----

----

| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

| Nevada                                                         | 59-3509694                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 9192 Red Branch Road, Suite 110                                |                                 |
| Columbia, Maryland                                             | 20866                                |
| (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 | x      |

----

----

----

NEW 

| Item 1.                                                         | Consolidated Financial Statements (Unaudited)                                         |   |
|-----------------------------------------------------------------|---------------------------------------------------------------------------------------|--------|
|                                                            |                                                                                  |   |
| Consolidated Balance Sheets                                     | 3                                                                                     |
|                                                            |                                                                                  |   |
| Consolidated Statements of Operations                           | 4                                                                                     |
|                                                            |                                                                                  |   |
| Consolidated Statements of Stockholders’ Equity (Deficit) | 5                                                                                     |
|                                                            |                                                                                  |   |
| Consolidated Statements of Cash Flows                           | 6                                                                                     |
|                                                            |                                                                                  |   |
| Notes to Consolidated Financial Statements                      | 7                                                                                     |
|                                                            |                                                                                  |   |
| Item 2.                                                         | Management's Discussion and Analysis of Financial Condition and Results of Operations | 20     |
|                                                            |                                                                                  |   |
| Item 4.                                                         | Controls and Procedures                                                               | 29     |
|                                                            |                                                                                  |   |
| PART II   OTHER INFORMATION                      |
|                                                            |                                                                                  |   |
| Item 1.                                                         | Legal Proceedings                                                                     | 30     |
|                                                            |                                                                                  |   |
| Item 2.                                                         | Unregistered Sales of Equity Securities and Use of Proceeds                           | 30     |
|                                                            |                                                                                  |   |
| Item 3.                                                         | Defaults Upon Senior Securities                                                       | 30     |
|                                                            |                                                                                  |   |
| Item 5.                                                         | Other Information                                                                     | 30     |
|                                                            |                                                                                  |   |
| Item 6.                                                         | Exhibits                                                                              | 31     |
|                                                            |                                                                                  |   |
| Signatures                                                      |                                                                                  |
|                                                            |                                                                                  |   |
| Certifications                                                  |                                                                                  |

----

Table of Contents

PART 

|                                                                                                                                                            |   | November 30, |       |   | August 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|-----------------|--------|
|                                                                                                                                                            |   | 2010              |       |   | 2010            |   |
|                                                                                                                                                            |   |              |       |   |            |   |
| ASSETS                                                                                                                                                          |   |
|                                                                                                                                                            |   |              |       |   |            |   |
| Current assets                                                                                                                                                  |   |              |       |   |            |   |
| Cash and cash equivalents                                                                                                                                       |   | $                 | 2,670,005  |   |            | $      | 502,528 |   |
| Deferred research and development costs                                                                                                                         |   |              | 106,281    |   |            |   | 64,207 |   |
| Prepaid expenses and other current assets                                                                                                                       |   |              | 13,116     |   |            |   | 14,378 |   |
| Total current assets                                                                                                                                            |   |              | 2,789,402  |   |            |   | 581,113 |   |
|                                                                                                                                                            |   |              |       |   |            |   |   |   |
| Equipment, net of accumulated depreciation of $116 and $0 at November 30, 2010 and August 31, 2010                                                              |   |              | 1,274      |   |            |   | - |   |
|                                                                                                                                                            |   |              |       |   |            |   |   |   |
| Total assets                                                                                                                                                    |   | $                 | 2,790,676  |   |            | $      | 581,113 |   |
|                                                                                                                                                            |   |              |       |   |            |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                            |   |
|                                                                                                                                                            |   |              |       |   |            |   |   |   |
| Current liabilities                                                                                                                                             |   |              |       |   |            |   |   |   |
| Accounts payable                                                                                                                                                |   | $                 | 39,642     |   |            | $      | 67,553 |   |
| Accrued liabilities                                                                                                                                             |   |              | 179,310    |   |            |   | 156,109 |   |
| Warrant liability                                                                                                                                               |   |              | 697,405    |   |            |   | 8,059 |   |
| Total current liabilities                                                                                                                                       |   |              | 916,357    |   |            |   | 231,721 |   |
|                                                                                                                                                            |   |              |       |   |            |   |   |   |
| Total liabilities                                                                                                                                               |   |              | 916,357    |   |            |   | 231,721 |   |
|                                                                                                                                                            |   |              |       |   |            |   |   |   |
| Commitments and contingencies                                                                                                                                   |   |              |       |   |            |   |   |   |
|                                                                                                                                                            |   |              |       |   |            |   |   |   |
| Stockholders' equity                                                                                                                                            |   |              |       |   |            |   |   |   |
| Preferred stock: $0.10 par value; 1,000,000 shares authorized, no shares issued and outstanding at November 30, 2010 and August 31, 2010                        |   |              | -          |   |            |   | - |   |
| Common stock: $0.001 par value; 100,000,000 shares authorized, 60,365,696 and 58,600,600 shares issued and outstanding at November 30, 2010 and August 31, 2010 |   |              | 60,366     |   |            |   | 58,601 |   |
| Common stock issuable; 441,000 and 0 shares at November 30, 2010 and August 31, 2010                                                                            |   |              | 441        |   |            |   | - |   |
| Additional paid-in capital                                                                                                                                      |   |              | 9,863,644  |   |            |   | 7,018,967 |   |
| Subscription receivable                                                                                                                                         |   |              | (125,000   | )      |            |   | - |   |
| Deficit accumulated during the development stage                                                                                                                |   |              | (7,925,132 | )      |            |   | (6,728,176 | ) |
| Total stockholders' equity                                                                                                                                      |   |              | 1,874,319  |   |            |   | 349,392 |   |
|                                                                                                                                                            |   |              |       |   |            |   |   |   |
| Total liabilities and stockholders' equity                                                                                                                      |   | $                 | 2,790,676  |   |            | $      | 581,113 |   |

----

Table of Contents

NEW 

|                                                           |   | Three Months Ended November 30, |       |   | Cumulative May 5, 1998 (Inception) toNovember 30, |   |
|----------------------------------------------------------------|--------|---------------------------------|------------|--------|--------------------------------------------------------|--------|
|                                                           |   | 2010                            |       |   | 2009                                                   |   |   | 2010 |   |
|                                                           |   |                            |       |   |                                                   |   |   |   |   |
| Revenue                                                        |   | $                               | -          |   |                                                   | $      | - |   |   | $ | - |   |
|                                                           |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Operating expense                                              |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Marketing and investor relations                               |   |                            | 37,055     |   |                                                   |   | 241,593 |   |   |   | 3,192,437 |   |
| Wages and benefits                                             |   |                            | 279,486    |   |                                                   |   | 225,360 |   |   |   | 1,396,963 |   |
| Management fees - related party                                |   |                            | -          |   |                                                   |   | - |   |   |   | 207,546 |   |
| Professional fees                                              |   |                            | 89,947     |   |                                                   |   | 92,568 |   |   |   | 1,261,855 |   |
| Research and development                                       |   |                            | 57,122     |   |                                                   |   | 274,314 |   |   |   | 1,503,446 |   |
| License fee                                                    |   |                            | -          |   |                                                   |   | - |   |   |   | 20,000 |   |
| Travel and entertainment                                       |   |                            | 6,187      |   |                                                   |   | 6,706 |   |   |   | 362,452 |   |
| Other operating expenses                                       |   |                            | 37,065     |   |                                                   |   | 61,755 |   |   |   | 592,835 |   |
| Total operating expense                                        |   |                            | 506,862    |   |                                                   |   | 902,296 |   |   |   | 8,537,534 |   |
|                                                           |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Loss from operations                                           |   |                            | (506,862   | )      |                                                   |   | (902,296 | ) |   |   | (8,537,534 | ) |
|                                                           |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Other income (expense)                                         |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Interest income                                                |   |                            | -          |   |                                                   |   | - |   |   |   | 98,582 |   |
| Interest expense                                               |   |                            | (251       | )      |                                                   |   | - |   |   |   | (11,253 | ) |
| Loss on disposal of fixed assets                               |   |                            | -          |   |                                                   |   | - |   |   |   | (5,307 | ) |
| Gain on dissolution of foreign subsidiary                      |   |                            | -          |   |                                                   |   | - |   |   |   | 59,704 |   |
| Foreign exchange gain (loss)                                   |   |                            | (497       | )      |                                                   |   | 16 |   |   |   | (85,382 | ) |
| Change in fair value of warrant liability                      |   |                            | (689,346   | )      |                                                   |   | 991,254 |   |   |   | 1,430,926 |   |
| Payable forgiven                                               |   |                            | -          |   |                                                   |   | - |   |   |   | 30,000 |   |
| Total other income (expense)                                   |   |                            | (690,094   | )      |                                                   |   | 991,270 |   |   |   | 1,517,270 |   |
|                                                           |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations                       |   |                            | (1,196,956 | )      |                                                   |   | 88,974 |   |   |   | (7,020,264 | ) |
|                                                           |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Loss from discontinued operations                              |   |                            | -          |   |                                                   |   | - |   |   |   | (162,097 | ) |
|                                                           |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Net income (loss)                                              |   | $                               | (1,196,956 | )      |                                                   | $      | 88,974 |   |   | $ | (7,182,361 | ) |
|                                                           |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Net income (loss) per common share - basic                     |   | $                               | (0.02      | )      |                                                   | $      | 0.00 |   |   |   |   |   |
| Net income (loss) per common share - diluted                   |   | $                               | (0.02      | )      |                                                   | $      | 0.00 |   |   |   |   |   |
|                                                           |   |                            |       |   |                                                   |   |   |   |   |   |   |   |
| Weighted average number of common shares outstanding - basic   |   |                            | 59,076,055 |   |                                                   |   | 58,600,600 |   |   |   |   |   |
| Weighted average number of common shares outstanding - diluted |   |                            | 59,076,055 |   |                                                   |   | 59,475,520 |   |   |   |   |   |

----

Table of Contents

ENERGY 

|                                                                                                                              |   | Preferred Stock |   |   | Common Stock |   |   | Common Stock Issuable |   |   | Additional Paid-in |   |   | Subscription |   |   | Accumulated Other Comprehensive Income |   |    | Deficit Accumulated During the Development |   |   | Comprehensive Income |   |   | Total Stockholders' Equity |       |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|--------|--------------|--------|--------|-----------------------|--------|--------|--------------------|--------|--------|--------------|--------|--------|----------------------------------------|--------|---------|--------------------------------------------|--------|--------|----------------------|--------|--------|----------------------------|------------|
|                                                                                                                              |   | Shares          |   |   | Amount       |   |   | Shares                |   |   | Amount             |   |   | Shares       |   |   | Amount                                 |   |    | Capital                                    |   |   | Receivable           |   |   | (Loss)                     |       |   | Stage |   |   | (Loss) |   |   | (Deficit) |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |
| Restricted common stock issued to related parties for management services at $0.003 per share                                     |   |            | -      |   |         | $      | -      |                  |   |   | 9,000,000          |   |   | $            | 9,000  |   |                                   |   | -       |                                       |   | $      | -                    |   |   | $                          | (6,000     | ) |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 3,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrestricted common stock sales to third parties at $0.13 per share                                                               |   |            | -      |   |         |   | -      |                  |   |   | 1,125,000          |   |   |         | 1,125  |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 148,875    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 150,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 1998                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (12,326 | ) |   |   | (12,326 | ) |   |   | (12,326 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (12,326 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 1998                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 10,125,000         |   |   |         | 10,125 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 142,875    |   |   |   | - |   |   |   | - |   |   |   | (12,326 | ) |   |   | - |   |   |   | 140,674 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 1999                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (77,946 | ) |   |   | (77,946 | ) |   |   | (77,946 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (77,946 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 1999                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 10,125,000         |   |   |         | 10,125 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 142,875    |   |   |   | - |   |   |   | - |   |   |   | (90,272 | ) |   |   | - |   |   |   | 62,728 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2000                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (12,446 | ) |   |   | (12,446 | ) |   |   | (12,446 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (12,446 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2000                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 10,125,000         |   |   |         | 10,125 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 142,875    |   |   |   | - |   |   |   | - |   |   |   | (102,718 | ) |   |   | - |   |   |   | 50,282 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for year ended August 31, 2001                                                                                           |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (12,904 | ) |   |   | (12,904 | ) |   |   | (12,904 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (12,904 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2001                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 10,125,000         |   |   |         | 10,125 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 142,875    |   |   |   | - |   |   |   | - |   |   |   | (115,622 | ) |   |   | - |   |   |   | 37,378 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2002                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (54,935 | ) |   |   | (54,935 | ) |   |   | (54,935 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (54,935 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2002                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 10,125,000         |   |   |         | 10,125 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 142,875    |   |   |   | - |   |   |   | - |   |   |   | (170,557 | ) |   |   | - |   |   |   | (17,557 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restricted common stock issued to a related party to satisfy outstanding management fees at $0.003 per share on December 19, 2002 |   |            | -      |   |         |   | -      |                  |   |   | 24,000,000         |   |   |         | 24,000 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 56,000     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 80,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restricted common stock issued to a related party to satisfy outstanding management fees at $0.003 per share on March 18, 2003    |   |            | -      |   |         |   | -      |                  |   |   | 6,999,600          |   |   |         | 7,000  |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 16,332     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 23,332 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2003                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (97,662 | ) |   |   | (97,662 | ) |   |   | (97,662 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (97,662 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2003                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 41,124,600         |   |   |         | 41,125 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 215,207    |   |   |   | - |   |   |   | - |   |   |   | (268,219 | ) |   |   | - |   |   |   | (11,887 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2004                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (19,787 | ) |   |   | (19,787 | ) |   |   | (19,787 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (19,787 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2004                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 41,124,600         |   |   |         | 41,125 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 215,207    |   |   |   | - |   |   |   | - |   |   |   | (288,006 | ) |   |   | - |   |   |   | (31,674 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2005                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (103,142 | ) |   |   | (103,142 | ) |   |   | (103,142 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (103,142 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2005                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 41,124,600         |   |   |         | 41,125 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 215,207    |   |   |   | - |   |   |   | - |   |   |   | (391,148 | ) |   |   | - |   |   |   | (134,816 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock and warrants at $0.17 per share on May 16, 2006                                                          |   |            | -      |   |         |   | -      |                  |   |   | 3,000,000          |   |   |         | 3,000  |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 497,000    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 500,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2006                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (157,982 | ) |   |   | (157,982 | ) |   |   | (157,982 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (157,982 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2006                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 44,124,600         |   |   |         | 44,125 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 712,207    |   |   |   | - |   |   |   | - |   |   |   | (549,130 | ) |   |   | - |   |   |   | 207,202 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class A Warrants  at $0.167 per share during November - December 2006                                       |   |            | -      |   |         |   | -      |                  |   |   | 3,000,000          |   |   |         | 3,000  |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 497,000    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 500,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class B Warrants  at $0.183per share November - May 2007                                                    |   |            | -      |   |         |   | -      |                  |   |   | 3,000,000          |   |   |         | 3,000  |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 547,000    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 550,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class C Warrants  at $0.50 per share during August 2007                                                     |   |            | -      |   |         |   | -      |                  |   |   | 980,000            |   |   |         | 980    |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 489,020    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 490,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class D Warrants  at $0.55 per share during August 2007                                                     |   |            | -      |   |         |   | -      |                  |   |   | 880,000            |   |   |         | 880    |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 483,120    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 484,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class E Warrants  at $0.60 per share during August 2007                                                     |   |            | -      |   |         |   | -      |                  |   |   | 880,000            |   |   |         | 880    |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 527,120    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 528,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock and warrants at $0.50 per share on April 23, 2007                                                        |   |            | -      |   |         |   | -      |                  |   |   | 1,000,000          |   |   |         | 1,000  |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 499,000    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 500,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend paid - spin off of MircoChannel Technologies Corporation                                                                 |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (400,000 | ) |   |   | - |   |   |   | (400,000 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustments                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | (1,811 | ) |   |   | - |   |   |   | (1,811 | ) |   |   | (1,811 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2007                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (1,442,769 | ) |   |   | (1,442,769 | ) |   |   | (1,442,769 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,444,580 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2007                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 53,864,600         |   |   |         | 53,865 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 3,754,467  |   |   |   | - |   |   |   | (1,811 | ) |   |   | (2,391,899 | ) |   |   |   |   |   |   | 1,414,622 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock and warrants issued for cash and services at $1.00 per Unit in February 2008                                         |   |            | -      |   |         |   | -      |                  |   |   | 3,675,000          |   |   |         | 3,675  |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 3,392,280  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,395,955 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class C Warrants at $0.50 per share during March 2008                                                                 |   |            | -      |   |         |   | -      |                  |   |   | 20,000             |   |   |         | 20     |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 9,980      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 10,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class D Warrants  at $0.55 per share during May 2008                                                        |   |            | -      |   |         |   | -      |                  |   |   | 20,000             |   |   |         | 20     |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 10,980     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 11,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class F Warrants  at $1.25 per share during April - May 2008                                                |   |            | -      |   |         |   | -      |                  |   |   | 175,000            |   |   |         | 175    |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 218,575    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 218,750 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock based compensation                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 3,600,303  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,600,303 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                                                                       |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustments                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | 12,504 |   |   |   | - |   |   |   | 12,504 |   |   |   | 12,504 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2008                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (5,721,545 | ) |   |   | (5,721,545 | ) |   |   | (5,721,545 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (5,709,041 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2008                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 57,754,600         |   |   |         | 57,755 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 10,986,585 |   |   |   | - |   |   |   | 10,693 |   |   |   | (8,113,444 | ) |   |   |   |   |   |   | 2,941,589 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class E Warrants  at $0.60 per share during July 2009                                                       |   |            | -      |   |         |   | -      |                  |   |   | 20,000             |   |   |         | 20     |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 11,980     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 12,000 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class F Warrants  at $1.25 per share during July - August 2009                                              |   |            | -      |   |         |   | -      |                  |   |   | 826,000            |   |   |         | 826    |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 1,031,674  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,032,500 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock based compensation                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 183,312    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 183,312 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reversal of stock based compensation due to forfeiture of stock options                                                           |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | (3,591,093 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (3,591,093 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustments                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | (10,693 | ) |   |   | - |   |   |   | (10,693 | ) |   |   | (10,693 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2009                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | 1,961,175 |   |   |   | 1,961,175 |   |   |   | 1,961,175 |   |
| Total comprehensive income                                                                                                        |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,950,482 |   |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2009                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 58,600,600         |   |   |         | 58,601 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 8,622,458  |   |   |   | - |   |   |   | - |   |   |   | (6,152,269 | ) |   |   |   |   |   |   | 2,528,790 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock based compensation                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 661,040    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 661,040 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reversal of stock based compensation due to forfeiture of stock options                                                           |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | (478,971   | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (478,971 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative adjustment upon adoption of ASC 815-40                                                                                 |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | (1,785,560 | ) |   |   | - |   |   |   | - |   |   |   | (342,771 | ) |   |   | - |   |   |   | (2,128,331 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended August 31, 2010                                                                                       |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (233,136 | ) |   |   | (233,136 | ) |   |   | (233,136 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (233,136 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2010                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | 58,600,600         |   |   |         | 58,601 |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 7,018,967  |   |   |   | - |   |   |   | - |   |   |   | (6,728,176 | ) |   |   | - |   |   |   | 349,392 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of Class F Warrants at $1.25 per share during October - November 2010                                                    |   |            | -      |   |         |   | -      |                  |   |   | 1,614,144          |   |   |         | 1,614  |   |                                   |   | 441,000 |                                       |   |   | 441                  |   |   |                       | 2,566,875  |   |   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,568,930 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subscription receivable for 100,000 shares at $1.25 per share on exercise of Class F Warrants                                     |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | (125,000 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (125,000 | ) |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of stock options                                                                                                         |   |            | -      |   |         |   | -      |                  |   |   | 150,952            |   |   |         | 151    |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 30,649     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 30,800 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock based compensation                                                                                                          |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | 247,153    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 247,153 |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the three months ended November 30, 2010                                                                             |   |            | -      |   |         |   | -      |                  |   |   | -                  |   |   |         | -      |   |                                   |   | -       |                                       |   |   | -                    |   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (1,196,956 | ) |   |   | (1,196,956 | ) |   |   | (1,196,956 | ) |
| Total comprehensive loss                                                                                                          |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | (1,196,956 | ) |   |   |   |   |
|                                                                                                                              |   |            |   |   |         |   |   |                  |   |   |               |   |   |         |   |   |                                   |   |    |                                       |   |   |                 |   |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, November 30, 2010                                                                                                        |   |            | -      |   |         | $      | -      |                  |   |   | 60,365,696         |   |   | $            | 60,366 |   |                                   |   | 441,000 |                                       |   | $      | 441                  |   |   | $                          | 9,863,644  |   |   | $ | (125,000 | ) |   | $ | - |   |   | $ | (7,925,132 | ) |   |   |   |   |   | $ | 1,874,319 |   |

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|                                                                                    |   | Three Months Ended November 30, |       |   | Cumulative May 5, 1998 (Inception) toNovember 30, |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------|------------|--------|--------------------------------------------------------|--------|
|                                                                                    |   | 2010                                 |       |   | 2009                                                   |   |   |  2010 |   |
|                                                                                    |   |                                 |       |   |                                                   |   |   |   |   |
| Cash flows from operating activities                                                    |   |                                 |       |   |                                                   |   |   |   |   |
| Income (loss) from continuing operations                                                |   | $                                    | (1,196,956 | )      |                                                   | $      | 88,974 |   |   | $ | (7,020,264 | ) |
| Add: loss from discontinued operations                                                  |   |                                 | -          |   |                                                   |   | - |   |   |   | (162,097 | ) |
| Adjustments to reconcile net income (loss) to net cash used in operating activities     |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Depreciation                                                                            |   |                                 | 116        |   |                                                   |   | - |   |   |   | 4,598 |   |
| Stock based compensation expense                                                        |   |                                 | 247,153    |   |                                                   |   | 191,616 |   |   |   | 4,691,808 |   |
| Reversal of stock based compensation expense due to forfeiture of stock options         |   |                                 | -          |   |                                                   |   | - |   |   |   | (4,070,064 | ) |
| Change in fair value of warrant liability                                               |   |                                 | 689,346    |   |                                                   |   | (991,254 | ) |   |   | (1,430,926 | ) |
| Loss of disposal of fixed assets                                                        |   |                                 | -          |   |                                                   |   | - |   |   |   | 5,307 |   |
| Payable written off                                                                     |   |                                 | -          |   |                                                   |   | - |   |   |   | (30,000 | ) |
| Common stock issued for services                                                        |   |                                 | -          |   |                                                   |   | - |   |   |   | 3,000 |   |
| Common stock issued for debt settlement                                                 |   |                                 | -          |   |                                                   |   | - |   |   |   | 103,332 |   |
| Changes in operating assets and liabilities:                                            |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Increase in deferred research and development costs                                     |   |                                 | (42,074    | )      |                                                   |   | (14,525 | ) |   |   | (106,281 | ) |
| Decrease (increase) in prepaid expenses and other current assets                        |   |                                 | 1,262      |   |                                                   |   | (40,749 | ) |   |   | (13,116 | ) |
| Increase (decrease) in accounts payable                                                 |   |                                 | (27,911    | )      |                                                   |   | 90,065 |   |   |   | 39,642 |   |
| Increase in accrued liabilities                                                         |   |                                 | 23,201     |   |                                                   |   | - |   |   |   | 179,310 |   |
| Increase in accounts payable - related party                                            |   |                                 | -          |   |                                                   |   | - |   |   |   | 30,000 |   |
| Net cash used in operating activities                                                   |   |                                 | (305,863   | )      |                                                   |   | (675,873 | ) |   |   | (7,775,751 | ) |
|                                                                                    |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Cash flows from investing activity                                                      |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Purchase of fixed assets                                                                |   |                                 | (1,390     | )      |                                                   |   | - |   |   |   | (11,179 | ) |
| Net cash used in investing activity                                                     |   |                                 | (1,390     | )      |                                                   |   | - |   |   |   | (11,179 | ) |
|                                                                                    |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Cash flows from financing activities                                                    |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Proceeds from the issuance of common stock, exercise of warrants and stock options, net |   |                                 | 2,474,730  |   |                                                   |   | - |   |   |   | 10,856,935 |   |
| Repayment of promissory note                                                            |   |                                 | -          |   |                                                   |   | - |   |   |   | (155,000 | ) |
| Proceeds from promissory notes                                                          |   |                                 | -          |   |                                                   |   | - |   |   |   | 155,000 |   |
| Dividend paid                                                                           |   |                                 | -          |   |                                                   |   | - |   |   |   | (400,000 | ) |
| Net cash provided by financing activities                                               |   |                                 | 2,474,730  |   |                                                   |   | - |   |   |   | 10,456,935 |   |
|                                                                                    |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                        |   |                                 | 2,167,477  |   |                                                   |   | (675,873 | ) |   |   | 2,670,005 |   |
|                                                                                    |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Cash and cash equivalents at beginning of period                                        |   |                                 | 502,528    |   |                                                   |   | 2,736,221 |   |   |   | - |   |
|                                                                                    |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Cash and cash equivalents at end of period                                              |   | $                                    | 2,670,005  |   |                                                   | $      | 2,060,348 |   |   | $ | 2,670,005 |   |
|                                                                                    |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
|                                                                                    |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                       |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Interest paid in cash                                                                   |   | $                                    | 251        |   |                                                   | $      | - |   |   | $ | 11,253 |   |
| Income taxes paid in cash                                                               |   | $                                    | -          |   |                                                   | $      | - |   |   | $ | - |   |
|                                                                                    |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Supplemental disclosure of non-cash transactions:                                       |   |                                 |       |   |                                                   |   |   |   |   |   |   |   |
| Accrued management fees converted to equity                                             |   | $                                    | -          |   |                                                   | $      | - |   |   | $ | 103,332 |   |
| Warrants issued for broker commissions                                                  |   | $                                    | -          |   |                                                   | $      | - |   |   | $ | 642,980 |   |

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|   | · | KEC; and |
|--------|--------|----------|

|   | · | New Energy Solar |
|--------|--------|------------------|

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|   | · | MotionPowerTM Technology for capturing and converting the kinetic energy of moving vehicles to generate electricity; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   | · | SolarWindowTM Technology which enables see-thru glass windows to generate electricity by applying electricity-generating coatings to their glass surfaces. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                 |   | Three Months Ended |       |
|------------------------------------------------------|--------|--------------------|------------|
|                                                 |   | November 30,       |       |
|                                                 |   | 2010               |       |   | 2009 |   |
|                                                 |   |               |       |   |   |   |
| Basic EPS Computation                                |   |               |       |   |   |   |
| Numerator: income available to common stockholders   |   | $                  | (1,196,956 | ) |   | $ | 88,974 |   |
|                                                 |   |               |       |   |   |   |   |   |
| Denominator:                                         |   |               |       |   |   |   |   |   |
| Weighted average number of common shares outstanding |   |               | 59,076,055 |   |   |   | 58,600,600 |   |
|                                                 |   |               |       |   |   |   |   |   |
| Basic EPS                                            |   | $                  | (0.02      | ) |   | $ | 0.00 |   |
|                                                 |   |               |       |   |   |   |   |   |
| Dilutive EPS Computation                             |   |               |       |   |   |   |   |   |
| Numerator: income available to common stockholders   |   | $                  | (1,196,956 | ) |   | $ | 88,974 |   |
|                                                 |   |               |       |   |   |   |   |   |
| Denominator:                                         |   |               |       |   |   |   |   |   |
| Weighted average number of common shares outstanding |   |               | 59,076,055 |   |   |   | 58,600,600 |   |
| Effect of dilutive securities:                       |   |               |       |   |   |   |   |   |
| Warrants                                             |   |               | -          |   |   |   | 874,920 |   |
| Total shares                                         |   |               | 59,076,055 |   |   |   | 59,475,520 |   |
|                                                 |   |               |       |   |   |   |   |   |
| Diluted EPS                                          |   | $                  | (0.02      | ) |   | $ | 0.00 |   |

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| Beginning Balance, September 1, 2010      |   | $      | 8,059   |   |
|-------------------------------------------|--------|--------|---------|--------|
| Change in fair value of warrant liability |   |   | 689,346 |   |
| Ending Balance, November 30, 2010         |   | $      | 697,405 |   |

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|                                     |   | Number of Options |       |   | Weighted Average Exercise Price |   | Weighted Average Remaining Contractual Term |   | Aggregate Intrinsic Value                                 |   |
|------------------------------------------|--------|-------------------|------------|--------|---------------------------------|--------|---------------------------------------------|--------|-----------------------------------------------------------|--------|
|                                     |   |              |       |   |                            |   |                                        |   |                                                      |   |
| Outstanding at August 31, 2010           |   |              | 2,700,000  |   |                            | $      | 0.57                                        |   |                                                      |   |   |   |
| Exercises                                |   |              | (220,000   | )      |                            |   | 0.54                                        |   |                                                      |   |   |   |
| Forfeitures                              |   |              | (180,000   | )      |                            |   | 0.44                                        |   |                                                      |   |   |   |
| Outstanding at November 30, 2010         |   |              | 2,300,000  |   |                            | $      | 0.58                                        |   | 9.2 years                                                 |   | $ | 2,599,000 |   |
|                                     |   |              |       |   |                            |   |                                        |   |                                                      |   |   |   |   |
| Exercisable at November 30, 2010         |   |              | 120,000    |   |                            | $      | 0.78                                        |   |         5.8 years |   | $ | 111,600 |   |
|                                     |   |              |       |   |                            |   |                                        |   |                                                      |   |   |   |   |
| Available for grant at November 30, 2010 |   |              | 12,260,000 |   |                            |   |                                        |   |                                                      |   |   |   |   |

|               |   | Three Months Ended |         |
|--------------------|--------|--------------------|--------------|
|               |   | November 30,       |         |
|               |   | 2010               |         |   | 2009 |   |
|               |   |               |         |   |   |   |
| Wages and benefits |   | $                  | 235,822      |   |   | $ | 182,729 |   |
| Professional fees  |   |               | 11,331  |   |   |   | 8,887 |   |
| Total              |   | $                  | 247,153      |   |   | $ | 191,616 |   |

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|   | (a) | as to 37,500 on June 30, 2010; |
|--------|-----|--------------------------------|

|   | (b) | as to 37,500 on September 30, 2010; |
|--------|-----|-------------------------------------|

|   | (c) | as to 37,500 on December 31, 2010; and |
|--------|-----|----------------------------------------|

|   | (d) | as to 37,500 on March 31, 2011. |
|--------|-----|---------------------------------|

|            |                |   | Stock Options Outstanding     |   |      | Stock Options Exercisable                           |   |
|-----------------|---------------------|--------|-------------------------------|--------|-----------|-----------------------------------------------------|--------|
| Exercise Prices |                |   | Number of Options Outstanding |   |      | Weighted Average Remaining Contractual Life (Years) |   |   | Weighted Average Exercise Price |   |   | Number of Options Exercisable |   |   | Weighted Average Remaining Contractual Life (Years) |   |   | Weighted Average Exercise Price |   |
|            |                |   |                          |   |      |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $               | 0.44                |   |                          |   | 150,000   |                                                |   |   | 7.9 |   |   | $ | 0.44 |   |   |   | 60,000 |   |   |   | 7.9 |   |   | $ | 0.44 |   |
|            | 0.55                |   |                          |   | 2,000,000 |                                                |   |   | 9.7 |   |   |   | 0.55 |   |   |   | — |   |   |   | — |   |   |   | — |   |
|            | 0.85                |   |                          |   | 100,000   |                                                |   |   | 7.8 |   |   |   | 0.85 |   |   |   | 40,000 |   |   |   | 7.8 |   |   |   | 0.85 |   |
|            | 1.66                |   |                          |   | 50,000    |                                                |   |   | 7.3 |   |   |   | 1.66 |   |   |   | 20,000 |   |   |   | 7.3 |   |   |   | 1.66 |   |
| $               | 0.44 – $ 1.66 |   |                          |   | 2,300,000 |                                                |   |   | 9.2 |   |   | $ | 0.58 |   |   |   | 120,000 |   |   |   | 5.8 |   |   | $ | 0.78 |   |

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|   | · | paid an aggregate annual salary of $150,000 payable in 24 equal bimonthly installments of $6,250, which would increase to an aggregate annual salary of $250,000 payable in 24 equal bimonthly installments of $10,416.67 if the Company consummates either an equity or debt financing or series of financings pursuant to which it either directly or through a subsidiary receives net proceeds (after deduction of the costs of such financing, inclusive of commissions and or finder’s fees) of not less than $7,000,000; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | paid a stipend of $1,000 per month during the term of the Employment Agreement to cover medical insurance premiums until such time as the Company can provide an alternative medical insurance plan; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | reimbursed for reasonable travel and other out-of-pocket expenses necessarily incurred in the performance of his duties. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

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|   | · | MotionPowerTM Technology for capturing and converting the kinetic energy of moving vehicles to generate electricity; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   | · | SolarWindowTM Technology which enables see-thru glass windows to generate electricity by applying electricity-generating coatings to their glass surfaces. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                             |   | Three Months Ended |    |   |       |   |    |       |   |
|----------------------------------|--------|--------------------|---------|--------|------------|--------|---------|------------|--------|
|                             |   | November 30,       |    |   | Increase / |   |    | Percentage |   |
|                             |   | 2010               |    |   | 2009       |   |    | (Decrease) |   |   | Change |   |
|                             |   |               |    |   |       |   |    |       |   |   |   |   |
| Operating expense                |   |               |    |   |       |   |    |       |   |   |   |   |
| Marketing and investor relations |   | $                  | 37,055  |   |       | $      | 241,593 |       |   | $ | (204,538 | ) |   |   | (85 | ) % |
| Wages and benefits               |   |               | 279,486 |   |       |   | 225,360 |       |   |   | 54,126 |   |   |   | 24 |   |
| Professional fees                |   |               | 89,947  |   |       |   | 92,568  |       |   |   | (2,621 | ) |   |   | (3 | ) |
| Research and development         |   |               | 57,122  |   |       |   | 274,314 |       |   |   | (217,192 | ) |   |   | (79 | ) |
| Travel and entertainment         |   |               | 6,187   |   |       |   | 6,706   |       |   |   | (519 | ) |   |   | (8 | ) |
| Other operating expenses         |   |               | 37,065  |   |       |   | 61,755  |       |   |   | (24,690 | ) |   |   | (40 | ) |
| Total operating expense          |   | $                  | 506,862 |   |       | $      | 902,296 |       |   | $ | (395,434 | ) |   |   | (44 | ) % |

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|                                      |   | Three Months Ended |     |   |   |   |
|-------------------------------------------|--------|--------------------|----------|--------|--------|--------|
|                                      |   | November 30,       |     |   |   |   |
|                                      |   | 2010               |     |   | 2009   |   |   | Change |   |
|                                      |   |               |     |   |   |   |   |   |   |
| Other income (expense)                    |   |               |     |   |   |   |   |   |   |
| Interest expense                          |   | $                  | (251     | )      |   | $      | - |   |   | $ | (251 | ) |
| Foreign exchange gain (loss)              |   |               | (497     | )      |   |   | 16 |   |   |   | (513 | ) |
| Change in fair value of warrant liability |   |               | (689,346 | )      |   |   | 991,254 |   |   |   | (1,680,600 | ) |
| Total other income (expense)              |   | $                  | (690,094 | )      |   | $      | 991,270 |   |   |   | (1,681,364 | ) |

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PART 

Item 

|   | (e) | as to 37,500 on June 30, 2010; |
|--------|-----|--------------------------------|

|   | (f) | as to 37,500 on September 30, 2010; |
|--------|-----|-------------------------------------|

|   | (g) | as to 37,500 on December 31, 2010; and |
|--------|-----|----------------------------------------|

|   | (h) | as to 37,500 on March 31, 2011. |
|--------|-----|---------------------------------|

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| Exhibit No. | Description of Exhibit                                                                                                                                                                                                                            |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                              |
| 3.1         | Articles of Incorporation (1)                                                                                                                                                                                                                     |
|        |                                                                                                                                                                                                                                              |
| 3.2         | Certificate of Amendment to the Articles of Incorporation changing name to New Energy Technologies, Inc. (1)                                                                                                                                      |
|        |                                                                                                                                                                                                                                              |
| 3.3         | By Laws (1)                                                                                                                                                                                                                                       |
|        |                                                                                                                                                                                                                                              |
| 4.1         | Securities Purchase Agreement dated February 8, 2008 (1)                                                                                                                                                                                          |
|        |                                                                                                                                                                                                                                              |
| 10.1        | Employment Agreement dated June 24, 2009 between New Energy Technologies, Inc. and Meetesh Patel (1)                                                                                                                                              |
|        |                                                                                                                                                                                                                                              |
| 10.2        | Amendment to the Employment Agreement dated April 6, 2010 between New Energy Technologies, Inc. and Meetesh Patel (1)                                                                                                                             |
|        |                                                                                                                                                                                                                                              |
| 10.3        | Stock Option Agreement dated April 6, 2010 between New Energy Technologies, Inc. and Meetesh Patel (1)                                                                                                                                       |
|        |                                                                                                                                                                                                                                              |
| 10.4        | Amended Form of Stock Option Agreement dated as of December 15, 2009 between Meetesh Patel and New Energy Technologies, Inc., correcting the grant date (1)                                                                                       |
|        |                                                                                                                                                                                                                                              |
| 10.5        | Amended Form of Stock Option Agreement dated as of December 15, 2009 between New Energy Technologies, Inc. and its non-employee directors, correcting the grant date(1)                                                                           |
|        |                                                                                                                                                                                                                                              |
| 10.6        | Employment Agreement dated August 9, 2010 between New Energy Technologies, Inc. and John A. Conklin (3)                                                                                                                                      |
|        |                                                                                                                                                                                                                                              |
| 10.7        | Stock Option Agreement dated August 9, 2010 between New Energy Technologies, Inc. and John A. Conklin (3)                                                                                                                                    |
|        |                                                                                                                                                                                                                                              |
| 10.8        | Employment Agreement dated December 17, 2010 between New Energy Technologies, Inc. and Andrew Farago (4)                                                                                                                                          |
|        |                                                                                                                                                                                                                                              |
| 10.9        | Stock Option Agreement dated December 17, 2010 between New Energy Technologies, Inc. and Andrew Farago (4)                                                                                                                                        |
|        |                                                                                                                                                                                                                                              |
| 10.10       | Redacted USF Sponsored Research Agreement (1)                                                                                                                                                                                                     |
|        |                                                                                                                                                                                                                                              |
| 10.11       | Redacted USF Option Agreement (1)                                                                                                                                                                                                                 |
|        |                                                                                                                                                                                                                                              |
| 10.12       | Redacted Veryst Agreement (1)                                                                                                                                                                                                                     |
|        |                                                                                                                                                                                                                                              |
| 10.13       | Redacted Sigma Design Agreement (1)                                                                                                                                                                                                               |
|        |                                                                                                                                                                                                                                              |
| 10.14       | Redacted Standard Exclusive License Agreement with Sublicensing Terms entered into on June 21, 2010 by and between the University of South Florida Research Foundation and New Energy Solar Corporation (the “License Agreement”) (2) |

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| 10.15  | Redacted Addendum dated November 30, 2010 to the License Agreement by and between the University of South Florida Research Foundation and New Energy Solar Corporation (3)                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                |
| 31.1   | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * |
|   |                                                                                                                                                                                                                |
| 32.1   | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *                   |

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SIGNATURE

|             | New Energy Technologies, Inc.           |
|------------------|-----------------------------------------|
|             | (Registrant)                            |
|             |                                    |
|             |                                    |
| January 14, 2011 | By:/s/ John Conklin                     |
|             | John Conklin                            |
|             | President, Chief Executive Officer, and |
|             | Chief Financial Officer                 |

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