| x | ANNUAL REPORT PURSUANT TO 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(State or other jurisdiction of incorporation or organization)          |   | 39-2075693(I.R.S. Employer Identification No.) |
|-------------------------------------------------------------------------------|--------|------------------------------------------------|
|                                                                          |   |                                           |
| 54 Cummings Park, Suite 316Woburn, MA(Address of principal executive offices) |   |  01801(Zip Code)                          |

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

----

----

----

|                                                                                                   |   |         |       |   |         |   |
|--------------------------------------------------------------------------------------------------------|--------|--------------|------------|--------|--------------|--------|
| ASSETS                                                                                                 |   |         |       |   |
|                                                                                                   |   | December 31, |       |   | December 31, |   |
|                                                                                                   |   | 2012         |       |   | 2011         |   |
| CURRENT ASSETS                                                                                         |   |         |       |   |         |   |
|    Cash                                                                                 |   | $            | 135,626    |   |         | $      | 255,862 |   |
|    Accounts receivable                                                                  |   |         | 267,116    |   |         |   | 247,110 |   |
|    Prepaid expense                                                                      |   |         | 1,417      |   |         |   | 1,417 |   |
|   Total current assets                                                                            |   |         | 404,159    |   |         |   | 504,389 |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
| Fixed assets, net                                                                                      |   |         | 1,737      |   |         |   | 4,084 |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
| OTHER ASSETS                                                                                           |   |         |       |   |         |   |   |   |
|    License with Related Party, net of accumulated amortization                          |   |         | 190,133    |   |         |   | 225,783 |   |
|   Total other assets                                                                              |   |         | 190,133    |   |         |   | 225,783 |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
| TOTAL ASSETS                                                                                           |   | $            | 596,029    |   |         | $      | 734,256 |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                  |   |         |       |   |         |
|                                                                                                   |   |         |       |   |         |   |   |   |
| CURRENT LIABILITIES                                                                                    |   |         |       |   |         |   |   |   |
|    Accounts payable and accrued expenses                                                |   | $            | 384,861    |   |         | $      | 316,517 |   |
|    Current portion of Original Issue Discount Senior Secured Convertible                |   |         |       |   |         |   |   |   |
|      Promissory Note, net of discount                                         |   |         | 2,400,000  |   |         |   | 2,000,000 |   |
|   Total current liabilities                                                                       |   |         | 2,784,861  |   |         |   | 2,316,517 |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
|    Original Issue Discount Senior Secured Convertible Promissory Note, net of discount, |   |         |       |   |         |   |   |   |
|       net of current portion                                             |   |         | -          |   |         |   | 400,000 |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
| TOTAL LIABILITIES                                                                                      |   |         | 2,784,861  |   |         |   | 2,716,517 |   |
|                                                                                                   |   |         |       |   |         |   |   |   |
| STOCKHOLDERS' DEFICIT                                                                                  |   |         |       |   |         |   |   |   |
|    Common stock, $0.001 par value, 75,000,000 shares authorized,                        |   |         |       |   |         |   |   |   |
|       28,167,063 and 26,670,000 shares issued and outstanding            |   |         | 28,167     |   |         |   | 26,670 |   |
|    Additional paid in capital                                                           |   |         | 1,747,583  |   |         |   | 1,029,080 |   |
|    Additional paid in capital - warrants                                                |   |         | 962,297    |   |         |   | 962,297 |   |
|    Deficit accumulated during the development stage                                     |   |         | (4,926,879 | )      |         |   | (4,000,308 | ) |
|   Total stockholders' deficit                                                                     |   |         | (2,188,832 | )      |         |   | (1,982,261 | ) |
|                                                                                                   |   |         |       |   |         |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                            |   | $            | 596,029    |   |         | $      | 734,256 |   |

----

|                                                                                          |   |              |       |   |              |   |       |              |   |
|-----------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|-------------------|--------|------------|-------------------|--------|
|                                                                                          |   |              |       |   |              |   |       | JANUARY 8, 2008   |   |
|                                                                                          |   |              |       |   |              |   |       | (INCEPTION)       |   |
|                                                                                          |   | YEAR ENDED        |       |   | YEAR ENDED        |   |       | THROUGH           |   |
|                                                                                          |   | DECEMBER 31, 2012 |       |   | DECEMBER 31, 2011 |   |       | DECEMBER 31, 2012 |   |
|                                                                                          |   |              |       |   |              |   |       |              |   |
| REVENUE                                                                                       |   | $                 | 648,477    |   |              | $      | 675,971    |              |   | $ | 2,064,151 |   |
|                                                                                          |   |              |       |   |              |   |       |              |   |   |   |   |
| COST OF REVENUES                                                                              |   |              | 415,004    |   |              |   | 378,061    |              |   |   | 1,286,329 |   |
|                                                                                          |   |              |       |   |              |   |       |              |   |   |   |   |
| GROSS PROFIT                                                                                  |   |              | 233,473    |   |              |   | 297,910    |              |   |   | 777,822 |   |
|                                                                                          |   |              |       |   |              |   |       |              |   |   |   |   |
| OPERATING EXPENSES                                                                            |   |              |       |   |              |   |       |              |   |   |   |   |
|     Indirect and administrative labor                                     |   |              | 192,083    |   |              |   | 232,323    |              |   |   | 580,489 |   |
|     Professional fees                                                     |   |              | 731,254    |   |              |   | 195,770    |              |   |   | 1,390,929 |   |
|     Depreciation and amortization expense                                 |   |              | 37,997     |   |              |   | 389,545    |              |   |   | 782,694 |   |
|     General and administrative                                            |   |              | 164,254    |   |              |   | 519,761    |              |   |   | 831,980 |   |
| Total operating expenses                                                                      |   |              | 1,125,588  |   |              |   | 1,337,399  |              |   |   | 3,586,092 |   |
|                                                                                          |   |              |       |   |              |   |       |              |   |   |   |   |
| NON-OPERATING (INCOME) EXPENSES                                                               |   |              |       |   |              |   |       |              |   |   |   |   |
|     Interest expense including amortization of OID and debt discount, net |   |              | 39,754     |   |              |   | 1,200,142  |              |   |   | 2,123,907 |   |
|     Forgiveness of debt                                                   |   |              | (5,298     | )      |              |   | -          |              |   |   | (5,298 | ) |
| Total non-operating (income) expenses                                                         |   |              | 34,456     |   |              |   | 1,200,142  |              |   |   | 2,118,609 |   |
|                                                                                          |   |              |       |   |              |   |       |              |   |   |   |   |
| NET LOSS                                                                                      |   | $                 | (926,571   | )      |              | $      | (2,239,631 | )                 |   | $ | (4,926,879 | ) |
|                                                                                          |   |              |       |   |              |   |       |              |   |   |   |   |
|                                                                                          |   |              |       |   |              |   |       |              |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                                                 |   |              | 27,179,474 |   |              |   | 24,190,192 |              |   |   |   |   |
|                                                                                          |   |              |       |   |              |   |       |              |   |   |   |   |
| NET LOSS PER SHARE                                                                            |   | $                 | (0.03      | )      |              | $      | (0.09      | )                 |   |   |   |   |

----

|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   | Deficit     |    |   |   |   |
|--------------------------------------------------------------|--------|--------------|------------|--------|------------|--------|--------|-----------|--------|--------|-------------|--------|--------|-------------|---------|--------|--------|--------|
|                                                         |   |         |       |   |       |   |   |      |   |   | Additional  |   |   | Accumulated |    |   |   |   |
|                                                         |   |         |       |   | Additional |   |   | Paid-In   |   |   | During the  |   |   |        |    |
|                                                         |   | Common Stock |       |   | Paid-In    |   |   | Capital - |   |   | Development |   |   |        |    |
|                                                         |   | Shares       |       |   | Amount     |   |   | Capital   |   |   | Warrants    |   |   | Stage       |    |   | Total  |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |
| Balance - November 19, 2007                                  |   |         | -          |   |       | $      | -      |      |   | $      | -           |   |   | $           | -       |   |   | $      | - |   |   | $ | - |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Common shares issued to founders for cash                    |   |         | 1,973,685  |   |       |   | 1,974  |      |   |   | 13,026      |   |   |        | -       |   |   |   | - |   |   |   | 15,000 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Common shares issued for cash - others                       |   |         | 2,500,001  |   |       |   | 2,500  |      |   |   | 35,500      |   |   |        | -       |   |   |   | - |   |   |   | 38,000 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Net loss for the period ended March 31, 2008                 |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | -       |   |   |   | (4,477 | ) |   |   | (4,477 | ) |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Balance - March 31, 2008                                     |   |         | 4,473,686  |   |       |   | 4,474  |      |   |   | 48,526      |   |   |        | -       |   |   |   | (4,477 | ) |   |   | 48,523 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended March 31, 2009                   |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | -       |   |   |   | (31,115 | ) |   |   | (31,115 | ) |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Balance - March 31, 2009                                     |   |         | 4,473,686  |   |       |   | 4,474  |      |   |   | 48,526      |   |   |        | -       |   |   |   | (35,592 | ) |   |   | 17,408 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Net loss for the period April 1, 2009 through                |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   December 30, 2009                                |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | -       |   |   |   | (5,719 | ) |   |   | (5,719 | ) |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| To reflect the issuance of shares in the merger of           |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Magnolia Solar Corp., net of the cancellation of |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   founders shares                                  |   |         | 19,356,314 |   |       |   | 19,356 |      |   |   | 289,144     |   |   |        | -       |   |   |   | (126,151 | ) |   |   | 182,349 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| To reflect the issuance of warrants in the issuance          |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   of the Original Issue Discount Promissory Notes  |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | 412,830 |   |   |   | - |   |   |   | 412,830 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| To reflect the issuance of warrants to the Placement Agent   |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | 454,976 |   |   |   | - |   |   |   | 454,976 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Net loss for the period December 30, 2009 through            |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   December 31, 2009                                |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | -       |   |   |   | (49,440 | ) |   |   | (49,440 | ) |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2009                                  |   |         | 23,830,000 |   |       |   | 23,830 |      |   |   | 337,670     |   |   |        | 867,806 |   |   |   | (216,902 | ) |   |   | 1,012,404 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Common shares issued for services rendered                   |   |         | 100,000    |   |       |   | 100    |      |   |   | 82,400      |   |   |        | -       |   |   |   | - |   |   |   | 82,500 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2010                |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | -       |   |   |   | (1,543,775 | ) |   |   | (1,543,775 | ) |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2010                                  |   |         | 23,930,000 |   |       |   | 23,930 |      |   |   | 420,070     |   |   |        | 867,806 |   |   |   | (1,760,677 | ) |   |   | (448,871 | ) |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Common shares issued for services rendered                   |   |         | 400,000    |   |       |   | 400    |      |   |   | 78,350      |   |   |        | -       |   |   |   | - |   |   |   | 78,750 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| To reflect the issuance of shares issued in                  |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Conversion of OID Notes                          |   |         | 1,040,000  |   |       |   | 1,040  |      |   |   | 258,960     |   |   |        | -       |   |   |   | - |   |   |   | 260,000 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| To reflect the issuance of penalty shares related to         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Amendment of OID Notes                           |   |         | 1,300,000  |   |       |   | 1,300  |      |   |   | 271,700     |   |   |        | -       |   |   |   | - |   |   |   | 273,000 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Value of warrants issued for services                        |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | 94,491  |   |   |   | - |   |   |   | 94,491 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2011                |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | -       |   |   |   | (2,239,631 | ) |   |   | (2,239,631 | ) |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2011                                  |   |         | 26,670,000 |   |       |   | 26,670 |      |   |   | 1,029,080   |   |   |        | 962,297 |   |   |   | (4,000,308 | ) |   |   | (1,982,261 | ) |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Common shares issued for services rendered                   |   |         | 1,155,000  |   |       |   | 1,155  |      |   |   | 688,845     |   |   |        | -       |   |   |   | - |   |   |   | 690,000 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Common shares issued for payment of interest                 |   |         | 342,063    |   |       |   | 342    |      |   |   | 29,658      |   |   |        | -       |   |   |   | - |   |   |   | 30,000 |   |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2012                |   |         | -          |   |       |   | -      |      |   |   | -           |   |   |        | -       |   |   |   | (926,571 | ) |   |   | (926,571 | ) |
|                                                         |   |         |       |   |       |   |   |      |   |   |        |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2012                                  |   |         | 28,167,063 |   |       | $      | 28,167 |      |   | $      | 1,747,583   |   |   | $           | 962,297 |   |   | $      | (4,926,879 | ) |   | $ | (2,188,832 | ) |

----

|                                                                                                  |   |              |     |   |              |   |          | JANUARY 8, 2008   |   |
|-------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|---------------|-------------------|--------|
|                                                                                                  |   |              |     |   |              |   |          | (INCEPTION)       |   |
|                                                                                                  |   | YEAR ENDED        |     |   | YEAR ENDED        |   |          | THROUGH           |   |
|                                                                                                  |   | DECEMBER 31, 2012 |     |   | DECEMBER 31, 2011 |   |          | DECEMBER 31, 2012 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                 |   |              |     |   |              |   |          |              |   |
|    Net loss                                                                            |   | $                 | (926,571 | )      |              | $      | (2,239,631    | )                 |   | $ | (4,926,879 |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
| Adjustments to reconcile net loss                                                                     |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|   to net cash used in operating activities:                                                 |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|     Depreciation and amortization expense                                         |   |              | 37,997   |   |              |   | 389,545       |              |   |   | 782,694 |   |
|     Common stock issued for services rendered                                     |   |              | 690,000  |   |              |   | 78,750        |              |   |   | 851,250 |   |
|     Common stock issued for penalty shares in the amendment of the OID Notes      |   |              | -        |   |              |   |  273,000 |              |   |   | 273,000 |   |
|     Common stock issued for payment of interest                                   |   |              | 30,000   |   |              |   | -             |              |   |   | 30,000 |   |
|     Warrants issued for services rendered                                         |   |              | -        |   |              |   | 94,491        |              |   |   | 94,491 |   |
|     Amortization of original issue discount and debt discount                     |   |              | -        |   |              |   | 1,200,791     |              |   |   | 2,082,830 |   |
|     Forgiveness of debt                                                           |   |              | (5,298   | )      |              |   | -             |              |   |   | (5,298 | ) |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
| Change in assets and liabilities                                                                      |   |              |     |   |              |   |          |              |   |   |   |   |
|     (Increase) in accounts receivable                                             |   |              | (20,006  | )      |              |   | (128,959      | )                 |   |   | (267,115 | ) |
|     (Increase) in prepaid expenses                                                |   |              | -        |   |              |   | -             |              |   |   | (1,417 | ) |
|     Increase (decrease) in accounts payable and accrued expenses                  |   |              | 73,642   |   |              |   | 157,290       |              |   |   | 390,158 |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|           Total adjustments                         |   |              | 806,335  |   |              |   | 2,064,908     |              |   |   | 4,230,593 |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|           Net cash used in operating activities     |   |              | (120,236 | )      |              |   | (174,723      | )                 |   |   | (696,286 | ) |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                 |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|    Acquisition of fixed assets                                                         |   |              | -        |   |              |   | -             |              |   |   | (8,288 | ) |
|    Deferred financing fees paid in connection with funding                             |   |              | -        |   |              |   | -             |              |   |   | (154,800 | ) |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|           Net cash used in investing activities     |   |              | -        |   |              |   | -             |              |   |   | (163,088 | ) |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                 |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|    Issuance of stock for cash                                                          |   |              | -        |   |              |   | -             |              |   |   | 5,000 |   |
|    Proceeds received from loan payable - related party                                 |   |              | -        |   |              |   | -             |              |   |   | 70,000 |   |
|    Repayment of loan payable - related party                                           |   |              | -        |   |              |   | -             |              |   |   | (70,000 | ) |
|    Net proceeds received from Original Issue Discount Promissory Notes                 |   |              | -        |   |              |   | -             |              |   |   | 990,000 |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|           Net cash provided by financing activities |   |              | -        |   |              |   | -             |              |   |   | 995,000 |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                  |   |              | (120,236 |   |              |   | (174,723      | )                 |   |   | 135,626 |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                                       |   |              | 255,862  |   |              |   | 430,585       |              |   |   | - |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
| CASH AND CASH EQUIVALENTS - END OF PERIOD                                                             |   | $                 | 135,626  |   |              | $      | 255,862       |              |   | $ | 135,626 |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION:                                                                   |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|   Cash paid during the period for:                                                          |   |              |     |   |              |   |          |              |   |   |   |   |
|      Interest                                                                |   | $                 | -        |   |              | $      | -             |              |   | $ | 1,371 |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
| NON-CASH SUPPLEMENTAL INFORMATION:                                                                    |   |              |     |   |              |   |          |              |   |   |   |   |
|                                                                                                  |   |              |     |   |              |   |          |              |   |   |   |   |
|   Stock issued for services rendered                                                        |   | $                 | 690,000  |   |              | $      | 78,750        |              |   | $ | 851,250 |   |
|   Stock issued for penalty shares for the amendment of the OID Notes                        |   | $                 | -        |   |              | $      | 273,000       |              |   | $ | 273,000 |   |
|   Stock issued for payment of interest                                                      |   | $                 | 30,000   |   |              | $      | -             |              |   | $ | 30,000 |   |
|   Stock issued in conversion of OID Notes                                                   |   | $                 | -        |   |              | $      | 260,000       |              |   | $ | 260,000 |   |
|   Warrants issued for services rendered                                                     |   | $                 | -        |   |              | $      | 94,491        |              |   | $ | 94,491 |   |
|   Amortization of original issue discount and debt discount                                 |   | $                 | -        |   |              | $      | 1,200,791     |              |   | $ | 2,082,830 |   |

----

----

----

----

----

----

|                           |   | December 31, |            |   | December 31, |   |
|--------------------------------|--------|--------------|-----------------|--------|--------------|--------|
|                           |   | 2012         |            |   | 2011         |   |
| Net loss                       |   | $            | ( 926,571  | )      |         | $      | (2,239,631 | ) |
|                           |   |         |            |   |         |   |   |   |
| Weighted-average common shares |   |         |            |   |         |   |   |   |
| outstanding (Basic)            |   |         | 27,179,474      |   |         |   | 24,190,192 |   |
|                           |   |         |            |   |         |   |   |   |
| Weighted-average common stock  |   |         |            |   |         |   |   |   |
| Equivalents                    |   |         |            |   |         |   |   |   |
| Stock options                  |   |         | -               |   |         |   | - |   |
| Warrants                       |   |         |  3,785,300 |   |         |   | 3,785,300 |   |
|                           |   |         |            |   |         |   |   |   |
| Weighted-average common shares |   |         |            |   |         |   |   |   |
| outstanding (Diluted)          |   |         | 30,964,774      |   |         |   | 27,975,492 |   |

----

----

----

----

| Balance – December 31, 2008                          |   |   | -         |   |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|
| Issued – in the 26.6 units                                                                                                                                                        |   |   | 2,660,000 |   |   | $      | 0.25   |   |
| Issued – to Placement Agent                                                                                                                                                       |   |   | 725,300   |   |   | $      | 0.25   |   |
| Balance – December 31, 2009                                                                                                                                                       |   |   | 3,385,300 |   |   | $      | 0.25   |   |
| Balance – December 31, 2010                                                                                                                                                       |   |   | 3,385,300 |   |   | $      | 0.25   |   |
|                                                                                                                                                                                    |   |   |      |   |   |   |   |   |
| Issued – for public relations                                                                                                                                                     |   |   | 400,000   |   |   | $      | 0.50   |   |
|                                                                                                                                                                                    |   |   |      |   |   |   |   |   |
| Balance – December 31, 2011                                                                                                                                                       |   |   | 3,785,300 |   |   | $      | 0.28   |   |
|                                                                                                                                                                                    |   |   |      |   |   |   |   |   |
| Balance – December 31, 2012                                                                                                                                                       |   |   | 3,785,300 |   |   | $      | 0.28   |   |

----

|                           |   | December 31, |   |   | December 31, |   |
|--------------------------------|--------|--------------|--------|--------|--------------|--------|
|                           |   | 2012         |   |   | 2011         |   |
| Office equipment and computers |   | $            | 6,106  |   |         | $      | 6,106 |   |
| Furniture and fixtures         |   |         | 2,182  |   |         |   | 2,182 |   |
|                           |   |         | 8,288  |   |         |   | 8,288 |   |
| Accumulated depreciation       |   |         | (6,551 | )      |         |   | (4,204 | ) |
|                           |   | $            | 1,737  |   |         | $      | 4,084 |   |

----

----

| December 31, 2012   |   |   |           |
|-------------------------------|--------|--------|----------------|
| Net operating losses          |   | $      | 875,500        |   |
| Valuation allowance           |   |   | ( 875,500 | ) |
|                          |   | $      | -              |   |

----

|                               |   |   |    |
|------------------------------------|--------|--------|---------|
| Federal statutory rate             |   |   | (34.0)% |   |
| State income taxes, net of federal |   |   | 0.0     |   |
| Valuation allowance                |   |   | 34.0    |   |
|                               |   |   | 0%      |   |

| Year ending December 31, |   |   |   |
|--------------------------|--------|--------|--------|
|                     |   |   |   |
| 2013                     |   |   | 17,229 |   |
| 2014                     |   |   | 5,156  |   |
| 2015                     |   |   | 4,053  |   |
|                     |   | $      | 26,438 |   |

----

| Concentrations in Accounts Receivable |   | December 31, 2012 |   |   | December 31, 2011 |   |
|---------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
| Customer A                            |   |              | 55%    |   |              |   | 60% |   |
| Customer B                            |   |              | 29%    |   |              |   | 40% |   |
| Customer C                            |   |              | 16%    |   |              |   | - |   |
|                                  |   |              |   |   |              |   |   |   |
| Concentrations in Revenue             |   | December 31, 2012 |   |   | December 31, 2011 |   |
| Customer A                            |   |              | 55%    |   |              |   | 15% |   |
| Customer B                            |   |              | 36%    |   |              |   | 62% |   |
| Customer C                            |   |              | -      |   |              |   | 15% |   |

|   |   |
|--------|--------|

|   | Level 1 | Quoted prices in active markets for identical assets or liabilities.  The Company's Level 1 assets consist of cash and cash equivalents. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  December 31, 2012    |   |    |    |   |    |   |   |    |   |   |      |   |
|----------------------------|--------|---------|---------|--------|---------|--------|--------|---------|--------|--------|-----------|--------|
|                       |   | Level 1 |    |   | Level 2 |   |   | Level 3 |   |   | Total     |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |
| Cash                       |   | $       | 135,626 |   |    | $      | -      |    |   | $      | -         |   |   | $ | 135,626 |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Total assets               |   | $       | 135,626 |   |    | $      | -      |    |   | $      | -         |   |   | $ | 135,626 |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Original Issue Discount    |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Senior Secured Convertible |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
|  Promissory Notes     |   | $       | -       |   |    | $      | -      |    |   | $      | 2,400,000 |   |   | $ | 2,400,000 |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Total liabilities          |   | $       | -       |   |    | $      | -      |    |   | $      | 2,400,000 |   |   | $ | 2,400,000 |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| December 31, 2011          |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
|                       |   | Level 1 |    |   | Level 2 |   |   | Level 3 |   |   | Total     |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Cash                       |   | $       | 255,862 |   |    | $      | -      |    |   | $      | -         |   |   | $ | 255,862 |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Total assets               |   | $       | 255,862 |   |    | $      | -      |    |   | $      | -         |   |   | $ | 255,862 |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Original Issue Discount    |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Senior Secured Convertible |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Promissory Notes           |   | $       | -       |   |    | $      | -      |    |   | $      | 2,400,000 |   |   | $ | 2,400,000 |   |
|                       |   |    |    |   |    |   |   |    |   |   |      |   |   |   |   |   |
| Total liabilities          |   | $       | -       |   |    | $      | -      |    |   | $      | 2,400,000 |   |   | $ | 2,400,000 |   |

----

|                                                                                       |   | Original Issue Discount    |      |
|--------------------------------------------------------------------------------------------|--------|----------------------------|-----------|
|                                                                                       |   | Senior Secured Convertible |      |
|                 |   | Promissory Notes           |      |
|                                                                                       |   |                       |      |
| Balance, January 1, 2011                                                                   |   | $                          | 1,459,209 |   |
|                                                                                       |   |                       |      |   |
| Realized gains/(losses)                                                                    |   |                       | -         |   |
|                                                                                       |   |                       |      |   |
| Unrealized gains/(losses) relating to                                                      |   |                       |      |   |
| instruments still held at the reporting date                                               |   |                       | -         |   |
|                                                                                       |   |                       |      |   |
| Purchases, sales, issuances and settlements, net                                           |   |                       | -         |   |
|                                                                                       |   |                       |      |   |
| Discount on notes                                                                          |   |                       | -         |   |
|                                                                                       |   |                       |      |   |
| Amortization of discount on notes                                                          |   |                       | 1,200,791 |   |
|                                                                                       |   |                       |      |   |
| Conversion of notes to common stock                                                        |   |                       | (260,000  | ) |
|                                                                                       |   |                       |      |   |
| Balance, December 31, 2011                                                                 |   | $                          | 2,400,000 |   |
|                                                                                       |   |                       |      |   |
| Realized gains/(losses)                                                                    |   |                       | -         |   |
|                                                                                       |   |                       |      |   |
| Unrealized gains/(losses) relating to                                                      |   |                       |      |   |
| instruments still held at the reporting date                                               |   |                       | -         |   |
|                                                                                       |   |                       |      |   |
| Purchases, sales, issuances and settlements, net                                           |   |                       | -         |   |
|                                                                                       |   |                       |      |   |
| Discount on notes                                                                          |   |                       | -         |   |
|                                                                                       |   |                       |      |   |
| Amortization of discount on notes                                                          |   |                       |  -   |   |
|                                                                                       |   |                       |      |   |
| Balance, December 31, 2012                                                                 |   | $                          | 2,400,000 |   |

----

| Exhibit No. |   | Description                                              |
|-------------|--------|----------------------------------------------------------|
| 23.1        |   | Consent of KBL, LLP                                      |
| 31.1        |   | Section 302 Certification of Principal Executive Officer |
| 31.2        |   | Section 302 Certification of Principal Financial Officer |
| 32.1        |   | Section 906 Certification of Principal Executive Officer |
| 32.2        |   | Section 906 Certification of Principal Financial Officer |

----

|                    |                                                                                           |              |
|-------------------------|------------------------------------------------------------------------------------------------|-------------------|
|                    | MAGNOLIA SOLAR CORPORATION                                                                     |
|                    |                                                                                           |              |
| Date: December 23, 2013 | By:                                                                                            | /s/ Ashok K. Sood |
|                    | Dr. Ashok K. SoodPresident, Chief Executive Officer and Director (Principal Executive Officer) |
|                    |                                                                                           |

|                               |                                                                                                         |             |
|------------------------------------|--------------------------------------------------------------------------------------------------------------|------------------|
| Date:  December 23, 2013 | By:                                                                                                          | /s/ Yash R. Puri |
|                               | Dr. Yash R. PuriExecutive Vice-President, Chief Financial Officer and Director (Principal Financial Officer) |

| Name              |   | Capacity                                                                                     |   | Date              |
|-------------------|--------|----------------------------------------------------------------------------------------------|--------|-------------------|
|              |   |                                                                                         |   |              |
| /s/ Ashok K. Sood |   |                                                                                         |   |              |
| Dr. Ashok K. Sood |   | President, Chief Executive Officer and Director (Principal Executive Officer)                |   | December 23, 2013 |
|              |   |                                                                                         |   |              |
| /s/ Yash R. Puri  |   |                                                                                         |   |              |
| Dr. Yash R. Puri  |   | Executive Vice-President, Chief Financial Officer and Director (Principal Financial Officer) |   | December 23, 2013 |
|              |   |                                                                                         |   |              |