**UNITEDSTATESSECURITIESAND EXCHANGE COMMISSION**Washington,D.C. 20549 

**FORM 10-K**

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscalyear ended: **June 30, 2010**

or

[   ] TRANSITION REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For thetransition period from __________________ to __________________

Commission filenumber: **333-70836**

**BIOMASS SECURE POWER INC.**(Exact name of registrant as specified in itscharter)

| **British Columbia, Canada**                                    | **N/A**                               |
|-----------------------------------------------------------------|---------------------------------------|
| State or other  jurisdiction of  incorporation or  organization | (I.R.S. Employer  Identification No.) |

**40218 Wellsline Road Abbotsford BC Canada V3G2K7**(Address of principal executive offices and Zip Code)

Registrant’s telephone number, includingarea code:  **604 807 4957**

**VIRTUAL MEDIA HOLDINGS INC.**(Former name or former address, if changed sincelast report)

Securities registered pursuant to Section 12(b)of the Act

| Title of each class |   | Name of Exchange on which registered |
|---------------------|--------|--------------------------------------|
|                |   |                                 |

Securities registered pursuant to Section 12(g)of the Act 

**Common Stock, no par value**(Title of Class)

Indicate by check mark if the registrant isa well-known seasoned issuer, as defined in Rule 405 of the Securities Act.               [  ] Yes [X] No

Indicate by check mark if the registrant isnot required to file reports pursuant to Section 13 or Section 15(d) of theAct.           [  ] Yes [X] No

**Note -**Checking the box above will not relieve anyregistrant required to file reports pursuant to Section 13 or 15 (d) of theExchange Act from their obligations under those sections.

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Indicate by check mark whether theregistrant (1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor 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.                                                                                                                                                                                         [X] Yes [] No

Indicate by check mark whether theregistrant has submitted electronically and posted on its corporate Web site,if any, every Interactive Data File required to be submitted and postedpursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) duringthe preceding 12 months (or for such shorter period that the registrant was requiredto submit and post such files).  ** (Not Applicable)**[ ] Yes [  ] No

Indicate by check markif disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(§ 229.405 of this chapter) is not contained herein, and will not becontained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K.                                   [X]

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See the definitions of“large accelerated filer,” “accelerated filer” and“smaller reporting company” in Rule 12b-2 of the Exchange Act.

| Large  accelerated filer | [] |                                          | Accelerated  filer         | []  |
|--------------------------|----|-----------------------------------------------|----------------------------|-----|
| Non-accelerated  filer   | [] | (Do not check if a smaller reporting company) | Smaller  reporting company | [X] |

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

State the aggregate market value of thevoting and non-voting common equity held by non-affiliates computed byreference to the price at which the common equity was last sold, or the averagebid and asked price of such common equity, as of the last business day of theregistrant’s most recently completed second fiscal quarter.

As of December 31,2009, the last business day of the registrant’s most recently completedsecond fiscal quarter the aggregate market value of the voting and non-votingcommon stock held by non-affiliates of the registrant was approximately$328,838, based on 131,535,273 common shares held by non-affiliates and lastsale prior to December 31, 2009 being $0.0025.

**Note.**—If a determination as to whether aparticular person or entity is an affiliate cannot be made without involvingunreasonable effort and expense, the aggregate market value of the common stockheld by non-affiliates may be calculated on the basis of assumptions reasonableunder the circumstances, provided that the assumptions are set forth in thisForm. 

APPLICABLEONLY TO REGISTRANTS INVOLVED IN BANKRUPTCYPROCEEDINGSDURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether theregistrant has filed all documents and reports required to be filed by Section12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to thedistribution of securities under a plan confirmed by a court.  [  ] Yes [  ] No

APPLICABLEONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstandingof each of the registrant’s classes of common stock, as of the latestpracticable date. **235,099,866 shares of common stock as at December 13,2010.**

DOCUMENTSINCORPORATED BY REFERENCE

List hereunder the following documents ifincorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II,etc.) into which the document is incorporated: (1) any annual report tosecurity holders; (2) any proxy or information statement; and (3) anyprospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of1933.  The listed documents should be clearly described for identificationpurposes (e.g., annual report to security holders for fiscal year endedDecember 24, 1980).  **Not Applicable**

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**TABLE OF CONTENTS**

| Part I.                                                                                                                       | 1      |
|-------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                          |   |
| Item 1. Business.                                                                                                             | 2      |
| Item 1A. Risk Factors.                                                                                                        | 5      |
| Item 1B. Unresolved Staff Comments.                                                                                           | 9      |
| Item 2. Properties.                                                                                                           | 9      |
| Item 3. Legal Proceedings.                                                                                                    | 11     |
| Item 4. (REMOVED AND RESERVED)                                                                                                | 11     |
|                                                                                                                          |   |
| Part II.                                                                                                                      | 11     |
|                                                                                                                          |   |
| Item 5. Market for Registrant’s Common Equity,   Related Stockholder Matters and Issuer Purchases of Equity Securities. | 11     |
| Item 6. Selected Financial Data.                                                                                              | 12     |
| Item 7. Management’s Discussion and Analysis of   Financial Condition and Results of Operations.                        | 13     |
| Item 7A. Quantitative and Qualitative Disclosures About   Market Risk.                                                        | 18     |
| Item 8. Financial Statements and Supplementary Data.                                                                          | 19     |
| Item 9. Changes in and Disagreements With Accountants on   Accounting and Financial Disclosure.                               | 20     |
| Item 9A. Control and Procedures.                                                                                              | 20     |
| Item 9B Other Information.                                                                                                    | 22     |
|                                                                                                                          |   |
| PART III.                                                                                                                     | 22     |
|                                                                                                                          |   |
| Item 10. Directors, Executive Officers and Corporate   Governance.                                                            | 22     |
| Item 11. Executive Compensation.                                                                                              | 26     |
| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.                      | 28     |
| Item 13. Certain Relationships and Related Transactions,   and Director Independence.                                         | 29     |
| Item  14. Principal accounting Fees and Services.                                                                             | 30     |
| Item 15. Exhibits, Financial Statement Schedules.                                                                             | 31     |
|                                                                                                                          |   |
| Signatures.                                                                                                                   | 32     |

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**PART I**

This annual report on Form 10-K containsforward-looking statements.  Forward-looking statements are projections ofevents, revenues, income, future economic performance or management’splans and objectives for future operations.  In some cases, you canidentify forward-looking statements by the use of terminology such as“may”, “should”, “expects”,“plans”, “anticipates”, “believes”,“estimates”, “predicts”, “potential” or“continue” or the negative of these terms or other comparableterminology.  Examples of forward-looking statements made in this annualreport on Form 10-K include statements about:

- Our business plans,    
-  Our belief regarding the impact of various    lawsuits, 
-  Our ability to raise additional finances, 
-  Our future customers, 
-  Our design of torrefied wood pellet plants, and 
-  Our future investments and allocation of capital    resources.

These statements are only predictions andinvolve known and unknown risks, uncertainties and other factors, including: 

- Our inability to obtain an unqualified audit    report for the 2006 and 2007 fiscal years,
-  The impact of various lawsuits that have been    filed against us, 
-  General economic and business conditions, 
-  Fluctuations in worldwide prices and demand for    torrefied wood pellets, 
-  Our lack of operating history, 
-  Our limited experience manufacturing pellets, 
-  Our dependence on a limited number of customers,    and 
-  The risks in the section of this annual report    entitled “Risk Factors”,

any of which may cause our or ourindustry’s actual results, levels of activity, performance orachievements to be materially different from any future results, levels ofactivity, performance or achievements expressed or implied by theseforward-looking statements.

While these forward-looking statementsand any assumptions upon which they are based are made in good faith andreflect our current judgment regarding the direction of our business, actualresults will almost always vary, sometimes materially, from any estimates,predictions, projections, assumptions or other future performance suggestedherein. Except as required by applicable law, including the securities laws ofthe United States, we do not intend to update any of the forward-lookingstatements to conform these statements to actual results

As used in this report, the terms“we”, “us” and “our” mean Biomass SecurePower Inc. In this report, unless otherwise specified, all dollar amounts areexpressed in United States dollars and all references to “commonshares” refer to the common shares in our capital stock. 

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**Item 1.  Business**

**Corporate History**

We were incorporated in the Province ofBritish Columbia on August 24, 1989 as Flamingos Beach Resort Inc. On August10, 1999, we changed our name to VMH Videomoviehouse.com Inc. On May 18, 2006,we changed our name to Virtual Media Holdings Inc. On February 9, 2009, wechanged our name to Biomass Secure Power Inc. On June 30, 2009, we legally have amalgamated with 0625920 BC Ltd., previous known as Biomass Secure PowerInc., as more particularly described under the heading“The Amalgamation”. As we have not issuedany shares to the 20 shareholders of 0625920 BC Ltd. to date, the accountingtreatment for the amalgamation has been deferred until such time as the shareshave been transferred to complete the transaction. 

**Corporate Developments**

From incorporation in August 1989 untilAugust 1999, our only operation consisted of developing an Internet web-site.The web-site was developed by our past president. In August 1999, we switchedour focus to the generation of revenues from the sale of video tapes, DVDs, andCDs and rental of DVDs over the internet. In October 2005, we were removed asan authorized seller at Amazon.com. Our sales through Amazon.com accounted forvirtually all of our revenues. 

We have ceased our movie selling businessand are focused on the development of our torrefied wood pellet plant businessbeginning July 1, 2007. 

*Previous Audits*

Our previous auditors, Dale MathesonCarr-Hilton Lebonte LLP (“DMCL”), had challenges in obtaining andmanagement had challenges in providing sufficient and appropriate informationrelating to the issuance of shares; transfers of funds between company bankaccounts; and payments to management. As such, we were unable to produceaccurate and complete financial statements and DMCL was unable to provide uswith an audit report for our 2006 and 2007 fiscal year ends. We may apply tothe Securities and Exchange Commission for relief from the requirement toproduce annual audited and interim non-audited financial statements as well asthe applicable annual reports on form 10-Ks and interim reports on Form 10-Qfor the 2006 and 2007 fiscal year. Until we file audited financial statements forthe 2006 and 2007 fiscal year or obtain relief from the requirement to filethose financial statements, we will not be in compliance with our reportingobligations under the Securities and Exchange Act of 1934. 

*The Amalgamation*

 On June 30, 2009, the following events  occurred: 

-  we entered into a share exchange agreement (the    “Share Exchange Agreements”) with each of the 20 shareholders of    0625920 BC Ltd., previously known as Biomass Secure Power Inc., whereby we    agreed to purchase all of the issued and outstanding shares of 0625920 BC Ltd.    in consideration for the issuance of an aggregate of 225,269,250 of our common    shares (the “Consideration Shares”);
- each of the 20 shareholders of 0625920 BC Ltd.    requested that the board of directors of 0625920 BC Ltd.  consent to and    approve the  transfer all of the issued and outstanding shares of 0625920    BC Ltd. to our company; 
- all outstanding share certificates of 0625920 BC    Ltd. were cancelled and one new share certificate was issued in the name of our    company, representing all of the issued and outstanding shares of 0625920 BC    Ltd.; and
- pursuant to section 273 of the British Columbia    Business Corporations Act, Biomass Secure Power Inc. and 0625920 BC Ltd.    amalgamated, with the resulting company adopting the name, articles, and notice    of articles of Biomass Secure Power Inc.

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0625920 BC Ltd. was a related party dueto a common director and shareholder. A form of the Share Exchange Agreement isattached to our annual report on Form 10-K for the fiscal year ended June 30,2009. On November 19, 2009, the British Columbia Securities Commission issued acease trade order against our company, which prohibits us from issuing theConsideration Shares. As of December 13, 2010, we have not issued theConsideration Shares. As such, for accounting purposes the merger transactionhas not been completed nor reflected in the financial statements as we have notdelivered any consideration for the shares of 0625920 BC Ltd. We anticipatethat we will issue the Consideration Shares upon the revocation of the ceasetrade order.

**Our Current Business**

*Our Business Plan*

Our business plan is to build plants thatwill process low quality logs and fibre typically left in the field and turn itinto torrefied wood pellets. We believe that our plants will be the first oftheir kind in Canada. We have completed the design and basic engineering workfor the building of our torrefied wood pellet plants. We will sell thetorrefied wood pellets to power producers in Europe that want a cleaner fuelthan coal. We have held discussions with power producers regarding the purchaseof our torrefied wood pellets. We have not signed any definitive agreementswith any power producers and there are no assurances any definitive agreementswill be signed. 

We plan to produce one million tons oftorrefied wood pellets per year from up to four plants that we propose to buildin various locations in British Columbia, Canada. British Columbia has anextensive timber industry and we believe that the waste products from thisindustry will be sufficient to provide our operations with a steady supply offuel.  We have had discussions with potential purchasers to secure longterm sales contracts but no definitive agreements have been signed and wecannot guarantee that such agreements will be signed. We do not anticipatebeginning the construction of our plants until we have a definitive agreementin place to purchase our torrefied wood pellets. 

*Torrefied wood pellets*

Torrefied wood pellets are primarily usedas a fuel for heating. Torrefied wood pellets are 30% denser than regular woodpellets and contain 16% more energy. While torrefied wood pellets have manyuses, such as a substitute for charcoal for barbeques, we anticipate ourtorrefied wood pellets will be sold as a substitute for coal as a boiler fuel.Torrefied wood pellets can be used in coal plants without altering the coalplant. Unlike normal wood pellets, torrefied wood pellets have approximatelythe same BTUs as coal, which allows coal to be completely replaced by torrefiedwood pellets.  Some coal producers may prefer to gradually add torrefiedwood pellets to their coal burners. We believe that the main advantage oftorrefied wood pellets over coal is torrefied wood pellets burn cleaner thancoal as they produce significantly less ash and sulphur emission. As demand forclean energy increases, we believe the demand for torrefied wood pellets willincrease.  

Torrefied wood pellets are not subject todeterioration during shipment or storage. This greatly reduces shipping costsfor torrefied wood pellets, compared to normal wood pellets. Also, torrefiedwood pellets are easier to grind, which reduces their processing costs whenthey are burned. 

*Our Customers*

We anticipate that we will sell ourtorrefied wood pellets to power producers in Europe. We have chosen this targetmarket because we believe European coal power producers will eliminate coalfrom their existing power plants in favour of our torrefied wood pellets.Currently, there is some demand for torrefied wood pellets in Europe. We haveheld discussions with power producers in Europe regarding the purchase of ourtorrefied wood pellets. We have not signed any definitive agreements with anypower producers and there are no assurances any definitive agreements will besigned. 

*Layout of Plants*

 The following is a description of the  anticipated layout of our plants. 

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Wood fibre will be supplied to the plantin the form of coarse wood chips. Trucks will be offloaded at 2 hydraulicstations and the material will be automatically conveyed to an undercoverstorage facility by way of a conveyor belt. As the material moves along theconveyor belt, it will pass though a de-lumper, magnetic separator,de-stoner/de-icer and classifier to remove foreign matter. Generally, the moisturecontent of the wood waste will vary; however, as the plant production rate isbased on the mass of bone dry fibre received, we anticipate using incentives toencourage the shipment of dry material.

Covered storage is essential. We need areserve of material on hand to ensure that the equipment stays in continuousoperation. We also need to protect the material from moisture during storage asthis will negatively impact the plant production rate. We also need to ensurethat the material being processed is not frozen and that all ice and snow hasbeen removed for the material before it is processed.

The storage facility will be fitted witha double level walking floor that will discharge material to buffer silos viamagnetic separators and de-stoners. The buffer silos will discharge at acontrolled rate to a series of fine shredders. This material will then bescreened and fine shredded before transfer to a bio-fuel fired flash dryer.

The shredded material from the flashdryer will have a target moisture content of 8%. To control this moisturecontent it may be necessary to recycle a portion of the material. It is alsonecessary to produce 20% more dry product than will be required for productionin order to provide energy for the dryer. The extra material is then milled toa fine powder and stored for use by the flash dryer burner.

Material from the flash dryer is conveyedto a screen and a mill to reduce the particle size to the optimum size forpelletizing. The material is then conveyed to the pellet mill and afterpelletizing is cooled on a band cooler before the product is placed in bulkstorage prior to shipment to the port. Bulk storage would be in the form ofelevated silos that will be used to place the material on rail cars inpreparation for shipment to the port.

We intend to locate the torreficationunit between the dryer and the pelletizing mill. This will produce a syntheticfuel gas that we propose to use for the torrefication furnace and the dryer.There may be some residual gas that could be used to generate a small quantityof electrical power. 

*Technology*

We anticipate that the dryer will bedesigned to operate with a variety of fuels including bio-mass powder,synthetic gas, natural gas and fuel oil. In addition, the off gas of the dryermay be used for generating steam for use by a steam turbine for the purpose ofgenerating power for the plant. There is a possibility of generating extrapower, if the local resources permit. 

We anticipate that the torreficationfurnace will feature the latest in regenerative burner technology to maximizethe quantity of synthetic gas available to provide energy for the plant and tomaximize the energy available for generating power.

We plan to use a fine shredder and flashdryer upstream of the torrefication furnace to ensure that the collectedmaterial is free of ice, rocks and metallic components that could damage theequipment. The design of the storage facility is anticipated to  be twotiered to allow for the run off of any snow and ice prior to processing thematerial in the plant. We plan to use a sparse fluid bed destoner to pre-warmthe material to remove stones, snow and ice. Heat for this equipment isanticipated to be provided by waste heat from the process. We believe that thiscustom design will be a first of its kind in Canada.

*Our Subsidiary*

On January 13, 2009, we incorporated a  subsidiary in California under the name of Biomass Secure Power Inc. (USA)  (“Biomass USA”). Mr. George Pappas is president and CEO of Biomass  USA. Biomass USA is currently in the early stages of development and we  anticipate that it will bring co-generation projects to fruition in the USA. As  of December 13, 2010, Biomass USA has not conducted any operations and is not  reflected in our financial statements. 

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*Expertise*

Our business plan is based on ourmanagement team’s experience in the construction and the implementationof medium sized industrial projects.  In particular, our management teamhas implemented projects at a number of pellet plants, supplying burner anddryer equipment along with material handling systems. Our management team hasconstructed a multifuel burner system for a medium-density fibreboard plantthat used dried and processed wood waste for fuel. In addition, the projectmanagement team will be drawn from people with many years of experience in thewood processing industry. We have not yet hired the project management team.

*Staffing*

We anticipate that each plant willrequire approximately 30 fulltime employees to operate the plant which will run24 hours per day 7 days per week. We anticipate that each plant will have askilled engineer at the plant at all times to address any problems that mayoccur. We plan to have an assistant engineer, who would be able to fix anymachines that break down. The remaining employees would be general labours,such as fork lift operators. These employees would report to the engineer whois on duty at that time.  

**Research and Development Expenditures**

We did not incur any research and development expendituresover the last fiscal year.

**Employees**

 At present, we have one full time employee and two  part-time employees. 

**Intellectual Property**

 We do not own, either legally or beneficially, any patents  or trademarks. 

**ITEM 1A. RISKFACTORS.**

An investment in our common stock involves a number ofvery significant risks. You should carefully consider the following risks anduncertainties in addition to other information in this report in evaluating ourcompany and its business before purchasing shares of our company's common stock.Our business, operating results and financial condition could be seriouslyharmed due to any of the following risks. You could lose all or part of yourinvestment due to any of these risks. 

***Risks Related to our Failure to File our Disclosure  Documents***

*As at December 13, 2010, our stock has been cease traded  in British Columbia.*

Our common shares have been cease traded in BritishColumbia since November 19, 2009 for failure to file our audited annualfinancial statements for the year ended June 30, 2009. As a result, trading inour common shares is prohibited in British Columbia and by residence of BritishColumbia no matter where they trade. Until the cease trade order is revoked, weare prohibited from raising additional funds through the sale of our debt orequity. If we cannot revoke the cease trade order, we will be unable to raisethe funds required to commence our business plan.

*As at December 13, 2010, we are non-compliant with FINRARule 6530 and, as a result, our company has been delisted from the OTC BulletinBoard.*

Companies trading on the OTC Bulletin Board generally mustbe reporting issuers under Section 12 of the Securities Exchange Act of 1934,as amended, and must be current in their reports under Section 13, in order tomaintain price quotation privileges on the OTC Bulletin Board.  Morespecifically, FINRA has enacted Rule 6530, which determines eligibility ofissuers quoted on the OTC Bulletin Board by requiring an issuer to be currentin its filings with the Securities and Exchange Commission, subject to a 30 daygrace period. While we have filed previous disclosure documents, we have notfiled audited financial statements for fiscal years after June 30, 2005. As aresult, we are non-compliant with FINRA Rule 6530 and the quotation of oursecurities on the OTC Bulletin Board is prohibited. Until we are compliant withFINRA Rule 6530, the market liquidity for our securities will be severelyadversely affected by limiting the ability of broker-dealers to sell oursecurities and the ability of stockholders to sell their securities in thesecondary market. Our securities will be ineligible for quotation on the OTCBulletin Board until one year after we have filed all outstanding disclosuredocuments or we obtain an exemption from the requirement to file alloutstanding disclosure documents. 

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**Risks Related to our Financial Condition**

*We anticipate that we will be unable to prepare reliable andaccurate financial statements because of insufficient documents and availableinformation for our fiscal years ended 2006 and 2007.*

We have been unable to prepare reliable and accurate information toobtain an unqualified opinion regarding our financialstatements for our fiscal years 2006 and 2007. We anticipate that we will beunable to obtain an unqualified audit report on our financial statements forthose periods. This may adversely affect our ability to raise additional funds throughfinancing and our shareholders’ ability to sell their shares. If we areunable to raise additional funds, there is a substantial risk that our businesswill fail.

*The fact that we have not earned any operating revenuessince we switched the focus of our company to our current business plan raisessubstantial doubt about our ability to continue as a going concern.*

We incurred accumulated net loss of $5,253,808 from prioroperations and $824,768 from the start of our development stage on July 1, 2007to June 30, 2010. We anticipate that we will continue to incur operatingexpenses without revenues for the foreseeable future. Because we have incurredlosses from operations since inception, have not attained profitable operationsand are dependent upon obtaining adequate financing to commence our businessoperations, in their report on our financial statements for the fiscal yearended June 30, 2010, our independent auditors included an explanatory paragraphregarding the substantial doubt about our ability to continue as a goingconcern. 

As of June 30, 2010, we had no cash or cash equivalentsand a working capital deficit of $345,782. We estimate our average monthlyoperating expenses over the next 12 months to be approximately $32,500 permonth, excluding any expenses incurred in the building of any plants. Inaddition, our budget could increase during the year in response to matters thatcannot be currently anticipated and we might find that we need to raise morecapital in order to properly address these items. As we cannot assure a lenderthat we will be able to successfully build our plants, we will probably beunable to raise debt financing from traditional lending sources. We havetraditionally raised our operating capital from sales of equity and debtsecurities, but there can be no assurance that we will continue to be able todo so. We are currently subject to a cease trade order imposed by the BritishColumbia Securities Commission and cannot raise any funds until it has beenrevoked. 

The recent economic uncertainty and market instability maymake it harder for us to raise capital as and when we need it and have made itdifficult for us to assess the impact of the crisis on our operations orliquidity and to determine if the prices we might receive on the sale of ourtorrefied wood pellets. If we cannot raise the money that we need to continuedevelopment of our torrefied wood pellet plant, we may be forced to delay,scale back, or cease our business plan. If any of these were to occur, there isa substantial risk that our business would fail. 

**Risks Related to our Company**

*Various lawsuits have been filed  against us.*

Various lawsuits have been filed againstus. For details on these lawsuits, see the information in the section entitled“Legal Proceedings”. While we do not believe that any of theselawsuits have merit and we intend to defend the lawsuits vigorously, we cannotpredict the outcome and we cannot predict the amount of time and expense thatmay be required to resolve them. Such litigation could also divert theattention of management and resources in general from day-to-day operations.Further, if any of the plaintiffs in these lawsuits are successful, we may berequired to issue additional common shares, which will dilute the holdings ofour existing shareholders or may be ordered to make cash payments, which due toour financial condition, we may be unable to make. If we are ordered to make asubstantial payment, there is a substantial risk that our business would fail. 

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*We have no prior experience inmanufacturing and operating a large torrefied wood pellet plant.*

Our success will be dependent on ourmanagement’s ability to manufacture and operate a torrefied wood pelletplant. To our knowledge, our plants will be the first of their kind in Canada.As such, we have no experience building and operating a large torrefied woodpellet plant and limited experience manufacturing similar products at thevolume we anticipate will be required to sustain our operations.  As aresult, we may not be able to develop and implement efficient, low-costmanufacturing capabilities and processes that will enable us to manufacture ourtorrefied wood pellets in significant volumes, while meeting the legal,regulatory, quality, price, durability, engineering, design and productionstandards required to market our products successfully. Further, we have noexperience selling torrefied wood pellets to power producers. As a result, wemay not be able to enter into a contract for the purchase and sale of ourtorrefied wood pellets on favourable terms or at all.

*We have no operating history relating  to our current business plan.*

We have no operating history relating toour current business plan on which to base an evaluation of our business andprospects. Our prospects must be considered in light of the risks,uncertainties, expenses and difficulties frequently encountered by companies seekingto establish a new business opportunity. Some of these risks and uncertaintiesrelate to our ability to build our plants, secure long term sales contracts,and obtain an adequate supply for our plants.

We cannot be sure that we will besuccessful in addressing these risks and uncertainties and our failure to do socould have a materially adverse effect on our financial condition. In addition,our operating results are dependent to a large degree upon factors outside ofour control. There are no assurances that we will be successful in addressingthese risks, and failure to do so may adversely affect our business.

It is unlikely that we will generate anyor significant revenues while we implement our business plan. In order for usto make a profit, we will need to successfully build our plants and secure longterm supply and sales contracts for our torrefied wood pellets. Even if webecome profitable, we may not sustain or increase our profits on a quarterly orannual basis in the future.

We will, in all likelihood, sustainoperating expenses without corresponding revenues and significant capitalexpense in the construction of our plants, for the foreseeable future.

*We anticipate that we will depend on a limited number ofcustomers for a high percentage of our revenue.*

We anticipate that we will sell our torrefiedwood pellets to power producers in Europe. We do not anticipate that wewill enter into agreements with a large number of producers and will have alimited number of customers. Once we begin operations, we anticipated that ourrevenues will be volatile because of the loss of sales to any one of ourcustomers would have a significant negative impact on our business. Due to ouranticipated dependence on a limited number of customers, any one of the followingevents may cause material fluctuations or declines in our revenue and have amaterial adverse effect on our financial condition and results of operations:

-  reduction, delay or cancellation of orders from one or more of    our significant customers;
-  selection by one or more of our significant customers of another    product;
-  loss of one or more of our significant customers and our failure    to identify additional or replacement customers; and
-  failure of any of our significant customers to make timely    payment for our products.

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*We will be dependent on the price of torrefied wood  pellets.*

Our business plan is based on certain assumptionsregarding the price of torrefied wood pellets. The price of torrefied woodpellets is dependent on many factors, including the cost for similar productssuch as coal.  If our assumptions are inaccurate and we cannot sell ourtorrefied wood pellets for more than the cost to produce them, our businesswill fail and you may lose your entire investment. 

*Economic conditions may adversely affect our business.*

Adverse worldwide economic conditions may have adverseimplications on our business. For example, our potential customers' ability toborrow money from their existing lenders or to obtain credit from other sourcesto fund operations may impair their ability to purchase our torrefied woodpellets, which would result in decreased in sales.

**Risks Relating to Our Common Stock**

*If we issue additional shares in the future, it willresult in the dilution of our existing shareholders.*

Our articles of incorporation authorizethe issuance of an unlimited amount of shares of common stock with no parvalue. Our board of directors may choose to issue some or all of such shares toacquire one or more products and to fund our overhead and general operatingrequirements. The issuance of any such shares will reduce the book value pershare and may contribute to a reduction in the market price of the outstandingshares of our common stock. If we issue any such additional shares, suchissuance will reduce the proportionate ownership and voting power of allcurrent shareholders. Further, such issuance may result in a change of controlof our corporation. 

We are currently prohibited from issuing any shares due to a cease trade order issued by the British Columbia SecuritiesCommission. Pursuant to our acquisition of 0625920 BCLtd., we agreed to issue 225,269,250 of our commonshares, of which none of been issued. Once this cease trade order has beenrevoked, we anticipate issuing these shares. The issuance of these shares willcause our book value per share to decrease, which may contribute to a reductionin the market price of the outstanding shares of our common stock. 

*Trading of our stock is restricted by the SecuritiesExchange Commission's penny stock regulations, which may limit a stockholder'sability to buy and sell our common stock.*

The Securities and Exchange Commission has adoptedregulations which generally define "penny stock" to be any equitysecurity that has a market price (as defined) less than $5.00 per share or anexercise price of less than $5.00 per share, subject to certain exceptions. Oursecurities are covered by the penny stock rules, which impose additional salespractice requirements on broker-dealers who sell to persons other thanestablished customers and "accredited investors". The term"accredited investor" refers generally to institutions with assets inexcess of $5,000,000 or individuals with a net worth in excess of $1,000,000 orannual income exceeding $200,000 or $300,000 jointly with their spouse. Thepenny stock rules require a broker-dealer, prior to a transaction in a pennystock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the Securities and Exchange Commission,which provides information about penny stocks and the nature and level of risksin the penny stock market. The broker-dealer also must provide the customerwith current bid and offer quotations for the penny stock, the compensation ofthe broker-dealer and its salesperson in the transaction and monthly accountstatements showing the market value of each penny stock held in the customer'saccount. The bid and offer quotations, and the broker-dealer and salespersoncompensation information, must be given to the customer orally or in writingprior to effecting the transaction and must be given to the customer in writingbefore or with the customer's confirmation. In addition, the penny stock rulesrequire that prior to a transaction in a penny stock not otherwise exempt fromthese rules, the broker-dealer must make a special written determination thatthe penny stock is a suitable investment for the purchaser and receive thepurchaser's written agreement to the transaction. These disclosure requirementsmay have the effect of reducing the level of trading activity in the secondarymarket for the stock that is subject to these penny stock rules. Consequently,these penny stock rules may affect the ability of broker-dealers to trade oursecurities. We believe that the penny stock rules discourage investor interestin and limit the marketability of our common stock.

*FINRA sales practice requirementsmay also limit a stockholder's ability to buy and sell our stock.*

In addition to the "penny stock" rules describedabove, the Financial Industry Regulatory Authority (known as "FINRA")has adopted rules that require that in recommending an investment to acustomer, a broker-dealer must have reasonable grounds for believing that theinvestment is suitable for that customer. Prior to recommending speculative lowpriced securities to their non-institutional customers, broker-dealers mustmake reasonable efforts to obtain information about the customer's financialstatus, tax status, investment objectives and other information. Underinterpretations of these rules, FINRA believes that there is a high probabilitythat speculative low priced securities will not be suitable for at least somecustomers. FINRA requirements make it more difficult for broker-dealers torecommend that their customers buy our common stock, which may limit yourability to buy and sell our stock and have an adverse effect on the market forour shares.

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*Our common stock is illiquid and the price of our commonstock may be negatively impacted by factors which are unrelated to ouroperations.*

Although our common stock is currently listed forquotation on the Pink Sheets, trading through the Pink Sheets is frequentlythin and highly volatile. There is no assurance that a sufficient market willdevelop in our stock, in which case it could be difficult for shareholders tosell their stock. The market price of our common stock could fluctuatesubstantially due to a variety of factors, including market perception of ourability to achieve our planned growth, quarterly operating results of ourcompetitors, trading volume in our common stock, changes in general conditionsin the economy and the financial markets or other developments affecting ourcompetitors or us. In addition, the stock market is subject to extreme priceand volume fluctuations. This volatility has had a significant effect on themarket price of securities issued by many companies for reasons unrelated totheir operating performance and could have the same effect on our common stock.

We do not intend to pay dividends on any investment inthe shares of stock of our company.

We have never paid any cash dividends and do not currentlyintend to pay any dividends for the foreseeable future. Because we do notintend to declare dividends, any gain on an investment in our company will needto come through an increase in the stock's price. This may never happen andinvestors may lose all of their investment in our company.

**ITEM 1B.UNRESOLVED STAFF COMMENTS**

 Not Applicable 

**ITEM 2.PROPERTIES.**

We do not own any properties. We have anoffice at 40218 Wellsline Road in Abbotsford BC that is provided free of chargeby one of our directors. We anticipate that this office will be suitable forour operations for the foreseeable future. Once our plants are operational, weanticipate we will require a larger office.

As of December 13, 2010, we haveconsidered various sites for our plants but have not signed any definitiveagreements. 

Our registered and records office islocated at 800-885 West Georgia Street, Vancouver, BC Canada V6C 3H1.

**ITEM 3. LEGALPROCEEDINGS.**

We are involved in lawsuits involvingprior management and individuals associated with them. 

On April 21, 2009, Calvin Kantonen fileda statement of claim with the Supreme Court of British Columbia, VancouverRegistry No. S092943 alleging that the defendants: our company and our transferagent, Computershare Trust Company of Canada, have improperly refused to removethe legend on 1,500,000 of our common shares held by Mr. Kantonen. On May 15,2009, the defendants filed a statement of defence whereby we denied theallegations of Mr. Kantonen and alleged that the shares were not validlyissued. No further proceedings have been undertaken in this lawsuit. TheCompany plans to vigorously defend this claim and denies the allegations of Mr.Kantonen. We anticipate that even if Mr.Kantonen’s lawsuit is successful, it should not have a material adverseeffect on our financial condition, results of operations, or cash flows.

On July 19, 2007, we filed a petitionwith the Supreme Court of British Columbia, Vancouver Registry No. S107252alleging that 34,678,993 common shares held by the following parties: AIInternational Holdings, Joga Bassi, Canaccord Capital Corp ITF (Steve GasperControl Stock), Jim Carroll, Brian Dean, Steven Frye, Grant Galloway, SteveGaspar, Chris Gaspar, Christopher Gaspar, Brian Holden, Calvin Kantonen, GeorgeMatin, Peter Matousak, Novak Capital, Penson Financial Services Canada Inc ITF6/13/2006 Stephen Gaspar A/C 15ER95B, Sukhjit Purewal, Deanna Sherban, DebbySkipper, Clay Smith, Nick Smith, Viligant Trader Inc., Wide OpenTechnologies should be cancelled because we did not receive adequateconsideration for the issuance of these shares.  No further proceedingshave been undertaken in this lawsuit. 

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On August 2, 2007, Steve Gaspar filed astatement of claim with the Supreme Court of British Columbia, VancouverRegistry No. S075257, alleging that the defendants: our company and our currentpresident Jim Carroll, issued a press release on July 27, 2007 which containedfalse and defamatory statements concerning Mr. Gaspar. On June 5, 2008, wefiled a statement of defence denying the claims in the statement of claim andalleging that the statements were in substance true and made without malice andthat Mr. Gaspar has not suffered any damages as a result of the press release.A default judgment was obtained on December 11, 2007 but was set aside byconsent on June 5, 2008 when we filed our statement of defence.

On June 25, 2007, Steve Gaspar, StephenGaspar, Christopher Gaspar, and Jonathan Gaspar (collectively,the “Gaspars”) filed a statement of claim with the SupremeCourt of British Columbia, Vancouver Registry No. S074362, alleging thatthe defendants: our company, our current president Jim Carroll, our currentdirector Len Klassen, and our current director Slawomir Kownacki, fordamages for breach of contract, inducing breach of contract and wrongfulinterference with economic relations of the Gaspars, and requesting followingorders:

-  that the defendants purchase the shares of the    Gaspars at fair value;
-  that the Gaspars are not liable for any profits    that accrued to them as a result of any employment contracts;
- for specific performance that we deliver    65,735,211 free trading shares;
-  a declaration that Steve Gaspar is entitled to    exercise an option to purchase 12,000,000 of our common shares at a price of    $0.01 per share; and
- a declaration that Christopher Gaspar is    entitled to exercise an option to purchase 5,205,000 of our common shares at a    price of $0.01 per share.

On July 23, 2007, we filed a statement ofdefence denying the allegations and alleging that none of the Gaspars are owedany money or shares. On December 4, 2009, a notice of motion was filedregarding the production of documents.  No further proceedings have beenundertaken in this lawsuit. We anticipate that even ifthe plaintiffs are successful, it should not have a material adverse effect onour financial condition, results of operations, or cash flows.

On September 11, 2007, the CanadianImperial Bank of Commerce (“CIBC”) filed a statement of claimagainst the defendants: Virtual Media Holdings Inc., Steve Gaspar, and DarleneGaspar alleging that the defendants owed CIBC $19,982.12 as of September 10,2007 with a daily interest rate of $5.22. On November 21, 2007, we filed astatement of defence denying each and every allegation. We anticipate that this lawsuit should not have a material adverse effect on ourfinancial condition, results of operations, or cash flows.

We have been in discussions with SteveGaspar regarding settling all outstanding actions with the Gaspars, includingfinal settlement of the lawsuit with CIBC. While we believe we do not have anyliability to any of the Gaspars, we believe it is in our best interest tosettle all outstanding matters with the Gaspars. If we cannot settle alloutstanding claims, we will vigorously defend all claims. 

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On November 12, 2007, Brian Holden fileda statement of claim in Clark Country Nevada, Case No A550988, alleging thatthe defendant: our company, breached two employment contracts resulting inunjust enrichment and breach of implied covenant of good faith and fairdealing. Mr. Holden alleges that pursuant to two employment agreements we areobligated to issue him 2,400,000 of our common shares and options to purchase12,000,000 of our common shares at a price of $0.05 per common share. OnNovember 30, 2007, we filed a statement of defence denying all of Mr.Holden’s claims and a containing a counterclaiming alleging that Mr. Holdenwas improperly issued certain common shares. On August 10, 2010 we entered intoa settlement agreement with Mr. Holden whereby Mr. Holden has deposited2,770,000 of our common shares with our transfer agent, which will be cancelledupon the cease trade order issued by the British Columbia Securities Commissionagainst our company being revoked, which settled all outstanding claims withMr. Holden. 

**Item 4.  (REMOVED AND RESERVED)**

**PART II**

**ITEM 5. MARKETFOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIES.**

**Markets**

Our shares are not traded on anyexchanges. Our shares are quoted on the OTC: Pink Sheets operated by theFinancial Industry Regulatory Authority (FINRA) under the symbol BMSPF.

Our common shares have been cease tradedby the British Columbia Securities Commission since November 19, 2009 forfailure to file our annual financial statements for the year ended June 30,2009. As a result, trading in our common shares is prohibited in BritishColumbia.

Companies trading on the OTC BulletinBoard generally must be reporting issuers under Section 12 of the SecuritiesExchange Act of 1934, as amended, and must be current in their reports underSection 13, in order to maintain price quotation privileges on the OTC BulletinBoard.  More specifically, FINRA has enacted Rule 6530, which determineseligibility of issuers quoted on the OTC Bulletin Board by requiring an issuerto be current in its filings with the Securities and Exchange Commission,subject to a 30 day grace period. While we have filed previous disclosuredocuments, we have not filed audited financial statements for fiscal yearsafter June 30, 2005. As a result, we are non-compliant with FINRA Rule 6530 andthe quotation of our securities on the OTC Bulletin Board is prohibited. Untilwe are compliant with FINRA Rule 6530, the market liquidity for our securitieswill be severely adversely affected by limiting the ability of broker-dealersto sell our securities and the ability of stockholders to sell their securitiesin the secondary market. Our securities will be ineligible for quotation on theOTC Bulletin Board until one year after we have filed all outstandingdisclosure documents or obtain an exemption from that requirement. 

**Transfer Agent**

Our shares of common stock are issued inregistered form. The transfer agent for our common stock is Computershare TrustCompany of Canada.

**Holders**

As of December 13, 2010 we hadapproximately 597 shareholders of record of our common shares, as of such date235,099,866 of our common shares were issued and outstanding.

**Share Capital**

 Common Stock 

Our authorized capital stock consists ofunlimited shares of no par value common stock. The holders of our common stock:

- Have equal rateable rights to dividends from funds    legally available if and when as and if declared by our board of directors;
- Are entitled to share rateably in all of our    assets available for distribution to holders of common stock upon liquidation,    dissolution or winding up of our affairs;

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- Do not have pre-emptive, subscription or    conversion rights and there are no redemption or sinking fund provisions or    rights; and
- Are entitled to one non-cumulative vote per    share on all matters on which stockholders may vote.

**Cash dividends**

As of the date of this annual report, wehave not paid any cash dividends to stockholders. The declaration of any futurecash dividend will be at the discretion of our board of directors and willdepend upon earnings, if any, our capital requirements and financial position,our general economic conditions, and other pertinent conditions. It is ourpresent intention not to pay any cash dividends in the foreseeable future, butrather to reinvest earnings, if any, in our business operations.

**Recent Sales of UnregisteredSecurities; Use of Proceeds from Registered Securities**

On June 28, 2009, we issued 33,578,512common shares to Jim Carroll at a fair market value of $0.0045 per common shareas settlement of his outstanding debt of $151,103 for outstanding salary andexpenses he has paid on behalf of our company. We issued the shares pursuant tosection 2.14 of Nation Instrument 45-106 *Prospectus and RegistrationExemptions*and pursuant to Regulation S promulgated under the SecuritiesAct of 1933 as Jim Carroll was not a US person. 

On June 28, 2009,we issued 1,169,767 common shares to George Pappas at a fair market value of$0.0045 per common share as settlement of his outstanding debt of $5,355 foroutstanding salary and expenses he has paid on behalf of our company. We issuedthe shares pursuant to section 2.14 of Nation Instrument 45-106 *Prospectusand Registration Exemptions*and pursuant to section 4(2) of the SecuritiesAct of 1933.

On May 23, 2009,we issued 3,000,000 common shares to Shaun Kohlmeier at a fair market value of$0.009 per common share as settlement of his outstanding debt of $27,000 forcompensation for assisting with the development of our company’s websiteand creating additional exposure for our company on the internet. We issued theshares pursuant to section 2.14 of Nation Instrument 45-106 *Prospectus andRegistration Exemptions*and pursuant section 4(2) of the Securities Act of1933. 

On November 20,2008, we issued 800,000 common shares to Len Klassen at a fair market value of$0.0041 per common share as settlement of his outstanding debt of $3,280 foroutstanding salary and expenses he has paid on behalf of our company. We issuedthe shares pursuant to section 2.14 of Nation Instrument 45-106 *Prospectusand Registration Exemptions*and pursuant to section 4(2) of the SecuritiesAct of 1933.

On November 20,2008, we issued 666,667 common shares to George Pappas at a fair market valueof $0.0041 per common share as settlement of his outstanding debt of $2,733 foroutstanding salary and expenses he has paid on behalf of our company. We issuedthe shares pursuant to section 2.14 of Nation Instrument 45-106 *Prospectusand Registration Exemptions*and pursuant to section 4(2) of the SecuritiesAct of 1933.

**Securities authorized for issuance  under equity compensation plans.**

 We do not have any stock compensation  plans. 

**Issuer Purchases of Equity Securities**

During the fiscal year ended June 30,2010, we did not purchase any of our equity securities. 

**ITEM 6.SELECTED FINANCIAL DATA.**

 Not applicable. 

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**ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS.**

**Results of Operations**

*Revenue*

During the fiscal years ended June 30,2010 and June 30, 2009, we did not generate any revenues. Since 2007, wediscontinued our internet media sales operations and commenced focusing on ourcurrent business plan. 

*Expenses*

Our expenses for the fiscal year endedJune 30, 2010 were $257,332 compared to $229,637 for the fiscal year ended June30, 2009 or an increase of $27,695. This increase was primarily attributable toan increase in our professional fees of a recovery of $15,252 in the fiscalyear ended June 30, 2009 to an expense of $28,032 in the fiscal year ended June30, 2010 due to audit fees of $20,000 and accounting fees of $5,000. Ourexpenses relating to shareholder communications decreased from an expense of$27,000 in the fiscal year ended June 30, 2009 to $nil in the fiscal year endedJune 30, 2010. The change in shareholder communications was primarilyattributable to us discontinuing the services of our investor relationsconsultant. Our management fees increased from $183,049 in the fiscal yearended June 30, 2009 to $208,475 in the fiscal year ended June 30, 2009. Thischange in management fees was primarily attributable to an increase in salariesto our management due to an increased workload of two of our officers. Ourtravel expenses decreased from $12,002 in the fiscal year ended June 30, 2009to $2,973 in the fiscal year ended June 30, 2009. This change in travelexpenses was primarily attributable to a decrease in travel for conferences andmeetings with potential buyers of our future products. Our office and generaladministrative fees decreased from $13,297 in the fiscal year ended June 30,2009 to $8,184 in the fiscal year ended June 30, 2010. The change in office andgeneral administrative expenses was primarily attributable to our efforts toreduce our general and administrative expenses while we focus on developing ourcurrent business plan. 

**Plan of Operation**

*Financing*

Discussions have been held withconventional lenders and private funding sources regarding financing for ourprojects. There are no assurances that we will be successful in obtaining thenecessary capital. If we are unsuccessful in obtaining additional capital wemay have to cut back or suspend activities until such time that we can raisecapital by way of loans, private placements or public offerings. Currentmanagement has been lending us funds to pay our expenses on a monthly basis. 

There can be no assurance that additionalfinancing will be available to us when needed or, if available, that it can beobtained on commercially reasonable terms. If we are not able to obtainadditional financing on a timely basis, if and when it is needed, we will beforced to delay or scale down some or all of our operations or perhaps evencease the operation of our business. 

Since inception we have funded ouroperations primarily through equity and debt financings and we expect that wewill continue to fund our operations through equity and debt financing. If thecease trade order issued by the British Columbia Securities Commission isrevoked and we raise additional financing by issuing equity securities, ourexisting stockholders’ ownership will be diluted. Obtaining loans, assumingany loans would be available, will increase our liabilities and future cashcommitments.

*Cash Requirements*

Our plan of operation over the next12 months is to enter into a long term sales contract for the purchase of ourtorrefied wood pellets. Once we have secured a buyer, we will begin to work onsecuring the supply for our plant and to eventually begin construction of ourtorrefied wood pellet plant. Our cash requirements are dependent on whether ornot we begin construction of our torrefied wood pellet plant. The constructionprocess will require a substantial amount of capital, which will we have toraise by way of loans, private placements or public offerings. 

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Below, we have provided an estimate of our operatingexpenses and working capital requirements for the next 12 months providedwe do not begin construction of our torrefied wood pellet plant. Our capitalrequirements, if we begin construction, will be dependant on the final sitelocation and initial production of the plant. 

| **Expense**                              |  ** ** | **Amount** |  ** ** |
|------------------------------------------|------------------|------------|------------------|
| Management Fees                          | $                | 240,000    |             |
| Professional Fees (accounting and legal) | $                | 100,000    |             |
| Travel                                   | $                | 50,000     |             |
| Total:                                   | $                | 390,000    |             |

Even without beginning construction of our torrefied woodpellet plant, which we do not anticipate will occur within the next 12 months,we anticipate that we will require additional funds of $390,000. As of June 30,2010, we have a working capital deficit of $345,782. We have a shortfall of$735,782 between our working capital deficit and anticipated cash requirementsfor the next 12 months. If we begin construction of our torrefied wood pelletplant, this shortfall will greatly increase. There can be no assurance thatadditional financing will be available to us when needed or, if available, thatit can be obtained on commercially reasonable terms. If we are not able toobtain the additional financing on a timely basis, if and when it is needed, wewill not be able to commence our business plan. 

**Liquidity and Capital Resources**

We have suffered recurring losses since inception. Ourability to meet our financial liabilities and commitments is primarilydependent upon the continued financial support of our directors andshareholders, the continued issuance of equity to new or existing shareholders,and our ability to achieve and maintain profitable operations. 

*Working Capital*

| ** **                    |  ** ** | **As at**           |  ** ** |  ** ** | **As at**          |  ** ** |
|-------------------------------|------------------|---------------------|------------------|------------------|--------------------|------------------|
| ** **                    |  ** ** | **June 30, 2010**   |  ** ** |  ** ** | **June 30, 2009**  |  ** ** |
| ** **                    |  ** ** |  ** **    |  ** ** |  ** ** |  ** **   |  ** ** |
| Current Assets                | $                | 63,000              |             | $                | 63,124             |             |
| Current Liabilities           |             | 408,782             |             |             | 150,930            |             |
| **Working Capital (deficit)** |  **$**      |  **(345,782)** |  ** ** |  **$**      |  **(87,806)** |  ** ** |

Our working capital deficit increased by $257,976 as aresult of us incurring debt to pay for our expenses instead of issuing equity.We have incurred recurring losses from inception. Our ability to meet ourfinancial obligations and commitments is primarily dependent upon continued financialsupport of our shareholders, directors and the continued issuance of equity tonew and existing shareholders. 

*Cash Flow*

| ** **                                    |  ** ** | **12 Months Ended** |   |  ** ** | **12 Months Ended** |   |
|-----------------------------------------------|------------------|---------------------|--------|------------------|---------------------|--------|
| ** **                                    |  ** ** | **June 30, 2010**   |   |  ** ** | **June 30, 2009**   |   |
| Cash flow from (used by) operating activities | $                | (231,822            | )      |             | (56,722             | )      |
| Cash flow from (used by) investing activities |             | (894                | )      |             | nil                 |   |
| Cash flow from (used by) financing activities |             | 232,592             |   |             | 56,796              |   |
| Net increase (decrease) in cash               | $                | (124                | )      |             | 74                  |   |

Operating Activities 

Our cash used by operating activities increased by  $175,100 primarily due to an increase in our expenses being paid by incurring  debt rather than through the issuance of stock.

Investing Activities

Our cash used by investing activities in the year endedJune 30, 2010 was for the acquisition of property and equipment.

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Cash Provided by Financing Activities

Our cash provided by financing activities increased by$175,796 due largely to a loan from a related party used to pay our expenses. 

**Off-Balance Sheet Arrangements**

We have not entered into any transactions withunconsolidated entities whereby we have financial guarantees or othercontingent arrangements that expose us to material continuing risks, contingentliabilities or any other obligations that provide financing, liquidity, marketrisk or credit risk support to us

**Going Concern**

We have historically incurred losses and have incurred anet loss of $257,332 during the fiscal year ended June 30, 2010, andapproximately $824,768 from July 1, 2007, the date of entering into ourdevelopment stage, to June 30, 2010. Because of these historical losses, wewill require additional working capital to develop our business operations. Weintend to raise additional working capital through equity financing, bankfinancing and/or advances from related parties or stockholder loans. We arecurrently prohibited from raising funds through the sale of any securities dueto a cease trade order issued by the British Columbia Securities Commission. 

The continuation of our business is dependent uponobtaining further financing and achieving a break even or profitable level ofoperations. We will not achieve a break even or profitable level of operationsuntil the successful construction of our torrefied wood pellet plant, which wedo not anticipate will occur within the next 12 months. The issuance ofadditional equity securities by us could result in a significant dilution inthe equity interests of our current or future stockholders. Obtaining loans,assuming any loans would be available, will increase our liabilities and futurecash commitments.

There are no assurances that we will be able to either (i)achieve a level of revenues adequate to generate sufficient cash flow fromoperations; or (ii) obtain additional financing through either equity financingand/or bank financing necessary to support our working capital requirements. Tothe extent that funds generated from operations and any equity financing and/orbank financing are insufficient, we will have to raise additional workingcapital. No assurance can be given that additional financing will be available,or if available, will be on terms acceptable to us. If adequate working capitalis not available, we may not be able to begin our operations.

Our auditors have included an explanatory paragraph in theaudit report of the year ended June 30, 2010 financial statements that we havesustained losses since inception and have limited cash resources. 

These conditions raise substantial doubt about our abilityto continue as a going concern. Our financial statements do not include anyadjustments relating to the recoverability and classification of asset carryingamounts or the amount and classification of liabilities that might be necessaryshould we be unable to continue as a going concern.

**Application of Critical Accounting Policies**

*Management’s Estimates and  Assumptions*

The preparation of our financialstatements in conformity with United States generally accepted accountingprinciples requires our management to make estimates and assumptions thataffect the reported amounts of assets and liabilities as of the balance sheetdate, and revenues and expenses for the period then ended.  Actualresults could differ significantly from those estimates 

*Equipment*

Equipment is stated at cost, net ofaccumulated depreciation. Depreciation is computed by using the straight-linemethod at rates based on the estimated useful lives of the various classes ofproperty, plant and equipment. Estimates of useful lives are based upon avariety of factors including durability of the asset, the amount of usage thatis expected from the asset, the rate of technological change and our businessplans for the asset. Should we change our plans with respect to the use andproductivity of the equipment, it may require a change in the useful life ofthe asset or incur a charge to reflect the difference between the carryingvalue of the asset and the proceeds expected to be realized upon theasset’s sale or abandonment. Expenditures for maintenance and repairs areexpensed as incurred and significant major improvements are capitalized anddepreciated over the estimated useful life of the asset. 

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*Income taxes*

We account for income taxes using theasset and liability method. Deferred tax liabilities and assets are determinedbased on temporary differences between the basis of assets and liabilities forincome tax and financial reporting purposes. The deferred tax assets andliabilities are classified according to the financial statement classificationof the assets and liabilities generating the differences. Valuation allowancesare established when necessary based upon the judgment of management to reducedeferred tax assets to the amount expected to be realized and could benecessary based upon estimates of future profitability and expenditure levels overspecific time horizons in particular tax jurisdictions. We recognize the taxbenefit from an uncertain tax position when, based on technical merits, it ismore likely than not the position will be sustained on examination by thetaxing authorities. 

*Fair value measurements*

Accounting standards require that fairvalue measurements be classified and disclosed in one of the followingcategories: 

Level 1 - Unadjusted quoted prices inactive markets that are accessible at the measurement date for identical,unrestricted assets or liabilities;

Level 2 – Quotedprices in markets that are not active, or inputs that are observable, eitherdirectly or indirectly, for substantially the full term of the asset orliability; and

Level 3 - Pricesor valuation techniques that require inputs that are both significant to thefair value measurement and unobservable (i.e., supported by little or no marketactivity).

Determining which category an asset orliability falls within the hierarchy requires significant judgment. We evaluateour hierarchy disclosures each quarter.

On July 1, 2009, we adopted a newlyissued accounting standard for fair value measurements of all nonfinancialassets and nonfinancial liabilities not recognized or disclosed at fair valuein the financial statements on a nonrecurring basis. This accounting standardhas not had a material impact on  our financial position, results ofoperations or liquidity. 

We use observable inputs when available.When observable inputs are not available, we use internally developed,unobservable inputs (Level 3 inputs in the fair value hierarchy of fair valueaccounting) to estimate cash flow projections used in its analysis to determinewhether its long-lived assets are impaired. 

*Foreign exchange translation*

Our functional currency is the UnitedStates (“US”) dollar, and reports its financial statements in USdollars. We translate our Canadian dollar balances to US dollars in thefollowing manner:  Assets and liabilities have been translated using therate of exchange at the balance sheet date.  Our results ofoperations have been translated using average rates.  Exchangedifferences arising on translation and realized gains and losses from foreigncurrency transactions are reflected in our results from operations.

All amounts included in the accompanyingfinancial statements and footnotes are stated in U.S. dollars.

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**Recent accounting  pronouncements**

In December 2007, the Financial Accounting Standards Board(“FASB”) issued ASC 805-10-65 and revised the authoritative guidancefor business combinations which establishes principles and requirements for howthe acquirer in a business combination (1) recognizes and measures in itsfinancial statements the identifiable assets acquired, the liabilities assumedand any non-controlling interest in the acquiree, (2) recognizes and measuresthe goodwill acquired in the business combination or a gain from a bargainpurchase and (3) determines what information to disclose to enable users of thefinancial statements to evaluate the nature and financial effects of thebusiness combination. This guidance applies prospectively to businesscombinations for which the acquisition date is on or after the beginning of thefirst annual reporting period beginning on or after December 15, 2008 Our adoptionof this revised guidance on July 1, 2009 did not have any impact on its resultsof operations or financial condition as it did not have any businesscombination activity during the year ended June 30, 2010. 

Additionally, the FASB amended the factors that should beconsidered in developing renewal or extension assumptions used to determine theuseful life of a recognized intangible asset to improve the consistency betweenthe useful life of a recognized intangible asset and the period of expected cashflows used to measure the fair value of the asset under the current guidanceconcerning business combinations and other U.S. generally accepted accountingprinciples.  This new guidance is effective for financial statementsissued for fiscal years beginning after December 15, 2008, and interim periodswithin those fiscal years.  Our adoption of the new guidance on July 1,2009 did not have a material impact on our financial position, results ofoperations or cash flows. 

On July 1, 2009, we adopted FASB ASC 815- Derivatives andHedging (EITF 07-5, Determining Whether an Instrument (or embedded Feature) isIndexed to an Entity’s Own Stock.   The standard requiresembedded derivative instruments be bifurcated and assessed, along with free-standingderivative instruments such as warrants and non-employee stock-options todetermine whether they should be considered a derivative liability and subjectto re-measurement at their fair value. Warrants with such provisions will nolonger be recorded to equity. The transition provisions of ASC 815-40-15require cumulative effect adjustments as of July 1, 2009 to reflect the amountsthat would have been recognized if derivative fair value accounting had beenapplied from the original issuance date of an equity- equity-linked financialinstrument through the implementation date of the revised guidance. Ouradoption of the new guidance on July 1, 2009 did not have a material impact onour financial position, results of operations or cash flows.

In May 2008, the FASB issued new authoritative guidancewhich establishes general standards of accounting and disclosure of events thatoccur after the balance sheet date but before the financial statements areissued.  ASC 855 guidance sets forth (1) the period after the balance sheetdate during which management should evaluate events or transactions that mayoccur for potential recognition or disclosure in the financial statements, (2)the circumstances under which an entity should recognize events or transactionsoccurring after the balance sheet date and (3) the disclosures an entity shouldmake about such events or transactions.  Our adoption of the new guidanceon July 1, 2009 did not have a material impact on our financial position,results of operations or cash flows.

In June 2009, the FASB issued the FASB AccountingStandards Codification (“Codification”). The Codification becamethe single source for all authoritative generally accepted accountingprinciples (“GAAP”) recognized by the FASB to be applied forfinancial statements issued for periods ending after September 15, 2009. TheCodification does not change GAAP and did not have an effect on our financialposition, results of operations or cash flows. We do not expect the adoption ofthe new guidance will have a material impact on our financial position, resultsof operations or cash flows.

In August 2009, FASB issued ASU No. 2009-5 “FairValue of Measurements and Disclosure (Topic 820) – Measuring Liabilitiesat Fair Value”.  The new guidance, which is now part of ASC 820, providesclarification that in certain circumstances in which a quoted price in anactive market for the identical liability is not available, a company isrequired to measure fair value using one or more of the following valuationtechniques:  the quoted price of the identical liability when traded as anasset, the quoted prices for similar liabilities when traded as assets, oranother valuation technique that is consistent with the principles of fairvalue measurements.  The new guidance clarifies that a company is notrequired to include an adjustment for restrictions that prevent the transfer ofthe liability and if an adjustment is applied to the quoted price used in avaluation technique, the result is a Level 2 or 3 fair value measurement. The new guidance is effective for interim and annual periods beginning afterAugust 27, 2009.  The adoption of this standard is being reviewed by usand is not expected to materially impact our financial statements.

17

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In September 2009, FASB issued ASU No. 2009-09, “Accountingfor Investments – Equity Method and Joint Ventures and Accounting forEquity-Based Payments to Non-Employees.  This update is an amendment toASC 323-10-S99 and 505-50-S99.  The amendment to ASC 323-10-S99 providesguidance on the accounting by an investor for stock-based compensation based onthe investor’s stock granted to employees of an equity methodinvestee.  Investors that are SEC registrants should classify any incomeor expense resulting from application of this guidance in the same incomestatement caption as the equity in earnings (or losses) of the investee. Theamendment to ASC 505-50-S99 clarifies the accounting by the grantee or grantorin transactions involving equity instruments granted to other than employees ifthe accounting does not reflect the same commitment date or similarvalues.  The adoption of this standard did not have a material effect onour financial statements

In January 2010, the FASB issued ASU, on codification,fair value measurement and disclosures (Topic 820-10).  The amendmentrequires new disclosures related to transfers in and out of Levels 1 and 2 andactivity in Level 3 fair value measurements.  A reporting entity isrequired to disclose separately the amounts of significant transfers in and outof Level 1 and Level 2 fair value measurements and describe the reasons for thetransfers.  Additionally, in the reconciliation for fair valuemeasurements in Level 3, a reporting entity must present separately informationabout purchases, sales, issuances and settlements (on a gross basis rather thana net number).  The new disclosures are effective for interim and annualreporting periods beginning after December 15, 2009, except for the disclosuresabout purchases, sales, issuances and settlements in the roll forward ofactivity in Level 3 fair value measurements.  Those disclosures areeffective for fiscal years beginning after December 15, 2010 and for interimperiods within those fiscal years.  We do not anticipate the adoption ofthis amendment will have a material effect on our financial position, resultsof operations or cash flows. 

In April 2010, the FASB issued accounting guidance for themilestone method of revenue recognition. This guidance allows entities to makea policy election to use the milestone method of revenue recognition andprovides guidance on defining a milestone and the criteria that should be metfor applying the milestone method. The scope of this guidance is limited totransactions involving milestones relating to research and development deliverables.The guidance includes enhanced disclosure requirements about each arrangement,individual milestones and related contingent consideration, information aboutsubstantive milestones and factors considered in the determination. Thisguidance is effective prospectively to milestones achieved in fiscal years, andinterim periods within those years, beginning after June 15, 2010. Earlyapplication and retrospective application are permitted. We are currentlyevaluating the impact, if any, that this new guidance will have on thedetermination or reporting of its financial results.

The FASB issued new guidance relating to revenuerecognition for contractual arrangements with multiple revenue-generatingactivities. The ASC Topic for revenue recognition includes identification of aunit of accounting and how arrangement consideration should be allocated toseparate the units of accounting, when applicable. The new guidance, includingexpanded disclosures, is applied on a prospective basis beginning on or afterJune 15, 2010.

**ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

 Not applicable 

18

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 Item 8.  Financial Statements and Supplementary Data.

**BIOMASS SECURE POWER INC.****(formerly Virtual      Media Holdings Inc.****(A development    Stage Company)**

**FINANCIAL STATEMENTS**

**JUNE 30, 2010 AND  2009**

19

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**REPORT  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To  the Shareholders,  Biomass  Secure Power Inc. (formerly Virtual Media Holdings Inc.)   (A  development stage company): 

We have  audited the accompanying balance sheets of Biomass Secure Power Inc. (formerly  Virtual Media Holdings Inc.) (A development stage company), a British Columbia corporation,  as of June 30, 2010 and 2009 and the related statements of operations, cash  flows, and stockholders' equity (deficit) for the years ended June 30, 2010,  2009 and 2008 and from July 1, 2007, the date of entering into the development  stage, to June 30, 2010. 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 audits to obtain reasonable assurance about whether the financial  statements are free of material misstatement. An audit includes examining, on a  test basis, evidence supporting the amounts and disclosures in the financial  statements. An audit also includes assessing the accounting principles used and  significant estimates made by management, as well as evaluating the overall  financial statement presentation. We believe that our audits provide a  reasonable basis for our opinion.

In our  opinion, the financial statements referred to above present fairly, in all  material respects, the financial position of Biomass Secure Power Inc.  (formerly Virtual Media Holdings Inc.) (A development stage company) as of June  30, 2010 and 2009, and the results of its operations and its cash flows for the  years ended June 30, 2010, 2009 and 2008 and from July 1, 2007, the date of  entering into the development stage, to June 30, 2010 in conformity with  accounting principles generally accepted in the United States of America.

As discussed  in Note 2, the Company has sustained losses since inception and has limited  cash resources. These factors raise substantial doubt about the Company's  ability to continue as a going concern. Realization of a major portion of the  assets is dependent upon the Company's ability to meet its future financing  requirements and the success of future operations. Management's plans regarding  those matters are described in Note 2. The financial statements do not include  any adjustments that might result from the outcome of this uncertainty.

*signed* “BDO CANADA  LLP”

Chartered  Accountants  Langley,  Canada  December 9,  2010

----

****

**BIOMASS  SECURE POWER INC.****(Formerly    Virtual Media Holdings Inc.)**** (A development stage company)****BALANCE SHEETS****AS AT JUNE 30**

| ** **                                            |  ** ** |  **2010**        |   |   | 2009       |   |
|-------------------------------------------------------|------------------|-----------------------|--------|--------|------------|--------|
| ** **                                            |  ** ** |  ** **      |   |   |       |   |
| **ASSETS**                                            |  ** ** |  ** **      |   |   |       |   |
|                                                  |  ** ** |  ** **      |   |   |       |   |
| **Current**                                           |  ** ** |  ** **      |   |   |       |   |
| Cash                                                  |  **$**      |  **-**           |   | $      | 124        |   |
| Prepaid expenses and deposit      (Note 8)            |  ** ** |  **63,000**      |   |   | 63,000     |   |
| ** **                                            |  ** ** |  **63,000**      |   |   | 63,124     |   |
| **Property and equipment**(Note 6)                    |  ** ** |  **644**         |   |   | -          |   |
| ** **                                            |  **$**      |  **63,644**      |   | $      | 63,124     |   |
| ** **                                            |  ** ** |  ** **      |   |   |       |   |
| **LIABILITIES**                                       |  ** ** |  ** **      |   |   |       |   |
| ** **                                            |  ** ** |  ** **      |   |   |       |   |
| **Current**                                           |  ** ** |  ** **      |   |   |       |   |
| Cheques in excess of cash on      hand                |  **$**      |  **26**          |   | $      | -          |   |
| Accounts payable and accrued      liabilities         |  ** ** |  **110,955**     |   |   | 85,695     |   |
| Due to related parties (Notes 7      and 9)           |  ** ** |  **297,801**     |   |   | 65,235     |   |
| ** **                                            |  ** ** |  **408,782**     |   |   | 150,930    |   |
| ** **                                            |  ** ** |  ** **      |   |   |       |   |
| **STOCKHOLDERS’ EQUITY**                        |  ** ** |  ** **      |   |   |       |   |
| ** **                                            |  ** ** |  ** **      |   |   |       |   |
| **Common stock      (**Note 8)                        |  ** ** |  ** **      |   |   |       |   |
| Authorized                                            |  ** ** |  ** **      |   |   |       |   |
| Unlimited number of no par value common shares        |  ** ** |  ** **      |   |   |       |   |
| Issued                                                |  ** ** |  ** **      |   |   |       |   |
| 235,099,866 common shares (2009 – 235,099,866)  |  ** ** |  **5,680,217**   |   |   | 5,680,217  |   |
| **Contributed      surplus**                          |  ** ** |  **53,221**      |   |   | 53,221     |   |
| **Accumulated      deficit from prior operations**    |  ** ** |  **(5,253,808)** |   |   | (5,253,808 | )      |
| **Accumulated      deficit during development stage** |  ** ** |  **(824,768)**   |   |   | (567,436   | )      |
| ** **                                            |  ** ** |  **(345,138)**   |   |   | (87,806    | )      |
| ** **                                            |  **$**      |  **63,644**      |   | $      | 63,124     |   |

Commitments  (Notes 9 and 12)

|                               |   |        Approved      by the Board of Directors: |
|-------------------------------|--------|------------------------------------------------------|
| "Slawomir Kownacki" |   | "James Carroll"                            |
| , Director                    |   | , Director                                           |

F-1

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****

**BIOMASS  SECURE POWER INC.****(Formerly    Virtual Media Holdings Inc.)**** (A development stage company)****STATEMENTS OF OPERATIONS****FOR THE YEARS ENDED JUNE 30**

| ** **                                                    |             |  **2010**        |   |             | 2009             |   |   | 2008        |   |   | From July 1, 2007, the date of      entering into development stage, to June 30, 2010 |   |
|---------------------------------------------------------------|------------------|-----------------------|--------|------------------|------------------|--------|--------|-------------|--------|--------|---------------------------------------------------------------------------------------|--------|
| ** **                                                    |  ** ** |  ** **      |   |  ** ** |  ** ** |   |   |        |   |   |                                                                                  |   |
| **Expenses**                                                  |  ** ** |  ** **      |   |  ** ** |  ** ** |   |   |        |   |   |                                                                                  |   |
| **Amortization**                                              | **$**            |  **250**         |   | $                | -                |   | $      | -           |   | $      | 250                                                                                   |   |
| **Management, director and consulting fees (Notes 8 and 10)** |  ** ** |  **208,475**     |   |  ** ** | 183,049          |   |   | 253,289     |   |   | 644,813                                                                               |   |
| **Office and general administrative (Note 8)**                |  ** ** |  **8,184**       |   |  ** ** | 13,297           |   |   | 20,837      |   |   | 42,318                                                                                |   |
| **Professional fees (recovery)**                              |  ** ** |  **28,032**      |   |  ** ** | (15,252          | )      |   | 45,000      |   |   | 57,780                                                                                |   |
| **Shareholder communication (Note 8)**                        |  ** ** |  **-**           |   |  ** ** | 27,000           |   |   | -           |   |   | 27,000                                                                                |   |
| **Transfer agent and filing fees (Note 8)**                   |  ** ** |  **9,418**       |   |  ** ** | 9,541            |   |   | 16,393      |   |   | 35,352                                                                                |   |
| **Travel (Note 8)**                                           |  ** ** |  **2,973**       |   |  ** ** | 12,002           |   |   | 2,280       |   |   | 17,255                                                                                |   |
| **Net loss for the      Year**                                | **$**            |  **(257,332**    | **)**  | $                | (229,637         | )      | $      | (337,799)   |   | $      | (824,768)                                                                             |   |
|                                                          |             |                  |   |             |             |   |   |        |   |   |                                                                                  |   |
| **Basic and Diluted    Loss Per Share**                       | **$**            |  **(0.001**      | **)**  | $                | (0.001           | )      | $      | (0.003      | )      |   |                                                                                  |   |
|                                                          |             |                  |   |             |             |   |   |        |   |   |                                                                                  |   |
| **Weighted Average Number of Stock      Outstanding**         |  ** ** |  **235,099,866** |   |  ** ** | 235,099,866      |   |   | 115,085,534 |   |   |                                                                                  |   |
|                                                               |             |                  |   |             |             |   |   |        |   |   |                                                                                  |   |

F-2

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**BIOMASS  SECURE POWER INC.****(Formely    Virtual Media Holdings Inc.)**** (A    development stage company)**** STATEMENTS OF STOCKHOLDERS’ EQUITY    (DEFICIT)****FOR THE YEARS ENDED JUNE 30**

| ** **                                                                                                         | **Share capital**     |                    | **Contributed surplus**         |        | **Deficit from prior operations** |        | **Deficit during develop stage** |        | **Total**           |
|--------------------------------------------------------------------------------------------------------------------|-----------------------|-------------------------|---------------------------------|-------------|-----------------------------------|-------------|----------------------------------|-------------|---------------------|
| ** **                                                                                                         | **Number**            |                    | **Amount**                      |        |                              |        |                             |
| **Balance,      June 30, 2007**                                                                                    |  **96,502,717**  | $                       |  **5,090,086**             | $           |  **53,221**                  | $           |  **(5,253,808)**            | $           | -                   | $ |  **(110,501)** |
| Capital stock issued for debt on August 29, 2007 at      $0.0075 per share                                         | 1,487,881             |                    | 11,159                          |        | -                                 |        | -                                |        | -                   |   | 11,159 |
| Capital stock issued for expenses incurred on behalf      of the Company on August 29, 2007 at $0.0075 per share   | 1,356,444             |                    | 10,173                          |        | -                                 |        | -                                |        | -                   |   | 10,173 |
| Capital stock returned to treasury on October 23,      2007                                                        | (3,000,000)           |                    | -                               |        | -                                 |        | -                                |        | -                   |   | - |
| Capital stock issued for expenses incurred on behalf      of the Company on February 5, 2008 at $0.0031 per share  | 5,780,463             |                    | 17,919                          |        | -                                 |        | -                                |        | -                   |   | 17,919 |
| Capital stock issued for debt on February 5, 2008 at      $0.0031 per share                                        | 20,000,000            |                    | 62,000                          |        | -                                 |        | -                                |        | -                   |   | 62,000 |
| Capital stock issued for management fees on February      5, 2008 at $0.0031 per share                             | 20,000,000            |                    | 62,000                          |        | -                                 |        | -                                |        | -                   |   | 62,000 |
| Capital stock issued for directors fees on June 30,      2008 at $0.0045 per share                                 | 3,750,000             |                    | 16,875                          |        | -                                 |        | -                                |        | -                   |   | 16,875 |
| Capital stock issued for management fees on June 30,      2008 at $0.0045 per share                                | 30,000,000            |                    | 135,000                         |        | -                                 |        | -                                |        | -                   |   | 135,000 |
| Capital stock issued for expenses incurred on behalf      of the Company on June 30, 2008 at $0.0045 per share     | 5,007,415             |                    | 22,534                          |        | -                                 |        | -                                |        | -                   |   | 22,534 |
| Net loss for the year ended June 30, 2008                                                                          | -                     |                    | -                               |        | -                                 |        | -                                |        | (337,799)           |   | (337,799) |
| **Balance,      June 30, 2008**                                                                                    |  **180,884,920** |  **$  ** |  **5,427,746**             | $           |  **53,221**                  | $           |  **(5,253,808)**            | $           |  **(337,799)** | $ |  **(110,640)** |
| Capital stock issued as deposit on agreement on      November 15, 2008 at $0.0042 per share                        | 15,000,000            |                    | 63,000                          |        | -                                 |        | -                                |        | -                   |   | 63,000 |
| Capital stock issued for expenses incurred on behalf      of the Company on October 13, 2008 at $0.0041 per shares | 666,667               |                    | 2,733                           |        | -                                 |        | -                                |        | -                   |   | 2,733 |
| Capital stock issued for expenses incurred on behalf      of the Company on November 20, 2008 at $0.0041 per share | 800,000               |                    | 3,280                           |        | -                                 |        | -                                |        | -                   |   | 3,280 |
| Capital stock issued for expenses on May 22, 2009 at      $0.009 per share                                         | 3,000,000             |                    | 27,000                          |        | -                                 |        | -                                |        | -                   |   | 27,000 |
| Capital stock issued for expenses incurred on behalf      of the Company on June 30, 2009 at $0.0045 per share     | 6,592,724             |                    | 29,758                          |        | -                                 |        | -                                |        | -                   |   | 29,758 |
| Capital stock issued for management fees on June 30,      2009 at $0.0045 per share                                | 28,155,555            |                    | 126,700                         |        | -                                 |        | -                                |        | -                   |   | 126,700 |
| Net loss for the year ended June 30, 2009                                                                          | -                     |                    | -                               |        | -                                 |        | -                                |        | (229,637)           |   | (229,637) |
| **Balance,      June 30, 2009**                                                                                    |  **235,099,866** |  **$**             |  **5,680,217  ** |  **$** |  **53,221**                  |  **$** |  **(5,253,808)**            |  **$** |  **(567,436)** |  **$** |  **(87,806)** |
| Net loss for the year ended June 30, 2010                                                                          | -                     |                    | -                               |        | -                                 |        | -                                |        | (257,332)           |   | (257,332) |
| **Balance,      June 30, 2010**                                                                                    |  **235,099,866** |  **$**             |  **5,680,217  ** |  **$** |  **53,221**                  |  **$** |  **(5,253,808)**            |  **$** |  **(824,768)** |  **$** |  **(345,138)** |

“Expenses”  above include office and general administrative, shareholder communication,  transfer agent and filing fees and travel expenses**.**

F-3

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****

**BIOMASS  SECURE POWER INC.****(Formerly    Virtual Media Holdings Inc.)**** (A development stage company)****STATEMENTS OF CASH FLOWS****FOR THE YEARS ENDED JUNE 30**

| ** **                                               |             |  **2010**      |   |   | 2009      |   |   | 2008      |   |   | From July 1, 2007, the date of      entering into development stage, to June 30, 2010 |   |
|----------------------------------------------------------|------------------|---------------------|--------|--------|-----------|--------|--------|-----------|--------|--------|---------------------------------------------------------------------------------------|--------|
| ** **                                               |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| **Cash Flows From (Used By) Operating      Activities**  |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| Net loss for the year                                    |  **$**      |  **(257,332)** |   | $      | (229,637) |   | $      | (337,799) |   | $      | (824,768                                                                              | )      |
| Items not involving cash:                                |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| Amortization                                             |  ** ** |  **250**       |   |   | -         |   |   | -         |   |   | 250                                                                                   |   |
| Stock issued for management, director and consulting     |  ** ** |  **-**         |   |   | 126,700   |   |   | 213,875   |   |   | 340,575                                                                               |   |
| Stock issued for expenses                                |  ** ** |  **-**         |   |   | 62,771    |   |   | 50,626    |   |   | 113,397                                                                               |   |
|                                                     |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| Change in non-cash operating      working capital items: |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| Accounts payable and accrued liabilities                 |  ** ** |  **25,260**    |   |   | (16,556   | )      |   | 72,377    |   |   | 81,081                                                                                |   |
|                                                     |  ** ** |  **(231,822)** |   |   | (56,722   | )      |   | (921      | )      |   | (289,465                                                                              | )      |
|                                                     |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| **Cash Flows From (Used By) Investing      Activity**    |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| **Acquisition of property and equipment**                |  ** ** |  **(894)**     |   |   | -         |   |   | -         |   |   | (894                                                                                  | )      |
| ** **                                               |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| ** **                                               |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| **Cash Flows From (Used By) Financing      Activities**  |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| **Loan proceeds from related party**                     |  ** ** |  **232,566**   |   |   | 56,796    |   |   | 971       |   |   | 290,333                                                                               |   |
| **Increase in bank overdraft**                           |  ** ** |  **26**        |   |   | -         |   |   | -         |   |   | 26                                                                                    |   |
| ** **                                               |  ** ** |  **232,592**   |   |   | 56,796    |   |   | 971       |   |   | 290,359                                                                               |   |
| **Increase (decrease) in Cash**                          |  ** ** |  **(124)**     |   |   | 74        |   |   | 50        |   |   | -                                                                                     |   |
| **Cash, Beginning of      Year**                         |  ** ** |  **124**       |   |   | 50        |   |   | -         |   |   | -                                                                                     |   |
| **Cash, End of Year**                                    |  **$**      |  **-**         |   | $      | 124       |   | $      | 50        |   | $      | -                                                                                     |   |
| ** **                                               |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| **Supplemental Cash Flow Information**                   |  ** ** |  ** **    |   |   |      |   |   |      |   |   |                                                                                  |   |
| **Common stock issued on deposit incurred in the year**  |  **$**      |  **-**         |   | $      | 63,000    |   | $      | -         |   | $      | 63,000                                                                                |   |
| **Common stock issued to settle debt**                   |  **$**      |  **-**         |   | $      | -         |   | $      | 73,159    |   | $      | 73,159                                                                                |   |
| **Interest Paid**                                        |  **$**      |  **-**         |   | $      | -         |   | $      | -         |   | $      | -                                                                                     |   |
| **Income Taxes Paid**                                    |  **$**      |  **-**         |   | $      | -         |   | $      | -         |   | $      | -                                                                                     |   |

F-4

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**BIOMASS SECURE POWER INC.  (Formerly Virtual Media Holdings Inc.)  (A development stage company)  NOTES TO THE FINANCIAL STATEMENTS  As At June 30, 2010**

**1.   NATURE OF BUSINESS AND  OPERATIONS**

Biomass Secure Power Inc., formerly Virtual Media  Holdings Inc., (“Biomass” or the “Company”), became a development stage  enterprise July 1, 2007. Prior to July 1, 2007, the company was conducting  internet sales of videos, CDs, DVDs and books as Virtual Media Holdings Inc,  (formerly VMH VideoMovieHouse.com Inc.). As at June 30, 2007, the company  ceased all operations in connection with internet sales, wrote-off all related  assets and was seeking a new business.  The Company plans to build, own and  operate a cellulose pelletizing plants that utilizes proprietary technology.  The Company’s headquarters are located in Abbottsford, British Columbia,  Canada. 

The Company is presently a delinquent filer with the  Securities Exchange Commission and is filing for relief from filing audited  financial statements for the years ended June 30, 2007 and 2006. At this time,  it is not known if the relief will be granted.

**2.   ABILITY TO CONTINUE AS A GOING  CONCERN**

The accompanying financial statements have been  prepared in US dollars and in accordance with accounting principles generally  accepted in the United States on a going concern basis, which contemplates the  realization of assets and the satisfaction of liabilities and commitments in  the normal course of business The Company commenced its evaluation and  development of a cellulose pelletizing plant in the first quarter of  2008.  Previously, the Company had been actively operating an  internet sales company. On June 30, 2007, the Company disposed of all of its  assets in connection with the internet sales activities.  During the  year ended June 30, 2010, the Company incurred a net loss of $257,332 (2009 -  $229,637).  Since the Company had re-entered the development stage,  it has an accumulated deficit of $824,768 at June 30, 2010.  These  conditions raise substantial doubt about the Company's ability to continue as a  going concern.

The Company's ability to continue as a going concern  is dependent on its ability to develop a cellulose pelletizing plant and  ultimately achieve profitable operations and to generate sufficient cash flow  from financing and operations to meet its obligations as they become payable.  The Company expects that it will need approximately $390,000 to fund its  operations during the next twelve months.  Management has plans to  seek additional capital through a private placement, public offering of its  common stock and joint arrangements.  Although there are no  assurances that management’s plans will be realized, management believes that  the Company will be able to continue operations in the  future.  Accordingly, no adjustment relating to the recoverability  and classification of recorded asset amounts and the classification of  liabilities has been made to the accompanying financial statements in  anticipation of the Company not being able to continue as a going concern.

**3.   SIGNIFICANT ACCOUNTING POLICIES**

These financial statements include the accounts of the  Company. The Company has a wholly owned subsidiary Biomass Secure Power Inc.  (USA), which has no operations or activities and therefore not reflected in the  financial statements of the Company.

These financial statements have in management’s opinion,  been properly prepared within reasonable limits of materiality and within the  framework of the significant accounting policies summarized below*: *

*(a) Management’s Estimates and Assumptions*

The preparation of financial statements in conformity  with United States generally accepted accounting principles requires management  to make estimates and assumptions that affect the reported amounts of assets  and liabilities as of the balance sheet date, and revenues and expenses for the  period then ended.  Actual results could differ significantly from  those estimates 

*(b) Cash*

F-5

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**BIOMASS SECURE POWER INC.  (Formerly Virtual Media Holdings Inc.)  (A development stage company)  NOTES TO THE FINANCIAL STATEMENTS  As At June 30, 2010**

The Company considers all highly liquid investments  with original maturities of three months or less to be cash equivalents. Cash  equivalents are carried at cost, which approximates market value. 

*(c) Equipment*

Equipment is stated at cost, net of accumulated  depreciation. Depreciation is computed by using the straight-line method at  rates based on the estimated useful lives of the various classes of property,  plant and equipment. Estimates of useful lives are based upon a variety of  factors including durability of the asset, the amount of usage that is expected  from the asset, the rate of technological change and the Company’s business  plans for the asset. Should the Company change its plans with respect to the  use and productivity of the equipment, it may require a change in the useful  life of the asset or incur a charge to reflect the difference between the  carrying value of the asset and the proceeds expected to be realized upon the  asset’s sale or abandonment. Expenditures for maintenance and repairs are  expensed as incurred and significant major improvements are capitalized and  depreciated over the estimated useful life of the asset. 

Computer equipment is amortized over three years on the  straight-line basis.

*(d) Intangible assets*

The Company accounts for intangible assets in  accordance with ASC 350, “*Intangibles- Goodwill and Other.*” This  standard requires that goodwill and other intangible assets with indefinite  useful lives not be amortized but instead tested annually for impairment, or  immediately if conditions indicate that impairment could exist. Intangible  assets with definite useful lives are amortized over their estimated useful  lives and reviewed for impairment in accordance with ASC 360, “*Accounting    for Impairment or Disposal of Long-Lived Assets.*” Substantial judgment is  necessary in the determination as to whether an event or circumstance has  occurred that may trigger an impairment analysis and in the determination of  the related cash flows from the asset. Estimating cash flows related to  long-lived assets is a difficult and subjective process that applies historical  experience and future business expectations to revenues and related operating  costs of assets. Should impairment appear to be necessary, subjective judgment  must be applied to estimate the fair value of the asset, for which there may be  no ready market, which often times results in the use of discounted cash flow  analysis and judgmental selection of discount rates to be used in the  discounting process. If the Company determines an asset has been impaired based  on the projected undiscounted cash flows of the related asset or the business  unit, and if the cash flow analysis indicates that the carrying amount of an asset  exceeds related undiscounted cash flows, the carrying value is reduced to the  estimated fair value of the asset. There were no intangible assets for the  years ended June 30, 2010 and 2009.

*(e) Impairment of long-lived assets*

The Company evaluates its long-lived assets, such as  equipment, and specifically identified intangibles, when events or changes in  circumstances indicate that the carrying value of such assets may not be  recoverable. When the Company believes an impairment condition may have occurred,  it is required to estimate the undiscounted future cash flows associated with a  long-lived asset or group of long-lived assets at the lowest level for which  identifiable cash flows are largely independent of the cash flows of other  assets and liabilities for long-lived assets that are expected to be held and  used. If the Company determines that the undiscounted cash flows from an asset  to be held and used are less than the carrying amount of the asset, or if the  Company has classified an asset as held for sale, it estimates fair value to  determine the amount of any impairment charge. 

*(f) Income taxes*

The Company accounts for income taxes using the asset  and liability method. Deferred tax liabilities and assets are determined based  on temporary differences between the basis of assets and liabilities for income  tax and financial reporting purposes. The deferred tax assets and liabilities  are classified according to the financial statement classification of the  assets and liabilities generating the differences. Valuation allowances are  established when necessary based upon the judgment of management to reduce  deferred tax assets to the amount expected to be realized and could be  necessary based upon estimates of future profitability and expenditure levels over  specific time horizons in particular tax jurisdictions. The Company recognizes  the tax benefit from an uncertain tax position when, based on technical merits,  it is more likely than not the position will be sustained on examination by the  taxing authorities. 

F-6

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**BIOMASS SECURE POWER INC.  (Formerly Virtual Media Holdings Inc.)  (A development stage company)  NOTES TO THE FINANCIAL STATEMENTS  As At June 30, 2010**

*(g) Stock-based compensation*

The Company has a stock-based compensation plan under  which stock-based awards have been granted to employees and non-employees.  Stock-based compensation is accounted for in accordance with ASC 718, “*Compensation  – Stock Compensation.*” The Company establishes fair values for its equity  awards to determine its cost and recognizes the related expense over the  appropriate vesting period. The Company recognizes expense for stock options  and restricted stock awards. For stock-based awards vesting based on service  period, the value of the portion of the award that is ultimately expected to  vest is recognized as expense over the requisite service period on a  straight-line basis for each separately vesting portion of the award as if the  award was, in substance, multiple awards. 

*(h) Fair value measurements*

Accounting standards require that fair value  measurements be classified and disclosed in one of the following categories: 

Level 1 - Unadjusted quoted prices in active markets  that are accessible at the measurement date for identical, unrestricted assets  or liabilities;

Level 2 – Quoted  prices in markets that are not active, or inputs that are observable, either  directly or indirectly, for substantially the full term of the asset or  liability; and

Level 3 - Prices  or valuation techniques that require inputs that are both significant to the  fair value measurement and unobservable (i.e., supported by little or no market  activity).

Determining which category an asset or liability falls  within the hierarchy requires significant judgment. We evaluate our hierarchy  disclosures each quarter.

On July 1, 2009, the Company adopted a newly  issued accounting standard for fair value measurements of all nonfinancial  assets and nonfinancial liabilities not recognized or disclosed at fair value  in the financial statements on a nonrecurring basis. This accounting standard  has not had a material impact on the Company’s financial position, results of  operations or liquidity. 

The Company uses observable inputs when available.  When observable inputs are not available, the Company uses internally  developed, unobservable inputs (Level 3 inputs in the fair value hierarchy of  fair value accounting) to estimate cash flow projections used in its analysis to  determine whether its long-lived assets are impaired. 

*(i) Earnings (loss) per share of common stock*

Basic earnings (loss) per share of common stock is  computed by dividing net income (loss) available to common shareholders by  the weighted-average number of common stock outstanding for the  period.  Diluted earnings per share of common stock reflect the  potential dilution that could occur if securities or other contracts to issue  common stock were exercised or converted into common stock or resulted in the issuance  of common stock that then shared in the earnings of the Company.

At June 30, 2010 and 2009, there were no stock options  and warrants which had an anti-dilutive effect on earnings per share. 

F-7

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**BIOMASS SECURE POWER INC.  (Formerly Virtual Media Holdings Inc.)  (A development stage company)  NOTES TO THE FINANCIAL STATEMENTS  As At June 30, 2010**

*(j)  Foreign exchange translation*

The Company's functional currency is the United States  (“US”) dollar, and reports its financial statements in US dollars. The Company  translates its Canadian dollar balances to US dollars in the following  manner:  Assets and liabilities have been translated using the rate  of exchange at the balance sheet date.  The Company’s results of  operations have been translated using average rates.  Exchange  differences arising on translation and realized gains and losses from foreign  currency transactions are reflected in the Company’s results from operations.

All amounts included in the accompanying financial  statements and footnotes are stated in U.S. dollars.

**4.   RECENTLY ISSUED ACCOUNTING  STANDARDS**

In December 2007, the Financial Accounting  Standards Board (“FASB”) issued ASC 805-10-65 and revised the authoritative  guidance for business combinations which establishes principles and  requirements for how the acquirer in a business combination (1) recognizes  and measures in its financial statements the identifiable assets acquired, the  liabilities assumed and any non-controlling interest in the acquiree,  (2) recognizes and measures the goodwill acquired in the business  combination or a gain from a bargain purchase and (3) determines what  information to disclose to enable users of the financial statements to evaluate  the nature and financial effects of the business combination. This guidance  applies prospectively to business combinations for which the acquisition date  is on or after the beginning of the first annual reporting period beginning on  or after December 15, 2008.  The Company’s adoption of this revised  guidance on July 1, 2009 did not have any impact on its results of  operations or financial condition as it did not have any business combination  activity during the year ended June 30, 2010. 

Additionally, the FASB amended the factors that should  be considered in developing renewal or extension assumptions used to determine  the useful life of a recognized intangible asset to improve the consistency  between the useful life of a recognized intangible asset and the period of  expected cash flows used to measure the fair value of the asset under the  current guidance concerning business combinations and other U.S. generally  accepted accounting principles.  This new guidance is effective for financial  statements issued for fiscal years beginning after December 15, 2008, and  interim periods within those fiscal years.  The Company’s adoption of the  new guidance on July 1, 2009 did not have a material impact on its  financial position, results of operations or cash flows. 

On July 1, 2009, the Company adopted FASB ASC 815-  Derivatives and Hedging (*EITF 07-5, Determining Whether an Instrument (or    embedded Feature) is Indexed to an Entity’s Own Stock*.   The  standard requires embedded derivative  instruments be bifurcated and assessed, along with free-standing derivative  instruments such as warrants and non-employee stock-options to determine  whether they should be considered a derivative liability and subject to  re-measurement at their fair value. Warrants with such provisions will no  longer be recorded to equity. The  transition provisions of ASC 815-40-15 require cumulative effect adjustments as  of July 1, 2009 to reflect the amounts that would have been recognized if  derivative fair value accounting had been applied from the original issuance  date of an equity- equity-linked financial instrument through the  implementation date of the revised guidance. The  Company’s adoption of the new guidance on July 1, 2009 did not have a  material impact on its financial position, results of operations or cash flows.

In May 2008, the FASB issued new authoritative  guidance which establishes general standards of accounting and disclosure of  events that occur after the balance sheet date but before the financial  statements are issued.  ASC 855 guidance sets forth (1) the period  after the balance sheet date during which management should evaluate events or  transactions that may occur for potential recognition or disclosure in the  financial statements, (2) the circumstances under which an entity should  recognize events or transactions occurring after the balance sheet date and  (3) the disclosures an entity should make about such events or  transactions.  The Company’s adoption of the new guidance on July 1,  2009 did not have a material impact on its financial position, results of  operations or cash flows.

F-8

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**BIOMASS SECURE POWER INC.  (Formerly Virtual Media Holdings Inc.)  (A development stage company)  NOTES TO THE FINANCIAL STATEMENTS  As At June 30, 2010**

In June 2009, the FASB issued the FASB Accounting  Standards Codification (“Codification”). The Codification became the single  source for all authoritative generally accepted accounting principles (“GAAP”)  recognized by the FASB to be applied for financial statements issued for  periods ending after September 15, 2009. The Codification does not change  GAAP and did not have an effect on our financial position, results of operations  or cash flows.  The Company does not expect the adoption of the new guidance  will have a material impact on its financial position, results of operations or  cash flows.

In August 2009, FASB issued ASU No. 2009-5 “Fair Value  of Measurements and Disclosure (Topic 820) – Measuring Liabilities at Fair  Value”.  The new guidance, which is now part of ASC 820, provides  clarification that in certain circumstances in which a quoted price in an  active market for the identical liability is not available, a company is  required to measure fair value using one or more of the following valuation  techniques:  the quoted price of the identical liability when traded  as an asset, the quoted prices for similar liabilities when traded as assets,  or another valuation technique that is consistent with the principles of fair  value measurements.  The new guidance clarifies that a company is not  required to include an adjustment for restrictions that prevent the transfer of  the liability and if an adjustment is applied to the quoted price used in a  valuation technique, the result is a Level 2 or 3 fair value  measurement.  The new guidance is effective for interim and annual  periods beginning after August 27, 2009.  The adoption of this  standard is being reviewed by the company and is not expected to materially  impact the Company’s financial statements.

In September 2009, FASB issued ASU No. 2009-09,  “Accounting for Investments – Equity Method and Joint Ventures and Accounting  for Equity-Based Payments to Non-Employees.  This update is an  amendment to ASC 323-10-S99 and 505-50-S99.  The amendment to ASC  323-10-S99 provides guidance on the accounting by an investor for stock-based  compensation based on the investor’s stock granted to employees of an equity  method investee.  Investors that are SEC registrants should classify  any income or expense resulting from application of this guidance in the same  income statement caption as the equity in earnings (or losses) of the investee.  The amendment to ASC 505-50-S99 clarifies  the accounting by the grantee or grantor in transactions involving equity  instruments granted to other than employees if the accounting does not reflect  the same commitment date or similar values.  The adoption of this  standard did not have a material effect on the Company’s financial statements

In January 2010, the FASB issued ASU, on  codification, fair value measurement and disclosures (Topic 820-10).  The  amendment requires new disclosures related to transfers in and out of Levels 1  and 2 and activity in Level 3 fair value measurements.  A reporting entity  is required to disclose separately the amounts of significant transfers in and  out of Level 1 and Level 2 fair value measurements and describe the reasons for  the transfers.  Additionally, in the reconciliation for fair value  measurements in Level 3, a reporting entity must present separately information  about purchases, sales, issuances and settlements (on a gross basis rather than  a net number).  The new disclosures are effective for interim and annual  reporting periods beginning after December 15, 2009, except for the  disclosures about purchases, sales, issuances and settlements in the roll  forward of activity in Level 3 fair value measurements.  Those disclosures  are effective for fiscal years beginning after December 15, 2010 and for  interim periods within those fiscal years.  The Company does not  anticipate the adoption of this amendment will have a material effect on its  financial position, results of operations or cash flows. 

In April 2010, the FASB issued accounting  guidance for the milestone method of revenue recognition. This guidance allows  entities to make a policy election to use the milestone method of revenue  recognition and provides guidance on defining a milestone and the criteria that  should be met for applying the milestone method. The scope of this guidance is  limited to transactions involving milestones relating to research and  development deliverables. The guidance includes enhanced disclosure  requirements about each arrangement, individual milestones and related  contingent consideration, information about substantive milestones and factors  considered in the determination. This guidance is effective prospectively to  milestones achieved in fiscal years, and interim periods within those years,  beginning after June 15, 2010. Early application and retrospective  application are permitted. The Company is currently evaluating the impact, if  any, that this new guidance will have on the determination or reporting of its  financial results.

F-9

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****BIOMASS SECURE POWER INC.    (Formerly Virtual Media Holdings Inc.)    (A development stage company)    NOTES TO THE FINANCIAL STATEMENTS    As At June 30, 2010****

 

The FASB issued new guidance relating to revenue  recognition for contractual arrangements with multiple revenue-generating  activities. The ASC Topic for revenue recognition includes identification of a  unit of accounting and how arrangement consideration should be allocated to separate  the units of accounting, when applicable. The new guidance, including expanded  disclosures, is applied on a prospective basis beginning on or afterJune 15, 2010.

F-10

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****

**BIOMASS SECURE POWER INC.  (Formerly Virtual Media Holdings Inc.)  (A development stage company)  NOTES TO THE FINANCIAL STATEMENTS  As At June 30, 2010**

**5.   MERGER AGREEMENT WITH  0625920 BC LTD.**

On June 30, 2009, the Company entered into an  agreement with 0625920 BC Ltd. (“0625920”) whereby the Company will be  acquiring certain intellectual property of 0625920 by way of merger of the two  Companies.  0625920 is a related party by a common director. Pursuant to the  terms of a Merger Agreement one share of the Company will be issued in exchange  for each 0625920 share outstanding at the agreement date of the acquisition and  merger.  At June 30, 2009, 0625920 had 225,269,250 stock outstanding.  As a  result of a cease-trade order issued by the securities commission the common  stock has not been issued and therefore, the transaction has not been completed  nor reflected in the financial statements. The above agreement has been  deferred until the cease-trade order is lifted.

**6.   PROPERTY AND EQUIPMENT**

|                       |  **June 30, 2010** | June 30, 2009                                                                                                                    |
|----------------------------|-------------------------|----------------------------------------------------------------------------------------------------------------------------------|
|                       |                    | **Cost**                                                                                                                         |   |   |  **Accumulated Amortization** |   |   | Cost |   |   | Accumulated Amortization |
| Computers                  | **$**                   | **894**                                                                                                                          |   | **$** | **            250** |   | $ | - |   | $ | - |
|        Net Book Value |                    |  **                  **** ** |   | **$** |  ** ****            644** |   |   |   |   | $ | - |

**7.   DUE TO RELATED PARTIES**

The Company is indebted to directors and officers of  the Company for operating expenses paid by those individuals.  The amounts are  payable on demand, unsecured and without interest. 

F-11

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****

****BIOMASS SECURE POWER INC.  (Formerly Virtual Media Holdings Inc.)  (A development stage company)  NOTES TO THE FINANCIAL STATEMENTS  As At June 30, 2010****

**8.   CAPITAL STOCK**

*Share issuances in 2010*

There was no stock issued during the year ended June 30, 2010 due to a  cease trade order issued by the British Columbia Securities Commission.

*Share issuances in 2009*

On November 15, 2008 the Company issued 15,000,000  common shares at $0.0042 per share for a total of $63,000 as a deposit in  connection with the acquisition agreement with 0625920 BC Ltd. (Note 5).  The  stock was recorded based upon the quoted market price of the Company’s common  stock on the date of director’s approval for the issuance.

On October 13, 2008 the Company issued 666,667 common  shares at $0.0041 per share for a total of $2,733 for expenses incurred on  behalf of the Company by a director.  The stock was recorded based upon the  quoted market price of the Company’s common stock on the date of director’s  approval for the issuance.

On November 20, 2008 the Company issued 800,000 common  shares at $0.0041 per share for a total of $3,280 for expenses incurred on  behalf of the Company by a director.  The stock was recorded based upon the  quoted market price of the Company’s common stock on the date of director’s  approval for the issuance.

On May 22, 2009 the Company issued 3,000,000 common  shares at $0.009 per share for a total of $27,000 for investor relations.  The  stock was recorded based upon the quoted market price of the Company’s common  stock on the date of director’s approval for the issuance.

On June 30, 2009 the Company issued 6,592,724 common  shares at $0.0045 per share for a total of $29,758 for expenses incurred on  behalf of the Company by directors.  The stock was recorded based upon the  quoted market price of the Company’s common stock on the date of director’s  approval for the issuance.

On June 30, 2009 the Company issued 28,155,555 common  shares at $0.0045 per share for a total of $126,700 for management fees paid to  a director and officer of the Company for services provided in the current  period.  The stock was recorded based upon the quoted market price of the  Company’s common stock on the date of director’s approval for the issuance.

*Share issuances in 2008*

On August 29, 2007 the Company issued 2,844,325 common  shares at $0.0075 per share for a total of $21,332 for expenses incurred on  behalf of the Company by a director.  Of those amounts 1,487,881 common shares  for a total of $11,159 was for settlement of debt related to expenses incurred  in a prior year and 1,356,444 common shares for a total of $10,173 was for  expenses incurred in the current year.  The stock was recorded based upon the  quoted market price of the Company’s common stock on the date of director’s  approval for the issuance.

On October 23, 2007, 3,000,000 common shares were  returned for cancellation. As the expense related to the issuance of these  common shares was properly recorded, there is no accounting impact for the  returned shares.

On February 5, 2008 the Company issued 5,780,463  common shares at $0.0031 per share for a total of $17,919 for expenses incurred  on behalf of the Company by directors.  The stock was recorded based upon the  quoted market price of the Company’s common stock on the date of director’s  approval for the issuance.

F-12

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**BIOMASS SECURE POWER INC.  (Formerly Virtual Media Holdings Inc.)  (A development stage company)  NOTES TO THE FINANCIAL STATEMENTS  As At June 30, 2010**

On February 5, 2008 the Company issued 40,000,000  common shares at $0.0031 per share for a total of $124,000 for management fees  paid to a director and officer of the Company.  Of those amounts 20,000,000  shares for a total of $62,000 was for settlement of debt related to management  fees of a prior year and 20,000,000 for a total of $62,000 was for management  fees incurred in the current year.  The stock was recorded based upon the  quoted market price of the Company’s common stock on the date of director’s  approval for the issuance.

On June 30, 2008 the Company issued 3,750,000 common  shares at $0.0045 per share for a total of $16,875 for directors’ fees.  The  stock was recorded based upon the quoted market price of the Company’s common  stock on the date of director’s approval for the issuance.

On June 30, 2008 the Company issued 30,000,000 common  shares at $0.0045 per share for a total of $135,000 for management fees paid to  a director and officer of the Company for services in the current year.  The  stock was recorded based upon the quoted market price of the Company’s common  stock on the date of director’s approval for the issuance.

On June 30, 2008 the Company issued 5,007,415 common  shares at $0.0045 per share for a total of $22,533 for expenses incurred on  behalf of the Company by directors.  The stock was recorded based upon the  quoted market price of the Company’s common stock on the date of director’s  approval for the issuance.

*Stock Options*

On March 24, 2004, the Company’s Board of Directors approved a nonqualified  stock option plan. This plan, subject to authorization of the Company’s Board  of Directors, allows the Company to distribute up to 5,000,000 options on  common stock to officers, directors, employees and consultants at an exercise  price of up to $0.25 per share. On October 8, 2004, the Board of Directors  approved an increase in S-8 stock to 15,000,000 options on common stock to  officers, directors, employees and consultants at an exercise price of up to  $0.03 per share. 

During the years ended June 30, 2010 and 2009, there were no common  stock options granted. As of June 30, 2010 and 2009, there were no outstanding  exercisable or un-exercisable common stock options.

F-13

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**BIOMASS SECURE POWER INC.  (Formerly Virtual Media Holdings Inc.)  (A development stage company)  NOTES TO THE FINANCIAL STATEMENTS  As At June 30, 2010**

**9.   COMMITMENT TO ISSUE STOCK**

The Company’s stock are traded on the OTC Bulletin  Board in the United States and the Company is subject to the securities laws of  the United States and Canada.  In November 2009, the British Columbia  Securities Commission issued a cease trade order against the Company thereby  preventing the Company from issuing or exchanging stock of the Company until  the cease trade order is removed.  

Subsequent to the date of the cease trade order the  Company entered into the following transactions approved by the directors  requiring the issuance of stock upon the removal of the cease trade order.  These transactions have not been recorded in the financial statements as the  transactions have not been completed:

|   | i.           | On June 30, 2009 the Company      entered into an acquisition and merger agreement with 0625920 BC Ltd (Note 5)      for exchange of 225,269,250 common stock of the Company. This has not been    recorded in the balance sheet of the company.                                                                                                                                                                                                                                                                                   |
|--------|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | ii.                    | On February 24, 2010 the board of      directors, subject to the removal of the cease trade order, approved the      issuance of 81,864,686 common stock for settlement of various indebtedness to    director and officers.                                                                                                                                                                                                                                                                                                            |
|   |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | iii.    | On March 12, 2010 the board of      directors, subject to the removal of the cease trade order, approved the      acceptance of share subscriptions of 1,456,013 common stock at $0.0158 per      share for proceeds of $23,005.  The subscription agreements and the related      proceeds were received by the Company between March 12, 2010 and June 16, 2010.      As the stock has not been issued, the subscription payable has been recorded as    a liability in due to related parties for the year ended June 30, 2010. |

**10.  RELATED PARTY TRANSACTIONS**

During the year ended June 30, 2010 the Company was  charged management, consulting and director fees totaling $170,000 (2009 -  $183,049)(2008 - $236,306)  by directors and officers of the Company.

The above-noted transactions were measured at the  exchange amount, which is the amount of consideration established and agreed to  by the related parties.

**11.  INCOME TAXES**

No provision for Canadian federal or provincial income  taxes has been recorded. The Company is in arrears on filing its statutory  income tax returns and is therefore unable to practicably determine the amount  of its loss carry forwards at this time. 

The Company expects to have net operating loss carry  forwards to offset any taxable income that may exist for the years ended June  30, 2010 and 2009. As at June 30, 2010, the Company expects to have significant  net operating loss carry forwards for income tax purposes available to offset  future taxable income. Future income tax assets as of June 30, 2010 and 2009  consist primarily of the tax effect of net operating loss carry forwards. 

The Company has provided a full valuation allowance on  the future income tax assets as of June 30, 2010 and 2009 to reduce such future  income tax assets to zero, as it is management’s belief that realization of  such amounts is not considered more likely than not.

In the ordinary course of business the Company has  transacted in foreign jurisdictions and is subject to the tax regime to that  foreign jurisdiction. The Company records tax contingencies for specific  transactions when it determines that the likelihood of an unfavorable outcome  is likely and the loss is reasonably estimable. Management currently believes  that the Company is not exposed to tax contingencies that could have a material  impact on the liquidity results of operations or financial condition of the  Company. As at June 30, 2010, the Company has not recorded an accrual for any  tax contingencies.

F-14

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****BIOMASS SECURE POWER INC.    (Formerly Virtual Media Holdings Inc.)    (A development stage company)    NOTES TO THE FINANCIAL STATEMENTS    As At June 30, 2010****

In June 2006, the FASB issued ASC 740 Income  Taxes. ASC 740 clarifies the accounting for uncertainty in income taxes  recognized in an enterprise’s financial statements, and prescribes a  recognition threshold and measurement attribute for the financial statement  recognition and measurement of a tax position taken or expected to be taken in  a tax return. The Company has evaluated its tax positions for the years ended  June 30, 2010 and 2009 and determined that it has no uncertain tax  positions requiring financial statement recognition. 

Under ASC 740, the  impact of an uncertain income tax position on income tax expense must be  recognized at the largest amount that is more-likely-than-not to be sustained.  An uncertain income tax position will not be recognized if it has 50% or less  likelihood of being sustained. 

The Company accrues interest  and penalties on our uncertain tax positions as a component of our provision  for income taxes.  There was no amount of interest and penalties accrued during 2010, 2009 or  2008. 

The Company files one income tax return in  Canada. Our income tax returns are generally considered closed to examination  for years prior to 2004.

**12.  COMMITMENTS AND CONTINGENCIES**

A statement of claim was issued against the Company for breach of  employment contract. The Company has filed a statement of defense disputing the  action. The claim is presently being disputed by the Company and the settlement  is undeterminable at this time. Any legal costs relating to this claim have  been recorded in the financial statements. The likelihood of loss is remote.

A second statement of claim was issued against the Company to remove  the trading restriction on the restricted stock. The Company has filed a  statement of defense disputing the action. Subsequent to year end, this claim  was settled with no financial impact to the Company. 

We establish reserves for legal claims when payments associated with  the claims become probable and the costs can be reasonably estimated. The  actual costs of resolving legal claims may be higher or lower than any amounts  reserved for the claims. On the basis of information currently available,  advice of counsel, available insurance coverage, if applicable, and established  reserves, it is the opinion of management that the eventual outcome of the  actions against us are remote will not have a material adverse effect on our  financial condition, results of operations, or cash flows. However, in the  event of unexpected future developments, it is possible that the ultimate  resolution of legal matters, if unfavorable, may be material to our financial  condition, results of operations, or cash flow.

F-15

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**ITEM 9. CHANGESIN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.**

On January 9, 2009, our board of directors approved the appointment of BDOCanada LLP as our independent accountants to audit our June 30, 2009 and 2010financial statements and through the interim period and dismissed DaleMatheson Carr-Hilton Labonte LLP ("DMCL”),as our independent accountants. On October 8, 2009, we received a letter fromDale Matheson Carr-Hilton Labonte LLP ("DMCL") stating that it hadnot been engaged to perform auditing services for our company for the prioryear and that it was no longer the auditor of record for our company. 

Duringthe fiscal year ended June 30, 2006, and any subsequent interim periodspreceding the change in accountants, there were no disagreements with DMCL, onany matter of accounting principles or practices, financial statementdisclosure, or auditing scope procedure. Duringthe course of their audit, DMCL advised our company's new management that ithad not been provided with sufficient documentation to support certainissuances of shares.  In addition, during the course of their audit of ourfiscal year ended June 30, 2006, DMCL advised our new management that it wasunable to rely on management’s representations.  Since that date, wehave not provided DMCL with any additional documentation in respect of theunsupported issuances of shares and DMCL has not provided us with anunqualified audit report for our 2006 fiscal year.The decision to change independent accountants was based on the determinationby our board of directors that such a step was appropriate given the change indirection of our company and the related growth in our demands, and that suchexpertise required can be provided by a national accounting firm. 

During the years ended June 30, 2006 and2007, and any subsequent interim periods preceding the change in accountants,BDO Canada LLP was not consulted regarding (1) the application of accountingprinciples to specified transactions, (2) the type of audit opinion that mightbe rendered on our financial statements, (3) written or oral advice that wouldbe an important factor considered by us in reaching a decision as to anaccounting, auditing or financial reporting issues, or (4) any matter that wasthe subject of a disagreement between us and our predecessor auditor asdescribed in Item 304(a)(1)(iv) or a reportable event as described in Item304(a)(1)(v) of Regulation S-K. 

**ITEM 9A.CONTROL AND PROCEDURES**

**Disclosure Controls and Procedures**

We maintain “disclosure controls andprocedures”, as that term is defined in Rule 13a-15(e), promulgated bythe Securities and Exchange Commission pursuant to the *Securities ExchangeAct of 1934*, as amended. Disclosure controls and procedures includecontrols and procedures designed to ensure that information required to bedisclosed in our company’s reports filed under the *Securities ExchangeAct of 1934* is recorded, processed, summarized and reported within the timeperiods specified in the Securities and Exchange Commission’s rules andforms, and that such information is accumulated and communicated to ourmanagement, including our principal executive officer and our principalfinancial officer, as appropriate, to allow timely decisions regarding requireddisclosure. 

As required by paragraph (b) of Rules 13a-15 under the *SecuritiesExchange Act of 1934*, our management, with the participation of ourprincipal executive officer and our principal financial officer, evaluated ourcompany’s disclosure controls and procedures as of the end of the periodcovered by this annual report on Form 10-K. Based on this evaluation, ourmanagement concluded that as of the end of the period covered by this annualreport on Form 10-K, our disclosure controls and procedures were not effective.

*Management’s Report on Internal Control over  Financial Reporting.*

Our management, including our principal executive officer,principal financial officer and our board of directors, is responsible forestablishing and maintaining a process to provide reasonable assuranceregarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generallyaccepted accounting principles. 

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Our management, with the participation of our principalexecutive officer and our principal financial officer, evaluated theeffectiveness of our internal control over financial reporting(“ICFR”) as of June 30, 2010. Our management’s evaluation ofour internal control over financial reporting was based on the framework in InternalControl—Integrated Framework, issued by the Committee of SponsoringOrganizations of the Treadway Commission. Based on this evaluation, ourmanagement concluded that our internal control over financial reporting was noteffective as of June 30, 2009 and that there were material weaknesses in ourinternal control over financial reporting as described below:

As defined by Auditing Standard No. 5,“An Audit of Internal Control Over Financial Reporting that is Integratedwith an Audit of Financial Statements and Related Independence Rule andConforming Amendments,” established by the Public Company AccountingOversight Board, a material weakness is a deficiency, or combination ofdeficiencies, in internal control over financial reporting, such that there isa reasonable possibility that a material misstatement of the Company’sannual or interim financial statements will not be prevented or detected on atimely basis.  In connection with the assessment described above,management identified the following control deficiencies that representmaterial weaknesses as of June 30, 2010:

(1) Specifically, we have determined that our internalcontrols and procedures for timely filing of material events is insufficientdue to a lack of knowledge regarding U.S. generally accepted accountingprinciples and the rules of the Securities and Exchange Commission byresponsible people within our company. Moreover, due to our inability toprovide sufficient documentation to our former auditor, it was unable to issuean audit report for the financial years ended June 30, 2006 and June 30, 2007.We are significantly in arrears in respect to timely filing of our quarterlyand annual reports.

(2)We lack an independent audit committee, audit committeefinancial expert, and independent directors. Our audit committee is comprisedof our board of directors. Our audit committee does not have an audit committeefinancial expert. A majority of our board of directors and audit committee isnot independent, as three of our directors are also officers.  Thesefactors may be counter to corporate governance practices as defined by thevarious stock exchanges and may lead to less effective or conflictedsupervision over management;

(3) We have ineffective controls overperiod end financial disclosure and reporting processes.

(4) There are infrequent ongoingmonitoring and a lack of separate evaluations when an effective monitoring andevaluative system is deemed necessary for corporate integrity.

As of June 30,2010, management assessed the effectiveness of our ICFR and based on thatevaluation, they concluded that, as of June 30, 2010, the internal controls andprocedures were not effective due to deficiencies that existed in the design oroperation of our ICFR. During the course of their evaluation, management didnot discover any fraud involving management or any other personnel who play asignificant role in our disclosure controls and procedures or internal controlsover financial reporting.

Due to a lack offinancial and personnel resources, we are not able to, and do not intend to,immediately take any action to remediate these materialweaknesses.  We will not be able to do so until, if ever, we acquiresufficient financing and staff to do so.  We will implement further controlsas circumstances, cash flow, and working capitalpermit.  Notwithstanding the assessment that our ICFR was noteffective and that there were material weaknesses as identified in this report,we believe that our financial statements contained in our Annual Report on Form10-K for the fiscal year ended June 30, 2010, fairly presents our financialposition, results of operations and cash flows for the years covered thereby inall material respects.

Our ChiefFinancial Officer is not a financial expert. This risk is mitigated by theactive involvement of the audit committee and the board of directors inreviewing the financial statements.  However, the lack of full timepersonnel who have technical experience and knowledge is an internal controlweakness and may result in the failure to timely report financial results.

It is unlikelythat the above noted internal control weakness can be properly addressed untilthe Company grows to a significant size to warrant the expense, such as thehiring of additional personnel, associated with implementing additionalsegregation of duties.  We are committed to improving our financialorganization and internal controls.  As part of this commitment, weintend to hire an additional person on a full time basis, when sufficient fundsare available to us, with technical experience and knowledge in accounting tobetter segregate duties consistent with control objectives and will increaseour personnel resources and technical accounting expertise within theaccounting function.

21

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Management believesthat the material weaknesses set forth above were the result of the scale ofour operations and are intrinsic to our small size.

We are committedto improving our financial organization. As part of this commitment, weanticipate that, pending the availability of sufficient funds, we will (1) hirea qualified individual who is competent in preparing reliable and timelyinformation for internal and external audit purposes and who is alsoknowledgeable in US GAAP; (2) appoint one or more outside directors to ourboard of directors who shall be appointed to our audit committee resulting in afully functioning audit committee who will undertake the oversight in theestablishment and monitoring of required internal controls and procedures; (3)create formal processes and controls over financial disclosure and reportingand monitor its progress and (4) hire independent third parties to performexpert advice over monitoring and evaluating the control environment.  Wewill continue to monitor and evaluate the effectiveness of our internalcontrols and procedures and our internal controls over financial reporting onan ongoing basis and are committed to taking further action and implementingadditional enhancements or improvements, as necessary and as funds allow.

Our principal executive officer, who is also our principalfinancial officer, does not expect that our disclosure controls or our internalcontrol over financial reporting will prevent all errors and all fraud. Acontrol system, no matter how well conceived and operated, can provide onlyreasonable, not absolute, assurance that the objectives of the control systemare met. Further, the design of a control system must reflect the fact thatthere are resource constraints, and the benefits of controls must be consideredrelative to their costs. Because of the inherent limitations in all controlsystems, no evaluation of controls can provide absolute assurance that allcontrol issues and instances of fraud, if any, within our company have beendetected. These inherent limitations include the realities that judgments indecision-making can be faulty, and that breakdowns can occur because of asimple error or mistake. Additional controls can be circumvented by theindividual acts of some persons, by collusion of two or more people, or bymanagement override of the controls. The design of any system of controls isbased in part upon certain assumptions about the likelihood of future events,and there can be no assurance that any design will succeed in achieving itsstated goals under all potential future conditions; over time, controls maybecome inadequate because of changes in conditions, or the degree of compliancewith the policies or procedures may deteriorate. Because of the inherentlimitations in a cost-effective control system, misstatements due to error orfraud may occur and not be detected.

**Changes in Internal Control over  Financial Reporting**

There have been no significant changes in our internal controls overfinancial reporting that occurred during fiscal year ended June 30, 2010 thathave materially or are reasonably likely to materially affect, our internalcontrols over financial reporting.

We plan to establish further internal controls andprocedures to ensure timely filing of material events. We also plan to furtherstrengthen our knowledge of U.S. generally accepted accounting principles andthe rules of the Securities and Exchange Commission through studying ofliterature and hiring of knowledgeable personnel. 

**ITEM 9B OTHER INFORMATION**

 None 

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**PART III**

**ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.**

**Directors and Executive Officers,  Promoters and Control Persons**

As at June 30, 2010, our Directors and Executive Officers,their age, positions held, and duration of such, are as follows:

| **Name**           | **Position Held  with our Company**                    | **Age** | **Date First  Elected or Appointed** |
|--------------------|--------------------------------------------------------|---------|--------------------------------------|
| James Carroll      | President,  CEO, Chief Financial Officer, and Director | 60      | January 10, 2007                     |
| George  Pappas     | Vice-President,  Secretary and Director                | 73      | December 30, 2008                    |
| Andrew  H. Burns   | Vice-President  and Director                           | 55      | June 30, 2009                        |
| Len  Klassen       | Director                                               | 71      | January 10, 2007                     |
| Slawomir  Kownacki | Director                                               | 34      | January 10, 2007                     |

*Family relationships*

There are no family relationships between  any Director or Executive Officer. 

*Business Experience*

The following is a brief account of the  education and business experience of Directors and Executive Officers during at  least the past five years, indicating their principal occupation during the  period, and the name and principal business of the organization by which they  were employed.

*JamesCarroll - President, Chief Executive Officer, Chief Financial Officer, andDirector*

Since January, 2007, Mr James Carroll hasbeen Chief Executive Officer, Chief Financial Officer, and a Director of ourcompany. Mr. Carroll also served as a director of our company from 2004 to2005. Mr. Carroll has been self employed since 1993 operating his own mortgagebrokerage business. From 1972 to 1992, Mr. Carroll worked in the banking andfinance industry.

We believe Mr. Carroll is qualified toserve on our board of directors because of his knowledge of our company’shistory and current operations, which he gained from working for our company asdescribed above, in addition to his business experience as described above.

*George  Pappas - Vice-President, Secretary and Director*

Since 1993, Mr George Pappas has been theVice President of All-Trades Fabrication Inc. (“All-Trades”)Through All-Trades, he has been involved in building projects for companiessuch as Disney, University of Southern California, and Boeing. Mr. Pappas hasextensive management experience and has specialized in structural steelbuildings up to three storied high and all aspects of fabrication and steelerection. 

Mr. Pappas is a licensed steel erectorwith an active C-51 Structural Steel license. 

We believeMr. Pappas is qualified to serve on our board of directors because of hisknowledge of our company’s history and current operations, which hegained from working for our company as described above, in addition to hisbusiness experience as described above.

*Andrew  H. Burns – Vice-President and Director*

Since 1990, Andrew Burns has been thePresident of Burns Energy Systems Ltd. (“Burns Energy”). ThroughBurns Energy, Mr. Burns has been involved with various industrial projects,such as the development of immersion burners with ceramic tubes, small borehigh velocity immersion burners, and submerged combustion equipment. Mr. Burnsis currently working on a large pelletizing project in Russia with EPS Inc. Mr.Burns is developing the furnace that will be used in the pelletizing process.Mr. Burns has published papers in various periodicals and books, and presentedtechnical papers at various conferences. 

Mr. Burns has a Bachelor of ScienceDegree in Metallurgy from University Leeds in the United Kingdom. 

We believe Mr. Burns is qualified toserve on our board of directors because of his knowledge of our company’shistory and current operations, which he gained from working for our company asdescribed above, in addition to his education and business experience asdescribed above.

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*Len  Klassen - Director*

Mr. Klassen has been a successful selfemployed businessman since returning to Canada in 1986. He has been involved inreal estate development and the food brokerage business. Prior to returning toCanada he was Vice President Asia for Bank of America.

We believe Mr. Klassen is qualified toserve on our board of directors because of his knowledge of our company’shistory and current operations, which he gained from working for our company asdescribed above, in addition to his education and business experience asdescribed above.

*Slawomir  Kownacki - Director*

Mr. Kownacki has twelve years in thesoftware development industry ranging from small stand alone applications andwebsites to fully developed databases driven by windows and web applications.Mr. Kownacki has developed and implemented a security integration system for amajor Las Vegas hotel chain. 

We believe Mr. Kownacki is qualified toserve on our board of directors because of his knowledge of our company’shistory and current operations, which he gained from working for our company asdescribed above, in addition to his education and business experience asdescribed above.

**Involvement in Certain Legal Proceedings**

Our directors and executive officers have not beeninvolved in any of the following events during the past ten years: 

|   | 1.     | any      bankruptcy petition filed by or against any business of which such person was a      general partner or executive officer either at the time of the bankruptcy or      within two years prior to that time;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 2.     | any        conviction in a criminal proceeding or being subject to a pending criminal    proceeding (excluding traffic violations and other minor offences);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 3.     | being        subject to any order, judgment, or decree, not subsequently reversed, suspended        or vacated, of any court of competent jurisdiction, permanently or temporarily        enjoining, barring, suspending or otherwise limiting his involvement in any    type of business, securities or banking activities;                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 4.     | being        found by a court of competent jurisdiction (in a civil action), the Securities        and Exchange Commission or the Commodity Futures Trading Commission to have        violated a federal or state securities or commodities law, and the judgment has    not been reversed, suspended, or vacated;                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 5.     | being        the subject of, or a party to, any federal or state judicial or administrative        order, judgment, decree, or finding, not subsequently reversed, suspended or        vacated, relating to an alleged violation of: (i) any federal or state        securities or commodities law or regulation; or (ii) any law or regulation        respecting financial institutions or insurance companies including, but not        limited to, a temporary or permanent injunction, order of disgorgement or        restitution, civil money penalty or temporary or permanent cease- and-desist        order, or removal or prohibition order; or (iii) any law or regulation        prohibiting mail or wire fraud or fraud in connection with any business entity;    or |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 6.     | being        the subject of, or a party to, any sanction or order, not subsequently        reversed, suspended or vacated, of any self-regulatory organization (as defined        in Section 3(a)(26) of the Securities Exchange Act of 1934), any registered        entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any        equivalent exchange, association, entity or organization that has disciplinary    authority over its members or persons associated with a member.                                                                                                                                                                                                                                                                        |

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**Compliance with section 16(a) of theExchange Act**

Since our company is a“foreign private issuer”, pursuant to Rule 3a12-3 promulgated underthe Securities Exchange Act of 1934 our insiders are exempt from the reportingrequirements of Section 16(a) of the Securities Exchange Act of 1934. Among other things, Section 16(a) of the Securities Exchange Act of 1934requires certain “reporting persons” of any issuer with any classof equity securities registered under Section 12 of the Securities Exchange Actof 1934 to file with the United States Securities and Exchange Commissionreports of ownership and changes in ownership of securities of the registeredclass.  Reporting persons consist of directors, executive officers andbeneficial owners of more than 10% of the securities of the registered class.

**Code of Ethics**

We have adopted a corporate code of ethics,which is attached as an exhibit to our annual report on Form 10-KSBfiled on September 25, 2003. We believe our code of ethics isreasonably designed to deter wrongdoing and promote honest and ethical conduct;provide full, fair, accurate, timely and understandable disclosure in publicreports; comply with applicable laws; ensure prompt internal reporting of codeviolations; and provide accountability for adherence to the code.

**Corporate Governance**

*Term of Office*

Each director of our company is to serve for a term of oneyear ending on the date of subsequent annual meeting of stockholders followingthe annual meeting at which such director was elected. Notwithstanding theforegoing, each director is to serve until his successor is elected and qualifiedor until his death, resignation or removal. Our board of directors is to electour officers and each officer is to serve until his successor is elected andqualified or until his death, resignation or removal.

*Committees of the Board*

Our board of directors held no formal meetings during theyear ended June 30, 2010. All proceedings of our board of directors wereconducted by resolutions consented to in writing by all the directors and filedwith the minutes of the proceedings of the directors. Such resolutionsconsented to in writing by the directors entitled to vote on that resolution ata meeting of the directors are, according to the corporate law of the Provinceof British Columbia, as valid and effective as if they had been passed at ameeting of our directors duly called and held. 

We currently do not have nominating or compensationcommittees or committees performing similar functions nor do we have a writtennominating or compensation committee charter. Our board of directors does notbelieve that it is necessary to have such committees because it believes thatthe functions of such committees can be adequately performed by our board ofdirectors. 

We do not have any defined policy or procedurerequirements for shareholders to submit recommendations or nominations fordirectors. We do not currently have any specific or minimum criteria for theelection of nominees to our board of directors and we do not have any specificprocess or procedure for evaluating such nominees. Our board of directors assessesall candidates, whether submitted by management or shareholders, and makesrecommendations for election or appointment. 

A shareholder who wishes to communicate with our board ofdirectors may do so by directing a written request to the address appearing onthe first page of this annual report. 

Disclosure Committee and Charter

We have a disclosure committee anddisclosure committee charter. Our disclosure committee is comprised of all ofour officers and directors. The purpose of the committee is to provideassistance to the Chief Executive Officer, who is also our Chief FinancialOfficer, in fulfilling his responsibilities regarding the identification anddisclosure of material information about us and the accuracy, completeness andtimeliness of our financial reports.

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*Audit Committee and Audit Committee Financial Expert*

Our audit committee is comprised of our board ofdirectors. Our board of directors has determined that we do not have a boardmember that qualifies as an “audit committee financial expert” asdefined in Item 401(h) of Regulation S-K. Len Klassen and Slawomir Kownackiqualify as “independent” as the term is used in Item 7(d)(3)(iv) ofSchedule 14A under the *Securities Exchange Act of 1934, as amended*andJames Carroll, George Pappas, and Andrew H. Burns are not“independent” as they are also officers of our company*.*We believe that retaining an independent director whowould qualify as an “audit committee financial expert” would beoverly costly and burdensome and is not warranted in our circumstances giventhe early stages of our development and the fact that we have not generated anyrevenues from operations to date.

**Indemnification**

Pursuant to our Articles ofIncorporation, we may indemnify an officer or director who is made a party toany proceeding, including a law suit, because of his position, if he acted ingood faith and in a manner he reasonably believed to be in our best interest.In certain cases, we may advance expenses incurred in defending any suchproceeding. To the extent that the officer or director is successful on themerits in any such proceeding as to which such person is to be indemnified, wemust indemnify him against all expenses incurred, including attorney’sfees. With respect to a derivative action, indemnity may be made only for theexpenses actually and reasonably incurred in defending the proceeding, and ifthe officer or director is judged liable, only by a court order. Theindemnification is intended to be to the fullest extent permitted by the lawsof British Columbia.

Regarding indemnification for liabilitiesarising under the Securities Act of 1933, as amended, which may be permitted todirectors or officers pursuant to the foregoing provisions, we are informedthat, in the opinion of the Securities and Exchange Commission, suchindemnification is against public policy, as expressed in the Act and is,therefore, unenforceable.

**ITEM 11.EXECUTIVE COMPENSATION.**

**Summary Compensation**

 The particulars of compensation paid to the following  persons: 

|   | (a)    | our principal executive officer;                                                                                                                                                                                                   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                               |
|   | (b)    | each of our two most highly compensated executive officers  who were serving as executive officers at the end of the year ended June 30,  2010; and                                                                                |
|   |   |                                                                                                                                                                                                                               |
|   | (c)    | up to two additional individuals for whom disclosure would  have been provided under (b) but for the fact that the individual was not  serving as our executive officer at the end of the most recently completed  financial year, |

who we will collectively refer to as the named executiveofficers, for our years ended June 30, 2010 and 2009, are set out in thefollowing summary compensation table: 

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| **Name and principal position**                            | **Year**     | **Salary****($)**    | **Bonus****($)** | **Stock awards****($)** | **Option awards****($)** | **Non-equity incentive plan   compensation    ($)** | **Change in pension value and nonqualified   deferred compensation earnings****($)** | **All other compensation****($)** | **Total****($)**     |
|------------------------------------------------------------|--------------|----------------------|------------------|-------------------------|--------------------------|-----------------------------------------------------|--------------------------------------------------------------------------------------|-----------------------------------|----------------------|
| **(a)**                                                    | **(b)**      | **(c)**              | **(d)**          | **(e)**                 | **(f)**                  | **(g)**                                             | **(h)**                                                                              | **(i)**                           | **(j)**              |
| **James Carroll**  President,  CEO, CFO & Director     | 2010    2009 | $120,000    $120,000 | Nil  Nil         | Nil        Nil          | Nil  Nil                 | Nil        Nil                                      | Nil        Nil                                                                       | Nil  Nil                          | $120,000    $120,000 |
| **George Pappas**  Vice-President,  Secretary and Director | 2010    2009 | $30,000  Nil         | Nil        Nil   | Nil            Nil      | Nil        Nil           | Nil        Nil                                      | Nil        Nil                                                                       | Nil        Nil                    | $30,000        Nil   |
| **Andrew H. Burns**  Vice-President  and Director          | 2010    2009 | $30,000  Nil         | Nil  Nil         | Nil        Nil          | Nil  Nil                 | Nil  Nil                                            | Nil        Nil                                                                       | Nil      Nil                      | $30,000  Nil         |

*Employment Agreements*

We have not entered into any employmentagreement or consulting agreement with our directors and executive officers. 

*Outstanding Equity Awards at Fiscal Year-End*

The following table sets forth for each named executiveofficer certain information concerning the outstanding equity awards as of June30, 2010.

| **Name**                                                                    | **Option awards**                                                              | **Stock awards**                                                                                      |
|-----------------------------------------------------------------------------|--------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|
| **Number of securities underlying unexercised options   (#)   exercisable** | **Number of securities underlying unexercised options   (#)****unexercisable** | **Equity incentive plan awards: Number of securities  underlying unexercised unearned options   (#)** | **Option exercise price****($)** | **Option expiration date** | **Number of shares or units of stock that have not  vested****(#)** | **Market value of shares of units of stock that have  not vested****($)** | **Equity incentive plan awards: Number of unearned  shares, units or other rights that have not vested   (#)** | **Equity incentive plan awards: Market or payout value  of unearned shares, units or other rights that have not vested****($)** |
| **(a)**                                                                     | **(b)**                                                                        | **(c)**                                                                                               | **(d)** | **(e)** | **(f)** | **(g)** | **(h)** | **(i)** | **(j)** |
| James Carroll                                                               | Nil                                                                            | Nil                                                                                                   | Nil | Nil | Nil | Nil | Nil | Nil | Nil |
| George  Pappas                                                              | Nil                                                                            | Nil                                                                                                   | Nil | Nil | Nil | Nil | Nil | Nil | Nil |
| Andrew  H. Burns                                                            | Nil                                                                            | Nil                                                                                                   | Nil | Nil | Nil | Nil | Nil | Nil | Nil |

**Compensation of Directors**

Our board of directors has received no compensation todate and there are no plans to compensate them in the near future, unless anduntil we begin to realize revenues and become profitable in our businessoperations. 

The table below shows the compensation of our directorsfor our last completed fiscal year ended June 30, 2010:

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| **Name**           | **Fees earned or paid in cash  ($)** | **Stock awards  ($)** | **Option awards  ($)** | **Non-equity incentive plan compensation   ($)** | **Nonqualified deferred compensation earnings   ($)** | **All other compensation   ($)** | **Total  ($)** |
|--------------------|--------------------------------------|-----------------------|------------------------|--------------------------------------------------|-------------------------------------------------------|----------------------------------|----------------|
| **(a)**            | **(b)**                              | **(c)**               | **(d)**                | **(e)**                                          | **(f)**                                               | **(g)**                          | **(h)**        |
| Len  Klassen       | Nil                                  | Nil                   | Nil                    | Nil                                              | Nil                                                   | Nil                              | Nil            |
| Slawomir  Kownacki | Nil                                  | Nil                   | Nil                    | Nil                                              | Nil                                                   | Nil                              | Nil            |

*Long-Term Incentive Plans*

There are no arrangements or plans in which we provide  pension, retirement or similar benefits for directors or executive officers,  except that our directors and executive officers may receive stock options at  the discretion of our board of directors. We do not have any material bonus or  profit sharing plans pursuant to which cash or non-cash compensation is or may  be paid to our directors or executive officers, except that stock options may  be granted at the discretion of our board of directors. 

We have no plans or arrangements inrespect of remuneration received or that may be received by our executiveofficers to compensate such officers in the event of termination of employment(as a result of resignation, retirement, change of control) or a change ofresponsibilities following a change of control.

**ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERS.**

**Security ownership of management**

In the following table, as of December13, 2010 we have determined the number and percentage of shares beneficiallyowned in accordance with Rule 13d-3 of the Exchange Act based on informationprovided to us by our controlling shareholders, executive officers anddirectors, and this information does not necessarily indicate beneficialownership for any other purpose. In determining the number of shares of ourcommon stock beneficially owned by a person and the percentage ownership ofthat person, we include any shares as to which the person has sole or sharedvoting power or investment power, as well as any shares subject to warrants oroptions held by that person that are currently exercisable or exercisablewithin 60 days.

| **(1) Title of        class** | **(2) Name and        address of****beneficial          owner**                                      |                  |   |  **(3) Amount and        nature of****beneficial          ownership** | **(4) Percent of****class****(1)** |
|-------------------------------|------------------------------------------------------------------------------------------------------|-----------------------|--------|----------------------------------------------------------------------------|------------------------------------|
| common stock                  | James Carroll      40218 Wellsline Road      Abbotsford BC  V3G 2K7                             | 78,037,517            |   | Direct                                                                | 33.2**(2)**                   |
| common stock                  | George      Pappas      6152      Nappa Circle      Huntington      Beach, CA  92647            | 4,197,076             |   | Direct                                                                     | 1.8%**(3)**                        |
| common stock                  | Andrew      H. Burns      52      Main Street East      Hamilton,      ON  L8M 1J2              | nil                   |   |                                                                       | 0%**(4)**                          |
| common stock                  | Len      Klassen      1755      Ocean Park Road      Surrey,      BC  V4A 3M1                   | 6,000,000             |   | Direct                                                                     | 2.6%                               |
| common stock                  | Slawomir      Kownacki      1210      London Street      New      Westminster, BC  V3M 5Z6 | 15,330,000            |   | Direct                                                                     | 6.5%                               |
| **common stock**              |                                                                                                 |  **103,564,593** |   |                                                                       | 44.1%**(5)**                       |

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|   | (1)             | Percentage of ownership is based on 235,099,866 common shares issued      and outstanding as of December 13, 2010. Except as otherwise indicated, we      believe that the beneficial owners of the common stock listed above, based on      information furnished by such owners, have sole investment and voting power with      respect to such shares, subject to community property laws where applicable.      Beneficial ownership is determined in accordance with the rules of the SEC and      generally includes voting or investment power with respect to securities.      Shares of common stock subject to options or warrants currently exercisable, or      exercisable within 60 days, are deemed outstanding for purposes of computing      the percentage ownership of the person holding such option or warrants, but are      not deemed outstanding for purposes of computing the percentage ownership of    any other person |
|--------|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | (2)             | Pursuant      to pending Share Exchange Agreements, as described under the heading  “Business — Corporate Developments — The Amalgamation”,      Mr. Carroll is to be issued 90,000,000 additional common      shares. Assuming 225,269,250 common shares are issued under the Share Exchange      Agreements, Mr. Carroll will have 36.5% of our issued and outstanding    common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | (3)        | Pursuant      to pending Share Exchange Agreements, as described under the heading  “Business — Corporate Developments — The Amalgamation”,      Mr. Pappas is to be issued 90,000,000 additional common      shares. Assuming 225,269,250 common shares are issued under the Share Exchange      Agreements, Mr. Pappas will have 20.5% of our issued and outstanding    common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | (4)        | Pursuant      to pending Share Exchange Agreements, as described under the heading  “Business — Corporate Developments — The Amalgamation”, Mr. Burns is to be issued 30,000,000 additional common shares.      Assuming 225,269,250 common shares are issued under the Share Exchange      Agreements, Mr. Burns will have 6.5% of our issued and outstanding common    shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | (5)   | Assuming      225,269,250 common shares are issued under all the Share Exchange      Agreements, our management will hold 68.1% of our issued and      outstanding common shares. The pending issuance of the shares under the Share    Exchange Agreements has been deferred until the cease trade order is lifted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

***Changes in Control***

We are unaware of any arrangement, theoperation of which may at a subsequent date result in a change in control ofour company

**ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.**

**Director Independence**

Under NASDAQ Marketplace Rule 5605(a)(2), a director is notconsidered to be independent if he is also an executive officer or employee ofthe company. Len Klassen and Slawomir Kownacki are “independentdirectors” as that term is defined by NASDAQ Marketplace Rule 5605(a)(2).

**Transactions with related persons**

There has been no transactions, or currently proposedtransaction, in which we were or are to be a participant and the amountinvolved exceeds the lesser of $120,000 or one percent of the average of ourtotal assets at year end for the last two completed fiscal years, and in whichany of the following persons had or will have a direct or indirect materialinterest:

|   | (i)   | Any of our directors or officers;                                                                                                                                     |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (ii)  | Any person who beneficially owns, directly or  indirectly, shares carrying more than 5% of the voting rights attached to our  outstanding shares of common stock; and |
|   | (iii) | Any member of the immediate family (including spouse,  parents, children, siblings and in-laws) of any of the foregoing persons.                                      |

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As discussed under the heading “Business —Corporate Developments — The Amalgamation”, we entered into Share ExchangeAgreements with the shareholders of 0625920 BC Ltd. Pursuant to the ShareExchange Agreements, Mr. Carroll is to be issued 90,000,000 additional commonshares. Assuming 225,269,250 common shares are issued under the Share ExchangeAgreements, Mr. Carroll will have 36.5% of our issued and outstanding commonshares. These shares have not been issued. Due to a cease trade order issued bythe British Columbia Securities Commission, we are now prohibited from issuingthose shares.. We anticipate the issuance of these shares shortly after thecease trade order is revoked. 

Pursuant to the Share Exchange Agreements, Mr. Pappas is tobe issued 90,000,000 additional common shares. Assuming 225,269,250 commonshares are issued under the Share Exchange Agreements, Mr. Pappas will have20.5% of our issued and outstanding common shares. These shares have not beenissued. Due to a cease trade order issued by the British Columbia SecuritiesCommission, we are now prohibited from issuing those shares.. We anticipate theissuance of these shares shortly after the cease trade order is revoked. 

Pursuant to the Share Exchange Agreements, Mr. Burns is tobe issued 30,000,000 additional common shares. Assuming 225,269,250 commonshares are issued under the Share Purchase Agreements, Mr. Burns will have 6.5%of our issued and outstanding common shares. These shares have not been issued.Due to a cease trade order issued by the British Columbia SecuritiesCommission, we are now prohibited from issuing those shares.. We anticipate theissuance of these shares shortly after the cease trade order is revoked. 

During the year ended June 30, 2010 we were charged by andrecorded management, consulting and directors fees totaling $208,475 (2009 -$183,049) .

**ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES.**

**Audit Fees**

The following table sets forth the fees billed to ourcompany for professional services rendered by BDO Canada LLP(“BDO”), our independent registered public accounting firm, for theyears ended June 30, 2010 and 2009: 

| **Fees**           |   | 2010   |   |   | 2009   |   |
|--------------------|--------|--------|--------|--------|--------|--------|
| Audit Fees         | $      | 10,000 |   | $      | 10,000 |   |
| Audit Related Fees |   | 0      |   |   | 0      |   |
| Tax Fees           |   | 0      |   |   | 0      |   |
| Other Fees         |   | 0      |   |   | 0      |   |
| **Total Fees**     | **$**  | 10,000 |   | $      | 10,000 |   |

*Policy on Pre-Approval by Audit Committee of ServicesPerformed by Independent Auditors*

We do not use BDO, for financial information system designand implementation. These services, which include designing or implementing asystem that aggregates source data underlying the financial statements orgenerates information that is significant to our financial statements, areprovided internally or by other service providers. We do not engage BDO toprovide compliance outsourcing services. 

Effective May 6, 2003, the Securities and ExchangeCommission adopted rules that require that before an external auditor isengaged by us to render any auditing or permitted non-audit related service,the engagement be: 

- approved by our audit committee (the functions of which are    performed by our entire board of directors); or 
- entered into pursuant to pre-approval policies and procedures    established by the board of directors, provided the policies and procedures are    detailed as to the particular service, the board of directors is informed of    each service, and such policies and procedures do not include delegation of the    board of directors' responsibilities to management. 

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Our entire board of directors pre-approves all servicesprovided by our independent auditors. All of the above services and fees werereviewed and approved by our directors before the respective services wererendered. 

Our board of directors have considered the nature andamount of fees billed by BDO and believe that the provision of services foractivities unrelated to the audit is compatible with maintaining BDO’sindependence. 

**ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES.**

 Exhibits required by Item 601 of  Regulation S-K: 

| **Exhibit** | **Document Description**                                                                                                                |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------|
| 3.1*        | Articles of Biomass Secure Power Inc.                                                                                                   |
| 3.2(1)      | Certificate Of Change Of Name, Notice Of  Articles                                                                                      |
| 3.3(1)      | Notice Of Alteration, Notice Of Articles                                                                                                |
| 10.1(2)     | A form of the share exchange agreement  entered into between our company and the 20 shareholders of 0625920 B.C. Ltd.  on June 30, 2009 |
| 10.2(2)     | Settlement Agreement with Brian Holden  dated August 10, 2010                                                                           |
| 14.1(3)     | Code of Ethics                                                                                                                          |
| 21.1        | Subsidiaries: Biomass Secure Power Inc.,  a company governed by the laws of California                                                  |
| 31.1*       | Section 302 Certification under Sarbanes-Oxley Act of 2002                                                                              |
| 32.1*       | Section 906 Certification under Sarbanes-Oxley Act of 2002                                                                              |
| 99.1(3)     | Audit Committee Charter                                                                                                                 |
| 99.2(3)     | Disclosure Committee Charter                                                                                                            |

(1)           Attached as an exhibit to our current report on Form 6-K filed on May15, 2009.(2)           Attachedas an exhibit to our annual report on Form 10-K for the fiscal year ended June30, 2009 filed on  December15, 2010(3)           Attachedas an exhibit to our annual report on Form 10-KSB filed on September 25, 2003

* Filed herewith 

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**SIGNATURES**

Pursuant to the requirements of Section 13  or 15(d) of the Securities Act of 1934, the registrant has duly caused this  report to be signed on its behalf by the undersigned, thereto duly authorized.

**BIOMASS SECURE POWER INC.**

By 

/s/ James Carroll  James CarrollPresident,Chief Executive Officer, Chief Financial Officer, and Director    PrincipleExecutive Officer, Principal Financial Officer and Principal Accounting OfficerDecember 15, 2010

Pursuant to the requirements of theSecurities Exchange Act of 1934, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on thedates indicated.

By 

/s/ James CarrollJames Carroll  President,Chief Executive Officer, Chief Financial Officer, and DirectorPrincipleExecutive Officer, Principal Financial Officer and Principal Accounting OfficerDecember 15, 2010

By 

/s/ GeorgePappasGeorgePappasVice-President,Secretary and DirectorDecember 15, 2010

By 

/s/ AndrewH. BurnsAndrewH. BurnsVice-Presidentand DirectorDecember 15, 2010

By 

/s/ LenKlassen  LenKlassenDirectorDecember 15, 2010

By 

/s/ SlawomirKownackiSlawomirKownackiDirectorDecember 15, 2010

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