain assets and liabilities may from time to time be required to be valued using the principles in the FASB pronouncement.  Generally, they establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels:





(1)
Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority;





(2)
Level 2 inputs consist of observable inputs other than the quoted prices included in Level 1;





(3) Level 3 inputs consist of unobservable inputs and have the lowest priority. We use appropriate valuation techniques based on the available inputs to measure the fair value of assets and liabilities when required.





The hierarchy only prioritizes the inputs, not the valuation techniques that are used. The inputs used in a given valuation may fall in different levels of the hierarchy. The level in the hierarchy in which the resulting fair value measurement falls is based on the lowest level input that is significant to the overall valuation, regardless of the valuation technique(s) used. Determining whether an input is significant is a judgmental matter requiring consideration of factors specific to the asset or liability.





Taxes on income - Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with applicable Statements of Financial Accounting Standards regarding Accounting for Income Taxes.These standards require the use of the asset/liability method of accounting for income taxes.  Deferred income tax expenses and benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carryforwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The Company provides deferred taxes for the estimated future tax effects attributable to temporary differences and carryforwards when realization is more likely than not.


F-10




VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 1 - Organization and summary of significant accounting policies (cont’d):





Net income per share of common stock – We follow FASB Statements pertaining to Earnings per Share, which require presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.  In the accompanying financial statements, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period.  Because we experienced an operating loss during the period, the calculation of diluted earnings per share did not include stock options described in Note 6, below, as the calculation would have been anti-dilutive.





Note 2 – Future operations:





On July 23, 2009, the Company completed the purchase of eight-five percent of the outstanding shares of E.P.E, a company operating in the photovoltaic marketplace in Greece.   At the date of the acquisition, EPE has been in business for a period of approximately three (3) years, with revenue-generating operations from its first photovoltaic park having commenced effective September 2008, so that at the date of acquisition, EPE has not yet completed a full twelve month cycle of revenue. The Company and 85% owned subsidiary EPE expect to continue to operate at a loss until such time as we are able to construct and operate a sufficient number of solar parks to allow for the generation of income adequate to cover all associated operating expenses and overhead.  The Company will look to construct up to 9 additional parks on existing lands and under the terms of both existing and pending licenses with anticipated total output upon project completion of up to 1.1 MW.   In order to complete these plans the Company will be required to raise approximately $4.8M of which the Company expects to receive credits back from the Greek government totalling $2.2M.  We do not presently have sufficient capital to implement our business plan.  To date, we have been funding our Company by way of related party loans.  We intend to complete a stock offering and/or locate suitable financing through loans or other facilities to allow us to continue as a going concern during this period while the plans are implemented. At July 31, 2009, we had suffered losses from development stage activities to date approximating $3,600,000, and had negative stockholders’ equity of approximately $400,000, all of which raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





Note 3 – Acquisition:





On July 23, 2009, the acquisition of Energeiaki E.P.E. of Tripoli, Greece (“E.P.E.”), an operating photovoltaic solar company, was completed with 85% of the shares of E.P.E. being acquired. Upon the acquisition of E.P.E.by Viosolar, the Company issued 4,000,000 shares of its common. E.P.E. currently has one photovoltaic solar park of 100kw in operation, and also has two other parks of 100kw each under construction and six other applications at various stages of government approval representing a total of 1.1MV. E.P.E. has made applications for various clients representing over 10MW of potential production. As a result of the acquisition, Viosolar is expected to enter into the photovoltaic marketplace in Greece.





The acquisition transaction has been valued at $444,131, based on an independent appraisal of the underlying assets of E.P.E.  FASB ASC 845-10-30-1 provides that non-monetary transactions be valued based on the fair value of the asset given up, or the fair value of the asset received if it is more clearly evident.  While the Company is aware that SEC accounting policy ordinarily dictates that stock transactions be valued at the quoted market value of the acquirer’s stock, based on recent trades, Management believes that appropriate accounting for this transaction represents an exception to that general policy, and that the fair value of the asset received (in this case 85% of the stock of E.P.E) is more clearly evident..  Viosolar’s stock is thinly traded, and only 453,956 shares were traded in the last year.  Moreover, the shares issued to acquire E.P.E. are not free trading shares.  Had these values been used for the acquisition, it would have been valued at approximately $2,200,000, or $.55 per share.  The value of 85% of the net underlying assets of E.P.E. per the independent appraisal was approximately $514,718. Thus, in Management’s opinion, the trading


F-11





VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 3 – Acquisition (cont’d):





price of Viosolar shares clearly does notrepresent the value of the E.P.E. transaction and the valuation of the E.P.E. shares should be valued on the basis of the independent appraisal of the net underlying assets, which uses level 2 fair value inputs.  Accordingly, the transaction has been valued based on the independent appraisal.





The allocation of the purchase prices, $368,840, is as follows:





At July 23, 2009

Book value


Fair value adjustments


Fair value$



$



$Net assets acquiredLand


39,648







39,648Equipment & Leasehold improvements


681,393



(152,119
)


529,274Furniture and fixtures


25,537







25,537Other intangible assets


14,859







14,859Power purchase agreement


-



454,528



454,528Licenses


-



454,528



454,528Cash and cash equivalents


38,203







38,203Trade and other receivable


91,082







91,082Prepaid expense


209,972







209,972Short-term borrowings


(287,769
)






(287,769
)Trade and other payables


(57,737
)






(57,737
)Trade deposits


(113,128
)






(113,128
)Long-term borrowings


(803,479
)






(803,479
)Long-term deferred tax liabilities


-



(151,387
)


(151,387
)(161,419
)


605,550



444,131Other comprehensive gain (loss)










(10,202
)Minority interest










(65,089
)Total consideration










368,840Satisfied by 4,000,000 common shares of Viosolar Inc.





The following unaudited pro forma summary presents the Viosolar as if E.P.E. had been acquired on August 1, 2008. The impact of other acquisitions on the pro forma amounts disclosed below is not significant. The pro forma amounts include the results of E.P.E, amortization of the acquired intangible assets recognized on acquisition. The pro forma information is provided for comparative purposes only and does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations of the combined companies.





August 1, 2008 to

July 31, 2009($)Revenue


861,521(Loss) for the financial year


(2,349,380
)Profit (loss) attributable to equity shareholders


(2,392,942
)


F-12


VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 4 – Uncertainty in Greek economy:





Uncertainty surrounding the current financial instability with respect to the Greek government (the “Government”) raises certain doubts about the Government’s ability to perform under certain licensing arrangements and power purchasing contracts entered into between EPE and the Government.  Presently the Company has submitted to the Government six (6) of nine (9) possible license applications, and received approval for 3 licenses, as it relates to the construction and operation of photovoltaic parks in Greece.  These license approvals contain a provision for retroactive contribution from the Greek government of up to 40% of the construction costs of the park in cash upon meeting certain criteria. Additionally, power purchase agreements for the electricity produced by the currently operating park, and future parks, are with DESMIE, the Greek utility. Under current economic conditions, the ability of the Greek government to effectively perform under these contracts remains unknown.  The Company has not yet determined the impact this uncertainly may have on these financial statements, and as such, the financial statements do not include any adjustments that might result from the outcome of this uncertainty.





Note 5 – Greek financial settlement practices:





Financial settlement practices in Greece differ from those in the United States and Canada.  In the U.S. and Canada, accounts are ordinarily settled by check or electronic payment.  Checks are deposited by the recipient, and credit is ordinarily given immediately or within a few days.  Few transactions are settled in cash.





In Greece, many transactions are settled in cash.  Our Greek operations utilize cash funds, and both pay many bills, and receive payment for bills in cash.  In addition, checks are also used, but the clearing time can take many weeks or longer.  It is common for many businesses to require post-dated checks at the time of a sale or agreement.  Such post-dated checks may be deposited at the appointed time by the recipient, or may even be transferred to another party.  Thus, such post-dated checks might be considered a “quasi-currency.”  Often, banks may lend against a portion of the value of the post-dated checks.





All transactions, whether in cash or by check, are subject to extensive approval procedures, which may include approval stamps and/or signatures by both parties to the transaction.





The effects of these practices on our financial statements are as follows:





a.
Post-dated checks received in payment of our receivables are included in accounts receivable, as the receipt of a post-dated check is not deemed to constitute payment.





b.
Post-dated checks given in payment of vendors’ invoices are included in accounts payable, as the issuance of a post-dated check is not deemed to constitute payment.





c.
Transactions settled in cash are recorded at the time of receipt or issuance of the cash.





Note 6 – Accounts receivable:





A summary of accounts receivable included in the accompanying balance sheets at July 31, 2009, 2008 and 2007, is as follows:





2009


2008


2007Trades receivable

$
137,531


$
-


$
-Less, Unearned income


78,669Net trades receivable

$
58,862


$
-


$
-





F-13


VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 7 – Prepaid Expense:





A summary of prepaid expense as of July 31, 2009, 2008 and 2007 is as follows:





2009


2008


2007Advance to supplies

$
164,812


$
-


$
-Damage deposit for rent


1,325



3,290



-$
166,137



3,290



-





Note 8 – Property, plant and equipment





Property, plant and equipment consist of the following:





July 31, 2009Estimated




Accumulated


NetLife

Cost


Amortization


Book ValueLand


$
39,648


$
-


$
39,648Equipment & leasehold improvements
20 years


529,274



536



528,738Furniture and fixtures
3~5 years


33,717



302



33,415$
619,892


$
32,671


$
601,801





Note 9 – Commitments:





On October 22, 2007, the Company entered into an investor relations agreement with an unrelated party for a period of one year for consideration of €3,000 per month and has granted 100,000 share purchase options exercisable at $2.25 per share until May 25, 2011.  The contract expired in the year ended October 31, 2008 and was not renewed.  The option was cancelled on May 26, 2009.





Effective September 15, 2008, the Company entered into a two (2) year lease for office space in a property located in Athens, Greece. The lease called for monthly rent in the amount of $3,365 (€2,540) plus applicable taxes and was to expire September 14, 2010. During the fiscal year 2009, the company paid total $27,983 (€20,320) plus applicable taxes and utilities. The lease was terminated on April 14, 2009.





On April 15, 2009, the Company entered into a four (4) year lease agreement for office space in a property located in Athens, Greece.  The lease calls for monthly rent in the amount of $1,383 (€1,000) plus applicable taxes, increasing to €1,150 in year 2 and escalating by 5% per annum for the final two years. The lease commenced on May 1, 2009 and expires on April 30, 2013. During the fiscal year 2009, the company paid total $4,150 (€3,000) plus applicable taxes and utilities.





On June 02, 2008, E.P.E entered into a sixty (60) month car lease agreement. A deposit of $1,711 (€1,100) was put up at inception. The lease called for monthly lease fee in the amount of $520 (€370) including tax.  Aggregate annual payments applicable to the car lease agreement for the next four years subsequent to July 31, 2009 are estimated as following:





2010

$
6,2402011


6,2402012


6,2402013


5,200$
23,920


F-14




VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 10 – Short term loan





A summary of short term loan as of July 31, 2009 is as follows:





2009Christos Grigoriou

$
78,507Line of credit with Alpha Bank (see Note 11)


284,872$
363,379





On June 23, 2008, we borrowed US $71,528 (€50,000) from Mr. Christos Grigoriou, a resident of Trikala, Greece. The loan is due and payable in full on May 23, 2010, bears interest at 10% per annum payable at maturity, and is unsecured.  At July 31, 2009, the outstanding loan balance was US$78,507 (€55,833) including accrued interest amount of US$6,979 (€5,833).





Note 11 – Alpha Bank Agreements





The Company’s subsidiary (E.P.E) entered into various credit agreements with Alpha Bank in Greece in 2007 totaling $281,220 (€200,000) which bear interest at the Euribor Rate plus 2% with quarterly payment. In addition, in August 2008, the E.P.E entered into two loan agreements providing for a term loan totaling of $851,120 (€600,000). The loans have a ten-year term and bears interest at the Euribor Rate plus 2% with quarterly payments on interest and principal. The Company has two lines of credit and two loans available as of July 31, 2009 under these agreements with the maximum amounts available and outstanding balance as follow:





Maximum amount available


Balance outstanding2009


2008


2009


2008Revolving Credit

$
281,220


$
-


$
284,872


$
-Loan 2008


843,660



-



795,390



-$
1,124,880



-


$
1,080,262


$
-





Aggregate annual payments applicable to the Loan 2008 for the next five years subsequent to July 31, 2009 are estimated as following:





2010

$
111,0822011


111,0822012


111,0822013


111,0822014


111,082Thereafter


471,043$
1,026,453


F-15


VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 12 –Intangible Assets:





Intangible assets consisted of the following:





US$


July 31, 2009Estimated



Accumulated

NetLives (years)

Cost

amortization

Book ValuePower Purchase Agreement
19

454,500

500

454,000Licenses
20

454,500

500

454,000909,000

1,000

908,000





Intangible assets subject to amortization are amortized using straight line method over their estimated useful lives to their estimated residual value of zero.





As of July 31, 2009, the estimated aggregate amortization of intangible assets for the years 2010 to 2014 is $46,271 yearly.





Note 13– Taxes on Income:





We follow applicable Statements of Financial Accounting Standards regarding Accounting for Income Taxes.  Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carryforwards. The Company is subject to income taxes in Canada and Greece.





No net provision for Canadian or Greek income taxes has been made in the accompanying statement of operations because no recoverable taxes were paid previously.  Similarly, no deferred tax asset attributable to the net operating loss carryforward has been recognized, as it is not deemed likely to be realized.





For the year ended July 31, 2009, the Company is subject to income taxes in Canada and Greece.  The provision for refundable Canadian income tax consists of the following:





Year Ended


Year Ended

Year EndedJuly 31, 2009


July 31, 2008

July 31, 2007Refundable Canadian income tax attributable to:Current operations

$
721,371


$
205,000

$
52,000Nondeductible expenses


-



-


-Timing differences, Stock based compensation


(715,966
)


(185,000
)Less, Change in valuation allowance


(5,405
)


(20,000
)

(52,000
)Net refundable amount

$
-


$
-

$
-





The provision for refundable Greek income tax consists of the following:





Year Ended

July 31,  2009


Year Ended

July 31,  2008


Year Ended

July 31, 2007Refundable Greek income tax attributable to:Current operations

$
74,200


$
92,500


$
NilNondeductible expenses


-



-



NilLess, Change in valuation allowance


(74,200
)


(92,500
)

$
NilNet refundable amount


-



-



Nil-


F-16





VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 13– Taxes on Income: (cont’d)





The cumulative tax effect at the expected rates in Canada and Greece for significant items comprising our net deferred tax amounts as of July 31, 2009, 2008 and 2007 are as follows:





July 31, 2009


July 31, 2008


July 31, 2007Canada Expected rate 34%


Greece Expected rate 25%


Canada Expected rate 34%


Greece Expected rate 25%


Canada Expected rate 34%


Greece Expected rate 25%Deferred tax asset attributable to:Net operating loss carryover

$
86,405


$
166,700


$
81,000


$
92,500


$
61,000


$
-Less, Valuation allowance


(86,405
)


(166,700
)


(81,000
)


(92,500
)


(61,000
)


-Net deferred tax  asset

$
-


$
-


$
-


$
-


$
-


$
-





At July 31, 2009, the Company has the following estimated operating losses by segment:





July 31, 2009


July 31, 2008


July 31, 2007Canada


Greece


Canada


Greece


Canada

GreeceOperating  Loss

$
15,896


$
296,822


$
59,036


$
370,325


$
153,844

Nil





At July 31, 2009, we have approximately $255,950 of net operating loss carry-forwards in Canada available to reduce taxable income in futures years, which expire beginning in 2024.





At July 31, 2009, we have approximately $667,147 of future losses for tax purposes in Greece that do not have an expiration date and which are available to reduce taxable income in future periods.





Note 14 – Issuance of shares and warrants:





As of July 31, 2009, the Company had issued shares of its Class A, voting, no par value common stock as follows:





Price PerDate
Description

Shares


Price Per Share


Amount07/19/04
Shares issued for cash and software license*


13,990,000


$
0.000000715


$
1007/19/04
Shares issued for cash and software license*


10,000


$
0.000000715



-07/21/04
Shares issued for cash


1,875,000


$
0.02



37,50007/23/04
Shares issued for cash


1,300,000


$
0.02



26,00007/26/04
Shares issued for cash


625,000


$
0.02



12,50007/28/04
Shares issued for cash


200,000


$
0.02



4,00007/31/07
Deferred registration costs charged against proceeds


-



-



(11,213
)07/23/09
Shares issued for acquisition


4,000,000


$
0.09221



368,84007/31/09
Cumulative Totals


22,000,000






$
437,637





* Restricted shares issued to officers of the Company were subscribed and issued at July 31, 2004, but not paid.  The subscriptions were fully paid on September 9, 2004.  Pursuant to EITF Abstract 85-1, the issuance of the shares has been recorded at July 31, 2004.  In connection with the issuance of these shares, we also received an exclusive software license for a divorced-parent, child-time-management software concept.  We have determined that the software license had no fair value at the time of issuance.  Moreover, SEC rules dictate that transfers of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the Company's initial public offering should be recorded at the transferors' historical cost basis determined under generally accepted accounting principles.


F-17


VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 14 – Issuance of shares and warrants (cont’d):





Therefore, since the shareholders had no cost basis in the license, capital stock has been credited only in the amount of the cash received.





In connection with the sale of 4,000,000 shares for cash noted above, we also issued 4,000,000 warrants to the same purchaser.  The warrants became effective on August 17, 2005, concurrent with the effective date of the Form F-1 that we filed, and expired one year later.  They allowed the holder to purchase 1 share of common stock for each 2 warrants tendered, at a price of $0.10 per share.  Under certain circumstances, based on the performance of our stock on the open market, we could have redeemed the warrants for $0.0001 per share.  At the time of issuance, management determined that the warrants did not have any fair market value.  None of the warrants were exercised by their expiration date, and thus expired unexercised on August 17, 2006.





We are also authorized to issue an unlimited number of Class B voting common shares, Class C non-voting common shares, and Class D non-voting common shares, and 5,000,000 shares of Class E non-voting preferred shares.  None of these other classes of shares had been issued at the date of the financial statements.





Note 15 – Stock options and stock awards





Stock Options and Stock Awards





In the fiscal year ending July 31, 2007, the Company’s Board of Directors and shareholders approved the Company’s Stock Option and Stock Award Plan [the “2007 Plan”] for up to 2,700,000 options. The 2007 Plan provides for the granting of restricted stock awards and option s to purchase common stock in the Company to officers, directors, employees, and consultants. Pursuant to the 2007 Plan, options are granted at $2.25 and have a term not to exceed five years. All options and awards are subject to various vesting schedules. On May 26, 2009, the Company’s Board of Directors approved that the stock options as previously granted under the 2007 Plan was re-priced at $0.40 per share which was subsequently approved by shareholders in September 2009.





On May 26, 2009, the Company’s Board of Directors approved the Company’s 2009 Stock Option and Stock Award Plan [the “2009 Plan”] providing for 2,700,000 options. The Plan was subsequently approved by shareholders in September 2009. The 2009 Plan is to further align the interests of employees, consultants and directors with those of the shareholders by providing incentive compensation opportunities tied to the performance of the Common Stock and by promoting increased ownership the Common Stock by such individuals. The Plan is also intended to advance the interests of the Company and its shareholders by attracting, retaining and motivating key personnel upon whose judgment, initiative and effort the successful conduct of the Company’s business is largely dependent. Pursuant to the 2009 Plan, the pricing of options is left to an administrator and not at the price of $0.40 per shares.  The following table summarizes information concerning stock options outstanding as of July 31, 2009:





For the year endedJuly 31, 2009


July 31, 2008Shares


Weighted Average Exercise Price


Shares


Weighted Average Exercise PriceOutstanding at beginning of the year


1,715,000


$
2.25



-


$
-Re-priced at $0.40 per shares


(1,715,000
)


2.25



-



-Re-priced at $0.40 per shares


1,715,000



0.40



-



-Granted


450,000



0.40



1,715,000



2.25Exercised


-



-



-



-Expired or cancelled


150,000



0.40



-



-Outstanding at end of year


2,015,000


$
0.40



1,715,000


$
2.25


F-18


VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 15 – Stock options and stock awards (continued)





Stock Options and Stock Awards (continued):





Exercise Price


Number Outstanding


Weighted Average Remaining Contractual Life


Number Subject to Exercise$
0.40



1,007,500



2.5



1,007,500$
0.40



1,007,500



3.0



1,007,500Total



2,015,000



2.75



2,015,000





Restricted stock awards are granted subject to certain restrictions, including in some cases service conditions. The grant-date fair value of restricted stock awards, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period.





The following table summarizes information on the Company’s restricted stock:





Shares


Weighted Average

Grant Date Fair ValueUnvested, at July 31, 2008


685,000


$
1.80Granted


80,000



0.20Vested


382,500Forfeited


10,000Unvested, end of year


372,500


$
1.63





The Company recognized stock-based expense of $2,105,782 ($544,067-2008). The following table summarizes information related to stock compensation expense recognized in the income statement:





(In thousands)

2008


2008General and administrative


2,106



455Investor relations


-



89Stock-based compensation expense


2,106



544





Unrecognized compensation expense related to outstanding stock options as of July 31, 2009 was $143,516 ($1,658,355-2008) and is expected to be recognized in fiscal year 2010. Unrecognized compensation expense related to outstanding restricted stock awards as of July 31, 2009 was $289,116 ($359,625 – 2008) and is expected to be recognized in 2010.





If not previously exercised or canceled, options outstanding at July 31, 2009 will expire as follows:





Range of Exercise Prices


Weighted Average ExerciseHigh


Low


Shares


PriceYear Ending July 31, 2013

$
0.40


$
0.40



1,565,000


$
0.40Year Ending July 31, 2014

$
0.40


$
0.40



450,000


$
0.40





VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 15 – Stock options and stock awards (continued)





Stock Options and Stock Awards (continued):





Valuation Assumptions





The Company uses the Black-Scholes option-pricing model (“Black-Scholes model”) to determine the fair value of stock options as of the grant date. The fair value of stock options under the Black-Scholes model requires management to make assumptions regarding projected employee stock option exercise behaviors, risk-free interest rates, volatility of the Company’s stock price and expected dividends.





The expense recognized for options granted under the 2007 Plan is equal to the fair value of stock options as of the grant date. The following table presents the range of the weighted average fair value of options granted to directors and employees and the related assumptions used in the Black-Scholes model for stock option grants made during fiscal years 2009, 2008 and 2007:





Options Granted2009


2008


2007Fair value of options granted

$
0.20


$
1.80



-Assumptions used:Expected life (years) (a)


2.50 – 3.00



1.50 – 3.50



-Risk free interest rate (b)


2.30
%


2.43% - 2.69
%


-Volatility (c)


199.91
%


120.02
%


-Dividend yield (d)


0.00
%


0.00
%


-





a)
Expected life: The expected term of options granted is determined using the “shortcut” method allowed by SAB No.107. Under this approach, the expected term is presumed to be the mid-point between the vesting date and the end of the contractual term.b)
Risk-free interest rate: The rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected life of the options.c)
Volatility: The expected volatility of the Company’s common stock is calculated by using the historical daily volatility of the Company’s stock price calculated over a period of time representative of the expected life of the options.d)
Dividend yield: The dividend yield rate is not considered in the model, as the Company has not established a dividend policy for the stock.





Note 16 – Related party transactions:





As at July 31, 2009 the Company owed $487,522 ($299,999 – 2008) including accrued interest, to a director of the Company for funds advanced for operations. On July 31, 2008, the Board of Directors approved a series of promissory notes bearing interest at 5% per annum. As a result of the agreements, the Company has accrued interest totaling $25,352 in respect of amounts advanced to the close of the fiscal year.





During the fiscal year ended July 31, 2009, the Company accrued management fees totaling $96,000 ($96,000 – 2008) to two directors of the Company, being Rick Walchuk and Michael Soursos.  The Company paid a total of $29,941 towards outstanding fees payable to Michael Soursos from the prior period.





During fiscal year ended July 31, 2009 the Company accrued invoices for services totaling $13,554 (2008 - $18,181) from a Company for which a director acts as a consultant.  This amount is included in accounts payable – related party.





VIOSOLAR INC.(A development stage enterprise)Notes to Consolidated Financial StatementsJuly 31, 2009, 2008 and 2007





Note 16 – Related party transactions (cont’d):





During the years ended July 31, 2008 and 2007 respectively, we incurred $72,000 and $36,000 in rent under a month to month sublease for office space with Bruca Trading, Limited.  Two directors of the Company also act as consultants to Bruca Trading Ltd. The lease agreement was terminated on September 15, 2008. At July 31, 2009, $36,000 was unpaid under the agreement, and is included in Loans from Related Parties on the accompanying balance sheets.





Note 17 - New accounting pronouncements:





In June 2009 the FASB established the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission ("SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.





ASC Topic 855, "Subsequent Events", ASC Topic 810, "Accounting for Transfers of Financial Assets", ASC Topic 105 "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles- were recently issued. Above codifications have no current applicability to the Company or their effect on the financial statements would not have been significant.





Accounting Standards Update ("ASU") ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU's No. 2009-2 through ASU No. 2010-03 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.





Note 18 - Subsequent events:





On August 25, 2009, the Company issued a total of 332,500 shares to employees, consultants and directors as stock based awards.





In accordance with FASB pronouncements regarding subsequent events, we have evaluated subsequent events through February 15, 2010 and we believe there are no subsequent events required to be disclosed pursuant to this pronouncement.


F-19


ITEM 19.  EXHIBITS





Exhibit Number
Exhibit Description
Filed3.1
Articles of Incorporation
Incorporated by reference to the Exhibits filed with Viosolar Inc.’s Form F-1 on February 16, 2005.3.2
Articles of Amendment, amending the name of the Corporation and the restrictions on share transfers
Incorporated by reference to the Exhibit filed with Viosolar Inc.’s Form 6-K filed on July 16, 20073.3
Bylaws
Incorporated by reference to the Exhibits filed with Viosolar Inc.’s Form F-1 filed on October 14, 20044.1
Stock Option and Stock Award Plan approved and adopted by the Board of Directors and Stockholders June 21, 2007
Incorporated by reference to the Annual Report filed on Form 20-F on February 15, 2008.4.2
Stock Option and Stock Award Plan approved and adopted by the Board of Directors and Stockholders September 23, 2009
Incorporated by reference to the Exhibits filed with Viosolar Inc.’s Form 6-K filed on September 9, 2009.10.1
Consulting Agreement with International Securities Group, Ltd., dated August 6, 2004
Incorporated by reference to the Exhibits filed with Viosolar Inc.’s Form F-1 filed on February 26, 2005.10.2
Office Sublease Agreement between Bruca Trading Limited and the Company
Incorporated by reference to the Annual Report filed on Form 20-F on February 15, 2008.10.3
Purchase and Sale Agreement between the Company and Energeiaki E.P.E., and Amended Articles of Incorporation of Energeiaki E.P.E., dated July 23, 2009.
Filed herewith12.1
Certification required by Rule 13a-14(a) or Rule 15d-14(a) – Chief Executive Officer
Filed herewith12.2
Certification required by Rule 13a-14(a) or Rule 15d-14(a) – Chief Financial Officer
Filed herewith13.1
Certification required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States code (18 U.S.C. 1350) – Chief Executive Officer
Filed herewith13.2
Certification required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States code (18 U.S.C. 1350) – Chief Financial Officer
Filed herewith








33


SIGNATURES





The registrant hereby certifies that it meets all the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.





Registrant:
VIOSOLAR INC.Date: March 16, 2010
By:
/s/ Rick WalchukName: Rick WalchukTitle: President, Chief Executive Officer, and Director (Principal Executive Officer)





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