**UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION**
Washington, D.C. 20549

FORM 10-K/A(Amendment No. 1)

[X] ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended: June 30, 2009

or

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

For the transition period from __________________ to
__________________

Commission file number: 333-70836

BIOMASS SECURE POWER INC.(Exact name of
registrant as specified in its charter)

|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 V3G 2K7(Address of principal executive offices and
Zip Code)

Registrant’s telephone
number, including area code:  604 807 4957

VIRTUAL MEDIA
HOLDINGS INC.(Former name or former
address, if changed since last 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 is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.               [  ] Yes [X] No

Indicate by check
mark if the registrant is not required to file reports pursuant to Section 13
or Section 15(d) of the Act.           [  ] Yes [X] No

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

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Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.                                                                                                                                                                                         []
Yes [X] No

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

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

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-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 the registrant is a shell company (as defined in Rule 12b-2 of the
Act).  [X] Yes [  ] No

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

As of December 31, 2008, the last business day of the registrant’s
most recently completed second fiscal quarter the aggregate market value of the
voting and non-voting common stock held by non-affiliates of the registrant was
approximately $187,609, based on 93,804,994 common shares held by
non-affiliates and last sale prior to December 31, 2008 being $0.002.

Note.—If a
determination as to whether a particular person or entity is an affiliate
cannot be made without involving unreasonable effort and expense, the aggregate
market value of the common stock held by non-affiliates may be calculated on
the basis of assumptions reasonable under the circumstances, provided that the
assumptions are set forth in this Form.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCYPROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check
mark whether the registrant has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
 [  ] Yes [  ] No

APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number
of shares outstanding of each of the registrant’s classes of common stock, as
of the latest practicable date. 235,099,866 shares of common stock as at
December 13, 2010.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated 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 to security holders; (2) any
proxy or information statement; and (3) any prospectus filed pursuant to Rule
424(b) or (c) of the Securities Act of 1933.  The listed documents should be
clearly described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).  Not Applicable

**EXPLANATORY  NOTE**

This Amendment No.
  1 to Annual Report on Form 10-K/A amends and restates the Annual Report on Form
  10-K for the year ended June 30, 2009 that was filed with the Securities and
  Exchange Commission on October 26, 2009. This amendment includes audited
  information as well as improved descriptions and risk relating to the company’s
  new business plan as of date of filing.

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**TABLE OF CONTENT**

|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                                                                                                         | 9 
|Item 4. Submissions of Matters to a Vote of Security Holders                                                                      | 10
|                                                                                                                                  |   
|PART II                                                                                                                           | 10
|                                                                                                                                  |   
|Item 5. Market for Registrant’s       Common Equity, Related Stockholder Matters and Issuer Purchases of Equity       Securities. | 10
|Item 6. Selected Financial Data                                                                                                   | 12
|Item 7. Management’s Discussion       and Analysis of Financial Condition and Results of Operations                               | 12
|Item 7A. Quantitative and       Qualitative Disclosures About Market Risk                                                         | 19
|Item 8. Financial Statements and       Supplementary Data                                                                         | 20
|Item 9. Changes in and Disagreements       With Accountants on Accounting and Financial Disclosure                                | 21
|Item 9A. Control and Procedures                                                                                                   | 21
|Item 9B Other Information                                                                                                         | 23
|                                                                                                                                  |   
|PART III                                                                                                                          | 24
|                                                                                                                                  |   
|Item 10. Directors, Executive Officers       and Corporate Governance                                                             | 24
|Item 11. Executive Compensation                                                                                                   | 24
|Item 12. Security Ownership of       Certain Beneficial Owners and Management and Related Stockholder Matters.                    | 27
|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                                                                            | 32
|                                                                                                                                  |   
|SIGNATURES                                                                                                                        | 33

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Part I

This annual report on
    Form 10-K contains forward-looking statements.  Forward-looking statements are
    projections of events, revenues, income, future economic performance or
    management’s plans and objectives for future operations.  In some cases, you
    can identify 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
    comparable terminology.  Examples of forward-looking statements made in this
  annual report 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 and involve 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 our industry’s actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements.

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

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

1

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**ITEM 1. BUSINESS**

***Corporate History***

We were
incorporated in the Province of British Columbia on August 24, 1989 as Flamingos
Beach Resort Inc. On August 10, 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, we changed our name to Biomass Secure Power
Inc. On June 30, 2009, we legally have amalgamated
with 0625920 BC Ltd., previous known as Biomass
Secure Power Inc., as more particularly described under the
heading “The Amalgamation”. As we have not issued any
shares to the 20 shareholders of 0625920 BC Ltd. to date, the accounting
treatment for the amalgamation has been deferred until such time as the shares
have been transferred to complete the transaction.

***Corporate
  Developments***

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

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

*Previous Audits*

Our previous
auditors, Dale Matheson Carr-Hilton Lebonte LLP (“DMCL”), had challenges in
obtaining and management had challenges in providing sufficient and appropriate
information relating to the issuance of shares; transfers of funds between
company bank accounts; and payments to management. As such, we were unable to
produce accurate and complete financial statements and DMCL was unable to
provide us with an audit report for our 2006 and 2007 fiscal year ends. We may
apply to the Securities and Exchange Commission for relief from the requirement
to produce annual audited and interim non-audited financial statements as well
as the applicable annual reports on form 10-Ks and interim reports on Form 10-Q
for the 2006 and 2007 fiscal year. Until we file audited financial statements
for the 2006 and 2007 fiscal year or obtain relief from the requirement to file
those financial statements, we will not be in compliance with our reporting
obligations 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.

2

---



0625920 BC Ltd. was a
related party due to a common director and shareholder. A form of the Share
Exchange Agreement is attached as Exhibit 10.1. On November 19, 2009, the
British Columbia Securities Commission issued a cease trade order against our
company, which prohibits us from issuing the Consideration Shares. As of December 13, 2010, we have not issued the
Consideration Shares. As such, for accounting purposes the merger transaction
has not been completed nor reflected in the financial statements as we have not
delivered any consideration for the shares of 0625920 BC Ltd. We anticipate
that we will issue the Consideration Shares upon the revocation of the cease
trade order.

**Our Current
  Business**

*Our Business
  Plan*

Our business plan
is to build plants that will process low quality logs and fibre typically left
in the field and turn it into torrefied wood pellets. We believe that our
plants will be the first of their kind in Canada. We have completed the design
and basic engineering work for the building of our torrefied wood pellet
plants. We will sell the torrefied wood pellets to power producers in Europe
that want a cleaner fuel than coal. We have held discussions with power
producers regarding the purchase of our torrefied wood pellets. We have not
signed any definitive agreements with any power producers and there are no
assurances any definitive agreements will be signed.

We plan to produce
one million tons of torrefied wood pellets per year from up to four plants that
we propose to build in various locations in British Columbia, Canada. British
Columbia has an extensive timber industry and we believe that the waste
products from this industry will be sufficient to provide our operations with a
steady supply of fuel. We have had discussions with potential purchasers to
secure long term sales contracts but no definitive agreements have been signed
and we cannot guarantee that such agreements will be signed. We do not
anticipate beginning the construction of our plants until we have a definitive
agreement in place to purchase our torrefied wood pellets.

Torrefied wood
  pellets

Torrefied wood
pellets are primarily used as a fuel for heating. Torrefied wood pellets are
30% denser than regular wood pellets and contain 16% more energy. While
torrefied wood pellets have many uses, such as a substitute for charcoal for
barbeques, we anticipate our torrefied 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 coal plant. Unlike normal wood pellets,
torrefied wood pellets have approximately the same BTUs as coal, which allows
coal to be completely replaced by torrefied wood pellets.  Some coal producers
may prefer to gradually add torrefied wood pellets to their coal burners. We
believe that the main advantage of torrefied wood pellets over coal is torrefied
wood pellets burn cleaner than coal as they produce significantly less ash and
sulphur emission. As demand for clean energy increases, we believe the demand
for torrefied wood pellets will increase.

Torrefied wood
pellets are not subject to deterioration during shipment or storage. This
greatly reduces shipping costs for torrefied wood pellets, compared to normal
wood pellets. Also, torrefied wood pellets are easier to grind, which reduces
their processing costs when they are burned.

Our Customers

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

Layout of
  Plants

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

3

---



Wood fibre will be
supplied to the plant in the form of coarse wood chips. Trucks will be
offloaded at 2 hydraulic stations and the material will be automatically
conveyed to an undercover storage facility by way of a conveyor belt. As the
material moves along the conveyor belt, it will pass though a de-lumper,
magnetic separator, de-stoner/de-icer and classifier to remove foreign matter.
Generally, the moisture content of the wood waste will vary; however, as the
plant production rate is based on the mass of bone dry fibre received, we
anticipate using incentives to encourage the shipment of dry material.

Covered storage is
essential. We need a reserve of material on hand to ensure that the equipment
stays in continuous operation. We also need to protect the material from
moisture during storage as this will negatively impact the plant production
rate. We also need to ensure that the material being processed is not frozen
and that all ice and snow has been removed for the material before it is
processed.

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

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

Material from the
flash dryer is conveyed to a screen and a mill to reduce the particle size to
the optimum size for pelletizing. The material is then conveyed to the pellet
mill and after pelletizing is cooled on a band cooler before the product is
placed in bulk storage prior to shipment to the port. Bulk storage would be in
the form of elevated silos that will be used to place the material on rail cars
in preparation for shipment to the port.

We intend to
locate the torrefication unit between the dryer and the pelletizing mill. This
will produce a synthetic fuel 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 quantity of electrical power.

Technology

We anticipate that
the dryer will be designed 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 dryer may be used for generating steam for use by a steam turbine
for the purpose of generating power for the plant. There is a possibility of
generating extra power, if the local resources permit.

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

We plan to use a
fine shredder and flash dryer upstream of the torrefication furnace to ensure
that the collected material is free of ice, rocks and metallic components that
could damage the equipment. The design of the storage facility is anticipated
to  be two tiered to allow for the run off of any snow and ice prior to
processing the material in the plant. We plan to use a sparse fluid bed
destoner to pre-warm the material to remove stones, snow and ice. Heat for this
equipment is anticipated to be provided by waste heat from the process. We
believe that this custom 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.

4

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Expertise

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

Staffing

We anticipate that
each plant will require approximately 30 fulltime employees to operate the
plant which will run 24 hours per day 7 days per week. We anticipate that each
plant will have a skilled engineer at the plant at all times to address any
problems that may occur. We plan to have an assistant engineer, who would be
able to fix any machines that break down. The remaining employees would be
general labours, such as fork lift operators. These employees would report to the
engineer who is on duty at that time.

***Research and
  Development Expenditures***

We did not incur any research and
development expenditures over 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. RISK FACTORS.**

An investment in our common stock
involves a number of very significant risks. You should carefully consider the
following risks and uncertainties in addition to other information in this
report in evaluating our company and its business before purchasing shares of
our company's common stock. Our business, operating results and financial
condition could be seriously harmed due to any of the following risks. You
could lose all or part of your investment 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 British Columbia since November 19, 2009 for failure to file our
audited annual financial statements for the year ended June 30, 2009. As a
result, trading in our common shares is prohibited in British Columbia and by
residence of British Columbia no matter where they trade. Until the cease trade
order is revoked, we are prohibited from raising additional funds through the
sale of our debt or equity. If we cannot revoke the cease trade order, we will
be unable to raise the funds required to commence our business plan.

*As at December 13, 2010, we are
non-compliant with FINRA Rule 6530 and, as a result, our company has been
delisted from the OTC Bulletin Board).*

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

5

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**Risks Related to our Financial
  Condition**

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

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

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

We incurred accumulated net loss of
$5,253,808 from prior operations and $567,436 from the start of our development
stage on July 1, 2007 to June 30, 2009. We anticipate that we will continue to
incur operating expenses without revenues for the foreseeable future. Because
we have incurred losses from operations since inception, have not attained
profitable operations and are dependent upon obtaining adequate financing to
commence our business operations, in their report on our financial statements
for the fiscal year ended June 30, 2009, our independent auditors included an
explanatory paragraph regarding the substantial doubt about our ability to
continue as a going concern.

As of June 30, 2009, we had no cash
or cash equivalents and a working capital deficit of $87,806. We estimate our
average monthly operating expenses over the next 12 months to be approximately
$32,500 per month, excluding any expenses incurred in the building of any
plants. In addition, our budget could increase during the year in response to
matters that cannot be currently anticipated and we might find that we need to
raise more capital in order to properly address these items. As we cannot
assure a lender that we will be able to successfully build our plants, we will
probably be unable to raise debt financing from traditional lending sources. We
have traditionally raised our operating capital from sales of equity and debt
securities, but there can be no assurance that we will continue to be able to
do so. We are currently subject to a cease trade order imposed by the British
Columbia Securities Commission and cannot raise any funds until it has been revoked.

The recent economic uncertainty and market instability may make it
harder for us to raise capital as and when we need it and have made it
difficult for us to assess the impact of the crisis on our operations or
liquidity and to determine if the prices we might receive on the sale of our
torrefied wood pellets. If we cannot raise the money that we need to continue
development 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 is
a substantial risk that our business would fail.

6

---



**Risks Related to our Company**

*Various lawsuits
  have been filed against us.*

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

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

Our success will
be dependent on our management’s ability to manufacture and operate a torrefied
wood pellet plant. 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 wood pellet plant and limited experience manufacturing similar
products at the volume we anticipate will be required to sustain our
operations.  As a result, we may not be able to develop and implement
efficient, low-cost manufacturing capabilities and processes that will enable us
to manufacture our torrefied wood pellets in significant volumes, while meeting
the legal, regulatory, quality, price, durability, engineering, design and
production standards required to market our products successfully. Further, we
have no experience selling torrefied wood pellets to power producers. As a
result, we may not be able to enter into a contract for the purchase and sale
of our torrefied 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 to our current business plan on which to base an
evaluation of our business and prospects. Our prospects must be considered in
light of the risks, uncertainties, expenses and difficulties frequently
encountered by companies seeking to establish a new business opportunity. Some
of these risks and uncertainties relate 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 be successful in addressing these risks and uncertainties and our
failure to do so could have a materially adverse effect on our financial
condition. In addition, our operating results are dependent to a large degree
upon factors outside of our control. There are no assurances that we will be
successful in addressing these risks, and failure to do so may adversely affect
our business.

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

We will, in all
likelihood, sustain operating expenses without corresponding revenues and
significant capital expense in the construction of our plants, for the
foreseeable future.

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

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

- reduction, delay or cancellation of orders from one or more of
    our significant customers;

7

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- 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.

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

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

*Economic conditions may adversely
  affect our business.*

Adverse worldwide economic
conditions may have adverse implications on our business. For example, our
potential customers' ability to borrow money from their existing lenders or to
obtain credit from other sources to fund operations may impair their ability to
purchase our torrefied wood pellets, which would result in decreased in sales.

**Risks Relating to Our Common
  Stock**

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

Our articles of
incorporation authorize the issuance of an unlimited amount of shares of common
stock with no par value. Our board of directors may choose to issue some or all
of such shares to acquire one or more products and to fund our overhead and
general operating requirements. The issuance of any such shares will reduce the
book value per share and may contribute to a reduction in the market price of
the outstanding shares of our common stock. If we issue any such additional
shares, such issuance will reduce the proportionate ownership and voting power
of all current shareholders. Further, such issuance may result in a change of
control of our corporation.

We are currently prohibited from
issuing any shares due to a cease trade order issued by the
British Columbia Securities Commission. Pursuant to our acquisition of 0625920 BC Ltd., we agreed to issue 225,269,250
of our common shares, of which none of been issued. Once this cease trade order
has been revoked, we anticipate issuing these shares. The issuance of these
shares will cause our book value per share to decrease, which may contribute to
a reduction in the market price of the outstanding shares of our common stock.

8

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

The Securities and Exchange
Commission has adopted regulations which generally define "penny
stock" to be any equity security that has a market price (as defined) less
than $5.00 per share or an exercise price of less than $5.00 per share, subject
to certain exceptions. Our securities are covered by the penny stock rules,
which impose additional sales practice requirements on broker-dealers who sell
to persons other than established customers and "accredited
investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net
worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
jointly with their spouse. The penny stock rules require a broker-dealer, prior
to a transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document in a form prepared by the
Securities and Exchange Commission, which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the
market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before
or with the customer's confirmation. In addition, the penny stock rules require
that prior to a transaction in a penny stock not otherwise exempt from these
rules, the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market 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 our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

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

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

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

Although our common stock is
currently listed for quotation on the Pink Sheets, trading through the Pink
Sheets is frequently thin and highly volatile. There is no assurance that a sufficient
market will develop in our stock, in which case it could be difficult for
shareholders to sell their stock. The market price of our common stock could
fluctuate substantially due to a variety of factors, including market
perception of our ability to achieve our planned growth, quarterly operating
results of our competitors, trading volume in our common stock, changes in
general conditions in the economy and the financial markets or other
developments affecting our competitors or us. In addition, the stock market is
subject to extreme price and volume fluctuations. This volatility has had a
significant effect on the market price of securities issued by many companies
for reasons unrelated to their operating performance and could have the same
effect on our common stock.

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

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

9

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**ITEM 1B. UNRESOLVED STAFF COMMENTS**

Not Applicable

**ITEM 2. PROPERTIES**.

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

As of December 13,
2010, we have considered various sites for our plants but have not signed any
definitive agreements.

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

**ITEM 3. LEGAL PROCEEDINGS.**

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

On April 21, 2009, Calvin Kantonen filed
a statement of claim with the Supreme Court of British Columbia, Vancouver
Registry No. S092943 alleging that the defendants: our company and our transfer
agent, Computershare Trust Company of Canada, have improperly refused to remove
the 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 the
allegations of Mr. Kantonen and alleged that the shares were not validly
issued. No further proceedings have been undertaken in this lawsuit. The
Company 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 adverse effect on our
financial condition, results of operations, or cash flows.

On July 19, 2007, we filed a petition
with the Supreme Court of British Columbia, Vancouver Registry No. S107252
alleging that 34,678,993 common shares held by the following parties: AI
International Holdings, Joga Bassi, Canaccord Capital Corp ITF (Steve Gasper
Control Stock), Jim Carroll, Brian Dean, Steven Frye, Grant Galloway, Steve
Gaspar, Chris Gaspar, Christopher Gaspar, Brian Holden, Calvin Kantonen, George
Matin, Peter Matousak, Novak Capital, Penson Financial Services Canada Inc ITF
6/13/2006 Stephen Gaspar A/C 15ER95B, Sukhjit Purewal, Deanna Sherban, Debby
Skipper, Clay Smith, Nick Smith, Viligant Trader Inc., Wide Open
Technologies should be cancelled because we did not receive adequate
consideration for the issuance of these shares.  No further proceedings have been
undertaken in this lawsuit.

On August 2, 2007, Steve Gaspar filed a
statement of claim with the Supreme Court of British Columbia, Vancouver
Registry No. S075257, alleging that the defendants: our company and our current
president Jim Carroll, issued a press release on July 27, 2007 which contained
false and defamatory statements concerning Mr. Gaspar. On June 5, 2008, we
filed a statement of defence denying the claims in the statement of claim and
alleging that the statements were in substance true and made without malice and
that 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 by
consent on June 5, 2008 when we filed our statement of defence.

On June 25, 2007, Steve Gaspar, Stephen
Gaspar, Christopher Gaspar, and Jonathan Gaspar (collectively,
the “Gaspars”) filed a statement of claim with the Supreme Court of
British Columbia, Vancouver Registry No. S074362, alleging that the
defendants: our company, our current president Jim Carroll, our current
director Len Klassen, and our current director Slawomir Kownacki, for
damages for breach of contract, inducing breach of contract and wrongful
interference with economic relations of the Gaspars, and requesting following orders:

- 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;

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- 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 of
defence denying the allegations and alleging that none of the Gaspars are owed
any money or shares. On December 4, 2009, a notice of motion was filed
regarding the production of documents.  No further proceedings have been
undertaken in this lawsuit. We anticipate that even if
the plaintiffs are successful, it should not have a material adverse effect on
our financial condition, results of operations, or cash flows.

On September 11, 2007, the Canadian
Imperial Bank of Commerce (“CIBC”) filed a statement of claim against the
defendants: Virtual Media Holdings Inc., Steve Gaspar, and Darlene Gaspar
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 a statement of
defence denying each and every allegation. We anticipate that this lawsuit should not have a material adverse effect on our
financial condition, results of operations, or cash flows.

We have been in discussions with Steve
Gaspar regarding settling all outstanding actions with the Gaspars, including
final settlement of the lawsuit with CIBC. While we believe we do not have any
liability to any of the Gaspars, we believe it is in our best interest to
settle all outstanding matters with the Gaspars. If we cannot settle all
outstanding claims, we will vigorously defend all claims.

On November 12, 2007, Brian Holden filed
a statement of claim in Clark Country Nevada, Case No A550988, alleging that
the defendant: our company, breached two employment contracts resulting in
unjust enrichment and breach of implied covenant of good faith and fair
dealing. Mr. Holden alleges that pursuant to two employment agreements we are
obligated to issue him 2,400,000 of our common shares and options to purchase
12,000,000 of our common shares at a price of $0.05 per common share. On
November 30, 2007, we filed a statement of defence denying all of Mr. Holden’s
claims and a containing a counterclaiming alleging that Mr. Holden was
improperly issued certain common shares. On August 10, 2010 we entered into a
settlement agreement with Mr. Holden whereby Mr. Holden has deposited 2,770,000
of our common shares with our transfer agent, which will be cancelled upon the
cease trade order issued by the British Columbia Securities Commission against
our company being revoked, which settled all outstanding claims with Mr.
Holden.

**ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS**

No matters were
submitted to a vote of security holders during the fourth quarter of fiscal
year 2009.

**PART II**

**ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.**

**Markets**

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

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

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

11

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**Transfer Agent**

Our shares of common
stock are issued in registered form. The transfer agent for our common stock is
Computershare Trust Company of Canada.

**Holders**

As of December 13,
2010 we had approximately 597 shareholders of record of our common shares, as
of such date 235,099,866 of our common shares were issued and outstanding.

**Share Capital**

*Common Stock*

Our authorized
capital stock consists of unlimited 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;
- 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, we have not paid any cash dividends to stockholders. The
declaration of any future cash dividend will be at the discretion of our board
of directors and will depend upon earnings, if any, our capital requirements
and financial position, our general economic conditions, and other pertinent
conditions. It is our present intention not to pay any cash dividends in the
foreseeable future, but rather to reinvest earnings, if any, in our business
operations.

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

On June 28, 2009,
we issued 33,578,512 common shares to Jim Carroll at a fair market value of
$0.0045 per common share as settlement of his outstanding debt of $151,103 for
outstanding salary and expenses he has paid on behalf of our company. We issued
the shares pursuant to section 2.14 of Nation Instrument 45-106 Prospectus
and Registration Exemptionsand pursuant to Regulation S promulgated under
the Securities Act 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 for
outstanding salary and expenses he has paid on behalf of our company. We issued
the shares pursuant to section 2.14 of Nation Instrument 45-106 Prospectus
and Registration Exemptionsand pursuant to section 4(2) of the Securities
Act 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 for
compensation for assisting with the development of our company’s website and
creating additional exposure for our company on the internet. We issued the
shares pursuant to section 2.14 of Nation Instrument 45-106 Prospectus and
Registration Exemptionsand pursuant section 4(2) of the Securities Act of
1933.

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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 for
outstanding salary and expenses he has paid on behalf of our company. We issued
the shares pursuant to section 2.14 of Nation Instrument 45-106 Prospectus
and Registration Exemptionsand pursuant to section 4(2) of the Securities
Act of 1933.

On November 20,
2008, we issued 666,667 common shares to George Pappas at a fair market value
of $0.0041 per common share as settlement of his outstanding debt of $2,733 for
outstanding salary and expenses he has paid on behalf of our company. We issued
the shares pursuant to section 2.14 of Nation Instrument 45-106 Prospectus
and Registration Exemptionsand pursuant to section 4(2) of the Securities
Act 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, 2009, we did not purchase any of our equity securities.

**ITEM 6. SELECTED FINANCIAL DATA.**

Not applicable.

**ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.**

**Results of
  Operations**

*Revenue*

During the fiscal
years ended June 30, 2009 and June 30, 2008, we did not generate any revenues.
Since 2007, we discontinued our internet media sales operations and commenced
focusing on our current business plan.

*Expenses*

Our expenses for
the fiscal year ended June 30, 2009 were $229,637, compared to $337,799 for the
fiscal year ended June 30, 2008 or a decrease of $108,162. This decrease was
primarily attributable to a decrease in professional fees from an expense of
$45,000 in the fiscal year ended June 30, 2008 to a recovery of $15,252  in the
fiscal year ended June 30, 2009. The change in professional fees was primarily
attributable to our decision to restrict the use of outside resources when
possible. The recovery was a negotiated discount on the prior year 2008
professional fees. Our management fees decreased from $253,289 in the fiscal
year ended June 30, 2008 to $183,049 in the fiscal year ended June 30, 2009.
This change in management fees was primarily attributable to issuing shares in
2009 at market rates as opposed to at a discount in 2008 with the difference
between the discount and market rate being additional compensation. Our travel expenses increased from $2,280 in the fiscal
year ended June 30, 2008 to $12,002 in the fiscal year ended June 30, 2009.
This change in travel expenses was primarily attributable to increase travel
for conferences and meetings with potential buyers of our future products. Our
office and general administrative fees decreased from $20,837 in the fiscal
year ended June 30, 2008 to $13,297 in the fiscal year ended June 30, 2009. The
change in office and general administrative expenses was primarily attributable
to our efforts to reduce our general and administrative expenses while we focus
on developing our current business plan.
Our shareholder communications increased from nil in the fiscal year ended June
30, 2008 to $27,000 in the fiscal year ended June 30, 2009. The change in
shareholder communications was a result of us hiring an investor relations
consultant.

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**Plan of
  Operation**

*Financing*

Discussions have
been held with conventional lenders and private funding sources regarding financing
for our projects. There are no assurances that we will be successful in
obtaining the necessary capital. If we are unsuccessful in obtaining additional
capital we may have to cut back or suspend activities until such time that we
can raise capital by way of loans, private placements or public offerings.
Current management has been lending us funds to pay our expenses on a monthly
basis.

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

Since inception we
have funded our operations primarily through equity and debt financings and we
expect that we will continue to fund our operations through equity and debt
financing. If the cease trade order issued by the British Columbia Securities
Commission is revoked and we raise additional financing by issuing equity
securities, our existing stockholders’ ownership will be diluted. Obtaining
loans, assuming any loans would be available, will increase our liabilities and
future cash commitments.

*Cash Requirements*

Our plan of
operation over the next 12 months is to enter into a long term sales contract
for the purchase of our torrefied wood pellets. Once we have secured a buyer,
we will begin to work on securing the supply for our plant and to eventually
begin construction of our torrefied wood pellet plant. Our cash requirements
are dependent on whether or not we begin construction of our torrefied wood
pellet plant. The construction process will require a substantial amount of
capital, which will we have to raise by way of loans, private placements or
public offerings.

Below, we have provided an estimate
of our operating expenses and working capital requirements for the next 12
months provided we do not begin construction of our torrefied wood pellet
plant. Our capital requirements, if we begin construction, will be dependant on
the final site location 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 wood pellet 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, 2009, we have a working capital deficit of $87,806.
We have a shortfall of $477,806 between our working capital deficit and anticipated
cash requirements for the next 12 months. If we begin construction of our
torrefied wood pellet plant, this shortfall will greatly increase. There can be
no assurance that additional financing will be available to us when needed or,
if available, that it can be obtained on commercially reasonable terms. If we
are not able to obtain the additional financing on a timely basis, if and when
it is needed, we will not be able to commence our business plan.

**Liquidity and Capital Resources**

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

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*Working
  Capital*

|                          |   | As at
  June 30, 2009 |   |   | As at
  June 30, 2008 |  
|------------------------- | - | --------------------- | - | - | --------------------- | -
|Current Assets            | $ | 63,124                |   | $ | 50                    |  
|Current Liabilities       | $ | 150,930               |   | $ | 100,042               |  
|Working Capital (deficit) | $ | (87,806               | ) | $ | ($99,992              | )

Our working capital deficit
decreased by $12,186 due to us settling previous liabilities through the
issuance of shares.  We have incurred recurring losses from inception. Our
ability to meet our financial obligations and commitments is primarily
dependent upon continued financial support of our shareholders, directors and
the continued issuance of equity to new and existing shareholders.

*Cash Flow*

|                                              |   | 12 Months Ended |   |   | 12 Months Ended |  
|--------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                              |   | June 30, 2009   |   |   | June 30, 2008   |  
|Cash flow from (used by) operating activities | $ | (56,722         | ) | $ | (921            | )
|Cash flow from (used by) investing activities |   | nil             |   |   | nil             |  
|Cash flow from (used by) financing activities |   | 56,796          |   |   | 971             |  
|Net increase (decrease) in cash               | $ | 74              |   | $ | 50              |  

Operating Activities

Our cash used by operating
  activities increased by $55,801 primarily due to a decrease in our expenses
  being paid through the issuance of stock.

Investing
  Activities

No cash was used by or provided
  from investing activities for either year.

Cash Provided by Financing
  Activities

Our cash provided by financing
activities increased by $55,825 due largely to a loan from a related party.

**Off-Balance Sheet Arrangements**

We have not entered into any
transactions with unconsolidated entities whereby we have financial guarantees
or other contingent arrangements that expose us to material continuing risks,
contingent liabilities or any other obligations that provide financing,
liquidity, market risk or credit risk support to us.

**Going Concern**

We have historically incurred
losses and have incurred a net loss of $229,637 during the fiscal year ended
June 30, 2009, and approximately $567,436 from July 1, 2007, the date of
entering into our development stage, to June 30, 2009. Because of these
historical losses, we will require additional working capital to develop our
business operations. We intend to raise additional working capital through equity
financing, bank financing and/or advances from related parties or stockholder
loans. We are currently prohibited from raising funds through the sale of any
securities due to a cease trade order issued by the British Columbia Securities
Commission.

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

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

Our auditors have included an
explanatory paragraph in the audit report of the year ended June 30, 2009
financial statements that we have sustained losses since inception and have
limited cash resources.

These conditions raise substantial
doubt about our ability to continue as a going concern. Our financial
statements do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might be necessary should we be unable to continue as a going
concern.

**Application of Critical
  Accounting Policies**

Management’s Estimates and Assumptions

The preparation of our financial
statements in conformity with United States generally accepted accounting
principles requires our 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

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 our business
plans for the asset. Should we change our 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.

Income taxes

We account 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. We recognize 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.

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.

16

---



On July 1, 2009, we 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 our financial position, results of operations 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 value
accounting) to estimate cash flow projections used in its analysis to determine
whether its long-lived assets are impaired.

Foreign exchange translation

Our functional currency is the United
States (“US”) dollar, and reports its financial statements in US dollars. We
translate our 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.  Our 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 our results from
operations.

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

***Recent
  accounting pronouncements***

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 Our 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, 2009.

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.  Our adoption of the new
guidance on July 1, 2009 did not have a material impact on our financial
position, results of operations or cash flows.

On July 1, 2009, we 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. Our adoption of the new guidance on July 1, 2009 did not have
a material impact on our 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.  Our adoption of the
new guidance on July 1, 2009 did not have a material impact on our financial
position, results of operations or cash flows.

17

---



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. We do not expect the adoption of the new
guidance will have a material impact on our 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 us and is not
expected to materially impact our 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 our 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.  We do not anticipate the adoption of this amendment
will have a material effect on our 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. We are currently evaluating the
impact, if any, that this new guidance will have on the determination or
reporting of its financial results.

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 after June 15, 2010.

18

---



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

Not applicable

19

---



**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.**

BIOMASS SECURE POWER INC.(formerly Virtual
      Media Holdings Inc.) (A development
    stage company)

**FINANCIAL STATEMENTS**

JUNE 30, 2009 AND
  2008

20

---



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, 2009 and 2008 and the related statements of
  operations, cash flows, and stockholders' equity (deficit) for the years then
  ended and from July 1, 2007, the date of entering into the development stage,
  to June 30, 2009. These financial statements are the responsibility of the
  Company's management. Our responsibility is to express an opinion on these
  financial statements based on our audits.

We conducted
  our audits in accordance with the standards of the Public Company Accounting
  Oversight Board (United States). Those standards require that we plan and
  perform the 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, 2009 and 2008, and the results of its operations and its cash flows for the
  years then ended and from July 1, 2007, the date of entering into the
  development stage, to June 30, 2009 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

|                                                      |   | 2009       |   |   | 2008       |  
|----------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                      |   |            |   |   |            |  
|**ASSETS**                                            |   |            |   |   |            |  
|                                                      |   |            |   |   |            |  
|**Current**                                           |   |            |   |   |            |  
|Cash                                                  | $ | 124        |   | $ | 50         |  
|Prepaid expenses and deposit
      (Notes 7)          |   | 63,000     |   |   | -          |  
|                                                      | $ | 63,124     |   | $ | 50         |  
|                                                      |   |            |   |   |            |  
|**LIABILITIES**                                       |   |            |   |   |            |  
|                                                      |   |            |   |   |            |  
|Current                                               |   |            |   |   |            |  
|Accounts payable and accrued
      liabilities        | $ | 85,695     |   | $ | 102,251    |  
|Due to related parties (Notes 6
      and 8)          |   | 65,235     |   |   | 8,439      |  
|                                                      |   | 150,930    |   |   | 110,690    |  
|                                                      |   |            |   |   |            |  
|**STOCKHOLDERS’ EQUITY (DEFICIT)**                    |   |            |   |   |            |  
|                                                      |   |            |   |   |            |  
|Common stock(Note 7)                                  |   |            |   |   |            |  
|Authorized                                            |   |            |   |   |            |  
|Unlimited number
      of no par value common shares. |   |            |   |   |            |  
|Issued                                                |   |            |   |   |            |  
|235,099,866 common shares (2008 – 180,884,920)        |   | 5,680,217  |   |   | 5,427,746  |  
|Contributed
      surplus                             |   | 53,221     |   |   | 53,221     |  
|Accumulated
      deficit from prior operations       |   | (5,253,808 | ) |   | (5,253,808 | )
|Accumulated
      deficit during development stage    |   | (567,436   | ) |   | (337,799   | )
|                                                      |   | (87,806    | ) |   | (110,640   | )
|                                                      | $ | 63,124     |   | $ | 50         |  

Commitments
  (Notes 8 and 11)
  Subsequent
  events (Note 8)

Approved
  by the Board of Directors:

|"Slawomir Kownacki" |  | "James Carroll"
|------------------- |  | ---------------
|, Director          |  | , Director     

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

F-1

---



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

|                                                          |   | 2009        |   |   | 2008        |   |   | From July 1, 2007, the date of
      entering into development stage, to June 30, 2009 |  
|--------------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | -------------------------------------------------------------------------------------- | -
|                                                          |   |             |   |   |             |   |   |                                                                                        |  
|**Expenses**                                              |   |             |   |   |             |   |   |                                                                                        |  
|Management, consulting and directors fees (Notes 7 and 9) | $ | 183,049     |   | $ | 253,289     | $ | $ | 436,338                                                                                |  
|Office and general administrative (Note 7)                |   | 13,297      |   |   | 20,837      |   |   | 34,134                                                                                 |  
|Professional fees (recovery)                              |   | (15,252)    |   |   | 45,000      |   |   | 29,748                                                                                 |  
|Shareholder communication (Note 7)                        |   | 27,000      |   |   | --          |   |   | 27,000                                                                                 |  
|Transfer agent and filing fees (Note 7)                   |   | 9,541       |   |   | 16,393      |   |   | 25,934                                                                                 |  
|Travel (Note 7)                                           |   | 12,002      |   |   | 2,280       |   |   | 14,282                                                                                 |  
|****                                                      |   |             |   |   |             |   |   |                                                                                        |  
|**Net loss for the
      Year**                           | $ | (229,637)   |   | $ | (337,799)   |   | $ | (567,436                                                                               | )
|                                                          |   |             |   |   |             |   |   |                                                                                        |  
|**Basic and Diluted
      Loss Per Share**                | $ | (0.001      | ) | $ | (0.003      | ) |   |                                                                                        |  
|****                                                      |   |             |   |   |             |   |   |                                                                                        |  
|**Weighted Average Number of Stock
      Outstanding**    |   | 190,695,696 |   |   | 115,085,534 |   |   |                                                                                        |  

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

F-2

---



BIOMASS
  SECURE POWER INC.(formerly
    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)                  | $ | -        
|Capital stock issued for debt on August 29, 2007 at
      $0.0075 per share                                         | 1,487,881     |   | 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              |   | -                             |   | -                            |   | -        
|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              |   | -                             |   | -                            |   | -        
|Capital stock issued for debt on February 5, 2008 at
      $0.0031 per share                                        | 20,000,000    |   | 62,000              |   | -                             |   | -                            |   | -        
|Capital stock issued for management fees on February
      5, 2008 at $0.0031 per share                             | 20,000,000    |   | 62,000              |   | -                             |   | -                            |   | -        
|Capital stock issued for directors fees on June 30,
      2008 at $0.0045 per share                                 | 3,750,000     |   | 16,875              |   | -                             |   | -                            |   | -        
|Capital stock issued for management fees on June 30, 2008
      at $0.0045 per share                                | 30,000,000    |   | 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              |   | -                             |   | -                            |   | -        
|Net loss for the year ended June 30, 2008                                                                           | -             |   | -                   |   | -                             |   | -                            |   | (337,799)
|Balance,
      June 30, 2008                                                                                        | 180,884,920   | $ | 5,427,746           | $ | 53,221                        | $ | (5,253,808)                  | $ | (337,799)
|Capital stock issued as deposit on agreement on
      November 15, 2008 at $0.0042 per share                        | 15,000,000    |   | 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               |   | -                             |   | -                            |   | -        
|Capital stock issued for expenses incurred on behalf
      of the Company on November 20, 2008 at $0.0041 per share | 800,000       |   | 3,280               |   | -                             |   | -                            |   | -        
|Capital stock issued for expenses incurred on May 22,
      2009 at $0.009 per share                                | 3,000,000     |   | 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              |   | -                             |   | -                            |   | -        
|Capital stock issued for management fees on June 30,
      2009 at $0.0045 per share                                | 28,155,555    |   | 126,700             |   | -                             |   | -                            |   | -        
|Net loss for the year ended June 30, 2009                                                                           | -             |   | -                   |   | -                             |   | -                            |   | (229,637)
|Balance,
      June 30, 2009                                                                                        | 235,099,866   | $ | 5,680,217           | $ | 53,221                        | $ | (5,253,808)                  | $ | (567,436)

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

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

F-3

---



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

|                                                         |   | 2009      |  |   | 2008      |   |   | From July 1, 2007, the date of
      entering into development stage, to June 30, 2009 |  
|-------------------------------------------------------- | - | --------- |  | - | --------- | - | - | -------------------------------------------------------------------------------------- | -
|                                                         |   |           |  |   |           |   |   |                                                                                        |  
|**Cash Flows From (Used By) Operating
      Activities** |   |           |  |   |           |   |   |                                                                                        |  
|Net loss for the year                                    | $ | (229,637) |  | $ | (337,799) |   | $ | (567,436                                                                               | )
|Items not involving cash:                                |   |           |  |   |           |   |   |                                                                                        |  
|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 item: |   |           |  |   |           |   |   |                                                                                        |  
|Accounts payable and accrued liabilities                 |   | (16,556)  |  |   | 72,377    |   |   | 55,821                                                                                 |  
|                                                         |   | (56,722)  |  |   | (921      | ) |   | (57,643                                                                                | )
|                                                         |   |           |  |   |           |   |   |                                                                                        |  
|****                                                     |   |           |  |   |           |   |   |                                                                                        |  
|**Cash Flows From (Used By) Financing
      Activity**   |   |           |  |   |           |   |   |                                                                                        |  
|Advances from related party                              |   | 56,796    |  |   | 971       |   |   | 57,767                                                                                 |  
|**Increase (decrease) in Cash**                          |   | 74        |  |   | 50        |   |   | 124                                                                                    |  
|**Cash, Beginning of
      Year**                        |   | 50        |  |   | -         |   |   | -                                                                                      |  
|**Cash, End of Year**                                    | $ | 124       |  | $ | 50        |   | $ | 124                                                                                    |  
|****                                                     |   |           |  |   |           |   |   |                                                                                        |  
|**Supplemental Cash Flow Information**                   |   |           |  |   |           |   |   |                                                                                        |  
|Common stock issued on deposit                           | $ | 63,000    |  | $ | -         |   | $ | 63,000                                                                                 |  
|Common stock issued to settle debt                       | $ | -         |  | $ | 73,159    |   | $ | 73,159                                                                                 |  
|Interest Paid                                            | $ | -         |  | $ | -         |   | $ |                                                                                        |  
|Income Taxes Paid                                        | $ | -         |  | $ | -         |   | $ |                                                                                        |  

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

F-4

---



**BIOMASS SECURE POWER INC.
  (formerly Virtual Media Holdings Inc.)
  (A development stage company)
  NOTES TO THE FINANCIAL STATEMENTS
  AS AT JUNE 30, 2009**

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 for nil
  proceeds.  During the year ended June 30, 2009, the Company incurred
  a net loss of $229,637 (2008 - $337,799).  Since the Company had
  re-entered the development stage, it has an accumulated deficit of $567,436 at
  June 30, 2009.  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

F-5

---



**BIOMASS SECURE POWER INC.
  (formerly Virtual Media Holdings Inc.)
  (A development stage company)
  NOTES TO THE FINANCIAL STATEMENTS
  AS AT JUNE 30, 2009**

(b) Cash

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.

(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, 2009 and 2008.

(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

---



**BIOMASS SECURE POWER INC.
  (formerly Virtual Media Holdings Inc.)
  (A development stage company)
  NOTES TO THE FINANCIAL STATEMENTS
  AS AT JUNE 30, 2009**

(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, 2009 and 2008, there were no stock options
  and warrants which had an anti-dilutive effect on earnings per share.

(j)
  Foreign exchange translation

F-7

---



**BIOMASS SECURE POWER INC.
  (formerly Virtual Media Holdings Inc.)
  (A development stage company)
  NOTES TO THE FINANCIAL STATEMENTS
  AS AT JUNE 30, 2009**

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.

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.

F-8

---



**BIOMASS SECURE POWER INC.
  (formerly Virtual Media Holdings Inc.)
  (A development stage company)
  NOTES TO THE FINANCIAL STATEMENTS
  AS AT JUNE 30, 2009**

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

---



**BIOMASS SECURE POWER INC.
  (formerly Virtual Media Holdings Inc.)
  (A development stage company)
  NOTES TO THE FINANCIAL STATEMENTS
  AS AT JUNE 30, 2009**

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 after
  June 15, 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 bya 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.   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.

7.   CAPITAL STOCK

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, 2008 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, 2008 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 management returned 3,000,000
  common shares for cancellation.  As the expense related to the issuance of
  these common shares were 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.

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 $22,534 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, 2009 and 2008, there were no common
  stock options granted. As of June 30, 2009 and 2008, there were no outstanding
  exercisable or un-exercisable common stock options.

8.   COMMITMENT TO ISSUE STOCK

The Company’s stock is traded on the OTC Bulletin
  Board in the United States and the Company is subject to the securities laws in
  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.

F-10

---



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 4)
      for exchange of 225,269,250 common stock of the Company. This has not been
      recorded in the balance sheet of the company.                                                                                                                                                                                                                                                                                       
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ii.  | Subsequent to year end, 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. | Subsequent to year end, 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 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.

9.   RELATED PARTY TRANSACTIONS

During the year ended June 30, 2009 the Company was
  charged management, consulting and directors fees totaling $183,049 (2008 -
  $253,289) 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.

10.  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, 2009 and 2008. As at June 30, 2009, 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, 2009 and 2008
  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, 2009 and 2008 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, 2009, the Company has not recorded an accrual for any
  tax contingencies.

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, 2009 and 2008 and determined that it has no uncertain tax
  positions requiring financial statement recognition.

F-11

---



**BIOMASS SECURE POWER INC.
  (formerly Virtual Media Holdings Inc.)
  (A development stage company)
  NOTES TO THE FINANCIAL STATEMENTS
  AS AT JUNE 30, 2009**

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 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.

11.  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-12

---



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

On January 9, 2009,
our board of directors approved the appointment of BDO Canada LLP as our independent
accountants to audit our June 30, 2009 and 2010 financial statements and
through the interim period and dismissed Dale Matheson Carr-Hilton Labonte LLP
("DMCL”), as our independent accountants. On October 8, 2009, we received
a letter from Dale Matheson Carr-Hilton Labonte LLP ("DMCL") stating
that it had not been engaged to perform auditing services for our company for
the prior year and that it was no longer the auditor of record for our company.

During the fiscal
year ended June 30, 2006, and any subsequent interim periods preceding the
change in accountants, there were no disagreements with DMCL, on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope procedure. During the course of their audit, DMCL advised our company's
new management that it had not been provided with sufficient documentation to
support certain issuances of shares.  In addition, during the course of their
audit of our fiscal year ended June 30, 2006, DMCL advised our new management that
it was unable to rely on management’s representations.  Since that date, we
have not provided DMCL with any additional documentation in respect of the
unsupported issuances of shares and DMCL has not provided us with an
unqualified audit report for our 2006 fiscal year. The decision to change
independent accountants was based on the determination by our board of
directors that such a step was appropriate given the change in direction of our
company and the related growth in our demands, and that such expertise required
can be provided by a national accounting firm.

During the years
ended June 30, 2006 and 2007, and any subsequent interim periods preceding the
change in accountants, BDO Canada LLP was not consulted regarding (1) the
application of accounting principles to specified transactions, (2) the type of
audit opinion that might be rendered on our financial statements, (3) written
or oral advice that would be an important factor considered by us in reaching a
decision as to an accounting, auditing or financial reporting issues, or (4)
any matter that was the subject of a disagreement between us and our
predecessor auditor as described in Item 304(a)(1)(iv) or a reportable
event as described in Item 304(a)(1)(v) of Regulation S-K.

**ITEM 9A. CONTROL AND PROCEDURES**

***Disclosure Controls and
  Procedures***

We maintain “disclosure controls
and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the
Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended. Disclosure controls and procedures include controls
and procedures designed to ensure that information required to be disclosed in
our company’s reports filed under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission’s rules and forms, and that such
information is accumulated and communicated to our management, including our principal
executive officer and our principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure.

As required by paragraph (b) of
Rules 13a-15 under the Securities Exchange Act of 1934, our management,
with the participation of our principal executive officer and our principal
financial officer, evaluated our company’s disclosure controls and procedures
as of the end of the period covered by this annual report on Form 10-K. Based
on this evaluation, our management concluded that as of the end of the period
covered by this annual report 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 for establishing and maintaining a process to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.

20

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Our management, with the
participation of our principal executive officer and our principal financial
officer, evaluated the effectiveness of our internal control over financial
reporting (“ICFR”) as of June 30, 2009. Our management’s evaluation of our
internal control over financial reporting was based on the framework in
Internal Control—Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, our
management concluded that our internal control over financial reporting was not
effective as of June 30, 2009 and that there were material weaknesses in our
internal control over financial reporting as described below:

As defined by Auditing Standard No. 5, “An Audit of Internal Control
Over Financial Reporting that is Integrated with an Audit of Financial
Statements and Related Independence Rule and Conforming Amendments,”
established by the Public Company Accounting Oversight Board, a material
weakness is a deficiency, or combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a
material misstatement of the Company’s annual or interim financial statements
will not be prevented or detected on a timely basis.  In connection with the
assessment described above, management identified the following control
deficiencies that represent material weaknesses as of June 30, 2009:

(1) Specifically, we have
determined that our internal controls and procedures for timely filing of
material events is insufficient due to a lack of knowledge regarding U.S.
generally accepted accounting principles and the rules of the Securities and
Exchange Commission by responsible people within our company. Moreover, due to
our inability to provide sufficient documentation to our former auditor, it was
unable to issue an 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
quarterly and annual reports.

(2)We lack an independent audit committee, audit committee
financial expert, and independent directors. Our audit committee is comprised
of our board of directors. Our audit committee does not have an audit committee
financial expert. A majority of our board of directors and audit committee is
not independent, as three of our directors are also officers.  These factors
may be counter to corporate governance practices as defined by the various
stock exchanges and may lead to less effective or conflicted supervision over
management;

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

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

As of June 30, 2009, management assessed the effectiveness of our
ICFR and based on that evaluation, they concluded that, as of
June 30, 2009, the internal
controls and procedures were not effective due to deficiencies that existed in
the design or operation of our ICFR. During the course of their evaluation,
management did not discover any fraud involving management or any other
personnel who play a significant role in our disclosure controls and procedures
or internal controls over financial reporting.

Due to a lack of financial and personnel resources, we are not able
to, and do not intend to, immediately take any action to remediate these
material weaknesses.  We will not be able to do so until, if ever, we acquire
sufficient financing and staff to do so.  We will implement further controls as
circumstances, cash flow, and working capital permit.  Notwithstanding the assessment
that our ICFR was not effective and that there were material weaknesses as
identified in this report, we believe that our financial statements contained
in our Annual Report on Form 10-K for the fiscal year ended June 30, 2009,
fairly presents our financial position, results of operations and cash flows
for the years covered thereby in all material respects.

Our Chief Financial Officer is not a financial expert. This risk is
mitigated by the active involvement of the audit committee and the board of
directors in reviewing the financial statements.  However, the lack of full
time personnel who have technical experience and knowledge is an internal
control weakness and may result in the failure to timely report financial
results.

21

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It is unlikely that the above noted internal control weakness can be
properly addressed until the Company grows to a significant size to warrant the
expense, such as the hiring of additional personnel, associated with implementing
additional segregation of duties.  We are committed to improving our financial
organization and internal controls.  As part of this commitment, we intend to
hire an additional person on a full time basis, when sufficient funds are
available to us, with technical experience and knowledge in accounting to
better segregate duties consistent with control objectives and will increase
our personnel resources and technical accounting expertise within the
accounting function.

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

We are committed to improving our financial organization. As part of
this commitment, we anticipate that, pending the availability of sufficient
funds, we will (1) hire a qualified individual who is competent in preparing
reliable and timely information for internal and external audit purposes and
who is also knowledgeable in US GAAP; (2) appoint one or more outside directors
to our board of directors who shall be appointed to our audit committee
resulting in a fully functioning audit committee who will undertake the
oversight in the establishment and monitoring of required internal controls and
procedures; (3) create formal processes and controls over financial disclosure
and reporting and monitor its progress and (4) hire independent third parties
to perform expert advice over monitoring and evaluating the control
environment.  We will continue to monitor and evaluate the effectiveness of our
internal controls and procedures and our internal controls over financial
reporting on an ongoing basis and are committed to taking further action and
implementing additional enhancements or improvements, as necessary and as funds
allow.

Our principal executive officer,
who is also our principal financial
officer, does not expect that our disclosure controls or our internal
control over financial reporting will prevent all errors and all fraud. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system are
met. Further, the design of a control system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within our company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of a
simple error or mistake. Additional controls can be circumvented by the
individual acts of some persons, by collusion of two or more people, or by
management override of the controls. The design of any system of controls is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions; over time, controls may
become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.

**Changes in
  Internal Control over Financial Reporting**

There have been no significant changes in our internal controls over
financial reporting that occurred during fiscal year ended June 30, 2009 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

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

**ITEM 9B OTHER INFORMATION**

None

22

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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, 2009, 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.

James Carroll - President, Chief Executive
Officer, Chief Financial Officer, and Director

Since January,
2007, Mr James Carroll has been Chief Executive Officer, Chief Financial
Officer and a Director of our company. Mr. Carroll also served as a director of
our company from 2004 to 2005. Mr. Carroll has been self employed since 1993
operating his own mortgage brokerage business. From 1972 to 1992, Mr. Carroll
worked in the banking and finance industry.

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

George Pappas - Vice-President, Secretary and
  Director

Since 1993, Mr
George Pappas has been the Vice President of All-Trades Fabrication
Inc.(“All-Trades”) Through All-Trades, he has been involved in building
projects for companies such as Disney, University of Southern California, and
Boeing. Mr. Pappas has extensive management experience and has specialized in
structural steel buildings up to three storied high and all aspects of
fabrication and steel erection.

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

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

Andrew H. Burns – Vice-President and Director

Since 1990, Andrew
Burns has been the President of Burns Energy Systems Ltd. (“Burns Energy”).
Through Burns Energy, Mr. Burns has been involved with various industrial
projects, such as the development of immersion burners with ceramic tubes,
small bore high velocity immersion burners, and submerged combustion equipment.
Mr. Burns is 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 presented technical papers at various conferences.

23

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

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

Len Klassen - Director

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

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

Slawomir Kownacki - Director

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

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

**Involvement in Certain Legal
  Proceedings**

Our directors and executive
officers have not been involved 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;          

24

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| | 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.                                                                                                                                                                                                                                                             

**Compliance with
  section 16(a) of the Exchange Act**

Since our company is a
“foreign private issuer”, pursuant to Rule 3a12-3 promulgated under the
Securities Exchange Act of 1934 our insiders are exempt from the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934.  Among
other things, Section 16(a) of the Securities Exchange Act of 1934 requires
certain “reporting persons” of any issuer with any class of equity securities
registered under Section 12 of the Securities Exchange Act of 1934 to file with
the United States Securities and Exchange Commission reports of ownership and
changes in ownership of securities of the registered class.  Reporting persons
consist of directors, executive officers and beneficial 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-KSB filed on September 25, 2003. We believe our code of ethics is
reasonably designed to deter wrongdoing and promote honest and ethical conduct;
provide full, fair, accurate, timely and understandable disclosure in public
reports; comply with applicable laws; ensure prompt internal reporting of code violations;
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 one year ending on the date of subsequent annual meeting of
stockholders following the annual meeting at which such director was elected.
Notwithstanding the foregoing, each director is to serve until his successor is
elected and qualified or until his death, resignation or removal. Our board of
directors is to elect our officers and each officer is to serve until his
successor is elected and qualified or until his death, resignation or removal.

*Committees of the Board*

Our board of directors held no
formal meetings during the year ended June 30, 2009. All proceedings of our
board of directors were conducted by resolutions consented to in writing by all
the directors and filed with the minutes of the proceedings of the directors.
Such resolutions consented to in writing by the directors entitled to vote on
that resolution at a meeting of the directors are, according to the corporate
law of the Province of British Columbia, as valid and effective as if they had
been passed at a meeting of our directors duly called and held.

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

We do not have any defined policy
or procedure requirements for shareholders to submit recommendations or nominations
for directors. We do not currently have any specific or minimum criteria for
the election of nominees to our board of directors and we do not have any
specific process or procedure for evaluating such nominees. Our board of
directors assesses all candidates, whether submitted by management or
shareholders, and makes recommendations for election or appointment.

25

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

Disclosure
  Committee and Charter

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

*Audit Committee and Audit
  Committee Financial Expert*

Our audit committee is comprised of our board of
directors. Our board of directors has determined that we do not have a board
member that qualifies as an “audit committee financial expert” as defined in
Item 401(h) of Regulation S-K. Len Klassen and Slawomir Kownacki qualify as
“independent” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the
Securities Exchange Act of 1934, as amendedand James 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 who would qualify as an “audit committee financial expert”
would be overly costly and burdensome and is not warranted in our circumstances
given the early stages of our development and the fact that we have not
generated any revenues from operations to date.

**Indemnification**

Pursuant to our
Articles of Incorporation, we may indemnify an officer or director who is made
a party to any proceeding, including a law suit, because of his position, if he
acted in good 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
such proceeding. To the extent that the officer or director is successful on
the merits in any such proceeding as to which such person is to be indemnified,
we must indemnify him against all expenses incurred, including attorney’s fees.
With respect to a derivative action, indemnity may be made only for the
expenses actually and reasonably incurred in defending the proceeding, and if
the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws
of British Columbia.

Regarding
indemnification for liabilities arising under the Securities Act of 1933, as
amended, which may be permitted to directors or officers pursuant to the foregoing
provisions, we are informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy, as expressed in the
Act and is, therefore, unenforceable.

**ITEM 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,
  2009; 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 executive officers, for our years ended June
30, 2009 and 2008, are set out in the following summary compensation table:

|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           | 2009
  2008 | 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 | 2009
  2008 | nil
  nil           | nil
    
    nil | nil
    
    nil | nil
    
    nil  | nil
  nil                                               | nil
  nil                                                                        | nil
  nil                  | nil
    
    nil   
|Andrew
  H. Burns
  Vice-President
  and Director          | 2009
  2008 | nil
    
    nil    | nil
    
    nil | nil
  nil        | nil
  nil         | nil
  nil                                               | nil
  nil                                                                        | nil
  nil                  | nil
  nil          

*Employment
Agreements*

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

*Outstanding Equity Awards at
  Fiscal Year-End*

The following table sets forth for
each named executive officer certain information concerning the outstanding
equity awards as of June 30, 2009.

|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 
  (#)
|(a)                                                                       | (b)                                                                     | (c)                                                                                                
|James Carroll                                                             | Nil                                                                     | Nil                                                                                                
|George
  Pappas                                                           | Nil                                                                     | Nil                                                                                                
|Andrew
  H. Burns                                                         | Nil                                                                     | Nil                                                                                                

**Compensation of Directors**

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

The table below shows the
compensation of our directors for our last completed fiscal year ended June 30,
2009:

26

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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 in respect of remuneration received or that may be
received by our executive officers to compensate such officers in the event of
termination of employment (as a result of resignation, retirement, change of
control) or a change of responsibilities following a change of control.

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

**Security ownership
  of management**

In the following
table, as of December 13, 2010 we have determined the number and percentage of
shares beneficially owned in accordance with Rule 13d-3 of the Exchange Act
based on information provided to us by our controlling shareholders, executive
officers and directors, and this information does not necessarily indicate
beneficial ownership for any other purpose. In determining the number of shares
of our common stock beneficially owned by a person and the percentage ownership
of that person, we include any shares as to which the person has sole or shared
voting power or investment power, as well as any shares subject to warrants or
options held by that person that are currently exercisable or exercisable
within 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, the operation of which may at a subsequent date result in a
change in control of our company

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

**Director Independence**

Under NASDAQ Marketplace Rule
5605(a)(2), a director is not considered to be independent if he is also an
executive officer or employee of the company. Len Klassen and Slawomir Kownacki
are “independent directors” as that term is defined by NASDAQ Marketplace Rule 5605(a)(2).

**Transactions with related persons**

There has been no transactions, or
currently proposed transaction, in which we were or are to be a participant and
the amount involved exceeds the lesser of $120,000 or one percent of the
average of our total assets at year end for the last two completed fiscal
years, and in which any of the following persons had or will have a direct or
indirect material interest:

| | (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.                                      

As
discussed under the heading “Business — Corporate Developments — The
Amalgamation”, we entered into Share Exchange Agreements with the shareholders
of 0625920 BC Ltd. Pursuant to the Share Exchange Agreements, 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. These shares have not been issued.
Due to a cease trade order issued by
the British Columbia Securities Commission,
we are now prohibited from issuing those shares.. We anticipate the issuance of these shares shortly after
the cease trade order is revoked.

28

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Pursuant to the Share Exchange
Agreements, 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. These shares have not been issued.
Due to a cease trade order issued by
the British Columbia Securities Commission,
we are now prohibited from issuing those shares.. We anticipate the issuance of these shares shortly after
the cease trade order is revoked.

Pursuant to the Share Exchange
Agreements, Mr. Burns is to be issued
30,000,000 additional common shares. Assuming 225,269,250 common shares 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 Securities Commission, we are now prohibited from issuing those shares.. We anticipate the issuance of these shares shortly after
the cease trade order is revoked.

During the year ended June 30, 2009
we were charged by and recorded management, consulting and directors fees
totaling $183,049 (2008 - $253,289).

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

**Audit Fees**

The following table sets forth the
fees billed to our company for professional services rendered by BDO Canada LLP
(“BDO”), our independent registered public accounting firm, for the years ended
June 30, 2009 and 2008:

|Fees               |   | 2009   |  |  | 2008  | 
|------------------ | - | ------ |  |  | ----- | 
|Audit Fees         | $ | 10,000 |  |  | 5,000 | 
|Audit Related Fees |   | 0      |  |  | 0     | 
|Tax Fees           |   | 0      |  |  | 0     | 
|Other Fees         |   | 0      |  |  | 0     | 
|Total Fees         | $ | 10,000 |  |  | 5,000 | 

Policy on Pre-Approval by Audit
Committee of Services Performed by Independent Auditors

We do not use BDO, for financial
information system design and implementation. These services, which include
designing or implementing a system that aggregates source data underlying the
financial statements or generates information that is significant to our
financial statements, are provided internally or by other service providers. We
do not engage BDO to provide compliance outsourcing services.

Effective May 6, 2003, the
Securities and Exchange Commission adopted rules that require that before an
external auditor is engaged 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.

Our entire board of directors
pre-approves all services provided by our independent auditors. All of the
above services and fees were reviewed and approved by our directors before the
respective services were rendered.

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Our board of directors have
considered the nature and amount of fees billed by BDO and believe that the
provision of services for activities unrelated to the audit is compatible with
maintaining BDO’s independence.

**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*   | 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*   | Settlement Agreement with Brian Holden
  dated August 10, 2010                                                                           
|14.1(2) | 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(2) | Audit Committee Charter                                                                                                                  
|99.2(2) | Disclosure Committee Charter                                                                                                             

(1)           Attached
as an exhibit to our current report on Form 6-K filed on May 15, 2009.
(2)           Attached as 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 CarrollJames Carroll
  President, Chief Executive Officer, Chief Financial Officer,
and Director
Principle Executive Officer, Principal Financial Officer and
  Principal Accounting Officer 
December 15, 2010

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

By

/s/ James CarrollJames Carroll
  President, Chief Executive Officer, Chief Financial Officer,
and Director
Principle Executive Officer, Principal Financial Officer and
Principal Accounting Officer
December 15, 2010

By

/s/ George PappasGeorge Pappas
  Vice-President, Secretary and Director

  
  December 15, 2010

By

/s/ Andrew H. Burns
  Andrew H. Burns
  Vice-President and Director

  
  December 15, 2010

By

/s/ Len KlassenLen Klassen
  Director

  
  December 15, 2010

By

/s/ Slawomir KownackiSlawomir Kownacki
Director


December 15, 2010

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