----

----

| þ | QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|-----------------------------------------------------------------------------------|

| o | TRANSITION REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------|

| Nevada                                                         |   | 87-0428526                          |
|----------------------------------------------------------------|--------|-------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No. |
|                                                           |   |                                |
| 914 Westwood Blvd., Box 801Los Angeles, California             |   | 90024                               |
| (Address of principal executive offices)                       |   | (Zip Code)                          |

| Large accelerated filer                                            | o      | Accelerated filer         | o      |
|--------------------------------------------------------------------|--------|---------------------------|--------|
|                                                               |   |                      |   |
| Non-accelerated filer(Do not check if a smaller reporting company) | o      | Smaller reporting company | þ |

----

----

----

| Part I - Financial Information    |                                                                                        | 3      |   |
|-----------------------------------|---------------------------------------------------------------------------------------------|--------|--------|
|                              |                                                                                        |   |   |   |
| Item 1.                           | Financial Statements                                                                        |   | 3      |   |
|                              |                                                                                        |   |   |   |
|                              | Balance Sheets (Unaudited) as of December 31, 2010 and September 30, 2010                   |   | 3      |   |
|                              |                                                                                        |   |   |   |
|                              | Statements of Operations (Unaudited) for the three months ended December 31, 2010 and 2009  |   | 4      |   |
|                              |                                                                                        |   |   |   |
|                              | Statements of Cash Flows (Unaudited) for the three months ended December 31, 2010 and 2009  |   | 5      |   |
|                              |                                                                                        |   |   |   |
|                              | Notes to unaudited condensed financial statements                                           |   | 6      |   |
|                              |                                                                                        |   |   |   |
|                              | Forward-Looking Statements                                                                  |   |   |   |
|                              |                                                                                        |   |   |   |
| Item 2.                           | Management’s Discussion and Analysis of Financial Condition and Results of Operations |   | 12     |   |
|                              |                                                                                        |   |   |   |
| Item 3.                           | Quantitative and Qualitative Disclosures About Market Risk                                  |   | 14     |   |
|                              |                                                                                        |   |   |   |
| Item 4.                           |  Controls and Procedures                                                               |   | 14     |   |
|                              |                                                                                        |   |   |   |
| Part II – Other Information |                                                                                        | 14     |   |
|                              |                                                                                        |   |   |   |
| Item 1.                           | Legal Proceedings                                                                           |   | 14     |   |
|                              |                                                                                        |   |   |   |
| Item 1A.                          | Risk Factors                                                                                |   | 15     |   |
|                              |                                                                                        |   |   |   |
| Item 2.                           |  Unregistered Sales of Equity Securities and Use of Proceeds                           |   | 15     |   |
|                              |                                                                                        |   |   |   |
| Item 3.                           |  Defaults Upon Senior Securities                                                       |   | 15     |   |
|                              |                                                                                        |   |   |   |
| Item 4.                           | Reserved                                                                                    |   | 15     |   |
|                              |                                                                                        |   |   |   |
| Item 5.                           | Other Information                                                                           |   | 15     |   |
|                              |                                                                                        |   |   |   |
| Item 6.                           | Exhibits                                                                                    |   | 15     |   |
|                              |                                                                                        |   |   |   |
| Signatures                        |                                                                                        | 16     |   |

----

|                                                                                                                                                                                                         |   | As of December 31, |        |   | As of September 30, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|---------------------|--------|
|                                                                                                                                                                                                         |   | 2010               |        |   | 2010                |   |
|                                                                                                                                                                                                         |   |               |        |   |                |   |
| ASSETS                                                                                                                                                                                                       |   |
|                                                                                                                                                                                                         |   |               |        |   |                |   |
| Current assets:                                                                                                                                                                                              |   |               |        |   |                |   |
|     Cash and cash equivalents                                                                                                                                                            |   | $                  | 152,996     |   |                | $      | 23,084 |   |
|     Other receivable                                                                                                                                                                     |   |               | 2,610       |   |                |   | 1,500 |   |
|     Inventory                                                                                                                                                                            |   |               | 700,731     |   |                |   | 579,160 |   |
|     Other current assets                                                                                                                                                                 |   |               | 83,431      |   |                |   | 11,750 |   |
|        Total current assets                                                                                                                                               |   |               | 939,768     |   |                |   | 615,494 |   |
| Non-current assets:                                                                                                                                                                                          |   |               |        |   |                |   |   |   |
|     Property and equipment, net                                                                                                                                                          |   |               | 39,922      |   |                |   | 38,599 |   |
|                                                                                                                                                                                                         |   |               |        |   |                |   |   |   |
|        Total assets                                                                                                                                                       |   | $                  | 979,690     |   |                | $      | 654,093 |   |
|                                                                                                                                                                                                         |   |               |        |   |                |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                                                   |   |
|                                                                                                                                                                                                         |   |               |        |   |                |   |   |   |
| Current liabilities:                                                                                                                                                                                         |   |               |        |   |                |   |   |   |
|     Accounts payable                                                                                                                                                                     |   | $                  | 112,778     |   |                | $      | 215,842 |   |
|     Accrued expenses                                                                                                                                                                     |   |               | 716,874     |   |                |   | 943,485 |   |
|     Deferred revenue                                                                                                                                                                     |   |               | 619,832     |   |                |   | 300,000 |   |
|     Notes payable - related parties                                                                                                                                                      |   |               | 27,000      |   |                |   | 27,000 |   |
|     Convertible notes, net of debt discount                                                                                                                                              |   |               | 1,459,073   |   |                |   | 1,470,776 |   |
|     10% subordinated convertible notes                                                                                                                                                   |   |               | 56,615      |   |                |   | 56,615 |   |
|     Shares to be issued                                                                                                                                                                  |   |               | 4,800       |   |                |   | - |   |
|     Derivative liability                                                                                                                                                                 |   |               | 48,713      |   |                |   | 137,053 |   |
|        Total current liabilities                                                                                                                                          |   |               | 3,045,685   |   |                |   | 3,150,771 |   |
|                                                                                                                                                                                                         |   |               |        |   |                |   |   |   |
| Stockholders' deficit:                                                                                                                                                                                       |   |               |        |   |                |   |   |   |
|     Preferred stock, $0.001 par value, (10,000,000 shares authorized at December 31, 2010)                                                                                               |   |               | -           |   |                |   | - |   |
|     Common stock, $0.001 par value, (600,000,000 shares authorized; 241,649,678 and 217,154,741 shares issued and outstanding at December 31, 2010 and September 30, 2010, respectively) |   |               | 241,650     |   |                |   | 217,155 |   |
|     Additional paid-in capital                                                                                                                                                           |   |               | 24,522,013  |   |                |   | 22,885,234 |   |
|     Accumulated deficit                                                                                                                                                                  |   |               | (26,829,658 | )      |                |   | (25,599,067 | ) |
|        Total stockholders' deficit                                                                                                                                        |   |               | (2,065,995  | )      |                |   | (2,496,678 | ) |
|                                                                                                                                                                                                         |   |               |        |   |                |   |   |   |
|        Total liabilities and stockholders'  deficit                                                                                                             |   | $                  | 979,690     |   |                | $      | 654,093 |   |

----

|                                                                  |   | Three Months Ended December 31, |        |
|-----------------------------------------------------------------------|--------|---------------------------------|-------------|
|                                                                  |   | 2010                            |        |   | 2009 |   |
|                                                                  |   |                            |        |   |   |   |
| Net revenues                                                          |   | $                               | -           |   |   | $ | 1,620,000 |   |
|                                                                  |   |                            |        |   |   |   |   |   |
| Cost of sales                                                         |   |                            | -           |   |   |   | 1,091,500 |   |
|                                                                  |   |                            |        |   |   |   |   |   |
| Gross profit                                                          |   |                            | -           |   |   |   | 528,500 |   |
|                                                                  |   |                            |        |   |   |   |   |   |
| Operating expenses                                                    |   |                            |        |   |   |   |   |   |
| General and administrative                                            |   |                            | 649,610     |   |   |   | 252,755 |   |
| Sales and marketing                                                   |   |                            | 84,270      |   |   |   | - |   |
| Research and development                                              |   |                            | 81,627      |   |   |   | 110,943 |   |
| Depreciation and amortization                                         |   |                            | 1,804       |   |   |   | 6,869 |   |
| Total operating expenses                                              |   |                            | 817,311     |   |   |   | 370,567 |   |
|                                                                  |   |                            |        |   |   |   |   |   |
| (Loss) income from operations                                         |   |                            | (817,311    | ) |   |   | 157,933 |   |
|                                                                  |   |                            |        |   |   |   |   |   |
| Other income (expense)                                                |   |                            |        |   |   |   |   |   |
| Interest expense and financing costs                                  |   |                            | (105,192    | ) |   |   | (84,010 | ) |
| Gain (loss) on change in fair value of:                               |   |                            |        |   |   |   |   |   |
| Derivative liability                                                  |   |                            | (5,557      | ) |   |   | - |   |
| Warrant and option liability                                          |   |                            | -           |   |   |   | 4,006,604 |   |
| Beneficial conversion liability                                       |   |                            | -           |   |   |   | 866,390 |   |
| Legal settlements                                                     |   |                            | (236,821    | ) |   |   | - |   |
| Loss on settlement of debt                                            |   |                            | (65,710     | ) |   |   | - |   |
| Loss on lease termination                                             |   |                            | -           |   |   |   | (197,455 | ) |
| Loss on asset disposition                                             |   |                            | -           |   |   |   | (11,217 | ) |
| Total other income (expense)                                          |   |                            | (413,280    | ) |   |   | 4,580,312 |   |
|                                                                  |   |                            |        |   |   |   |   |   |
| (Loss) income before income taxes                                     |   |                            | (1,230,591  | ) |   |   | 4,738,245 |   |
| Net (loss) income attributable to common shareholders                 |   | $                               | (1,230,591  | ) |   | $ | 4,738,245 |   |
|                                                                  |   |                            |        |   |   |   |   |   |
| Basic (loss) income per share                                         |   | $                               | (0.01       | ) |   | $ | 0.03 |   |
| Diluted (loss) income per share                                       |   | $                               | (0.01       | ) |   | $ | 0.03 |   |
|                                                                  |   |                            |        |   |   |   |   |   |
| Basic weighted average number of shares of common stock outstanding   |   |                            | 226,576,360 |   |   |   | 148,314,046 |   |
| Diluted weighted average number of shares of common stock outstanding |   |                            | 226,576,360 |   |   |   | 167,051,458 |   |

----

|                                                                                                                     |   | Three Months Ended December 31, |       |
|--------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                                                                                     |   | 2010                            |       |   | 2009 |   |
|                                                                                                                     |   |                            |       |   |   |   |
| Cash flows from operating activities                                                                                     |   |                            |       |   |   |   |
|     Net (loss) income                                                                                |   | $                               | (1,230,591 | ) |   | $ | 4,738,245 |   |
|       Adjustments to reconcile net (loss) income to net cash used by operating activities: |   |                            |       |   |   |
|        Depreciation                                                                   |   |                            | 1,804      |   |   |   | 6,869 |   |
|        Amortization of beneficial conversion feature and debt discounts               |   |                            | 58,695     |   |   |   | - |   |
|        Share based payments                                                           |   |                            | 154,848    |   |   |   | 70,762 |   |
|        Common stock issued for services                                               |   |                            | 464,171    |   |   |   | 19,000 |   |
|        (Gain) loss on change in fair value of:                                        |   |                            |       |   |   |   |   |   |
|           Derivative liability                                         |   |                            | 5,557      |   |   |   | - |   |
|           Warrant and option liability                                 |   |                            | -          |   |   |   | (4,006,604 | ) |
|           Beneficial conversion liability                              |   |                            | -          |   |   |   | (866,390 | ) |
|        Loss on settlement of debt                                                     |   |                            | 65,710     |   |   |   | - |   |
|        Loss on termination of lease                                                   |   |                            | -          |   |   |   | 197,455 |   |
|        Impairment of property and equipment                                           |   |                            | -          |   |   |   | 11,217 |   |
|        (Increase) decrease in:                                                        |   |                            |       |   |   |   |   |   |
|           Inventory                                                    |   |                            | (121,571   | ) |   |   | 1,069,460 |   |
|           Other current assets                                         |   |                            | (73,919    | ) |   |   | 18,708 |   |
|           Other assets                                                 |   |                            | -          |   |   |   | (2,400 | ) |
|        Increase (decrease) in:                                                        |   |                            |       |   |   |   |   |   |
|           Accounts payable                                             |   |                            | 151,114    |   |   |   | 118,804 |   |
|           Accrued expenses                                             |   |                            | (223,611   | ) |   |   | 36,486 |   |
|           Deferred revenue                                             |   |                            | 319,832    |   |   |   | (1,620,000 | ) |
| Net cash used by operating activities                                                                                    |   |                            | (427,961   | ) |   |   | (208,388 | ) |
|                                                                                                                     |   |                            |       |   |   |   |   |   |
| Cash flows from investing activities:                                                                                    |   |                            |       |   |   |   |   |   |
|     Purchase of property and equipment                                                               |   |                            | (3,127     | ) |   |   | - |   |
| Cash flows from financing activities:                                                                                    |   |                            |       |   |   |   |   |   |
|     Borrowings                                                                                       |   |                            | -          |   |   |   | 200,000 |   |
|     Common stock issued for cash                                                                     |   |                            | 561,000    |   |   |   | - |   |
| Net cash provided by financing activities                                                                                |   |                            | 561,000    |   |   |   | 200,000 |   |
|                                                                                                                     |   |                            |       |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                                     |   |                            | 129,912    |   |   |   | (8,388 | ) |
| Cash and cash equivalents, beginning of period                                                                           |   |                            | 23,084     |   |   |   | 22,982 |   |
| Cash and cash equivalents, end of period                                                                                 |   | $                               | 152,996    |   |   | $ | 14,594 |   |
|                                                                                                                     |   |                            |       |   |   |   |   |   |
| SUPPLEMENTARY CASH FLOW INFORMATION:                                                                                     |   |                            |       |   |   |   |   |   |
|     Income taxes paid                                                                                |   | $                               | 2,569      |   |   | $ | - |   |
|     Interest paid                                                                                    |   | $                               | -          |   |   | $ | - |   |

----

----

|                                                    |   | For the Three Months Ended December 31, 2009 |      |
|---------------------------------------------------------|--------|----------------------------------------------|-----------|
|                                                    |   | Income (Numerator)                           |      |   | Weighted Average Number of Shares (Denominator) |   |   | Amount per Share |   |
|                                                    |   |                                         |      |   |   |   |   |   |   |
| Basic Earnings Per Share                                |   |                                         |      |   |   |   |   |   |   |
| Income common stockholders                              |   | $                                            | 4,738,245 |   |   |   | 148,314,046 |   |   | $ | 0.03 |   |
|                                                    |   |                                         |      |   |   |   |   |   |   |   |   |   |
| Effect of Dilutive Securities                           |   |                                         |      |   |   |   |   |   |   |   |   |   |
| Adjustment - gain on "in the money" warrants            |   |                                         | (781,360  | ) |   |   | 1,871,053 |   |   |   |   |   |
| Adjustment - gain on debt conversions and interest, net |   |                                         | (848,803  | ) |   |   | 16,866,359 |   |   |   |   |   |
|                                                    |   |                                         |      |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Share                              |   |                                         |      |   |   |   |   |   |   |   |   |   |
| Adjusted income available to common stockholders        |   | $                                            | 3,108,082 |   |   |   | 167,051,458 |   |   | $ | 0.02 |   |

----

|                          |   | December 31, |   |   | September 30, |   |
|-------------------------------|--------|--------------|--------|--------|---------------|--------|
|                          |   | 2010         |   |   | 2010          |   |
|                          |   |         |   |   |          |   |
| Machinery and equipment       |   | $            | 41,726 |   |          | $      | 38,599 |   |
| Less accumulated depreciation |   |         | (1,804 | )      |          |   | - |   |
|                          |   |         |   |   |          |   |   |   |
| Property and equipment, net   |   | $            | 39,922 |   |          | $      | 38,599 |   |

|                   |   | December 31, |    |   | September 30, |   |
|------------------------|--------|--------------|---------|--------|---------------|--------|
|                   |   | 2010         |    |   | 2010          |   |
|                   |   |         |    |   |          |   |
| Accrued salaries       |   | $            | 96,892  |   |          | $      | 77,000 |   |
| Interest payable       |   |         | 300,274 |   |          |   | 256,777 |   |
| Claims payable         |   |         | -       |   |          |   | 290,000 |   |
| Other accrued expenses |   |         | 319,708 |   |          |   | 319,708 |   |
|                   |   |         |    |   |          |   |   |   |
| Total accrued expenses |   | $            | 716,874 |   |          | $      | 943,485 |   |

----

----

|                             |   |       |       |   |     |   |   |      |   |   | Weighted    |   |
|----------------------------------|--------|------------|------------|--------|----------|--------|--------|-----------|--------|--------|-------------|--------|
|                             |   |       |       |   | Weighted |   |   |      |   |   | Average     |   |
|                             |   |       |       |   | Average  |   |   | Aggregate |   |   | Remaining   |   |
|                             |   | Number     |       |   | Exercise |   |   | Intrinsic |   |   | Contractual |   |
|                             |   | of Options |       |   | Price    |   |   | Value     |   |   | Life        |   |
|                             |   |       |       |   |     |   |   |      |   |   |        |   |
| Outstanding at October 1, 2010   |   |       | 24,501,316 |   |     | $      | 0.13   |      |   | $      | -           |   |   |   | 2.55 |   |
| Granted                          |   |       | 2,290,000  |   |     |   | 0.06   |      |   |   |        |   |   |   |   |   |
| Expired                          |   |       | -          |   |     |   | -      |      |   |   |        |   |   |   |   |   |
| Forfeited                        |   |       | -          |   |     |   | -      |      |   |   |        |   |   |   |   |   |
| Exercised                        |   |       | -          |   |     |   | -      |      |   |   |        |   |   |   |   |   |
| Outstanding at December 31, 2010 |   |       | 26,791,316 |   |     | $      | 0.12   |      |   | $      | -           |   |   |   | 2.62 |   |
|                             |   |       |       |   |     |   |   |      |   |   |        |   |   |   |   |   |
| Exercisable at December 31, 2010 |   |       | 26,791,316 |   |     | $      | 0.12   |      |   | $      | -           |   |   |   | 2.62 |   |

|     |   |        |       |   | Weighted    |   |   |        |   |   | Weighted    |   |
|----------|--------|-------------|------------|--------|-------------|--------|--------|-------------|--------|--------|-------------|--------|
|     |   |        |       |   | Average     |   |   |        |   |   | Average     |   |
|     |   |        |       |   | Remaining   |   |   |        |   |   | Remaining   |   |
| Exercise |   | Options     |       |   | Contractual |   |   | Options     |   |   | Contractual |   |
| Price    |   | Outstanding |       |   | Life        |   |   | Exercisable |   |   | Life        |   |
| $0.06    |   |        | 5,990,000  |   |        |   | 4.46   |        |   |   | 5,990,000   |   |   |   | 4.46 |   |
| $0.10    |   |        | 6,416,850  |   |        |   | 2.98   |        |   |   | 6,416,850   |   |   |   | 2.98 |   |
| $0.12    |   |        | 6,450,940  |   |        |   | 0.30   |        |   |   | 6,450,940   |   |   |   | 0.30 |   |
| $0.15    |   |        | 5,000,000  |   |        |   | 3.33   |        |   |   | 5,000,000   |   |   |   | 3.33 |   |
| $0.25    |   |        | 2,933,526  |   |        |   | 1.96   |        |   |   | 2,933,526   |   |   |   | 1.96 |   |
|     |   |        | 26,791,316 |   |        |   | 2.62   |        |   |   | 26,791,316  |   |   |   | 2.62 |   |

| ·   | risk free rate of return of 1.26 – 1.74%; |
|--------------------|-------------------------------------------------|

| ·   | volatility of 190 |
|--------------------|-------------------|

| ·   | dividend yield of 0%; and |
|--------------------|---------------------------|

| ·   | expected term of 5 years. |
|--------------------|---------------------------|

|                                |   |        |       |   | Weighted |   |   |      |   |
|-------------------------------------|--------|-------------|------------|--------|----------|--------|--------|-----------|--------|
|                                |   |        |       |   | Average  |   |   | Aggregate |   |
|                                |   | Number      |       |   | Exercise |   |   | Intrinsic |   |
|                                |   | of Warrants |       |   | Price    |   |   | Value     |   |
| Outstanding at October 1, 2010      |   |        | 65,238,820 |   |     | $      | 0.18   |      |   | $ | - |   |
| Granted                             |   |        | 10,174,998 |   |     |   | 0.15   |      |   |   |   |   |
| Expired                             |   |        | -          |   |     |   | -      |      |   |   |   |   |
| Forfeited                           |   |        | -          |   |     |   | -      |      |   |   |   |   |
| Exercised                           |   |        | -          |   |     |   | -      |      |   |   |   |   |
| Outstanding as of December 31, 2010 |   |        | 75,413,818 |   |     | $      | 0.18   |      |   | $ | - |   |
|                                |   |        |       |   |     |   |   |      |   |   |   |   |
| Exercisable as of December 31, 2010 |   |        | 75,413,818 |   |     | $      | 0.18   |      |   | $ | - |   |

----

|   |   |     |   |   |        |   |       |        |   |   | Weighted    |   |   |             |   |   |        |   |
|--------|--------|----------|--------|--------|-------------|--------|------------|-------------|--------|--------|-------------|--------|--------|------------------|--------|--------|-------------|--------|
|   |   |     |   |   |        |   |       |        |   |   | Average     |   |   |             |   |   |        |   |
|   |   |     |   |   |        |   |       |        |   |   | Remaining   |   |   | Weighted Average |   |
|   |   | Exercise |   |   | Warrants    |   |       | Warrants    |   |   | Contractual |   |   | Exercise Price   |   |   |        |   |
|   |   | Price    |   |   | Outstanding |   |       | Exercisable |   |   | Life        |   |   | Outstanding      |   |   | Exercisable |   |
|   |   |     |   |   |        |   |       |        |   |   |        |   |   |             |   |   |        |   |
|   |   | $        | 0.06   |   |        |   | 1,000,000  |        |   |   | 1,000,000   |   |   |             | 4.62   |   |        | $      | 0.06 |   |   | $ | 0.06 |   |
|   |   | $        | 0.10   |   |        |   | 14,904,722 |        |   |   | 14,904,722  |   |   |             | 1.47   |   |        | $      | 0.10 |   |   | $ | 0.10 |   |
|   |   | $        | 0.12   |   |        |   | 5,760,000  |        |   |   | 5,760,000   |   |   |             | 2.73   |   |        | $      | 0.12 |   |   | $ | 0.12 |   |
|   |   | $        | 0.14   |   |        |   | 5,000,000  |        |   |   | 5,000,000   |   |   |             | 4.81   |   |        | $      | 0.14 |   |   | $ | 0.14 |   |
|   |   | $        | 0.15   |   |        |   | 2,107,667  |        |   |   | 2,107,667   |   |   |             | 3.83   |   |        | $      | 0.15 |   |   | $ | 0.15 |   |
|   |   | $        | 0.17   |   |        |   | 18,633,330 |        |   |   | 18,633,330  |   |   |             | 4.57   |   |        | $      | 0.17 |   |   | $ | 0.17 |   |
|   |   | $        | 0.18   |   |        |   | 850,000    |        |   |   | 850,000     |   |   |             | 2.04   |   |        | $      | 0.18 |   |   | $ | 0.18 |   |
|   |   | $        | 0.25   |   |        |   | 21,029,312 |        |   |   | 21,029,312  |   |   |             | 2.13   |   |        | $      | 0.25 |   |   | $ | 0.25 |   |
|   |   | $        | 0.30   |   |        |   | 6,128,787  |        |   |   | 6,128,787   |   |   |             | 2.08   |   |        | $      | 0.30 |   |   | $ | 0.30 |   |
|   |   |     |   |   |        |   |       |        |   |   |        |   |   |             |   |   |        |   |   |   |   |   |   |   |
|   |   |     |   |   |        |   | 75,413,818 |        |   |   | 75,413,818  |   |   |             |   |   |        |   |   |   |   |   |   |   |

----

|   | · | our inability to obtain the financing we need to continue our operations; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | changes in regulatory requirements that adversely affect our business; |
|--------|--------|------------------------------------------------------------------------|

|   | · | loss of our key personnel; and |
|--------|--------|--------------------------------|

|   | · | risks over which we have no control, such as the general global downturn in the economy which may adversely affect spending by government agencies. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| ·   | Issued 3,597,932 shares of common stock for conversion of debt in the amount of $98,000 (including interest). We relied on Section 4(2) of the Securities Act, and Regulation D promulgated thereunder, as providing an exemption from registering the sale of these shares of common stock under the Securities Act. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Issued 10,350,000 shares of common stock together with warrants to purchase 5,174,998 shares of common stock, for gross proceeds of $621,000 ($0.06 per share). We relied on Section 4(2) of the Securities Act, and Regulation D promulgated thereunder, as providing an exemption from registering the sale of these shares of common stock under the Securities Act. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit No. |   | Description of Exhibit                                                                                                  |
|-------------|--------|-------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                    |
| 3.1         |   | Articles of Incorporation as amended (1)                                                                           |
|        |   |                                                                                                                    |
| 3.2         |   | Bylaws as amended  (1)                                                                                        |
|        |   |                                                                                                                    |
| 31.1        |   | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*                                                |
|        |   |                                                                                                                    |
| 31.2        |   | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*                                                |
|        |   |                                                                                                                    |
| 32.1        |   | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |
|        |   |                                                                                                                    |
| 32.2        |   | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |

----

|                    | SIONIX CORPORATION |                                                                                                                              |
|-------------------------|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|
|                    |               |                                                                                                                              |   |
| Date: February 14, 2011 | By:                | /s/ David R. Wells                                                                                                                |   |
|                    |               | David R. Wells                                                                                                                    |   |
|                    |               | President, Chief Financial Officer, Secretary/Treasurer, and Principal Financial and Accounting Officer (Duly Authorized Officer) |   |
|                    |               |                                                                                                                              |   |

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