----

----

----

| 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          |   | (I.R.S. Employer    |
| incorporation or organization)           |   | Identification No.) |
|                                     |   |                |
| 9192 Red Branch Road, Suite 110          |   |                |
| Columbia, Maryland                       |   | 21045               |
| (Address of principal executive offices) |   | (Zip Code)          |

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

----

----

----

| PART I FINANCIAL INFORMATION                                                                             |
|----------------------------------------------------------------------------------------------------------|
|                                                                                                     |   |
| 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                                                                                         | 30 |
|                                                                                                     |   |
| Signatures                                                                                               | 33 |
|                                                                                                     |   |
| Certifications                                                                                           |   |

----

|                                                                                                                                                       |   | May 31, |        |   | August 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|-------------|--------|------------|--------|
|                                                                                                                                                       |   | 2011    |        |   | 2010       |   |
|                                                                                                                                                       |   |    |        |   |       |   |
| ASSETS                                                                                                                                                     |   |    |        |   |       |   |
|                                                                                                                                                       |   |    |        |   |       |   |
| Current assets                                                                                                                                             |   |    |        |   |       |   |
| Cash and cash equivalents                                                                                                                                  |   | $       | 3,032,774   |   |       | $      | 502,528 |   |
| Deferred research and development costs                                                                                                                    |   |    | 162,644     |   |       |   | 64,207 |   |
| Prepaid expenses and other current assets                                                                                                                  |   |    | 54,399      |   |       |   | 14,378 |   |
| Total current assets                                                                                                                                       |   |    | 3,249,817   |   |       |   | 581,113 |   |
|                                                                                                                                                       |   |    |        |   |       |   |   |   |
| Equipment, net of accumulated depreciation of $348 and $0 at May 31, 2011 and August 31, 2010                                                              |   |    | 1,042       |   |       |   | - |   |
|                                                                                                                                                       |   |    |        |   |       |   |   |   |
| Total assets                                                                                                                                               |   | $       | 3,250,859   |   |       | $      | 581,113 |   |
|                                                                                                                                                       |   |    |        |   |       |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                       |   |    |        |   |       |   |   |   |
|                                                                                                                                                       |   |    |        |   |       |   |   |   |
| Current liabilities                                                                                                                                        |   |    |        |   |       |   |   |   |
| Accounts payable                                                                                                                                           |   | $       | 76,698      |   |       | $      | 67,553 |   |
| Accrued liabilities                                                                                                                                        |   |    | 165,859     |   |       |   | 156,109 |   |
| Warrant liability                                                                                                                                          |   |    | -           |   |       |   | 8,059 |   |
| Total current liabilities                                                                                                                                  |   |    | 242,557     |   |       |   | 231,721 |   |
|                                                                                                                                                       |   |    |        |   |       |   |   |   |
| Total liabilities                                                                                                                                          |   |    | 242,557     |   |       |   | 231,721 |   |
|                                                                                                                                                       |   |    |        |   |       |   |   |   |
| Commitments and contingencies                                                                                                                              |   |    |        |   |       |   |   |   |
|                                                                                                                                                       |   |    |        |   |       |   |   |   |
| Stockholders' equity                                                                                                                                       |   |    |        |   |       |   |   |   |
| Preferred stock: $0.10 par value; 1,000,000 shares authorized, no shares issued and outstanding at May 31, 2011 and August 31, 2010                        |   |    | -           |   |       |   | - |   |
| Common stock: $0.001 par value; 300,000,000 shares authorized, 20,638,360 and 19,533,533 shares issued and outstanding at May 31, 2011 and August 31, 2010 |   |    | 20,638      |   |       |   | 19,533 |   |
| Additional paid-in capital                                                                                                                                 |   |    | 13,711,573  |   |       |   | 7,058,035 |   |
| Deficit accumulated during the development stage                                                                                                           |   |    | (10,723,909 | )      |       |   | (6,728,176 | ) |
| Total stockholders' equity                                                                                                                                 |   |    | 3,008,302   |   |       |   | 349,392 |   |
|                                                                                                                                                       |   |    |        |   |       |   |   |   |
| Total liabilities and stockholders' equity                                                                                                                 |   | $       | 3,250,859   |   |       | $      | 581,113 |   |

----

|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   | Cumulative   |       |
|--------------------------------------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|------------|----------------|--------|--------|------------|--------|--------|--------------|------------|
|                                                                     |   | Three Months Ended |       |   | Nine Months Ended |   |       | May 5, 1998    |   |
|                                                                     |   | May 31,            |       |   | May 31,           |   |       | (Inception) to |   |
|                                                                     |   | 2011               |       |   | 2010              |   |       | 2011           |   |   | 2010       |   |   | May 31, 2011 |       |
|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |
| Revenue                                                                  |   | $                  | -          |   |              | $      | -          |           |   | $      | -          |   |   | $            | -          |   |   | $ | - |   |
|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Operating expense                                                        |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Marketing and investor relations                                         |   |               | 53,569     |   |              |   | 252,922    |           |   |   | 213,919    |   |   |         | 535,055    |   |   |   | 3,369,301 |   |
| Wages and benefits                                                       |   |               | 1,129,163  |   |              |   | 132,463    |           |   |   | 2,660,348  |   |   |         | 605,250    |   |   |   | 3,777,825 |   |
| Management fees - related party                                          |   |               | 22,500     |   |              |   | -          |           |   |   | 30,000     |   |   |         | -          |   |   |   | 237,546 |   |
| Professional fees                                                        |   |               | 238,785    |   |              |   | 136,847    |           |   |   | 654,353    |   |   |         | 364,207    |   |   |   | 1,826,261 |   |
| Research and development                                                 |   |               | 128,148    |   |              |   | 72,025     |           |   |   | 223,248    |   |   |         | 514,152    |   |   |   | 1,669,572 |   |
| License fee                                                              |   |               | 10,000     |   |              |   | -          |           |   |   | 10,000     |   |   |         | -          |   |   |   | 30,000 |   |
| Travel and entertainment                                                 |   |               | 42,687     |   |              |   | 22,380     |           |   |   | 59,327     |   |   |         | 53,022     |   |   |   | 415,592 |   |
| Other operating expenses                                                 |   |               | 55,798     |   |              |   | 54,410     |           |   |   | 150,862    |   |   |         | 199,662    |   |   |   | 706,632 |   |
| Total operating expense                                                  |   |               | 1,680,650  |   |              |   | 671,047    |           |   |   | 4,002,057  |   |   |         | 2,271,348  |   |   |   | 12,032,729 |   |
|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Loss from operations                                                     |   |               | (1,680,650 | )      |              |   | (671,047   | )              |   |   | (4,002,057 | )      |   |         | (2,271,348 | ) |   |   | (12,032,729 | ) |
|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Other income (expense)                                                   |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Interest income                                                          |   |               | -          |   |              |   | -          |           |   |   | -          |   |   |         | -          |   |   |   | 98,582 |   |
| Interest expense                                                         |   |               | (382       | )      |              |   | -          |           |   |   | (1,238     | )      |   |         | -          |   |   |   | (12,240 | ) |
| Loss on disposal of fixed assets                                         |   |               | -          |   |              |   | -          |           |   |   | -          |   |   |         | -          |   |   |   | (5,307 | ) |
| Gain on dissolution of foreign subsidiary                                |   |               | -          |   |              |   | -          |           |   |   | -          |   |   |         | -          |   |   |   | 59,704 |   |
| Foreign exchange loss                                                    |   |               | -          |   |              |   | (638       | )              |   |   | (497       | )      |   |         | (1,344     | ) |   |   | (85,382 | ) |
| Change in fair value of warrant liability                                |   |               | -          |   |              |   | 165,660    |           |   |   | 8,059      |   |   |         | 1,721,658  |   |   |   | 2,128,331 |   |
| Payable forgiven                                                         |   |               | -          |   |              |   | -          |           |   |   | -          |   |   |         | -          |   |   |   | 30,000 |   |
| Total other income (expense)                                             |   |               | (382       | )      |              |   | 165,022    |           |   |   | 6,324      |   |   |         | 1,720,314  |   |   |   | 2,213,688 |   |
|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Loss from continuing operations                                          |   |               | (1,681,032 | )      |              |   | (506,025   | )              |   |   | (3,995,733 | )      |   |         | (551,034   | ) |   |   | (9,819,041 | ) |
|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Loss from discontinued operations                                        |   |               | -          |   |              |   | -          |           |   |   | -          |   |   |         | -          |   |   |   | (162,097 | ) |
|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Net loss                                                                 |   | $                  | (1,681,032 | )      |              | $      | (506,025   | )              |   | $      | (3,995,733 | )      |   | $            | (551,034   | ) |   | $ | (9,981,138 | ) |
|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Net loss per common share - basic and diluted                            |   | $                  | (0.08      | )      |              | $      | (0.03      | )              |   | $      | (0.20      | )      |   | $            | (0.03      | ) |   |   |   |   |
|                                                                     |   |               |       |   |              |   |       |           |   |   |       |   |   |         |       |   |   |   |   |   |
| Weighted average number of common shares outstanding - basic and diluted |   |               | 20,638,360 |   |              |   | 19,533,533 |           |   |   | 20,314,810 |   |   |         | 19,533,533 |   |   |   |   |   |

----

|                                                                                                                             |   |         |       |   |       |   |   |            |   |   | Accumulated   |   |   |                |    |   |                |   |        |             |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|--------|------------|--------|--------|-----------------|--------|--------|---------------|--------|--------|---------------------|---------|--------|---------------------|--------|-------------|------------------|--------|
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   | Other         |   |   | Deficit Accumulated |    |   |                |   |        |             |   |
|                                                                                                                             |   | Common Stock |       |   | Additional |   |   | Comprehensive   |   |   | During the    |   |   | Comprehensive       |    |   | Total Stockholders' |   |
|                                                                                                                             |   | Shares       |       |   | Amount     |   |   | Paid-in Capital |   |   | Income (Loss) |   |   | Development Stage   |    |   | Income (Loss)       |   |        | Equity (Deficit) |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |
| Restricted common stock issued to related parties for management services at $0.001 per share                                    |   |         | 3,000,000  |   |       | $      | 3,000  |            |   | $      | -             |   |   | $                   | -       |   |                | $      | -           |             |   | $ | - |   |   | $ | 3,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Unrestricted common stock sales to third parties at $0.40 per share                                                              |   |         | 375,000    |   |       |   | 375    |            |   |   | 149,625       |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 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                                                                                                         |   |         | 3,375,000  |   |       |   | 3,375  |            |   |   | 149,625       |   |   |                | -       |   |                |   | (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                                                                                                         |   |         | 3,375,000  |   |       |   | 3,375  |            |   |   | 149,625       |   |   |                | -       |   |                |   | (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                                                                                                         |   |         | 3,375,000  |   |       |   | 3,375  |            |   |   | 149,625       |   |   |                | -       |   |                |   | (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                                                                                                         |   |         | 3,375,000  |   |       |   | 3,375  |            |   |   | 149,625       |   |   |                | -       |   |                |   | (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                                                                                                         |   |         | 3,375,000  |   |       |   | 3,375  |            |   |   | 149,625       |   |   |                | -       |   |                |   | (170,557    | )                |   |   | - |   |   |   | (17,557 | ) |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Restricted common stock issued to a related party to satisfy outstanding management fees at $0.01 per share on December 19, 2002 |   |         | 8,000,000  |   |       |   | 8,000  |            |   |   | 72,000        |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 80,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Restricted common stock issued to a related party to satisfy outstanding management fees at $0.01 per share on March 18, 2003    |   |         | 2,333,200  |   |       |   | 2,333  |            |   |   | 20,999        |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 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                                                                                                         |   |         | 13,708,200 |   |       |   | 13,708 |            |   |   | 242,624       |   |   |                | -       |   |                |   | (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                                                                                                         |   |         | 13,708,200 |   |       |   | 13,708 |            |   |   | 242,624       |   |   |                | -       |   |                |   | (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                                                                                                         |   |         | 13,708,200 |   |       |   | 13,708 |            |   |   | 242,624       |   |   |                | -       |   |                |   | (391,148    | )                |   |   | - |   |   |   | (134,816 | ) |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Issuance of common stock and warrants at $0.50 per share on May 16, 2006                                                         |   |         | 1,000,000  |   |       |   | 1,000  |            |   |   | 499,000       |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 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                                                                                                         |   |         | 14,708,200 |   |       |   | 14,708 |            |   |   | 741,624       |   |   |                | -       |   |                |   | (549,130    | )                |   |   | - |   |   |   | 207,202 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class A Warrants  at $0.50 per share during November - December 2006                                       |   |         | 1,000,000  |   |       |   | 1,000  |            |   |   | 499,000       |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 500,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class B Warrants  at $0.55 per share November 2006 - May 2007                                              |   |         | 1,000,000  |   |       |   | 1,000  |            |   |   | 549,000       |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 550,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class C Warrants  at $1.50 per share during August 2007                                                    |   |         | 326,667    |   |       |   | 327    |            |   |   | 489,673       |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 490,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class D Warrants  at $1.65 per share during August 2007                                                    |   |         | 293,333    |   |       |   | 293    |            |   |   | 483,707       |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 484,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class E Warrants  at $1.80 per share during August 2007                                                    |   |         | 293,333    |   |       |   | 293    |            |   |   | 527,707       |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 528,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Issuance of common stock and warrants at $1.50 per share on April 23, 2007                                                       |   |         | 333,333    |   |       |   | 333    |            |   |   | 499,667       |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 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                                                                                                         |   |         | 17,954,866 |   |       |   | 17,955 |            |   |   | 3,790,377     |   |   |                | (1,811  | )      |                |   | (2,391,899  | )                |   |   |   |   |   |   | 1,414,622 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Common stock and warrants issued for cash and services at $3.00 per Unit in February 2008                                        |   |         | 1,225,000  |   |       |   | 1,225  |            |   |   | 3,394,730     |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 3,395,955 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class C Warrants  at $1.50 per share during March 2008                                                     |   |         | 6,667      |   |       |   | 7      |            |   |   | 9,993         |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 10,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class D Warrants  at $1.65 per share during May 2008                                                       |   |         | 6,667      |   |       |   | 7      |            |   |   | 10,993        |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 11,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class F Warrants  at $3.75 per share during April - May 2008                                               |   |         | 58,333     |   |       |   | 58     |            |   |   | 218,692       |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 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                                                                                                         |   |         | 19,251,533 |   |       |   | 19,251 |            |   |   | 11,025,089    |   |   |                | 10,693  |   |                |   | (8,113,444  | )                |   |   |   |   |   |   | 2,941,589 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class E Warrants  at $1.80 per share during July 2009                                                      |   |         | 6,667      |   |       |   | 7      |            |   |   | 11,993        |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 12,000 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class F Warrants  at $3.75 per share during July - August 2009                                             |   |         | 275,333    |   |       |   | 275    |            |   |   | 1,032,225     |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 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                                                                                                         |   |         | 19,533,533 |   |       |   | 19,533 |            |   |   | 8,661,526     |   |   |                | -       |   |                |   | (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                                                                                                         |   |         | 19,533,533 |   |       |   | 19,533 |            |   |   | 7,058,035     |   |   |                | -       |   |                |   | (6,728,176  | )                |   |   | - |   |   |   | 349,392 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Rounding due to reverse one for three stock split effective March 16, 2011                                                       |   |         | (3         | )      |       |   | -      |            |   |   | -             |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | - |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of Class F Warrants at $3.75 per share during October 2010 - February 2011                                              |   |         | 1,054,512  |   |       |   | 1,055  |            |   |   | 3,953,320     |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 3,954,375 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Exercise of stock options                                                                                                        |   |         | 50,318     |   |       |   | 50     |            |   |   | 30,750        |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 30,800 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Stock based compensation                                                                                                         |   |         | -          |   |       |   | -      |            |   |   | 2,669,468     |   |   |                | -       |   |                |   | -           |             |   |   | - |   |   |   | 2,669,468 |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Net loss for the nine months ended May 31, 2011                                                                                  |   |         | -          |   |       |   | -      |            |   |   | -             |   |   |                | -       |   |                |   | (3,995,733  | )                |   |   | (3,995,733 | ) |   |   | (3,995,733 | ) |
| Total comprehensive loss                                                                                                         |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   | $ | (3,995,733 | ) |   |   |   |   |
|                                                                                                                             |   |         |       |   |       |   |   |            |   |   |          |   |   |                |    |   |                |   |        |             |   |   |   |   |   |   |   |   |
| Balance, May 31, 2011                                                                                                            |   |         | 20,638,360 |   |       | $      | 20,638 |            |   | $      | 13,711,573    |   |   | $                   | -       |   |                | $      | (10,723,909 | )                |   |   |     |   |   | $ | 3,008,302 |    |

----

|                                                                                    |   |              |       |   |           |   |       | Cumulative   |   |
|-----------------------------------------------------------------------------------------|--------|-------------------|------------|--------|----------------|--------|------------|--------------|--------|
|                                                                                    |   | Nine Months Ended |       |   | May 5, 1998    |   |
|                                                                                    |   | May 31,           |       |   | (Inception) to |   |
|                                                                                    |   | 2011              |       |   | 2010           |   |       | May 31, 2011 |   |
|                                                                                    |   |              |       |   |           |   |       |         |   |
| Cash flows from operating activities                                                    |   |              |       |   |           |   |       |         |   |
| Loss from continuing operations                                                         |   | $                 | (3,995,733 | )      |           | $      | (551,034   | )            |   | $ | (9,819,041 | ) |
| Add: loss from discontinued operations                                                  |   |              | -          |   |           |   | -          |         |   |   | (162,097 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities              |   |              |       |   |           |   |       |         |   |   |   |   |
| Depreciation                                                                            |   |              | 348        |   |           |   | -          |         |   |   | 4,830 |   |
| Stock based compensation expense                                                        |   |              | 2,669,468  |   |           |   | 521,914    |         |   |   | 7,114,123 |   |
| Reversal of stock based compensation expense due to forfeiture of stock options         |   |              | -          |   |           |   | -          |         |   |   | (4,070,064 | ) |
| Change in fair value of warrant liability                                               |   |              | (8,059     | )      |           |   | (1,721,658 | )            |   |   | (2,128,331 | ) |
| 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                                     |   |              | (98,437    | )      |           |   | (3,571     | )            |   |   | (162,644 | ) |
| Increase in prepaid expenses and other current assets                                   |   |              | (40,021    | )      |           |   | (17,951    | )            |   |   | (54,399 | ) |
| Increase (decrease) in accounts payable                                                 |   |              | 9,145      |   |           |   | (3,724     | )            |   |   | 76,698 |   |
| Increase in accrued liabilities                                                         |   |              | 9,750      |   |           |   | 88,150     |         |   |   | 165,859 |   |
| Increase in accounts payable - related party                                            |   |              | -          |   |           |   | -          |         |   |   | 30,000 |   |
| Net cash used in operating activities                                                   |   |              | (1,453,539 | )      |           |   | (1,687,874 | )            |   |   | (8,923,427 | ) |
|                                                                                    |   |              |       |   |           |   |       |         |   |   |   |   |
| Cash flows from investing activity                                                      |   |              |       |   |           |   |       |         |   |   |   |   |
| Purchase of equipment                                                                   |   |              | (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 |   |              | 3,985,175  |   |           |   | -          |         |   |   | 12,367,380 |   |
| Repayment of promissory note                                                            |   |              | -          |   |           |   | -          |         |   |   | (155,000 | ) |
| Proceeds from promissory notes                                                          |   |              | -          |   |           |   | -          |         |   |   | 155,000 |   |
| Dividend paid                                                                           |   |              | -          |   |           |   | -          |         |   |   | (400,000 | ) |
| Net cash provided by financing activities                                               |   |              | 3,985,175  |   |           |   | -          |         |   |   | 11,967,380 |   |
|                                                                                    |   |              |       |   |           |   |       |         |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                        |   |              | 2,530,246  |   |           |   | (1,687,874 | )            |   |   | 3,032,774 |   |
|                                                                                    |   |              |       |   |           |   |       |         |   |   |   |   |
| Cash and cash equivalents at beginning of period                                        |   |              | 502,528    |   |           |   | 2,736,221  |         |   |   | - |   |
|                                                                                    |   |              |       |   |           |   |       |         |   |   |   |   |
| Cash and cash equivalents at end of period                                              |   | $                 | 3,032,774  |   |           | $      | 1,048,347  |         |   | $ | 3,032,774 |   |
|                                                                                    |   |              |       |   |           |   |       |         |   |   |   |   |
| Supplemental disclosure of cash flow information:                                       |   |              |       |   |           |   |       |         |   |   |   |   |
| Interest paid in cash                                                                   |   | $                 | 1,238      |   |           | $      | -          |         |   | $ | 12,240 |   |
| 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 |   |

----

----

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

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

----

----

----

|                                                 |   | Three Months Ended |       |   | Nine Months Ended |   |
|------------------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                                 |   | May 31,            |       |   | May 31,           |   |
|                                                 |   | 2011               |       |   | 2010              |   |   | 2011 |   |   | 2010 |   |
|                                                 |   |               |       |   |              |   |   |   |   |   |   |   |
| Basic and Diluted EPS Computation                    |   |               |       |   |              |   |   |   |   |   |   |   |
| Numerator: income available to common stockholders   |   | $                  | (1,681,032 | )      |              | $      | (506,025 | ) |   | $ | (3,995,733 | ) |   | $ | (551,034 | ) |
|                                                 |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                         |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares outstanding |   |               | 20,638,360 |   |              |   | 19,533,533 |   |   |   | 20,314,810 |   |   |   | 19,533,533 |   |
|                                                 |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted EPS                                |   | $                  | (0.08      | )      |              | $      | (0.03 | ) |   | $ | (0.20 | ) |   | $ | (0.03 | ) |

----

----

----

| Beginning Balance, September 1, 2010      |   | $      | 8,059  |   |
|-------------------------------------------|--------|--------|--------|--------|
| Change in fair value of warrant liability |   |   | (8,059 | )      |
| Ending Balance, May 31, 2011              |   | $      | -      |   |

----

|                                |   | Number of Options |      |   | Weighted Average Exercise Price |   | Weighted Average Remaining Contractual Term |   | Aggregate Intrinsic Value |   |
|-------------------------------------|--------|-------------------|-----------|--------|---------------------------------|--------|---------------------------------------------|--------|---------------------------|--------|
|                                |   |              |      |   |                            |   |                                        |   |                      |   |
| Outstanding at August 31, 2010      |   |              | 900,003   |   |                            | $      | 1.70                                        |   |                      |   |   |   |
| Grants                              |   |              | 610,002   |   |                            |   | 5.97                                        |   |                      |   |   |   |
| Exercises                           |   |              | (73,334   | )      |                            |   | 1.61                                        |   |                      |   |   |   |
| Forfeitures                         |   |              | (60,000   | )      |                            |   | 1.32                                        |   |                      |   |   |   |
| Outstanding at May 31, 2011         |   |              | 1,376,671 |   |                            | $      | 3.62                                        |   | 9.1 years                 |   | $ | 11,500 |   |
|                                |   |              |      |   |                            |   |                                        |   |                      |   |   |   |   |
| Exercisable at May 31, 2011         |   |              | 181,669   |   |                            | $      | 4.70                                        |   | 8.1 years                 |   | $ | 8,050 |   |
|                                |   |              |      |   |                            |   |                                        |   |                      |   |   |   |   |
| Available for grant at May 31, 2011 |   |              | 3,549,995 |   |                            |   |                                        |   |                      |   |   |   |   |

----

|               |   | Three Months Ended |         |   | Nine Months Ended |   |
|--------------------|--------|--------------------|--------------|--------|-------------------|--------|
|               |   | May 31,            |         |   | May 31,           |   |
|               |   | 2011               |         |   | 2010              |   |   | 2011 |   |   | 2010 |   |
|               |   |               |         |   |              |   |   |   |   |   |   |   |
| Wages and benefits |   | $                  | 1,022,011    |   |              | $      | 85,369 |   |   | $ | 2,386,453 |   |   | $ | 451,661 |   |
| Professional fees  |   |               | 92,114  |   |              |   | 26,557 |   |   |   | 283,015  |   |   |   | 70,253 |   |
| Total              |   | $                  | 1,114,125    |   |              | $      | 111,926 |   |   | $ | 2,669,468 |   |   | $ | 521,914 |   |

----

----

| (a)   | as to 12,500 on June 30, 2010; |
|-----------------|--------------------------------|

| (b)   | as to 12,500 on September 30, 2010; |
|-----------------|-------------------------------------|

| (c)   | as to 12,500 on December 31, 2010; and |
|-----------------|----------------------------------------|

| (d)   | as to 12,500 on March 31, 2011. |
|-----------------|---------------------------------|

----

|                                                                                                      |   |  Stock Options Outstanding |      |   | Stock Options Exercisable |   |
|-----------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|---------------------------|--------|
|                                                                                                      |   |                            |      |   | Weighted                  |   |   |   |   |   |   |   |   | Weighted |   |   |   |   |
|                                                                                                      |   |                            |      |   | Average                   |   |   | Weighted |   |   |   |   |   | Average |   |   | Weighted |   |
|                                                                                                      |   | Number of                       |      |   | Remaining                 |   |   | Average |   |   | Number of |   |   | Remaining |   |   | Average |   |
|                                                                                                      |   | Options                         |      |   | Contractual               |   |   | Exercise |   |   | Options |   |   | Contractual |   |   | Exercise |   |
| Exercise Prices                                                                                           |   | Outstanding                     |      |   | Life (Years)              |   |   | Price |   |   | Exercisable |   |   | Life (Years) |   |   | Price |   |
|                                                                                                      |   |                            |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $ 1.32                                                                                                    |   |                            | 50,001    |   |                      |   | 3.6 |   |   | $ | 1.32 |   |   |   | 35,001 |   |   |   | 3.6 |   |   | $ | 1.32 |   |
|    1.65                                                                                    |   |                            | 666,667   |   |                      |   | 9.2 |   |   |   | 1.65 |   |   |   | — |   |   |   | — |   |   |   | — |   |
|    2.50                                                                                    |   |                            | 10,000    |   |                      |   | 9.9 |   |   |   | 2.50 |   |   |   | — |   |   |   | — |   |   |   | — |   |
|    2.55                                                                                    |   |                            | 33,334    |   |                      |   | 7.3 |   |   |   | 2.55 |   |   |   | 13,334 |   |   |   | 7.3 |   |   |   | 2.55 |   |
|    3.27                                                                                    |   |                            | 33,334    |   |                      |   | 9.8 |   |   |   | 3.27 |   |   |   | 13,334 |   |   |   | 9.8 |   |   |   | 3.27 |   |
|    4.98                                                                                    |   |                            | 16,667    |   |                      |   | 6.8 |   |   |   | 4.98 |   |   |   | 9,999 |   |   |   | 6.8 |   |   |   | 4.98 |   |
|    5.94                                                                                    |   |                            | 50,001    |   |                      |   | 9.6 |   |   |   | 5.94 |   |   |   | 20,000 |   |   |   | 9.6 |   |   |   | 5.94 |   |
|    6.21                                                                                    |   |                            | 500,000   |   |                      |   | 9.6 |   |   |   | 6.21 |   |   |   | 83,334 |   |   |   | 9.6 |   |   |   | 6.21 |   |
|    6.51                                                                                    |   |                            | 16,667    |   |                      |   | 9.7 |   |   |   | 6.51 |   |   |   | 6,667 |   |   |   | 9.7 |   |   |   | 6.51 |   |
|               $ 1.32 – $ 6.51 |   |                            | 1,376,671 |   |                      |   | 9.1 |   |   | $ | 3.62 |   |   |   | 181,669 |   |   |   | 8.8 |   |   | $ | 4.70 |   |

----

----

----

----

----

|                             |   | Three Months Ended |      |   |            |   |    | Nine Months Ended |   |   |            |   |
|----------------------------------|--------|------------------------------|-----------|--------|-----------------|--------|---------|-----------------------------|--------|--------|-----------------|--------|
|                             |   | May 31,                 |      |   | Increase / |   |    | May 31,                |   |   | Increase / |   |
|                             |   | 2011                         |      |   | 2010            |   |    | (Decrease)                  |   |   | 2011            |   |   | 2010 |   |   | (Decrease) |   |
|                             |   |                         |      |   |            |   |    |                        |   |   |            |   |   |   |   |   |   |   |
| Operating expense                |   |                         |      |   |            |   |    |                        |   |   |            |   |   |   |   |   |   |   |
| Marketing and investor relations |   | $                            | 53,569    |   |            | $      | 252,922 |                        |   | $      | (199,353        | )      |   | $ | 213,919 |   |   | $ | 535,055 |   |   | $ | (321,136 | ) |
| Wages and benefits               |   |                         | 1,129,163 |   |            |   | 132,463 |                        |   |   | 996,700         |   |   |   | 2,660,348 |   |   |   | 605,250 |   |   |   | 2,055,098 |   |
| Management fees - related party  |   |                         | 22,500    |   |            |   | -       |                        |   |   | 22,500          |   |   |   | 30,000 |   |   |   | - |   |   |   | 30,000 |   |
| Professional fees                |   |                         | 238,785   |   |            |   | 136,847 |                        |   |   | 101,938         |   |   |   | 654,353 |   |   |   | 364,207 |   |   |   | 290,146 |   |
| Research and development         |   |                         | 128,148   |   |            |   | 72,025  |                        |   |   | 56,123          |   |   |   | 223,248 |   |   |   | 514,152 |   |   |   | (290,904 | ) |
| License fee                      |   |                         | 10,000    |   |            |   | -       |                        |   |   | 10,000          |   |   |   | 10,000 |   |   |   | - |   |   |   | 10,000 |   |
| Travel and entertainment         |   |                         | 42,687    |   |            |   | 22,380  |                        |   |   | 20,307          |   |   |   | 59,327 |   |   |   | 53,022 |   |   |   | 6,305 |   |
| Other operating expenses         |   |                         | 55,798    |   |            |   | 54,410  |                        |   |   | 1,388           |   |   |   | 150,862 |   |   |   | 199,662 |   |   |   | (48,800 | ) |
| Total operating expense          |   | $                            | 1,680,650 |   |            | $      | 671,047 |                        |   | $      | 1,009,603       |   |   | $ | 4,002,057 |   |   | $ | 2,271,348 |   |   | $ | 1,730,709 |   |

----

----

----

|                                      |   | Three Months Ended |   |   |   |   |    | Nine Months Ended |   |   |     |   |
|-------------------------------------------|--------|--------------------|--------|--------|--------|--------|---------|-------------------|--------|--------|----------|--------|
|                                      |   | May 31,            |   |   |   |   |    | May 31,           |   |   |     |   |
|                                      |   | 2011               |   |   | 2010   |   |    | Change            |   |   | 2011     |   |   | 2010 |   |   | Change |   |
|                                      |   |               |   |   |   |   |    |              |   |   |     |   |   |   |   |   |   |   |
| Other income (expense)                    |   |               |   |   |   |   |    |              |   |   |     |   |   |   |   |   |   |   |
| Interest expense                          |   | $                  | (382   | )      |   | $      | -       |              |   | $      | (382     | )      |   | $ | (1,238 | ) |   | $ | - |   |   | $ | (1,238 | ) |
| Foreign exchange loss                     |   |               | -      |   |   |   | (638    | )                 |   |   | 638      |   |   |   | (497 | ) |   |   | (1,344 | ) |   |   | 847 |   |
| Change in fair value of warrant liability |   |               | -      |   |   |   | 165,660 |              |   |   | (165,660 | )      |   |   | 8,059 |   |   |   | 1,721,658 |   |   |   | (1,713,599 | ) |
| Total other income (expense)              |   | $                  | (382   | )      |   | $      | 165,022 |              |   |   | (165,404 | )      |   | $ | 6,324 |   |   | $ | 1,720,314 |   |   |   | (1,713,990 | ) |

----

----

----

| Exhibit No. |   | Description of Exhibit                                                                                                                                        |
|------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |   |                                                                                                                                                                    |
| 3.1              |   | Articles of Incorporation, as amended (1)                                                                                                                               |
|             |   |                                                                                                                                                                    |
| 3.2              |   | Certificate of Amendment to the Articles of Incorporation changing name to New Energy Technologies, Inc. (1)                                                            |
|             |   |                                                                                                                                                                    |
| 3.3              |   | Certificate of Amendment to the Articles of Incorporation increasing the authorized shares from 100,000,000 to 300,000,000 (2)                                          |
|             |   |                                                                                                                                                                    |
| 3.4              |   | Certificate of Change to the Articles of Incorporation relating to the one-for-three reverse stock split (2)                                                            |
|             |   |                                                                                                                                                                    |
| 3.5              |   | By Laws (1)                                                                                                                                                             |
|             |   |                                                                                                                                                                    |
| 4.1              |   | Securities Purchase Agreement dated February 8, 2008 (1)                                                                                                                |
|             |   |                                                                                                                                                                    |
| 10.1             |   | Employment Termination Agreement with Mr. Cucinelli (1)                                                                                                                 |
|             |   |                                                                                                                                                                    |
| 10.2             |   | Employment Agreement dated June 24, 2009 between New Energy Technologies, Inc. and Meetesh Patel (1)                                                                    |
|             |   |                                                                                                                                                                    |
| 10.3             |   | Amendment to the Employment Agreement dated April 6, 2010 between New Energy Technologies, Inc. and Meetesh Patel (1)                                                   |
|             |   |                                                                                                                                                                    |
| 10.4             |   | Stock Option Agreement dated April 6, 2010 between New Energy Technologies, Inc. and Meetesh Patel (1)                                                                  |
|             |   |                                                                                                                                                                    |
| 10.5             |   | 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)             |
|             |   |                                                                                                                                                                    |
| 10.6             |   | 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) |

----

| 10.7   |   | Employment Agreement dated February 1, 2010 between New Energy Technologies, Inc. and James B. Wilkinson (1)                                                                                                                                          |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                  |
| 10.8   |   | Resignation and Mutual Determination to Terminate Employment between New Energy Technologies, Inc. and James B. Wilkinson, dated February 15, 2010 (1)                                                                                                |
|   |   |                                                                                                                                                                                                                                                  |
| 10.9   |   | Employment Agreement dated August 9, 2010 between New Energy Technologies, Inc. and John A. Conklin (3)                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                  |
| 10.10  |   | Stock Option Agreement dated August 9, 2010 between New Energy Technologies, Inc. and John A. Conklin (3)                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                  |
| 10.11  |   | Employment Agreement dated December 17, 2010 between New Energy Technologies, Inc. and Andrew Farago (4)                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                  |
| 10.12  |   | Stock Option Agreement dated December 17, 2010 between New Energy Technologies, Inc. and Andrew Farago (4)                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                  |
| 10.13  |   | Stock Option Agreement dated January 17, 2011 between New Energy Technologies, Inc. and Jatinder Bhogal (5)                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                  |
| 10.14  |   | Stock Option Agreement dated January 17, 2011 between New Energy Technologies, Inc. and Alistair Livesey (5)                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                  |
| 10.15  |   | Stock Option Agreement dated January 17, 2011 between New Energy Technologies, Inc. and Joseph Sierchio (5)                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                  |
| 10.16  |   | Stock Option Agreement dated January 19, 2011 between New Energy Technologies, Inc. and Javier Jimenez (5)                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                  |
| 10.17  |   | Consultancy Agreement dated February 1, 2011 between New Energy Technologies, Inc. and Elliot Maza (6)                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                  |
| 10.18  |   | Employment Agreement dated February 2, 2011 between New Energy Technologies, Inc. and Scott Taper (7)                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                  |
| 10.19  |   | Stock Option Agreement dated March 23, 2011, 2011 between New Energy Technologies, Inc. and Peter Fusaro (12)                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                  |
| 10.20  |   | Stock Option Agreement dated March 23, 2011, 2011 between New Energy Technologies, Inc. and Todd Pitcher (12)                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                  |
| 10.21  |   | Redacted USF Sponsored Research Agreement (1) (8)                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                  |
| 10.22  |   | Redacted USF Option Agreement (1) (8)                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                  |
| 10.23  |   | Redacted Veryst Agreement (1) (7)                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                  |
| 10.24  |   | Redacted Sigma Design Agreement (1) (7)                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                  |
| 10.25  |   | 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”) (7) (8) |

----

| 10.26  |   | Redacted Addendum 1 dated November 30, 2010 to the License Agreement by and between the University of South Florida Research Foundation and New Energy Solar Corporation (8) (9)    |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                |
| 10.27  |   | 2006 Incentive Stock Option Plan (10)                                                                                                                                               |
|   |   |                                                                                                                                                                                |
| 10.28  |   | Redacted version of the Cooperative Research and Development Agreement entered into between the National Renewable Energy Laboratory and New Energy Technologies, Inc. (11)         |
|   |   |                                                                                                                                                                                |
| 31.1   |   | Certification of Principal Executive 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 * |
|   |   |                                                                                                                                                                                |
| 31.2   |   | Certification of 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 Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *                   |
|   |   |                                                                                                                                                                                |
| 32.2   |   | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *                   |

----

----

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

----