**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**





**Washington,
      D.C. 20549**





**FORM
      10-KSB**








x
            ANNUAL
                REPORT UNDER SECTION 13 OR 15 (d) OF THESECURITIES
                EXCHANGE ACT OF 1934For
                the fiscal year ended: **JULY 31, 2007** ̈
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934For
                transition period
                from _____ to  _____.





Commission
      File Number 333-48746








**CHINA
      NUVO SOLAR ENERGY, INC.**


(Name
      of
      small business issuer in its charter)





**NEVADA**
            **87-0567853**(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                Number)





**319
      Clematis Street – Suite 703, West Palm Beach, Florida
      33401**


(Address
      of principal executive offices)(Zip Code)





Issuer's
      telephone number, including area code: **(303)
      796-8940**





Securities
      registered pursuant to Section 12(b) of the Exchange Act:
**None**





Securities
      registered under Section 12(g) of the Exchange Act:
**None**





Check
        whether the issuer is not required to file reports pursuant to Section 13
        or
        Section 15(d) of the Act:   ̈





Check
      whether the issuer (1) has filed all reports required to be filed by Section
      13
      or 15 (d) of the Exchange during the past 12 months (or for such shorter period
      that the Registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 Days: xYes   ̈No





Check
      if
      there is no disclosure of delinquent filers pursuant to Item 405 of Regulation
      S-B contained in this form, and no disclosure will be contained, to the best
      of
      the Registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB: x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  ̈Yes  xNo





Issuer’s
      revenue for its most recent fiscal year: $-0-





The
      aggregate market value of the voting common equity held by non-affiliates of
      the
      issuer as of November 5, 2007 was $8,389,000, based on the last sale price
      of
      the issuers common stock ($0.08 per share) as reported by the OTC Bulletin
      Board.





The
      Registrant had 194,652,462 shares of common stock outstanding as of November
      5,
      2007.





Documents
      incorporated by reference: None











**CHINA
      NUVO SOLAR ENERGY, INC.**


FORM
      10-KSB





THIS
      REPORT MAY CONTAIN CERTAIN “FORWARD-LOOKING” STATEMENTS AS SUCH TERM IS DEFINED
      IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 OR BY THE SECURITIES
      AND
      EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH REPRESENT
      THE
      REGISTRANT’S EXPECTATIONS OR BELIEFS, INCLUDING BUT NOT LIMITED TO, STATEMENTS
      CONCERNING THE REGISTRANT’S OPERATIONS, ECONOMIC PERFORMANCE, FINANCIAL
      CONDITION, GROWTH AND ACQUISITION STRATEGIES, INVESTMENTS, AND FUTURE
      OPERATIONAL PLANS.  FOR THIS PURPOSE, ANY STATEMENTS CONTAINED HEREIN
      THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING
      STATEMENTS.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, WORDS
      SUCH AS “MAY”, “EXPECT”, “BELIEVE”, “ANTICIPATE”, “INTENT”, “COULD”, “ESTIMATE”,
“MIGHT”, OR “CONTINUE” OR THE NEGATIVE OR OTHER VARIATIONS THEREOF OR COMPARABLE
      TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING
      STATEMENTS.  THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL
      RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE REGISTRANT’S CONTROL,
      AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY OF IMPORTANT
      FACTORS, INCLUDING UNCERTAINTY RELATED TO ACQUISITIONS, GOVERNMENTAL REGULATION,
      MANAGING AND MAINTAINING GROWTH, THE OPERATIONS OF THE COMPANY AND ITS
      SUBSIDIARIES, VOLATILITY OF STOCK PRICE AND ANY OTHER FACTORS DISCUSSED IN
      THIS
      AND OTHER REGISTRANT FILINGS WITH THE SECURITIES AND EXCHANGE
      COMMISSION.





**PART
      I**





**ITEM
      1.                    DESCRIPTION
      OF BUSINESS**





(a)           Business
      development





We
      were
      originally organized under the laws of the State of Nevada in 1996 as Zacman
      Enterprises, Inc. and subsequently changed its name to eNutrition, Inc.
      eNutrition was a direct mail marketing company engaged in the development and
      marketing of nutritional supplements.  Operation commenced in June
      2000 by securing the exclusive rights to market the nutritional supplement,
      HI-Q.  In September 2001, eNutrition entered into a License Agreement
      with HI-Q Nutrition, Inc., a Nevada corporation, granting them the exclusive
      right to engage in the business of marketing and distributing nutritional
      products under the trade name HI-Q.





On
      April
      30, 2002, we entered into an agreement with HI-Q Nutrition, Inc. for the sale
      of
      all of our assets relating to our HI-Q brand of nutritional supplements,
      including the brand name, trademark, product formulations, customer base and
      marketing ideas, which comprised all of the assets and business of our
      company.  The agreement closed and became effective on May 20, 2002,
      immediately prior to our acquisition of the Torpedo business described below.
      We
      received cash consideration of $10,000, plus forgiveness of any uncollected
      royalties owed to HI-Q Nutrition, Inc.  In addition, HI-Q Nutrition,
      Inc. assumed all liabilities relating to the HI-Q brand products.  At
      a special shareholders' meeting held on May 17, 2002, our stockholders approved
      the sale of all of eNutrition's assets, and the assumption of all liabilities,
      to HI-Q Nutrition, Inc. Our stockholders also approved a one share for 1.8870314
      share reverse stock split and the purchase and retirement of 4,478,430
      post-reverse-split shares.





-1-





On
      May
      17, 2002, our stockholders also approved our acquisition of all of the issued
      and outstanding securities of Torpedo Delaware in exchange for 8,000,000 shares
      of our common stock issued to the Torpedo USA stockholders.  On May
      20, 2002 we changed our name to Torpedo Sports USA, Inc.  Torpedo USA,
      through its wholly-owned subsidiary Torpedo Canada, was a manufacturer and
      distributor of outdoor recreational products for children, such as, toboggans,
      baby sleds, snowboards, tricycles, scooters and skateboards. The transaction
      was
      recorded as a reverse acquisition based on factors demonstrating that Torpedo
      USA constituted the accounting acquirer.





In
      January 2004, Torpedo Canada filed in Canada, a notice of its intention to
      make
      a proposal to its creditors for the restructuring of its debts.  The
      proposal procedure allowed Torpedo Canada to continue to operate its business
      subject to protection of the secured interests of its lenders and suspended
      efforts by creditors to collect their debts while Torpedo Canada reviewed and
      analyzed its financial condition.  On May 6, 2004, Torpedo Canada
      filed for protection under the Bankruptcy and Insolvency Act of Canada with
      the
      intention to liquidate its assets.  Torpedo Canada ceased its
      operating activities in May 2004.  In June 2007, we executed a Stock
      Purchase Agreement by and between the Company and CLB Investment Corp. (“CLB”),
      pursuant to which CLB acquired all of the capital stock of Torpedo Canada in
      exchange for $10.00. As a result of this transaction, approximately $2.3 million
      in liabilities of Torpedo were eliminated from the consolidated balance sheet
      and therefore no longer reflected on our financial statements.





On
      February 1, 2005, we acquired all of the issued and outstanding common stock
      of
      Interactive.  Pursuant to terms of the merger agreement, in exchange
      for all of the issued and outstanding common shares of Interactive we issued
      27,037,282 shares of our common stock to the former Interactive shareholders
      in
      order for them to own 51% of our outstanding common stock on the closing date
      of
      the merger, on a fully diluted basis.  We agreed to issue additional
      shares if certain agreed upon criteria, to be determined, were met in order
      to
      allow the former Interactive security holders to hold 54% of our outstanding
      common stock (based on the shares outstanding at the time of
      closing).  As of October 30, 2007, we did not issue any of these
      additional shares.  In connection with the merger agreement, the
      former Interactive shareholders agreed to use their best efforts post-closing
      to
      cause our company to raise sufficient funds to pay-off or otherwise dispose
      of
      up to $250,000 of our liabilities.  As of October 31, 2007, $100,000
      has been paid.  Finally, if Torpedo USA did not dispose of all of
      assets and liabilities within three months following the acquisition closing
      date, we were required to issue an additional 500,000 shares to the former
      Interactive shareholders.  The Company has determined that it will
      issue such shares once Torpedo USA has raised sufficient shares to satisfy
      up to
      $250,000 of its liabilities.





In
      conjunction with the merger agreement, we changed our name to Interactive Games,
      Inc. and approved an increase in our authorized common stock from 50,000,000
      shares to 100,000,000 shares.





The
      acquisition of Interactive by us was accounted for as a reverse merger because
      on a post-merger basis, the former Interactive shareholders held a majority
      of
      the outstanding common stock of our company on a voting and fully diluted
      basis.  As a result, Interactive was deemed to be the acquirer for
      accounting purposes.





In
        June
        2007, our stockholders approved the consolidation of our operating assets
        at
        that time into one operating subsidiary and the spin-off of that operating
        subsidiary on a pro-rata basis to our stockholders of record as of July 10,
        2007, whereby each stockholder as of the





-2-





record
        date will receive a pro rata number of shares of common stock in the operating
        subsidiary for each share of common stock in the Company held by such
        stockholder as of the record date.  The board of directors of the
        Company has retained the authority to cancel the spin-off distribution at
        any
        time prior to its completion in the event it determines that the spin-off
        is not
        in the best interests of the Company or its
        stockholders.  Importantly, all shareholders who acquired or acquire
        common stock after July 10, 2007 will not be entitled to participate in this
        “spin-off” distribution.





The
      “distribution” of the spin-off shares will occur at a later date subject to
      completion of certain legal and regulatory requirements and
      conditions.  We currently anticipate that the
      distribution  will occurprior to December 31, 2007.  Our
      intent is to make the newly created spin-off company publicly traded subject
      to
      the filing of all necessary documentation and obtaining all required regulatory
      approvals.





Also
      in
      June 2007, our stockholders, through a written consent executed by stockholders
      holding a majority of the outstanding shares of our common stock entitled to
      vote, adopted and approved Amended and Restated Articles of Incorporation and
      ratified the Amended and Restated Bylaws of the Company, which were adopted
      by
      our board of directors on June 26, 2007.





The
      Amended and Restated Articles of Incorporation increased the authorized capital
      stock of the Company from 105,000,000 shares to 500,000,000 shares, of which
      25,000,000 shares now may be preferred stock having the voting powers,
      designations, preferences, limitations, restrictions and relative rights as
      determined by the board of directors from time to time.  The Company’s
      stockholders also authorized our chief executive officer to change our name
      to
      China Nuvo Solar Energy, Inc. at such time as the chief executive officer deemed
      appropriate in his sole discretion.





Generally,
      the Amended and Restated Bylaws of the Company updated our former bylaws to
      reflect changes to applicable law.  For example, under the Amended and
      Restated Bylaws stockholders may now take action by written action signed by
      stockholders holding a majority of the shares entitled to vote on the given
      action.





In
      July
      2007, we issued an additional 500,000 shares of our common stock to CLB in
      consideration of its assumption of approximately an additional $418,000 of
      notes
      and accrued and unpaid interest, accounts payable and accrued
      expenses.





Pursuant
      to an Agreement and Plan of Reorganization dated as of April 23, 2007, as
      amended on July 25, 2007 (the “Share Exchange Agreement”), by and between
      the Company and Nuvo Solar Energy, Inc., a Colorado corporation (“Nuvo”), we and
      Nuvo entered into a share exchange whereby all of the issued and outstanding
      capital stock of Nuvo, on a fully-diluted basis, was exchanged for like
      securities of the Company, and whereby Nuvo became our wholly owned subsidiary
      (the “Share Exchange”).  The Share Exchange was effective as of July
      25, 2007, upon the completed filing of Articles of Exchange with the Nevada
      Secretary of State and a Statement of Share Exchange with the Colorado Secretary
      of State.  Contemporaneously with the Share Exchange, we changed our
      name to “China Nuvo Solar Energy, Inc.”





Immediately
      prior to the effective time of the Share Exchange, Nuvo had outstanding
      5,500,000 shares of its common stock (“Nuvo Common Stock”) and no shares of
      preferred stock.  In accordance with the Share Exchange Agreement,
      each share of Nuvo Common Stock





-3-





was
      acquired by us in exchange for approximately 24.24 shares of our common stock
      for a total of 133,333,255 shares issued.  Accordingly, after giving
      effect to the Share Exchange, the Company had approximately 189,915,355 shares
      of Common Stock outstanding immediately following the transaction.





As
      a
      result of the Share Exchange, the former Nuvo shareholders together held
      approximately 66.6% of the Company’s outstanding common stock immediately
      following the transaction, on a fully-diluted basis.  Accordingly, the
      Share Exchange constituted a change of control of the Company.  As a
      result of the Share Exchange, Nuvo constituted the accounting acquirer in the
      Share Exchange, however, we elected to have a July 31 fiscal year end, which
      is
      the same fiscal year end that Interactive Games, Inc. had prior to the Share
      Exchange.





In
      September 2007, we announced the execution of a term sheet with Pioneer
      Materials, Inc. (“PMI”) of Torrance, California, to establish a pilot
      development and manufacturing operation in PMI’s Chengdu, Sichuan, China
      facility located in Chengdu’s West High Tech development zone.  Upon
      execution of the term sheet, we paid PMI $10,000 toward the future costs under
      the proposed agreement.  The agreement with PMI has the objective of
      establishing initial production of solar cells using our licensed technology
      based on an invention titled *“Photovoltaic cell with integral light
      transmitting waveguide in a ceramic sleeve”*.  PMI is a
      manufacturer and supplier of materials for the semiconductor, hard drive media,
      optical media and photonic industries.  PMI is developing for the
      solar energy industry advanced materials for thin film photovoltaics (solar
      cell) processing.  The companies are currently negotiating the terms
      of a definitive agreement that is required to complete the proposed
      venture.








(b)           Business
      of issuer





Overview
      of our Current Business – Nuvo





Upon
      completion of the Share Exchange, we ceased all operations relating to our
      historical business and adopted the business plan of Nuvo, which is now our
      wholly owned subsidiary.  Pursuant to the terms of the Share Exchange
      as described more fully above, we spun-off our operations existing prior to
      the
      Share Exchange to our shareholders of record on July 10,
      2007.  Throughout this report, the terms “Company” and “Nuvo” refer to
      China Nuvo Solar Energy, Inc. and the business of Nuvo now owned and operated
      by
      China Nuvo Solar Energy, Inc.





Nuvo
      was
      formed on April 13, 2006 under the laws of the State of Colorado. Nuvo was
      formed to seek a business opportunity in the alternate energy or
“next-generation energy" sector. This industry sector encompasses non-hydro
      carbon based energy production and renewable energy technologies that are
“net-zero" or emissions free.





Nuvo
      has
      identified the solar energy category as extremely promising because of its
      worldwide commercialization efforts to date. Solar power is a distributed energy
      technology that uses solar cells to convert the sun's energy to electricity.
      The
      major advantage of solar is its abundance for all purposes.  Today,
      the cost of solar power substantially exceeds the cost of power furnished by
      the
      electric utility grid. As a result, federal, state and local governmental bodies
      in many countries, most notably the United States, Japan and Germany, have
      provided subsidies in the form of cost reductions, tax write-offs and other
      incentives to end users, distributors, systems integrators and manufacturers
      of
      solar power products to promote the use of solar energy in on-grid applications
      and to reduce dependency on other forms of energy.





-4-





Nuvo
      intends to locate and utilize such incentives in the development of its
      technology, if available.





On
      June
      9, 2006, Nuvo signed a license agreement with Photovoltaics.com, Inc. (“PV”),
      which is based in Hutchinson Island, Florida. Nuvo acquired exclusive worldwide
      rights to PV's solar cell technology relating to a multiple stacked solar cell
      using wave guide transfers. This license agreement includes all patents issued
      pursuant to certain patents applications or amendments that have been filed
      and
      the rights to use all applicable copyrights, trademarks and related intellectual
      property obtained on or in connection with the process and products. As
      consideration for this license, Nuvo agreed to pay a total aggregate license
      fee
      of $250,000, of which $150,000 was paid on June 9, 2006 and $100,000 was paid
      on
      August 11, 2006.  The term of the license is for 10 years and
      automatically renewable for successive ten-year terms under the same terms
      and
      conditions as provided for in the license agreement.





Nuvo
      also
      agreed to pay the licensor a total of $180,000 to provide services relating
      to
      sales, marketing, manufacturing and order fulfillment for a period of three
      years ending in June, 2009.  As of November 1, 2007, Nuvo has paid
      $164,000 of this amount and has agreed to pay $16,000  in December
      2007 upon whichthe entire amount has been paid.





**Intellectual
      Property and License Agreement**





The
      science that is used in our solar cell technology is based on an invention
      titled, *“Photovoltaic cell with integral light transmitting waveguide in a
      ceramic sleeve”,* utilizes Cadmium/Tellurium Cadmium/Sulfide powders layered
      in a ceramic sleeve with a copper back contact.  The ceramic sleeve
      eliminates the need for vacuum chambers or a vat with a molten
      material.  A lens is then glued on to the cell.  The cell
      utilizes a wave guide to carry light through the cell.  In addition,
      the wave guide can photo generate an electrical potential in the
      cell.  The material and amount of layers determines voltage while
      amperage is dependent in part upon particle size.  In essence, a
      multiple stacked solar cell using a wave guide transfers the square conversion
      area of the solar cell exposed to the sun from the horizontal to the
      vertical.





Our
      licensed technology incorporates a process that is conducive to manufacturing
      using a batch process.  This is possible because the solar cell
      cylinder itself replaces the necessity to use expensive vacuum chambers during
      production.  We believe this approach is the most expeditious and
      cost-effective alternative to development of manufacturing
      capability.  Consequently, since the batch processing approach is
      highly labor intensive, Nuvo has executed a  term sheet to establish a
      pilot manufacturing facility in China due to the fact that the only independent
      mine and refining operations for Cad/Tel production known to the Company in
      the
      world is located in China.





Our
      licensed technology uses a ceramic sleeve as a receptacle for the various
      materials used for a solar cell.  The ceramic sleeve replaces typical
      equipment such as expensive vacuum chambers thereby permitting the
      interchangeability of materials.  Production processes using a vacuum
      chamber in many cases cannot interchange materials because of contamination
      issues. We believe that utilizing the technology, if a shortage of one type
      of
      material occurs, a shift can be made quickly and economically to a more cost
      effective but complementary material.  The materials that can be used
      in these cells goes from soft materials like Cadmium/Tellurium to hard materials
      like Silicon.





A
      recently published independent report by the Joannopoulos Research Group at
      the
      Massachusetts Institute of Technology (“MIT”) determined that light trapping by
      wave guides





-5-





they
      put
      into photovoltaic cells was increased by 37%.  This is accomplished by
      inter-dispersing clear crystal particles on waveguides with the solar
      cell.   We believe our licensed technology offers a number of
      significant advantages in light trapping efficiencies and certain production
      economies compared to current technologies.  We believe our licensed
      technology can increase light trapping even further by placement of these clear
      crystal particles in a random manner.  In addition, these wave guides
      allow even more layers of photovoltaic materials to be put down as the wave
      guides bring the light down even further than the few microns it can now travel
      in most materials.  We believe these ceramic sleeve solar cells with
      wave guides lend themselves to ideal cells for use in a concentrator
      system.





**Competition**




Companies
      pursuing similar technologies including different but related fields represent
      substantial competition. Many of these organizations are some of the largest
      companies in the world and have substantially greater capital resources,
      research and development staffs and facilities, as well as greater manufacturing
      and marketing capabilities than Nuvo does.   These organizations
      also compete with Nuvo to attract qualified personnel, parties for acquisitions,
      joint ventures or other collaborations.  As a result, there is no
      assurance that Nuvo’s technology will prove viable or that it will be able to
      compete with these larger organizations to produce any product or
      service.




**Government
      Regulation**




The
        market for electricity generation products is heavily influenced by foreign,
        federal, state and local government regulations and policies concerning the
        electric utility industry, as well as internal policies and regulations
        promulgated by electric utilities. These regulations and policies often relate
        to electricity pricing and technical interconnection of customer-owned
        electricity generation. In the United States and in a number of other countries,
        these regulations and policies are being modified and may continue to be
        modified. Nuvo will also be required to comply with all foreign, federal,
        state
        and local regulations regarding protection of the
        environment.





**Compliance
      with Environmental Laws**





We
        are
        required to comply with all foreign, federal, state and local regulations
        regarding protection of the environment. If more stringent regulations are
        adopted in the future, the costs of compliance with these new regulations
        could
        be substantial. We may need to procure certain governmental and other permits
        to
        conduct our business. If we fail to comply with present or future environmental
        regulations, however, we may be required to pay substantial fines, suspend
        future production or cease operations. The manufacture of our potential products
        may use, generate and discharge toxic, volatile and otherwise hazardous
        chemicals and wastes. Any failure by us to control the use of, or to restrict
        adequately the discharge of, hazardous substances could subject us to
        potentially significant monetary damages and fines or suspensions in our
        business operations. In addition, under some foreign, federal and state statutes
        and regulations, a governmental agency may seek recovery and response costs
        from
        operators of property where releases of hazardous substances have occurred
        or
        are ongoing, even if the operator was not responsible for such release or
        otherwise at fault.








-6-





**Employees**





The
      Company currently does not have any full or part-time employees other than
      its
      officers.





**Risk
      Factors**





***In
      General.***  The purchase of shares of our common stock is
      very speculative and involves a very high degree of risk.  An
      investment in us is suitable only for the persons who can afford the loss of
      their entire investment.  Accordingly, investors should carefully
      consider the following risk factors, as well as other information set forth
      herein, in making an investment decision with respect to securities of the
      Company.





***The
      market price of our common stock
      may fluctuate significantly.***





The
      market price of our common shares may fluctuate significantly in response to
      factors, some of which are beyond our control, such as:





·
            the
                announcement of new products or product enhancements by us or our
                competitors;


·
            developments
                concerning intellectual property rights and regulatory
                approvals;


·
            quarterly
                variations in our and our competitors’ results of
                operations;


·
            changes
                in earnings estimates or recommendations by securities
                analysts;


·
            developments
                in our industry; and


·
            general
                market conditions and other factors, including factors unrelated
                to our
                own operating performance.





Further,
      the stock market in general has recently experienced extreme price and volume
      fluctuations.  Continued market fluctuations could result in extreme
      volatility in the price of our common shares, which could cause a decline in
      the
      value of our common shares.  You should also be aware that price
      volatility might be worse if the trading volume of our common shares is
      low.





***Because
      we gained access to the public markets through a share exchange, we may not
      be
      able to attract the attention of major brokerage
      firms.***





Additional
      risks may exist since we
      gained access to the public markets through a share
      exchange.  Security analysts of major brokerage firms may not cover us
      since there is no incentive to brokerage firms to recommend the purchase of
      our
      common stock.  No assurance can be given that brokerage firms will
      want to conduct any secondary offerings on our behalf in the
      future.





-7-




***Trading
      of our common stock is limited.***





Trading
      of our common stock is conducted on the National Association of Securities
      Dealers’ Over-the-Counter Bulletin Board, or “OTC Bulletin Board.” This has
      adversely effected the liquidity of our securities, not only in terms of the
      number of securities that can be bought and sold at a given price, but also
      through delays in the timing of transactions and reduction in security analysts'
      and the media's coverage of us. This may result in lower prices for our common
      stock than might otherwise be obtained and could also result in a larger spread
      between the bid and asked prices for our common stock.





***Because
      it is a “penny stock,” it will
      be more difficult for you to sell shares of our common
      stock.***





Our
      common stock is a “penny stock.”
Broker-dealers who sell penny stocks must provide purchasers of these stocks
      with a standardized risk-disclosure document prepared by the SEC. This document
      provides information about penny stocks and the nature and level of risks
      involved in investing in the penny-stock market. A broker must also give a
      purchaser, orally or in writing, bid and offer quotations and information
      regarding broker and salesperson compensation, make a written determination
      that
      the penny stock is a suitable investment for the purchaser, and obtain the
      purchaser’s written agreement to the purchase. The penny stock rules may make it
      difficult for you to sell your shares of our stock. Because of the rules, there
      is less trading in penny stocks. Also, many brokers choose not to participate
      in
      penny-stock transactions.  Accordingly, you may not always be able to
      resell shares of our common stock publicly at times and prices that you feel
      are
      appropriate.





***Risks
      Related to Our New Business***





***We
      currently have no product revenues and will need to raise additional capital
      to
      operate our business.***





To
      date,
      we have generated no product revenues.  Until we are able to prove
      that our proprietary solar technology will work on a large commercial scale
      and
      can set up adequate manufacturing facilities, we will not have product revenues.
      Therefore, for the foreseeable future, we will have to fund all of our
      operations and capital expenditures from additional financing, which may not
      be
      available on favorable terms, if at all.  If we are unable to raise
      additional funds on acceptable terms, or at all, we may be unable to complete
      the development of our solar technology and set up adequate manufacturing
      facilities to produce a commercially viable product.  In addition, we
      could be forced to discontinue product development.  Any additional
      sources of financing will likely involve the sale of our equity securities
      or
      issuance of debt instruments that may be convertible into our common stock,
      which will have a dilutive effect on our stockholders.





***We
      are not currently profitable and may never become
      profitable.***





We
      have a
      history of losses and expect to incur substantial losses and negative operating
      cash flow for the foreseeable future, and we may never achieve or maintain
      profitability. Even if we succeed in developing and commercializing one or
      more
      products, we expect to incur substantial losses for the foreseeable future
      and
      may never become profitable.  We also expect to continue to incur
      significant operating and capital expenditures and anticipate that our expenses
      will increase substantially in the foreseeable future as we continue to
      undertake research and development of potential alternative energy
      sources.





-8-




We
      also expect to experience negative
      cash flow for the foreseeable future as we fund our operating losses and capital
      expenditures. As a result, we will need to generate significant revenues in
      order to achieve and maintain profitability. We may not be able to generate
      these revenues or achieve profitability in the future. Our failure to achieve
      or
      maintain profitability could negatively impact the value of our
      stock.





***We
      have a lack of operating history in which to base an investment
      decision.***





Nuvo
      is a
      newly created startup company that has no operating history.  Our
      acquisition of solar cell technology from Photovoltaics.com, Inc. provides
      us
      with an opportunity for new business development, which carries continued unique
      risks inherent with any new business opportunity.  As a new start up
      company, Nuvo is subject to unforeseen costs, expenses, problems and
      difficulties inherent in these new business ventures.





Our
      operations to date have been limited to organizing the company, acquiring and
      securing the proprietary technology. These operations provide a limited basis
      for you to assess our ability to commercialize any product and the advisability
      of investing in our securities.





***No
      assurance of success or profitability.***





We
      have
      no current business operations and expect to incur significant losses and
      negative operating cash flow for the foreseeable future, and we may never
      achieve or maintain profitability. Even if we succeed in developing and
      commercializing one or more products, we expect to incur losses for the
      foreseeable future and may never become profitable.





***We
      currently have outstanding debt that is convertible into shares of our common
      stock at prices that may be significantly below the market price at any given
      time and therefore significant dilution could occur to our current
      stockholders.***





At
      July
      31, 2007, we had a total of $299,125 in debt that is convertible into shares
      of
      our common stock at a discount of up to 25% of the market price for our common
      stock at any given time.  The conversion of any or all of this debt
      could result in significant dilution to our stockholders at the time such debt
      is converted.





***We
      currently have stock options and common stock purchase warrants outstanding
      that
      may be exercisable at prices below the market price for our common stock at
      any
      given time that could result in significant dilution to our
      stockholders.***





At
      July
      31, 2007, we had a total of 8,912,107 stock options and common stock purchase
      warrants outstanding exercisable at a weighted average exercise price of $0.13
      at that date.  The conversion of any or all of these options and
      warrants could occur at prices below the market price of our common stock at
      a
      given time and could cause substantial dilution to our
      stockholders.  In addition, as we seek to raise additional capital to
      fund our future business operations, we could issue additional stock options
      and
      warrants at prices below market that cause additional dilution to our
      stockholders.


-9-


***We
      will compete with organizations of all sizes from multinational manufacturing
      and energy companies to similar sized startup companies as well as research
      and
      educational institutions.   Developments by competitors may
      render our technologies or potential products obsolete or
      non-competitive.***




Companies
      pursuing similar technologies including different but related fields represent
      substantial competition. Many of these organizations are some of the largest
      companies in the world and have substantially greater capital resources,
      research and development staffs and facilities, as well as greater manufacturing
      and marketing capabilities than we do.   These organizations also
      compete with us to attract qualified personnel, parties for acquisitions, joint
      ventures or other collaborations.  As a result, there is no assurance
      that our technology will prove viable or that we will be able to compete with
      these larger organizations to produce any product or service.





***Evaluating
        our business and future prospects may be difficult due to the rapidly changing
        market landscape.***





The
        market we are attempting to enter is rapidly evolving and is experiencing
        technological advances and new market entrants. Our future success will require
        us to commercialize our technology and we have limited experience upon which
        to
        predict whether it will be successful. As a result, you should consider our
        business and prospects in light of the risks, expenses and challenges that
        we
        will face as an early-stage company seeking to develop and manufacture new
        products in a growing and rapidly evolving market.





***We
        may fail to successfully bring to market products based on our technology,
        which
        may prevent us from achieving product sales and market
        share.***





We
        expect
        to derive a substantial portion of our revenues from sales of new solar power
        products that are under development and not yet commercially available. If
        we
        fail to successfully develop our new solar power products or technologies,
        we
        will likely be unable to recover the losses we may incur to develop these
        products and technologies and may be unable to establish our sales and market
        share and become profitable. Many of our proposed product and manufacturing
        technologies are novel and represent a departure from conventional solar
        power
        technologies, and it is difficult to predict whether we will be successful
        in
        completing their development.





***Our
        solar power products may not gain market acceptance, which would prevent
        us from
        achieving increased sales and market share.***





The
        development of a successful market for solar power products may be adversely
        affected by a number of factors, many of which are beyond our control,
        including:





·
              our
                  failure to produce solar power products that compete favorably
                  against
                  other solar power products on the basis of cost, quality and
                  performance;


·
              whether
                  or not customers will accept our new technology and any products
                  based on
                  that technology; and


·
              our
                  failure to develop and maintain successful relationships with
                  distributors, systems integrators and other resellers, as well
                  as
                  strategic partners.





If
        our
        proposed solar power products fail to gain market acceptance, we would be
        unable
        to establish sales and market share and to achieve and sustain
        profitability.





-10-





***Technological
      changes in the solar power industry could render our solar power products
      uncompetitive or obsolete, which could reduce our market share and cause our
      sales to decline.***





Our
        failure to develop our technology and introduce new solar power products
        could
        cause our technology to become uncompetitive or obsolete, which could reduce
        our
        ability to sell products or gain market share and cause potential sales to
        decline. The solar power industry is rapidly evolving and competitive. We
        will
        need to invest significant financial resources in future research and
        development to keep pace with technological advances in the solar power industry
        and to effectively compete in the future. Our development efforts may be
        rendered obsolete by the technological advances of others and other technologies
        may prove more advantageous for the commercialization of solar power
        products.





***Our
        success in the future may depend on our ability to establish and maintain
        strategic alliances, and any failure on our part to establish and maintain
        such
        relationships would adversely affect our market penetration and revenue
        growth.***





We
        may be
        required to establish strategic relationships with third parties in the solar
        power industry, including in international markets.  Our ability to
        establish strategic relationships will depend on a number of factors, many
        of
        which are outside our control, such as the competitive position of our
        technology and our products relative to our competitors. We can provide no
        assurance that we will be able to establish other strategic relationships
        in the
        future.





In
        addition, any strategic alliances that we establish, will subject us to a
        number
        of risks, including risks associated with sharing proprietary information,
        loss
        of control of operations that are material to developed business and
        profit-sharing arrangements. Moreover, strategic alliances may be expensive
        to
        implement and subject us to the risk that the third party will not perform
        its
        obligations under the relationship, which may subject us to losses over which
        we
        have no control or expensive termination arrangements. As a result, even
        if our
        strategic alliances with third parties are successful, our business may be
        adversely affected by a number of factors that are outside of our
        control.





***Our
        management team may not be able to successfully implement our business
        strategies.***





Our
        management team has limited experience in the alternative energy
        sector.  If our management team is unable to execute on its business
        strategies, then our product development, the establishment of manufacturing
        operations and distribution network and our sales and marketing activities
        would
        be materially and adversely affected. In addition, we may encounter difficulties
        in effectively managing the budgeting, forecasting and other process control
        issues presented by any future growth. We may seek to augment or replace
        members
        of our management team or we may lose key members of our management team,
        and we
        may not be able to attract new management talent with sufficient skill and
        experience.


-11-




***Existing
        regulations and changes to such regulations may present technical, regulatory
        and economic barriers to the purchase and use of solar power products, which
        may
        significantly reduce demand for our products.***





The
        market for electricity generation products is heavily influenced by foreign,
        federal, state and local government regulations and policies concerning the
        electric utility industry, as well as internal policies and regulations
        promulgated by electric utilities. These regulations and policies often relate
        to electricity pricing and technical interconnection of customer-owned
        electricity generation. In the United States and in a number of other countries,
        these regulations and policies are being modified and may continue to be
        modified. Customer purchases of, or further investment in the research and
        development of, alternative energy sources, including solar power technology,
        could be deterred by these regulations and policies, which could result in
        a
        significant reduction in the potential demand for our solar power products.
        For
        example, utility companies commonly charge fees to larger, industrial customers
        for disconnecting from the electric grid or for having the capacity to use
        power
        from the electric grid for back-up purposes. These fees could increase the
        cost
        to our customers of using our solar power products and make them less desirable,
        thereby harming our business, prospects, results of operations and financial
        condition. We anticipate that our solar power products and their installation
        will be subject to oversight and regulation in accordance with national and
        local ordinances relating to building codes, safety, environmental protection,
        utility interconnection and metering and related matters. There is also a
        burden
        in having to track the requirements of individual states and design equipment
        to
        comply with the varying standards. Any new government regulations or utility
        policies pertaining to our solar power products may result in significant
        additional expenses to us and our resellers and their customers and, as a
        result, could cause a significant reduction in demand for our solar power
        products.





***Compliance
        with environmental regulations can be expensive, and noncompliance with these
        regulations may result in adverse publicity and potentially significant monetary
        damages and fines.***





We
        are
        required to comply with all foreign, federal, state and local regulations
        regarding protection of the environment. If more stringent regulations are
        adopted in the future, the costs of compliance with these new regulations
        could
        be substantial. We may need to procure certain governmental and other permits
        to
        conduct our business. If we fail to comply with present or future environmental
        regulations, however, we may be required to pay substantial fines, suspend
        future production or cease operations. The manufacture of our potential products
        may use, generate and discharge toxic, volatile and otherwise hazardous
        chemicals and wastes. Any failure by us to control the use of, or to restrict
        adequately the discharge of, hazardous substances could subject us to
        potentially significant monetary damages and fines or suspensions in our
        business operations. In addition, under some foreign, federal and state statutes
        and regulations, a governmental agency may seek recovery and response costs
        from
        operators of property where releases of hazardous substances have occurred
        or
        are ongoing, even if the operator was not responsible for such release or
        otherwise at fault.





***Product
        liability claims against us could result in adverse publicity and potentially
        significant monetary damages.***





Like
        other retailers, distributors and manufacturers of products that are used
        by
        consumers, we may face an inherent risk of exposure to product liability
        claims
        in the event that the use of the solar power products we intend to sell results
        in injury. Since our intended products are electricity producing devices,
        it is
        possible that consumers could be injured or killed





-12-





by
        potential products, whether by product malfunctions, defects, improper
        installation or other causes. In addition, we cannot predict whether product
        liability claims will be brought against us in the future or the effect of
        any
        resulting adverse publicity on our business. Moreover, we may not have adequate
        resources in the event of a successful claim against us. We will need to
        evaluate the potential risks we face and procure appropriate levels of insurance
        for product liability claims.  There is no assurance we will be able
        to afford such coverage to adequately protect the Company and its
        stockholders.  The successful assertion of any future product
        liability claims against us could result in potentially significant monetary
        damages and if any insurance protection is inadequate to cover these claims,
        they could require us to make significant payments.





***If
      we fail to adequately protect or enforce our intellectual property rights or
      secure rights to patents of others, the value of our intellectual property
      rights would diminish.***





Our
      success, competitive position and future revenues will depend in part on our
      ability, and the abilities of any licensors we may engage, to obtain and
      maintain patent protection for our products, methods, processes and other
      technologies, to preserve our trade secrets, to prevent third parties from
      infringing on our proprietary rights and to operate without infringing the
      proprietary rights of third parties.





We
      cannot
      predict:





·
            the
                degree and range of protection any patents will afford us against
                competitors, including whether third parties will find ways to invalidate
                or otherwise circumvent our licensed
                patents;


·
            if
                and when patents will issue;


·
            whether
                or not others will obtain patents claiming aspects similar to those
                covered by our licensed patents and patent applications;
                or


·
            whether
                we will need to initiate litigation or administrative proceedings
                which
                may be costly whether we win or
                lose.





Our
      success also depends upon the skills, knowledge and experience of our scientific
      and technical personnel, our consultants and advisors as well as any licensors
      and contractors.  To help protect our proprietary know-how and our
      inventions for which patents may be unobtainable or difficult to obtain, we
      will
      rely on trade secret protection and confidentiality agreements.  To
      this end and to the extent possible, we intend to require all of our employees
      and consultants to enter into agreements which prohibit the disclosure of
      confidential information and, where applicable, require disclosure and
      assignment to us of the ideas, developments, discoveries and inventions
      important to our business. These agreements may not provide adequate protection
      for our trade secrets, know-how or other proprietary information in the event
      of
      any unauthorized use or disclosure or the lawful development by others of such
      information.  If any of our trade secrets, know-how or other
      proprietary information is disclosed, the value of our trade secrets, know-how
      and other proprietary rights would be significantly impaired and our business
      and competitive position would suffer.





***If
      we infringe the rights of third parties we could be prevented from selling
      products, forced to pay damages, and defend against
      litigation.***





If
      our
      products, methods, processes and other technologies infringe the proprietary
      rights of other parties, we could incur substantial costs and we may have
      to:





-13-








·
            obtain
                licenses, which may not be available on commercially reasonable terms,
                if
                at all;


·
            redesign
                our products or processes to avoid
                infringement;


·
            stop
                using the subject matter claimed in the patents held by others, which
                could cause us to lose the use of one or more of our product
                candidates;


·
            pay
                damages; or


·
            defend
                litigation or administrative proceedings which may be costly whether
                we
                win or lose, and which could result in a substantial diversion of
                our
                valuable management resources.





***We
      rely on key executive officers and scientific advisors, and their knowledge
      of
      our business and technical expertise would be difficult to
      replace.***




We
      are
      highly dependent on our consultant Mr. Lawrence Curtin, the developer of our
      solar technology.  We do not have “key person” life insurance policies
      for any of our officers.  The loss of the technical knowledge and
      management and industry expertise of any of our current or future key personnel
      could result in delays in product development, loss of customers and sales
      and
      diversion of management resources, which could adversely affect our operating
      results.





***If
      we are unable to hire additional qualified personnel, our ability to grow our
      business may be harmed.***




We
      will
      need to hire additional qualified personnel with expertise in solar cell
      technology, government regulation, development and manufacturing, and sales
      and
      marketing. We may face significant competition for qualified individuals, and
      we
      cannot be certain that our search for such personnel will be successful.
      Attracting and retaining qualified personnel will be critical to our
      success.





***Risks
      Related to Doing Business in China***





***Adverse
      changes in
      political and economic policies of the******Peoples
      Republic of China (PRC)******government could have a
      material adverse effect on the overall economic growth of China, which could
      reduce the demand for our anticipated products and materially and adversely
      affect our competitive position.***





We
      currently intend to conduct a majority of our business operations in China
      and a
      portion of our potential sales could be made in China in the near future.
      Accordingly, our business, financial condition, results of operations and
      prospects are affected significantly by economic, political and legal
      developments in China. The Chinese economy differs from the economies of most
      developed countries in many respects, including:





·
            the
                amount of government involvement;


·
            the
                level of development;


·
            the
                growth rate;


·
            the
                control of foreign exchange; and


·
            the
                allocation of resources.





-14-





While
      the Chinese economy has grown
      significantly inrecentyears, the growth has
      been
      uneven, both geographically and among various sectors of the economy. The PRC
      government has implemented various measures to encourage economic growth and
      guide the allocation of resources. Some of these measures benefit the overall
      Chinese economy, but may also have a negative effect on us. For example, our
      financial condition and results of operations may be adversely affected by
      government control over capital investments or changes in tax regulations that
      are applicable to us.





The
      Chinese economy has been transitioning from a planned economy to a more
      market-oriented economy. Although in recent years the PRC government has
      implemented measures emphasizing the utilization of market forces for economic
      reform, the reduction of state ownership of productive assets and the
      establishment of sound corporate governance in business enterprises, a
      substantial portion of the productive assets in China is still owned by the
      PRC
      government. The continued control of these assets and other aspects of the
      national economy by the PRC government could materially and adversely affect
      our
      business. The PRC government also exercises significant control over Chinese
      economic growth through the allocation of resources, controlling payment of
      foreign currency-denominated obligations, setting monetary policy and providing
      preferential treatment to particular industries or companies. Efforts by the
      PRC
      government to slow the pace of growth of the Chinese economy could result in
      decreased capital expenditure by solar energy users, which in turn could reduce
      demand for our anticipated products.





Any
      adverse change in the economic conditions or government policies in China could
      have a material adverse effect on the overall economic growth and the level
      of
      renewable energy investments and expenditures in China, which in turn could
      lead
      to a reduction in demand for our anticipated products and consequently have
      a
      material adverse effect on our businesses.





***Uncertainties
      with respect to the Chinese legal system could have a material adverse effect
      on
      us.***





We
      currentlyplan to conduct substantially
      all of
      our business through anagreement with
      a third
      party that owns manufacturing facilities and conducts a majority of its business
      in China. Thisarrangementmay
      besubject to laws and regulations
      applicable to foreign investment in China and, in particular, laws applicable
      to
      foreign-owned enterprises. The PRC legal system is based on written statutes.
      Prior court decisions may be cited for reference but have limited precedential
      value. Since 1979, PRC legislation and regulations have significantly enhanced
      the protections afforded to various forms of foreign investments in China.
      However, since these laws and regulations are relatively new and the PRC legal
      system continues to rapidly evolve, the interpretations of many laws,
      regulations and rules are not always uniform and enforcement of these laws,
      regulations and rules involve uncertainties, which may limit legal protections
      available to us. In addition, any litigation in China may be protracted and
      result in substantial costs and diversion of resources and management
      attention.





***Restrictions
      on currency exchange may limit our ability to receive and use our revenues
      effectively.***





Foreign
      exchange transactions by companies under China’s capital account continue to be
      subject to significant foreign exchange controls and require the approval of
      PRC
      governmental authorities.





-15-




**ITEM
      2.                            DESCRIPTION
      OF PROPERTY.**





Our
      executive offices are located at 319 Clematis Street – Suite 703, West Palm
      Beach, Florida 33401 and are provided to us on a month to month basis by a
      corporation in which our officers and director are affiliated.  This
      space was provided to us free of charge during the year ended July 31, 2007
      and
      included the use of office space and the occasional use of fax machines, copy
      machines and other office equipment.








**ITEM
      3.                            LEGAL
      PROCEEDINGS.**





Our
      company is not a party in to any bankruptcy, receivership or other legal
      proceeding, and to the best of our knowledge, no such proceedings by or against
      us have been threatened.








**ITEM
      4.                            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITIES HOLDERS.**





On
      June
      28, 2007, our stockholders, through a written consent executed by stockholders
      holding 53.15% of the outstanding shares of our common stock entitled to vote,
      adopted and approved Amended and Restated Articles of Incorporation and ratified
      the Amended and Restated Bylaws of the Company, which were adopted by our board
      of directors on June 26, 2007.  Our stockholders also approved the
      consolidation of our operating assets in June 2007 into one operating subsidiary
      and the spin-off of that operating subsidiary on a pro-rata basis to the
      Company’s stockholders of record as of July 10, 2007, whereby each stockholder
      as of the record date would receive a pro rata number of shares of common stock
      in the operating subsidiary for each share of common stock in the Company held
      by such stockholder as of the record date.    The
      stockholders also approved the Share Exchange with Nuvo Solar Energy,
      Inc.








**PART
      II**





**ITEM
      5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS.**





(a)           Market
      information





Our
      common stock is quoted on the Over-the-Counter Bulletin Board, or “OTC Bulletin
      Board” under the trading symbol “CNUV”.  The following table lists the
      high and low bid information for our common stock as quoted on the OTC Bulletin
      Board for the fiscal years ended 2006 and 2007, respectively:





**Price
                Range****Quarter
                Ended**
            
            **High
                ($)**
            
            **Low
                ($)**October
                31, 2005
            
            .25
            
            .08January
                31, 2006
            
            .40
            
            .17April
                30, 2006
            
            .40
            
            .06July
                31, 2006
            
            .09
            
            .03




-16-




October
                31, 2006
            
            .10
            
            .05January
                21, 2007
            
            .12
            
            .05April
                30, 2007
            
            .14
            
            .06July
                31, 2007
            
            .15
            
            .06





The
      above
      quotations from the OTC Bulletin Board reflect inter-dealer prices, without
      retail mark-up, mark-down or commission, and may not represent actual
      transactions.




(b)           Holders





The
      number of record holders of our common stock as of November 5, 2007, was
      approximately 84 based on information received from our transfer
      agent.  This amount excludes an indeterminate number of shareholders
      whose shares are held in “street” or “nominee” name.





(c)           Dividends





We
      have
      not paid or declared any dividends on our common stock and we do not anticipate
      paying dividends on our common stock for the foreseeable future.





(d)           Securities
      authorized for issuance under equity compensation plans





We
      have
      the following securities authorized for issuance under our equity compensation
      plans as of July 31, 2007.  This does not include 18,000,000 options
      available for future issuance under our 2007 Stock Option Plan approved by
      our
      board of directors on August 27, 2007.





**Equity
      Compensation Plan Information**


Plan
                category
            Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights
            
            Weighted-average
                exercise price of outstanding options, warrants and rights
            
            Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column
                (a))(a)
            
            (b)
            
            (c)Equity
                compensation plans approved by security holders
            -0-
            
            $-0-
            
            -0-Equity
                compensation plans not approved by security holders
            1,700,000
            
            $0.20
            
            800,000Total
            1,700,000
            
            $0.20
            
            800,000








Recent
      Sales of Unregistered Equity Securities





None.


-17-


**ITEM
      6.                            PLAN
      OF OPERATION.**





(a)           Plan
      of operation





Upon
      completion of the Share Exchange, we ceased all operations relating to the
      business of Interactive Games, Inc. and adopted the business plan of Nuvo,
      which
      is now our wholly owned subsidiary.  Our focus is the development of a
      viable manufacturing process for our solar cell technology.





Our
      plan
      of operation for the period for the next twelve months is to continue
      implementing Nuvo’s business plan as described above.  We expect our
      principal expenditures during the next 12 months to include:





·
            Remaining
                payments to the licensor of our intellectual property of approximately
                $16,000 for consulting services related to product
                development.


·
            Development
                costs related to establishing a viable manufacturing process for
                our solar
                cell technology including costs related to setting up a pilot
                manufacturing process.


·
            General
                and administrative costs and costs related to public company
                operations.





As
      part
      of our planned operations, our main focus will be the development of a viable
      manufacturing process for our technology.  As part our plan, we
      recently announced the signing of a term sheet and intend to execute a
      definitive agreement with Pioneer Materials, Inc. with the intent to provide
      us
      with the facilities and expertise in China necessary to develop a pilot
      manufacturing process and eventually, a full manufacturing facility assuming
      the
      pilot process is successful.





While
      our
      independent auditor has presented our financial statements on the basis that
      we
      are a going concern, which contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business over a reasonable
      length of time, they have raised a substantial doubt about our ability to
      continue as a going concern.





To
      address the going concern situation addressed in our financial statements,
      we
      will require additional capital to fund the development of a pilot manufacturing
      process as well as for general corporate working capital to fund our day-to-day
      operations and costs associated with being a publicly-traded
      company.  This amount does not include any amounts which may be
      necessary to pay off existing debt or accrued expenses.  We presently
      believe the source of funds will primarily consist of debt financing, which
      may
      include debt instruments that may include loans from our officers or directors,
      or the sale of our equity securities in private placements or other equity
      offerings or instruments.





We
      can
      make no assurance that we will be successful in raising the funds necessary
      for
      our working capital requirements as suitable financing may not be available
      and
      we may not have the ability to sell our equity securities under acceptable
      terms
      or in amounts sufficient to fund our needs. Our inability to access various
      capital markets or acceptable financing could have a material effect on our
      results of operations, research and deployment of our business strategies and
      severely threaten our ability to operate as a going concern.





During
      the remainder of our current fiscal year and for the foreseeable future, we
      will
      be concentrating on raising the necessary working capital through acceptable
      debt facilities and





-18-





equity
      financing to insure our ability to continue our research and implement other
      business strategies.  To the extent that additional capital is raised
      through the sale of equity or equity related securities, the issuance of such
      securities could result in significant dilution of our current
      shareholders.





In
      October 2007, our Board of Directors approved for the Company to issue up to
      $700,000 of convertible debentures.  In October, 2007 we issued
      convertible debentures to unaffiliated third parties totaling $240,000,and
      received net proceeds of $199,800. These debentures mature in three years and
      carry an interest rate of 6% per annum.  The debentures can be
      converted into our common stock by the holders at any time following six months
      from their issuance until maturity at 75% of the lowest closing bid price of
      our
      common stock during the twenty trading days prior to conversion.  We
      also have the option of redeeming the debentures while they are outstanding
      for
      115% of face value during the first six months, 125% of face value from six
      months to one year, and at 131% of face value from one year to
      maturity.





(c)           Off-Balance
      sheet arrangements





During
      the fiscal year ended July 31, 2007, the Company did not engage in any
      off-balance sheet arrangements as defined in Item 303(c) of the SEC’s Regulation
      S-B.








**ITEM
      7.                           
FINANCIAL STATEMENTS.**





The
      financial statements and related information required to be filed are indexed
      and begin on page F-1 and are incorporated herein.








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





Not
      applicable.





**ITEM
      8A.                      CONTROLS
      AND PROCEDURES.**





We
      maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and
      15d-159e) under the Securities and Exchange Act of 1934, as amended (the
“Exchange Act”)) that are designed to ensure that information required to be
      disclosed by us in the reports that we file or submit under the Exchange Act
      is
      recorded, processed, summarized and reported within the time periods specified
      in the Securities and Exchange Commission’s rules and forms and that such
      information is accumulated and communicated to our management as appropriate
      to
      allow timely decisions regarding required disclosures.  A review and
      evaluation of our disclosure controls and procedures was performed by the
      Company’s management, including the Company’s Principal Executive Officer (the
“CEO”) who is also Principal Financial Officer (the “CFO”), as of July 31,
      2007.  Based on that review and evaluation, the Principal Executive
      Officer/Principal Accounting Officer has concluded that the Company’s disclosure
      controls and procedures were effective as of July 31, 2007.





Additionally,
      there were no significant changes in our internal controls during the quarter
      ended July 31, 2007, there were no changes in our internal control over
      financial reporting that have materially affected, or reasonably likely to
      materially affect, our internal control over financial reporting.





-19-











**ITEM
      8B.                      OTHER
      INFORMATION.**





Not
      applicable.











**PART
      III**





**ITEM
      9.                            DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.**





(a)           Identification
      of directors and executive officers





The
      following table sets forth the name, age, position and office term of each
      executive officer and director of the Company.





**Name**
            **Age**
            **Position**Henry
                Fong
            72
            President,
                Chief Executive Officer and DirectorStephen
                D. King
            51
            DirectorBarry
                S. Hollander
            50
            Chief
                Financial OfficerThomas
                B. Olson
            41
            Secretary





***Henry
      Fong*****.**  Mr. Fong has been the president,
      chief executive officer, and a director of the Company since March 2002 and
      president and a director of Nuvo since its inception in April
      2006.  Mr. Fong was the president, treasurer and a director of
      Hydrogen Power, Inc. from its inception in 1983 until January 2, 2007. Mr.
      Fong
      has been a director of FastFunds Financial Corporation, a publicly traded shell
      company, since June 2004. Mr. Fong has been president and a director of Equitex
      2000, Inc. since its inception in 2001. Mr. Fong has been the president and
      a
      director of Inhibiton Therapeutics, Inc. since its inception in May 2004.
      Inhibiton Therapeutics is a publicly held company performing research and
      development on new cancer therapies. From 1959 to 1982, Mr. Fong served in
      various accounting, finance and budgeting positions with the Department of
      the
      Air Force. During the period from 1972 to 1981 he was assigned to senior
      supervisory positions at the Department of the Air Force headquarters in the
      Pentagon. In 1978, he was selected to participate in the Federal Executive
      Development Program and in 1981, he was appointed to the Senior Executive
      Service. In 1970 and 1971, he attended the Woodrow Wilson School, Princeton
      University and was a Princeton Fellow in Public Affairs. Mr. Fong received
      the
      Air Force Meritorious Civilian Service Award in 1982. Mr. Fong has passed the
      uniform certified public accountant exam. In March 1994, Mr. Fong was one of
      twelve CEOs selected as Silver Award winners in FINANCIAL WORLD magazine's
      corporate American "Dream Team."





***Stephen
      D.
      King.***Mr. King has been a director since November
      2006.  Mr. King was elected chief executive officer of Wits Basin
      Precious Minerals, Inc., a publicly traded mineral exploration company,
      effective September 15, 2006 and has served as a director since July 8,
      2004.  Mr. King also served as president of Wits Basin from May 15,
      2006 to September 15, 2006. Since October 2000, Mr. King has served as president
      of SDK Investments, Inc., a private investment firm located in Atlanta, Georgia
      specializing in corporate finance and investing. He served as president, from
      January 1994 until July 2000 and chairman until October 2000, of





-20-





PopMail.com,
      Inc., a publicly traded company with businesses in the hospitality and Internet
      sectors.





***Barry
      S.
      Hollander.***Mr. Hollander has been chief financial
      officer of the Company since 2002.  Mr. Hollander has been the chief
      financial officer of VP Sports, a privately-held company, since March
      1999.  From 1994 to 1999, Mr. Hollander was the chief financial
      officer of California Pro Sports, Inc., an in-line skate importer, marketer
      and
      distributor.  In 1999 California Pro merged with Imaginon,
      Inc.  Mr. Hollander has been in the sporting goods industry since 1980
      in various accounting, senior management and executive positions. Mr. Hollander
      has a BS degree from Fairleigh Dickinson University and passed the uniform
      certified public accountant exam.





***Thomas
      B. Olson.******* Mr. Olson has been secretary of
      the Company since March 2002 and has been secretary and treasurer of Nuvo since
      its inception in April 2006.  Mr. Olson was secretary of Hydrogen
      Power, Inc. from January 1988 to April 5, 2007 when he became an assistant
      secretary.  Hydrogen Power, Inc. is a publicly-traded company in the
      alternative energy sector.  Mr. Olson served as a director of Chex
      Services, formerly a subsidiary of Hydrogen Power, Inc., since May 2002. Mr.
      Olson has been Secretary of Equitex 2000, Inc. since its inception in 2001.
      Mr.
      Olson has been the secretary of Inhibiton Therapeutics, Inc. since its inception
      in May 2004. Inhibiton Therapeutics is a publicly held company performing
      research and development on new cancer therapies. From August 2002 to July
      2004,
      Mr. Olson was secretary of El Capitan Precious Metals, Inc., a publicly traded
      company with ownership interests in mining properties. Mr. Olson has attended
      Arizona State University and the University of Colorado at Denver.





(b)           Significant
      employees





Not
      applicable.





(c)           Family
      relationships





None.





(d)           Involvement
      in certain legal proceedings





Not
      applicable.





Code
      of Ethics





In
      2003
      we adopted a Code of Ethics for Senior Financial Management to promote honest
      and ethical conduct and to deter wrongdoing.  This Code applies to our
      Chief Executive Officer, Chief Financial Officer, controller, principal
      accounting officer and other employees performing similar
      functions.  The obligations of the Code of Ethics supplement, but do
      not replace, any other code of conduct or ethics policy applicable to our
      employees generally.





Under
      the
      Code of Ethics, all members of the senior financial management
      shall:





·
            Act
                honestly and ethically in the performance of their duties at our
                company,


·
            Avoid
                actual or apparent conflicts of interest between personal and professional
                relationships,





-21-





·
            Provide
                full, fair, accurate, timely and understandable disclosure in reports
                and
                documents that we file with, or submits to, the SEC and in other
                public
                communications by our company,


·
            Comply
                with rules and regulations of federal, state and local governments
                and
                other private and public regulatory agencies that affect the conduct
                of
                our business and our financial
                reporting,


·
            Act
                in good faith, responsibly, with due care, competence and diligence,
                without misrepresenting material facts or allowing the member's
                independent judgment to be
                subordinated,


·
            Respect
                the confidentiality of information acquired in the course of work,
                except
                when authorized or legally obtained to disclosure such
                information,


·
            Share
                knowledge and maintain skills relevant to carrying out the member's
                duties
                within our company,


·
            Proactively
                promote ethical behavior as a responsible partner among peers and
                colleagues in the work environment and
                community,


·
            Achieve
                responsible use of and control over all assets and resources of our
                company entrusted to the member,
                and


·
            Promptly
                bring to the attention of the Chief Executive Officer any information
                concerning (a) significant deficiencies in the design or operating
                of
                internal controls which could adversely to record, process, summarize
                and
                report financial date or (b) any fraud, whether or not material,
                that
                involves management or other employees who have a significant role
                in our
                financial reporting or internal
                controls.





We
      will
      provide a copy of the Code of to any person without charge, upon
      request.  Requests can be sent to China Nuvo Solar Energy, Inc., 319
      Clematis Street, Suite 703, West Palm Beach, Florida 33401.





Corporate
      Governance





There
      have been no material changes to procedures by which security holders may
      recommend nominees to our board of directors.





We
      currently have no standing audit or nominating committees of our board of
      directors.  Our entire board of directors currently consisting of Mr.
      Henry Fong and Mr. Stephen King currently performs these
      functions.  While we currently have no standing audit or nominating
      committee, we have determined that Mr. Fong would be considered an audit
      committee financial expert although he is not an independent
      director.








**ITEM
      10.                            EXECUTIVE
      COMPENSATION.**





(a)           General





The
      following tables set forth all of the compensation awarded to, earned by or
      paid
      to:





In
      Table
      (1):  (i) each individual serving as an Interactive Games’ principal
      executive officer during the fiscal year ended July 31, 2007; (ii) each other
      individual that served as an Interactive Games’ executive officer at the
      conclusion of the fiscal year ended July 31, 2007 and who received in excess
      of
      $100,000 in the form of salary and bonus during such fiscal year (collectively,
      the “Interactive named executives”).





-22-








In
      Table
      (2): (i) each individual serving as Nuvo’s principal executive officer during
      the fiscal year ended July 31, 2007; (ii) each other individual that served
      as
      an executive officer of Nuvo at the conclusion of the fiscal year ended July
      31,
      2007 and who received in excess of $100,000 in the form of salary and bonus
      during such fiscal year (collectively, the “Nuvo named
      executives”).





(b)           Summary
      compensation tables





**Table
      1. Summary Compensation of Executive Officers – Interactive Games,
      Inc.**





**Name
                and Principal Position**
            
            **Year**
            
            **Salary**
            
            **Bonus**
            
            **Equity**
              **Awards**
            
            **Option**
              **Awards**
            
            **All
                Other Compensation**
            
            **Total**Henry
                Fong
              *Chief
                Executive Officer & President*
            
            2007
              
              2006
            
            $80,000
              
              $80,000
            
            -
              
              -
            
            $66,214
              
              -
            
            -
              
              -
            
            -
              
              -
            
            $146,214
              
              $80,000Barry
                S. Hollander
              *Chief
                Financial Officer*
            
            2007
              
              2006
            
            $35,000
              
              $10,000
            
            -
              
              -
            
            $33,107
              
              -
            
            -
              
              -
            
            -
              
              -
            
            $68,107
              
              $10,000Thomas
                B. Olson
              *Secretary*
            
            2007
              
              2006
            
            $7,500
              
              $30,000
            
            -
              
              -
            
            $26,670
              
              -
            
            -
              
              -
            
            -
              
              -
            
            $34,170
              
              $30,000





**Table
      2. Summary Compensation of Executive Officers – Nuvo Solar Energy,
      Inc.**





**Name
                and Principal Position**
            
            **Year**
            
            **Salary**
            
            **Bonus**
            
            **Option**
              **Awards**
            
            **All
                Other Compensation**
            
            **Total**Henry
                Fong
              *Chief
                Executive Officer & President*
            
            2007
              
              2006
            
            $43,000
              
              $12,000
            
            -
              
              -
            
            -
              
              -
            
            -
              
              -
            
            $43,000
              
              $12,000Thomas
                B. Olson
              *Secretary*
            
            2007
              
              2006
            
            $11,250
              
              $3,000
            
            -
              
              -
            
            -
              
              -
            
            -
              
              -
            
            $11,750
              
              $3,000





(c)           Narrative
      disclosure to summary compensation
      table.





During
      the fiscal year ended July 31, 2007, the Company had month-to-month arrangements
      with Henry Fong, Barry Hollander and Thomas B. Olson for their management
      services, whereby it paid Mr. Fong a monthly management fee of $6,667 in
      consideration of his services to the Company as President and Chief Executive
      Officer, Mr. Hollander a monthly management fee of $2,500 for his services
      as
      Chief Financial Officer and Mr. Olson a monthly management fee through October
      31, 2006 of $2,500 in consideration of his services as Secretary and
      Treasurer.





In
      July
      2007, Messrs. Fong, Hollander and Olson converted $90,000, $45,000, and $36,250,
      respectively, in accrued fees owed to them into 642,857, 321,429, and 258,929
      shares of our common stock respectively, at a conversion price of $0.14 per
      common share.  In





-23-





addition,
      Messrs. Fong, Hollander and Olson received warrants to purchase 642,857,
      321,429, and 258,929, respectively, shares of our common stock for a period
      of
      two years at an exercise price of $0.10 per share.   These
      warrants were valued using the Black-Scholes option pricing model and determined
      to have a value of $66,214, $33,107, and 26,670, for Messrs. Fong, Hollander,
      and Olson, respectively, which amounts are included as “Equity Awards” in the
      Summary Compensation Table.





Nuvo
      did
      not have any formal employment agreements with its officers.  Nuvo
      paid Mr. Fong a management fee of $3,000 per month, and Mr. Olson a management
      fee of $750 per month for their respective services until June
      2007.  Beginning in July 2007, our board of directors authorized
      management fees of $10,000 per month for Mr. Fong and $3,000 per month for
      Mr.
      Olson.





(d)           Outstanding
      equity awards at fiscal year end table.





The
      following table sets forth information regarding each unexercised option and
      non-vested stock award held by each of the Interactive named executive officers
      as of July 31, 2006.





**Name**
            
            **Number
                of Securities Underlying Unexercised**
              **Options
                Exercisable**
            
            **Number
                of Securities Underlying Unexercised Options
                Unexercisable**
            
            **Option
                Exercise**
              **Price
                ($)**
            
            **Option**
              **Expiration
                Date**Henry
                Fong
            
            900,000
            
            -
            
            $0.20
            
            1/16/2009Barry
                S. Hollander
            
            500,000
            
            -
            
            $0.20
            
            1/16/2009Thomas
                B. Olson
            
            250,000
            
            -
            
            $0.20
            
            1/16/2009





(e)           Additional
      narrative disclosure.





We
      currently have no retirement plans or similar benefits for our
      officers.  We also have no contracts or agreements with our officers
      for payments that may result neither from their resignation, retirement, or
      other termination, nor in the event of a change in control.





(f)           Compensation
      of directors





Neither
      Interactive Games nor Nuvo paid fees to their respective directors for
      attendance at meetings of the board; however, the Company may adopt a policy
      of
      making such payments in the future.  The Company will reimburse
      out-of-pocket expenses incurred by directors in attending board and committee
      meetings.








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





The
      following table sets forth information known to the Company with respect to
      the
      beneficial ownership (as such term is defined in Rule 13d-3 under the Securities
      Exchange Act of 1934, as amended) of the outstanding common stock of the Company
      as of November 5, 2007 by (1) each person known by the Company to
      beneficially own 5% or more of the







-24-





Company’s
      outstanding common stock, (2) each named executive officer (as defined in
      Item 402(a)(2) of Regulation S-B promulgated under the Securities Act of 1933,
      as amended), (3) each of the Company’s directors and (4) all of the
      Company’s named executive officers and directors as a group. The number of
      shares beneficially owned is determined under rules promulgated by the SEC,
      and
      the information is not necessarily indicative of beneficial ownership for any
      other purpose.  Including those shares in the tables does not,
      however, constitute an admission that the named stockholder is a direct or
      indirect beneficial owner of those shares.




**Name
                of Beneficial Owner**
            **Number
                of Shares of Preferred Stock**
              **Beneficially
                Owned**
            **Percent
                of**
              **Preferred
                Stock (1)**
            **Number
                of Shares of Common Stock**
              **Beneficially
                Owned**
            **Percent
                of**
              **Common
                Stock (1)**Henry
                Fong
              319
                Clematis Street – Ste 703
              West
                Palm Beach, FL 33401
            520,953
                (2)
            97.20%
            32,643,316
                (3)
            16.48%Barry
                S. Hollander
              319
                Clematis Street – Ste 703
              West
                Palm Beach, FL 33401
            -
            0
            1,669,852
                (4)
            *Thomas
                B. Olson
              7315
                East Peakview Avenue
              Englewood,
                CO  80111
            -
            0
            3,545,377
                (5)
            1.82%Stephen
                D. King
              900
                IDS Center
              80
                South 8th
                Street,
              Minneapolis,
                MN 55402
            -
            0
            1,000,000
                (6)
            *All
                Executive Officers and
              Directors
                as a Group (4 persons)
            520,953
            97.20%
            38,858,545
                (7)
            19.39%Michele
                Friedman
              777
                Flagler Dr S., 8th Floor
              West
                Palm Beach, FL 33401
            -
            -
            19,125,713
                (10)
            9.82%Richard
                W. Perkins
              730
                E Lake Street
              Wayzata,
                MN 55391
            -
            -
            25,742,406
                (8)
            13.22%Wayne
                W. Mills
              2125
                Hollybush Rd
              Medina,
                MN  55340
            -
            -
            27,924,679
                (9)
            14.28%Hunter
                Ridge Partners LLC
              500
                Ford Road
              Minneapolis,
                MN 55426
            -
            -
            9,751,963
            5.04%Gulfstream
                Financial Partners
              319
                Clematis Street – Ste. 703
              West
                Palm Beach, FL 33401
            36,110  (11)
            6.74%
            25,082,679
                (11)
            12.88%


**__________**


*
                means less than 1%





-25-




(1)
            As
                of November 5, 2007, 194,652,462 shares of our common stock and 535,890
                shares of our preferred stock were
                outstanding.


(2)
            Includes
                (i) 36,110 shares of preferred stock held by a partnership in which
                Mr.
                Fong is a partner, (ii) 164,473 shares of preferred stock held by
                a
                corporation in which Mr. Fong is an 80% shareholder, (iii) 123,069
                shares
                of preferred stock held by another corporation in which Mr. Fong
                is an 80%
                shareholder and (iv) 197,301 shares of preferred stock held by a
                corporation in which Mr. Fong is an
                officer.


(3)
            Includes(i)
                900,000 shares underlying options granted under our 2003 Stock Option
                Plan, (ii) warrants to purchase 642,857 shares of common stock, (iii)
                24,953,715 shares of common stock and warrants to purchase 128,964
                shares
                of common stock owned by Gulfstream Financial Partners, of which
                Mr. Fong
                is a partner (which is separately identified in this stockholder
                table),
                (iv) includes 1,449,431 shares of common stock and warrants to purchase
                587,400 shares of common stock owned by a corporation in which Mr.
                Fong is
                an officer and director, (v) 439,553 shares of common stock and warrants
                to purchase 439,533 shares of common stock held by another corporation
                in
                which Mr. Fong is an 80% shareholder and (vi) 704,646 shares of common
                stock and warrants to purchase 704,646 shares of common stock held
                by a
                corporation in which Mr. Fong is an
                officer.


(4)
            Includes
                (i) 500,000 shares underlying options granted under our 2003 Stock
                Option
                Plan and (ii) warrants to purchase 321,429 shares of common
                stock.


(5)
            Includes
                (i) 250,000 shares underlying options granted under our 2003 Stock
                Option
                Plan and (ii) warrants to purchase 258,929 shares of common
                stock.  Also includes 2,458,761 shares of common stock held
                jointly with Mr. Olson’s spouse.


(6)
            Consists
                of warrants to purchase shares of the Company’s common
                stock.


(7)
            Includes
                1,650,000 shares underlying options granted under our 2003 Stock
                Option
                Plan and warrants to purchase 4,083,898 shares of our common
                stock.


(8)
            Includes
                1,500,000 shares of common stock held by a limited partnership of
                which
                Mr. Perkins is the general partner and 24,242,406 shares of common
                stock
                held by Richard W. Perkins Trust U/A 6/14/78 FBO Richard W.
                Perkins.


(9)
            Includes
                (i) warrants to purchase 100,000 shares of common stock held by a
                limited
                liability company of which Mr. Mills is the sole member, (ii) warrants
                to
                purchase 800,000 shares of common stock held by Mr. Mills, (iii)
                6,062,602
                shares held by a limited liability company of which Mr. Mills holds
                50% of
                the membership interest, (iv) 9,751,963 shares held by a Hunter Ridge
                Partners, LLC, a limited liability company of which Mr. Mills holds
                50% of
                the membership interest (which is set forth separately in this beneficial
                ownership table), and (v) an aggregate of 4,979,482 shares of common
                stock
                beneficially held by Mr. Mills’
spouse.


(10)
            Includes
                options to purchase 150,000 shares of common stock  and 300,000
                shares of common stock held by Mrs. Friedman’s
                spouse.


(11)
            Mr.
                Fong, our President, Chief Executive Officer and Director, is a partner
                of
                Gulfstream Financial Partners.  Includes warrants to purchase
                128,964 shares of common stock.





(c)           Changes
      in control





We
      are
      not aware of any arrangements that could result in a change in control of the
      Company.


-26-




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





(a)           Transactions
      with related persons.





**Interactive
      Games, Inc.**





During
      the year ended  ended July 31, 2007, the Company repaid $26,000 to VP
      Sports, Inc., a corporation of which Mr. Fong is an officer.  During
      the year ended December 31, 2006, the Company repaid $203,600 to the same
      related party.  The balance owed to this related party at July 31,
      2007 of $493,252 was cancelled in consideration for the issuance of 197,301
      shares of the Company’s Class A Preferred Stock, 704,646 shares of the Company’s
      common stock, and warrants to purchase 704,646 shares of the Company’s common
      stock at an exercise price of $0.10 per share and expiring in July
      2009.





During
      the year ended July 31, 2007, the Company repaid $45,000 to Equitex 2000, a
      corporation for which Mr. Fong is an officer.  The balance owed to
      this related party at July 31, 2007 of $361,182 was cancelled in consideration
      for the issuance of 164,473 shares of the Company’s Class A Preferred Stock,
      587,400 shares of the Company’s common stock, and warrants to purchase 587,400
      shares of the Company’s common stock at an exercise price of $0.10 per share and
      expiring in July 2009.





As
      of
      July 31, 2007, USA Skate, of which Mr. Fong holds a majority interest and Mr.
      Hollander a minority interest, cancelled $307,673 the Company owed in
      consideration for the issuance of 123,069 shares of the Company’s Class A
      Preferred Stock, 439,533 shares of the Company’s common stock, and warrants to
      purchase 439,533 shares of the Company’s common stock at an exercise price of
      $0.10 per share and expiring in July 2009.





As
      of
      July 31, 2007, Gulfstream Financial Partners, a corporation for which Mr. Fong
      is an officer, director and sole owner, cancelled $90,275 the Company owed
      in
      consideration for the issuance of 36,110 shares of the Company’s Class A
      Preferred Stock, 128,964 shares of the Company’s common stock, and warrants to
      purchase 128,964 shares of the Company’s common stock at an exercise price of
      $0.10 per share and expiring in July 2009.





As
      of
      July 31, 2007, an unrelated party cancelled $37,344 the Company owed in
      consideration for the issuance of 14,938 shares of the Company’s Class A
      Preferred Stock, 53,349 shares of the Company’s common stock, and warrants to
      purchase 53,349 shares of the Company’s common stock at an exercise price of
      $0.10 per share and expiring in July 2009.





As
      of
      July 31, 2007, $171,250 was owed to officers of the Company. The balance owed
      to
      the officers was cancelled in consideration for the issuance of 642,857 shares
      of the Company’s common stock and warrants to purchase 642,857 shares of the
      Company’s common stock at an exercise price of $0.10 per share and expiring in
      July 2009.





**Nuvo
      Solar Energy, Inc.**





During
      the fiscal year ended July 31, 2007, Nuvo issued promissory notes totaling
      $99,450 payable to its president.  During that same period, $49,575 in
      principal and $2,425 in accrued interest was paid on these notes leaving a
      principal balance of $49,875 along with





-27-





$1,979
      in
      accrued interest outstanding.  The promissory notes have an interest
      rate of 10% per annum and are due on demand.





During
      the fiscal year ended July 31, 2007, Nuvo issued promissory notes totaling
      $81,000 payable to a company owned by the president.  During the year
      ended July 31, 2006, this entity loaned Nuvo $300.  In the year ended
      July 31, 2007, $48,176 in principal and $1,424 in accrued interest was paid
      on
      these notes leaving a principal balance of $33,124 along with $564 in accrued
      interest outstanding.  The promissory notes have an interest rate of
      10% per annum and are due on demand.





During
      the fiscal year ended July 31, 2007, Nuvo issued promissory notes totaling
      $19,000 to a trust created by the president for the benefit of his
      children.  In the year ended July 31, 2007, $2,768 in principal and
      $232 in accrued interest was paid on these notes leaving a principal balance
      of
      $16,232 along with $71 in accrued interest outstanding.  The
      promissory notes have an interest rate of 10% per annum and are due on
      demand.





In
      July
      2007, Nuvo issued a promissory note to Pyramid Partners LP, a significant
      stockholder, in the amount of $125,000.  This note is convertible into
      Nuvo common stock at 85% of the offering price of the first equity offering
      of
      at least $500,000 conducted by us during the term of the note, which is one
      year.  The entire principal balance of $125,000 was outstanding at
      July 31, 2007 along with $479 in accrued interest.  This note carries
      and interest rate of 10% per annum.





Director
      Independence





Our
      board
      of directors has two directors and has no standing sub-committees at this time
      due to the associated expenses and the small size of our board.  We
      are not currently listed on a national securities exchange that has requirements
      that a majority of the board of directors be independent, however, the board
      has
      determined that Stephen D. King is “independent” under the definition set forth
      in the listing standards of the NASDAQ Stock Market, Inc., which is the
      definition that our board has chosen to use for the purposes of the determining
      independence.





In
      performing the functions of the audit committee, our board oversees our
      accounting and financial reporting process.  In this function, our
      board performs several functions.  Our board, among other duties,
      evaluates and assesses the qualifications of the Company’s independent auditors;
      determines whether to retain or terminate the existing independent auditors;
      meets with the independent auditors and financial management of the Company
      to
      review the scope of the proposed audit and audit procedures on an annual basis;
      reviews and approves the retention of independent auditors for any non-audit
      services; reviews the independence of the independent auditors; reviews with
      the
      independent auditors and with the Company’s financial accounting personnel the
      adequacy and effectiveness of accounting and financial controls and considers
      recommendations for improvement of such controls; reviews the financial
      statements to be included in our annual and quarterly reports filed with the
      Securities and Exchange Commission; and discusses with the Company’s management
      and the independent auditors the results of the annual audit and the results
      of
      our quarterly financial statements. While we do not currently have a standing
      compensation committee, our non-employee director considers executive officer
      compensation, and our entire board participates in the consideration of director
      compensation.  Our non-employee board member oversees our compensation
      policies, plans and programs.  Our non-employee board member further
      reviews and approves corporate performance goals and objectives relevant to
      the
      compensation of our





-28-





executive
      officers; reviews the compensation and other terms of employment of our Chief
      Executive Officer and our other executive officers; and administers our equity
      incentive and stock option plans.  Each of our directors participates
      in the consideration of director nominees.  In addition to nominees
      recommended by directors, our board will consider nominees recommended by
      shareholders if submitted in writing to our secretary.  Our board
      believes that any candidate for director, whether recommended by shareholders
      or
      by the board, should be considered on the basis of all factors relevant to
      our
      needs and the credentials of the candidate at the time the candidate is
      proposed.  Such factors include relevant business and industry
      experience and demonstrated character and judgment.








**ITEM
      13.                            EXHIBITS**





Exhibits





2.1
            Agreement
                and Plan of Reorganization by and between the Company and Nuvo Solar
                Energy, Inc. dated April 23, 2007. (*incorporated by reference to
                Company’s Form 8-K filed on May 1, 2007*)2.2
            Amendment
                No. 1 to Agreement and Plan of Reorganization by and between the
                Company
                and Nuvo Solar Energy, Inc. dated July 25, 2007. (*incorporated by
                reference to Company’s Form 8-K filed on July 31,
                2007*)2.3
            Articles
                of Exchange relating to the share exchange by and between Interactive
                Games, Inc. and Nuvo Solar Energy, Inc. as filed with the Nevada
                Secretary
                of State on July 25, 2007. (*incorporated by reference to Company’s
                Form 8-K filed on July 31, 2007*)2.4
            Statement
                of Share Exchange relating to the share exchange by and between
                Interactive Games, Inc. and Nuvo Solar Energy, Inc. as filed with
                the
                Colorado Secretary of State on July 25, 2007. (*incorporated by
                reference to Company’s Form 8-K filed on July 31,
                2007*)3.1
            Amended
                and Restated Articles of Incorporation of Interactive Games, Inc.
                *(incorporated by reference to Company’s Form 8-K filed on July 5,
                2007).*3.2
            Amended
                and Restated Bylaws of Interactive Games, Inc. (*incorporated by
                reference to Company’s Form 8-K filed on July 5,
                2007).*3.3
            Amended
                and Restated Articles of Incorporation of China Nuvo Solar Energy,
                Inc.  (*incorporated by reference to Company’s Form 8-K filed
                on July 31, 2007*)3.4
            Certificate
                of Designation of Series A Preferred Stock. (*incorporated by reference
                to Company’s Form 8-K filed on July 31, 2007)*4.1
            Form
                of promissory note made by the Company in favor of certain investors
                in
                July 2007. (*incorporated by reference to Company’s Form 8-K filed on
                July 31, 2007*)4.2
            Form
                of warrant issued by the Company to certain investors on July 2007.
                (*incorporated by reference to Company’s Form 8-K filed on July 31,
                2007*)




-29-




10.1
            Agreement
                between the Company and Photovoltiacs.com, Inc. dated June 9, 2006,
                as
                amended. (*incorporated by reference to Company’s Form 8-K filed on
                July 31, 2007*)14.1
            Code
                of Ethics. *(filed herewith)*21.1
            List
                of Subsidiaries. *(filed herewith)*.31.1
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *(filed
                herewith)*.31.2
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *(filed
                herewith)*.32.1
            Certification
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *(filed
                herewith)*.32.2
            Certification
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *(filed
                herewith)*.








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





Hawkins
      Accounting served as our certifying accountant for the fiscal year ended July
      31, 2007, as well as the certifying accountant for Nuvo prior to the Share
      Exchange for the year ended December 31, 2006.  Sherb & Co., LLP
      served as our certifying accountant for the fiscal year ended July 31,
      2006.





**Fiscal
      Year ended July 31, 2007 – Hawkins Accounting**





Audit
      Fees





Fees
      for
      audit services billed for the fiscal year ended July 31, 2007 were $24,000
      and
      consisted of (i) audit of the Company’s annual financial statements; and (ii)
      consultations on financial accounting and reporting matters arising during
      the
      course of the audit and reviews.





Audit-Related
      Fees





There
      were no other aggregate fees billed in the fiscal year ended July 31, 2007
      for
      assurance and related services by the principal accountants that were reasonably
      related to the performance of the audit or review of the financial statements
      that were not reported above.





Tax
      Fees





There
      were no aggregate fees billed in the fiscal year ended July 31, 2007 for
      professional services rendered by the principal accountant for tax compliance,
      tax advice, and tax planning.





-30-





All
      Other
      Fees





During
      the fiscal year ended July 31, 2007, while acting and independent accountant
      to
      Nuvo prior to the Share Exchange, Hawkins accounting was paid $7,500 including
      $5,000 for audit services related to Nuvo’s December 31, 2006 audited financial
      statements and $2,500 for the review of Nuvo’s June 30, 2007 interim financial
      statements.





**Fiscal
      Years ended July 31, 2007 and 2006 – Sherb & Co.,
      LLC**





Audit
      Fees - 2006





Fees
      for
      audit services billed for the fiscal year ended July 31, 2006 were $31,165
      and
      consisted of (i) audit of the Company’s annual financial statements; (ii)
      reviews of the Company’s quarterly financial statements; and (iii) consultations
      on financial accounting and reporting matters arising during the course of
      the
      audit and reviews.





Audit-Related
      Fees





There
      were no other aggregate fees billed in either of the fiscal years ended July
      31,
      2007 and 2006 for assurance and related services by the principal accountants
      that were reasonably related to the performance of the audit or review of the
      financial statements that were not reported above.





Tax
      Fees





There
      were no aggregate fees billed in either of the fiscal years ended July 31,
      2007
      and 2006 for professional services rendered by the principal accountant for
      tax
      compliance, tax advice, and tax planning.





All
      Other Fees





During
      the fiscal year ended July 31, 2007, Sherb & Co., billed $10,500 in fees
      related to (i) reviews of the Company’s quarterly financial statements; and (ii)
      consultations on financial accounting and reporting matters arising during
      the
      course of the reviews.





We
      do not
      have an audit committee currently serving and as a result our entire board
      of
      directors performs the duties of an audit committee.  Our board of
      directors will evaluate and approve in advance, the scope and cost of the
      engagement of an auditor before the auditor renders audit and non-audit
      services.  We do not rely on pre-approval policies and
      procedures.





-31-





**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.








CHINA
                NUVO SOLAR ENERGY, INC.(Registrant)Date:
                November 13, 2007
            By:
                */s/ Henry Fong*Henry
                FongPrincipal
                Executive OfficerBy:
                */s/ Barry S. Hollander*Barry
                S. HollanderPrincipal
                Financial Officer











In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.











Date:
                November 13, 2007
            */s/
                Henry Fong*Henry
                FongDirectorDate:
                November 13, 2007
            */s/
                Stephen D. King*Stephen
                D. KingDirector






-32-











**CHINA
      NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**





**YEARS
      ENDED JULY 31, 2007 AND 2006**





**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**








Report
                of Independent Registered Public Accounting Firm
            F-2Consolidated
                financial statements:Consolidated
                balance sheet
            F-3Consolidated
                statements of operations
            F-4Consolidated
                statement of changes in stockholders' deficit and other comprehensive
                income
            F-5Consolidated
                statements of cash flows
            F-6
                – F-7Notes
                to consolidated financial statements
            F-8
                – F22











F-1











**To
        the Board of Directors and Shareholders**
 China
        Nuvo Solar Energy, Inc.
 West
        Palm
        Beach, Florida
 
 **Report
        of Independent Registered Public Accounting Firm**
 
 I
        have
        audited the balance sheet of China Nuvo Solar Energy, Inc. as of July 31,
        2007
        and the related statements of operations, stockholders' equity and cash flows
        for the years ending July 31, 2007 and 2006.  These financial
        statements are the responsibility of the Company's management. My responsibility
        is to express an opinion on these financial statements based on my
        audit.
 
 I
        conducted my audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States).  Those standards require
        that I plan and perform the audit to obtain reasonable assurance about whether
        the financial statements are free of material misstatement. An audit includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements.  An audit also includes assessing the
        accounting principles used and significant estimates made by management,
        as well
        as evaluating the overall financial statement presentation. I believe that
        my
        audit provides reasonable basis for my opinion.
 
 In
        my
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of China Nuvo Solar Energy, Inc
        as of
        July 31, 2007, the results of operations and it's cash flows for the years
        ended
        July 31, 2007 and 2006 in conformity with generally accepted accounting
        principles in theUnited States of America.
 
 The
        accompanying financial statements have been prepared assuming the Company
        will
        continue as a going concern.  As discussed in Note I to the financial
        statements, the Company has incurred net losses since inception, which raise
        substantial doubt about its ability to continue as a going
        concern.  The financial statements do not include any adjustment that
        might result from the outcome of this uncertainty.
 
 
 /s/
        Hawkins Accounting
 November
        I2, 1 2, 2007
 Los
        Angeles, CA
  
 1875
        Century Park East Suite H-3513 Los Angeles, CA 90067
 (310)
        553-5707, Fax (310) 553-5337 info@cpahawkins.com




F-2






CHINA
                  NUVO SOLAR ENERGY, INC. AND SUBSIDIARYConsolidated Balance
                  SheetFor the Year Ended July 31, 2007**Assets**2007Current
                  AssetsCash
              
              $
              33,021Notes
                  and interest receivable
              
              
              27,692Prepaid
                  expenses and other current assets
              
              
              46,000Total
                  current assets
              
              
              106,713Solar
                  intellectual property, less accumulated depreciation of
                  $29,166
              
              
              220,834Debt
                  issuance costs
              
              
              107,783Total
                  assets
              
              $
              435,330**Liabilities
                  and Shareholders’ Deficit**Current
                  liabilities:Accrued
                  liability\ies, related parties
              
              $
              311,354Accounts
                  payable and accrued expenses
              
              
              62,173Derivative
                  liability convertible debentures
              
              
              345,655Notes
                  payable
              
              
              191,233Notes
                  payable, related party
              
              
              184,499Total
                  current liabilities
              
              
              1,094,914Long-term
                  liabilities:Convertible
                  debentures payable, net
              
              
              154,275Total
                  liabilities
              
              
              1,249,189Shareholders’
                  deficit:Preferred
                  stock, $.001 par value; 5,000,000 shares authorized,535,891
                  (2007) and -0- (2006) shares issued and outstanding
              
              
              535,891Common
                  stock, $.001 par value, 495,000,00 shares authorized;193,552,462
                  (2007) and 52,782,100 (2006) issued and outstanding
              
              
              193,552Additional
                  paid-in capital
              
              
              (2,057,040
              )Retained
                  earnings
              
              
              513,738Total
                  shareholders' deficit
              
              
              (813,859
              )Total
                  liabilities and shareholders' deficit
              
              $
              435,330




See
      accompanying notes to financial
      statements


F-3




**CHINA
                  NUVO SOLAR ENERGY, INC. AND SUBSIDIARYConsolidated Statements of
                  OperationsFor the Years Ended July 31, 2007 and
                  2006****2007**
              
              
              **2006**Revenues:Revenues
              
              -
              
              
              -Cost
                  of revenues
              
              -
              
              
              -Gross
                  profit
              
              -
              
              
              -Operating
                  costs and expenses:Selling,
                  general and administrativeBonus,
                  related party
              
              $
              275,561Consulting
                  fees
              
              
              116,000Management
                  fees, related parties
              
              
              99,250
              
              
              $
              160,000Stock
                  compensation cost
              
              
              431,589
              
              
              
              223,399Legal
                  and accounting
              
              
              82,547
              
              
              
              36,000Other
              
              
              82,105
              
              
              
              78,484Total
                  operating costs and expenses
              
              
              1,087,052
              
              
              
              497,883Operating
                  loss
              
              
              (1,087,052
              )
              
              
              (497,883
              )Other
                  (expenses) incomeInterest
                  expense, related parties
              
              
              (107,418
              )
              
              
              (131,174
              )Interest
                  expense, other
              
              
              (221,754
              )
              
              
              (48,054
              )Interest
                  income, related parties
              
              
              1,192Total
                  other income (expenses)
              
              
              (327,980
              )
              
              
              (179,228
              )Loss
                  before sale of subsidiary
              
              
              (1,415,032
              )
              
              
              (677,111
              )Gain
                  from sale of subsidiary
              
              
              1,711,789
              
              
              
              -Net
                  income (loss)
              
              $
              296,757
              
              
              $
              (677,111
              )Basic
                  and diluted net loss from operations per common share
              
              $
              (0.03
              )
              
              $
              (0.01
              )Basic
                  and diluted net gain from sale of subsidiary per common
                  share
              
              $
              0.03
              
              
              $
              
              **Basic
                  and diluted weighted average common shares outstanding
              
              
              55,119,401
              
              
              
              49,798,739**Less
                  than $.01




See
      accompanying notes to financial
      statements


F-4




**CHINA
                    NUVO SOLAR ENERGY, INC. AND SUBSIDIARYConsolidated Statement of
                    Changes in Shareholders' DeficitFor the Years Ended July 31, 2007 and
                    2006**Common
                    stock
                
                Additionalpaid-in
                
                Stock
                    subscription
                
                Deferred
                
                Accumulated
                    other comprehensive
                
                Preferred
                
                Accumulated(deficit)
                
                Totalstockholders'Shares
                
                
                Amount
                
                capital
                
                receivable
                
                compensation
                
                income
                
                stock
                
                equity
                
                deficitBalance
                    at August 1, 2005
                
                46,055,100
                
                $
                46,055
                
                $
                (3,249,416)
                
                $
                (4,856)
                
                $
                (103,399)
                
                $
                (30,828)
                
                $
                -
                
                $
                (702,597)
                
                $
                (4,045,041)Amortization
                    of deferred compensation
                
                
                
                
                
                
                
                
                
                
                
                
                
                103,399
                
                
                
                
                
                
                
                
                
                
                
                103,399Fair
                    value of issuance of options and warrants
                
                
                
                
                
                
                
                7,466
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                7,466Issuance
                    of shares pursuant to the merger agreement
                
                5,227,000
                
                
                5,227
                
                
                (5,227)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                -Issuance
                    of shares in connection with convertible
                  debentures
                
                1,500,000
                
                
                1,500
                
                
                118,500
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                120,000Reversal
                    of previously recorded subscription receivable
                
                
                
                
                
                
                
                
                
                
                4,856
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                4,856Net
                    loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (677,111)
                
                
                (677,111)Foreign
                    currency translation adjustment
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (147,045)
                
                
                
                
                
                
                
                
                (147,045)Balances,
                    July 31, 2006
                
                52,782,100
                
                
                52,782
                
                
                (3,128,677)
                
                
                -
                
                
                -
                
                
                (177,873)
                
                
                -
                
                
                (1,379,708)
                
                
                (4,633,476)Issuance
                    of shares upon conversion of subordinated debentures
                
                2,000,000
                
                
                2,000
                
                
                83,875
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                85,875Issuance
                    of shares for services
                
                1,800,000
                
                
                1,800
                
                
                106,200
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                108,000Issuance
                    of shares pursuant to Agreement and Plan of
                    Reorganization
                
                133,333,255
                
                
                133,333
                
                
                (208,572)
                
                
                
                
                
                
                
                
                -
                
                
                
                
                
                (4,480,854)
                
                
                (4,556,093)Sale
                    of subsidiary
                
                
                
                
                
                
                
                (177,873)
                
                
                
                
                
                
                
                
                177,873
                
                
                
                
                
                4,550,983
                
                
                4,550,983Spin
                    -off of subsidiary
                
                
                
                
                
                
                
                (468,591)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,526,560
                
                
                1,057,969Issuance
                    of warrants in connection with notes payable issued
                
                
                
                
                
                
                
                73,125
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                73,125Issuance
                  of common stock, preferred stock and warrants  pursuant to
                  conversion of accrued expenses and notes and interest payable
                
                3,637,107
                
                
                3,637
                
                
                1,663,473
                
                
                
                
                
                
                
                
                
                
                
                535,891
                
                
                
                
                
                2,203,001Net
                    income
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                296,757
                
                
                296,757Balances,
                    July 31, 2007
                
                193,552,462
                
                $
                193,552
                
                $
                (2,057,040)
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                535,891
                
                $
                513,738
                
                $
                (813,859)


See
      accompanying notes to financial
      statements


F-5




**CHINA
                  NUVO SOLAR ENERGY, INC. AND SUBSIDIARY****Consolidated
                  Statement of Cash Flows****For
                  the Years Ended July 31, 2007 and 2006**2007
              
              
              2006Cash
                  flows from operating activities:Net
                  income (loss) before sale of subsidiary
              
              $
              296,757
              
              
              $
              (677,111
              )Adjustments
                  to reconcile net income (loss) before sale of subsidiaryto
                  net cash used in operating activities:Gain
                  on sale of subsidiary
              
              
              (1,711,789
              )
              
              
              -Amortization
                  of deferred compensation
              
              
              
              
              
              
              103,399Amortization
                  of discount on debentures payable
              
              
              36,368
              
              
              
              32,032Amortization
                  of debt issuance costs
              
              
              20,483
              
              
              
              4,909Common
                  stock based compensation
              
              
              431,589
              
              
              
              126,250Depreciation
              
              
              2,083
              
              
              
              -Change
                  in operating assets and liabilities:Increase
                  in prepaid expenses and other current assets
              
              
              (46,000
              )
              
              
              -Increase
                  (decrease) in accounts payable and accrued expenses
              
              
              7,952
              
              
              
              (7,548
              )Increase
                  in amounts due to related parties
              
              
              209,978
              
              
              
              131,178Increase
                  (decrease) in derivative liability
              
              
              15,655
              
              
              
              (55,000
              )Increase
                  in registration rights penalty
              
              
              
              
              
              
              161,700Net
                  cash used in operating activities
              
              
              (736,924
              )
              
              
              (180,191
              )Cash
                  flows from investing activities:Purchase
                  of property and equipment
              
              
              -
              
              
              
              (150,000
              )Proceeds
                  from notes receivable
              
              
              (26,500
              )Net
                  cash (used in) investing activities
              
              
              (26,500
              )
              
              
              (150,000
              )Cash
                  flows from financing activities:Proceeds
                  from sale of common stock
              
              
              530,949
              
              
              
              25,000Proceeds
                  from issuance of third party notes payable
              
              
              8,000Proceeds
                  from debentures payable
              
              
              
              
              
              
              385,000Placement
                  fees paid
              
              
              
              
              
              
              (60,050
              )Proceeds
                  from advances and loans from related parties
              
              
              351,027
              
              
              
              4,000Payment
                  of related party notes payable
              
              
              (50,569
              )Payment
                  to related party for notes receivable
              
              
              (53,850
              )Net
                  cash provided by financing activities
              
              
              785,557
              
              
              
              353,950Net
                  increase in cash and cash equivalents
              
              
              22,133
              
              
              
              23,759




Continued


F-6




**CHINA
                    NUVO SOLAR ENERGY, INC. AND SUBSIDIARY****Consolidated
                    Statement of Cash Flows (Continued)****For
                    the Years Ended July 31, 2007 and 2006**2007
                
                
                2006Cash
                    and cash equivalents, beginning of period
                
                
                10,888
                
                
                
                756Cash
                    and cash equivalents, end of period
                
                $
                33,021
                
                
                $
                24,515Supplemental
                    disclosures of cash flow information:
                
                
                
                
                
                
                -Cash
                    paid during the year for interest
                
                $
                4,801
                
                
                $
                -Cash
                    paid during the year for taxes
                
                $
                -
                
                
                $
                -Non-cash
                    investing and financial activities:Fair
                    value of options and shares issued for notes payable andservices
                
                
                
                
                
                $
                126,250Common
                    stock issued in connection with merger
                
                $
                133,333
                
                
                $
                -




See
      accompanying notes to financial
      statements


F-7
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**1.**
            **Organization,
                basis of presentation and summary of significant accounting
                policies:**





**Organization**





China
      Nuvo Solar Energy, Inc. (the “Company”), formerly known as Interactive Games,
      Inc. (the "Interactive"), was previously known as Torpedo Sports USA, Inc.
      ("Torpedo USA").  Torpedo USA, through its wholly-owned Canadian
      subsidiary Torpedo Sports Inc. ("Torpedo") manufactured and distributed outdoor
      recreational products for children for sale in the United States and Canada
      through May 6, 2004.





On
      May 6,
      2004, Torpedo filed for protection under the Bankruptcy and Insolvency Act
      of
      Canada (the "Torpedo Bankruptcy") with the intention to liquidate its assets.
      Torpedo ceased its operating activities in May 2004.





On
      February 1, 2005, Torpedo USA acquired all of the issued and outstanding common
      stock of Interactive, pursuant to a definitive merger agreement (the "Merger
      Agreement"). Interactive's original plan was to deliver to its customers, gaming
      technology by providing both software and gaming hardware. However, Interactive
      has few assets and minimal revenue-generating operations.  Interactive
      attempts to develop and market interactive casino technologies and slot machine
      games to the Native American Class II, Class III and charitable gaming
      markets.





Pursuant
      to terms of the Merger Agreement, Torpedo USA, in exchange for all of the issued
      and outstanding common shares of Interactive, issued 27,037,282 shares of
      Torpedo USA's common stock to the former Interactive shareholders in order
      for
      them to own 51% of the outstanding common stock of the Company on the closing
      date of the merger, on a fully diluted basis. The Company may issue additional
      shares if certain agreed upon criteria, to be determined, are met in order
      to
      allow the former Interactive security holders to hold 54% of the outstanding
      common stock of the Company (based on the shares outstanding at the time of
      closing). Accordingly, Torpedo could issue up to an additional 3,457,453 shares
      to the former Interactive shareholders. In connection with the Merger Agreement,
      the former Interactive shareholders agreed to use their best efforts
      post-closing to cause Torpedo USA to raise sufficient funds to pay-off or
      otherwise dispose of up to $250,000 of Torpedo USA's liabilities. Although
      $100,000 was paid, such pay-off or disposal has not been completed. Finally,
      should Torpedo USA not dispose of all of its assets and liabilities within
      three
      months following the acquisition closing date, the Company will be required
      to
      issue an additional 500,000 shares to the former Interactive shareholders.
      The
      Company has determined that it will issue such shares once Torpedo USA raises
      sufficient funds to satisfy up to $250,000 of its liabilities.





In
      conjunction with the Merger Agreement, Torpedo USA changed its name to
      Interactive Games, Inc. and approved an increase in its authorized common stock
      ($0.001 par value) from 50,000,000 shares to 100,000,000 shares.





The
      acquisition of Interactive by Torpedo USA was accounted for as a reverse merger
      because on a post-merger basis, the former Interactive shareholders hold a
      majority of the outstanding common stock of Torpedo USA on a voting and fully
      diluted basis. As a result, Interactive was deemed to be the acquirer for
      accounting purposes. Accordingly, the financial statements presented, from
      inception, are those of Interactive for all periods prior to the acquisition,
      and the financial statements of the consolidated companies from the acquisition
      date forward. The historical stockholders' deficit of Interactive prior to
      the





F-8
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**1.**
            **Organization,
                basis of presentation and summary of significant accounting policies
                (continued):**





**Organization
      (continued)**





acquisition
      have been retroactively restated (a recapitalization) for the equivalent number
      of shares received in the acquisition after giving effect to any differences
      in
      the par value of Torpedo USA's and Interactive's common stock, with an offset
      to
      additional paid-in capital. The restated consolidated accumulated deficit of
      the
      accounting acquirer (Interactive) is carried forward after the
      acquisition.





In
        June
        2007, our stockholders approved the consolidation of our operating assets
        at
        that time into one operating subsidiary and the spin-off of that operating
        subsidiary on a pro-rata basis to our stockholders of record as of July 10,
        2007, whereby each stockholder as of the record date will receive a pro rata
        number of shares of common stock in the operating subsidiary for each share
        of
        common stock in the Company held by such stockholder as of the record
        date.  Importantly, all shareholders who acquired or acquire common
        stock after July 10, 2007 will not be entitled to participate in this “spin-off”
distribution.





The
      “distribution” of the spin-off shares will occur subject to completion of
      certain legal and regulatory requirements and conditions.  We
      currently anticipate that the distribution will occur prior to December 31,
      2007.  Our intent is to make the newly created spin-off company
      publicly traded subject to the filing of all necessary documentation and
      obtaining all required regulatory approvals.





Also
      in
      June 2007, our stockholders, through a written consent executed by stockholders
      holding a majority of the outstanding shares of our common stock entitled to
      vote, adopted and approved Amended and Restated Articles of Incorporation and
      ratified the Amended and Restated Bylaws of the Company, which were adopted
      by
      our board of directors on June 26, 2007.





The
      Amended and Restated Articles of Incorporation increased the authorized capital
      stock of the Company from 105,000,000 shares to 500,000,000 shares, of which
      25,000,000 shares now may be preferred stock having the voting powers,
      designations, preferences, limitations, restrictions and relative rights as
      determined by the board of directors from time to time.  The Company’s
      stockholders also authorized our chief executive officer to change our name
      to
      China Nuvo Solar Energy, Inc. at such time as the chief executive officer deemed
      appropriate in his sole discretion.





Generally,
      the Amended and Restated Bylaws of the Company updated our former bylaws to
      reflect changes to applicable law.  For example, under the Amended and
      Restated Bylaws stockholders may now take action by written action signed by
      stockholders holding a majority of the shares entitled to vote on the given
      action.





Pursuant
      to an Agreement and Plan of Reorganization dated as of April 23, 2007, as
      amended on July 25, 2007 (the “Share Exchange”), by and between the Company
      and Nuvo Solar Energy, Inc., a Colorado corporation (“Nuvo”) incorporated on
      April 13, 2006, we and Nuvo entered into a share exchange whereby all of the
      issued and outstanding capital stock of Nuvo, on a fully-diluted basis, was
      exchanged for like securities of the Company, and whereby Nuvo became our wholly
      owned subsidiary (the “Share Exchange”).  The Share Exchange was
      effective as of July 25, 2007, upon the completed filing of Articles of Exchange
      with the Nevada Secretary of State and a Statement of Share





F-9
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**1.**
            **Organization,
                basis of presentation and summary of significant accounting policies
                (continued):**





**Organization
      (continued)**





Exchange
      with the Colorado Secretary of State.  Contemporaneously with the
      Share Exchange, we changed our name to “China Nuvo Solar Energy,
      Inc.”





Immediately
      prior to the effective time of the Share Exchange, Nuvo had outstanding
      5,500,000 shares of its common stock (“Nuvo Common Stock”) and no shares of
      preferred stock.  In accordance with the Share Exchange Agreement,
      each share of Nuvo Common Stock was acquired by us in exchange for approximately
      24.24 shares of our common stock for a total of 133,333,255 shares
      issued.  Accordingly, after giving effect to the Share Exchange, the
      Company had approximately 189,915,355 shares of Common Stock outstanding
      immediately following the transaction.





As
      a
      result of the Share Exchange, the former Nuvo shareholders together held
      approximately 66.6% of the Company’s outstanding common stock immediately
      following the transaction, on a fully-diluted basis.  Accordingly, the
      Share Exchange constituted a change of control of the Company.  As a
      result of the Share Exchange, Nuvo constituted the accounting acquirer in the
      Share Exchange; however, we elected to have a July 31 fiscal year end, which
      is
      the same fiscal year end that Interactive Games, Inc. had prior to the Share
      Exchange.





Nuvo
      was
      formed for the purpose of seeking a business opportunity in the alternate energy
      or “next-generation energy" sector. This industry sector encompasses non-hydro
      carbon based energy production and renewable energy technologies that are
“net-zero" or emissions free.




On
      June
      9, 2006 Nuvo signed a license agreement with Photovoltaics.com, Inc. (“PV”),
      Hutchinson Island, Florida.  Nuvo acquired exclusive worldwide rights
      to PV's solar cell technology relating to a multiple stacked solar cell using
      wave guide transfers. This license agreement includes all patents issued
      pursuant to certain patent applications or amendments that have been filed
      and
      the rights to use all applicable copyrights, trademarks and related intellectual
      property obtained on or in connection with the process and products. As
      consideration for this license, Nuvo paid a total aggregate license fee of
      $250,000.   The term of the license is for 10 years,
      automatically renewable for successive ten year terms under the same terms
      and
      conditions as provided for in this agreement.  Nuvo also agreed to pay
      PV a fee of $180,000 over the first three years of the agreement to act as
      a
      consultant.





In
      September 2007, we announced the execution of a binding term sheet with Pioneer
      Materials, Inc. (“PMI”) of Torrance, California, to establish a pilot
      development and manufacturing operation in PMI’s Chengdu, Sichuan, China
      facility located in Chengdu’s West High Tech development zone.  The
      agreement with PMI has the objective of establishing initial production of
      solar
      cells using our licensed technology based on an invention titled
*“Photovoltaic cell with integral light transmitting waveguide in a ceramic
      sleeve”*.  PMI is a manufacturer and supplier of materials for the
      semiconductor, hard drive media, optical media and photonic
      industries.  PMI is developing for the solar energy industry advanced
      materials for thin film photovoltaics (solar cell) processing.  The
      companies are currently negotiating the terms of a definitive agreement that
      is
      required to complete the proposed venture.





F-10
 **CHINA
                NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
                TO CONSOLIDATED FINANCIAL STATEMENTS
                (CONTINUED)**
 **FOR
                THE YEARS ENDING JULY 31, 2007 AND
                2006**




**1.**
            **Organization,
                basis of presentation and summary of significant accounting policies
                (continued):**





**Organization
      (continued)**





**Going
      concern and management’s plans**





The
      Company had a working capital deficit of $988,201 at July 31, 2007.
      Additionally, the Company to date has generated minimal revenues. Accordingly,
      the Company has no ready source of working capital. These factors raise
      substantial doubt about the Company's ability to continue as a going concern.
      The consolidated financial statements do not include any adjustments relating
      to
      the recoverability and classification of assets or the amounts and
      classification of liabilities that might be necessary should the Company be
      unable to continue as a going concern. While management believes the Company
      may
      be able to raise funds through the issuance of debt or equity instruments,
      there
      is no assurance the Company will be able to raise sufficient funds to operate
      in
      the future.





Upon
      completion of the Share Exchange, we ceased all operations relating to the
      business of Interactive Games, Inc. and adopted the business plan of Nuvo,
      which
      is now our wholly owned subsidiary.  Our focus is the development of a
      viable manufacturing process for our solar cell technology.





As
      part
      of our planned operations, our main focus will be the development of a viable
      manufacturing process for our technology.  As discussed above, we plan
      on finalizing an arrangement with PMI, whereby PMI will provide us with the
      facilities and expertise in China necessary to develop a pilot manufacturing
      process and eventually, a full manufacturing facility assuming the pilot process
      is successful.





We
      will
      require additional capital to fund the development of a pilot manufacturing
      process as well as for general corporate working capital to fund our day-to-day
      operations and costs associated with being a publicly-traded
      company.  This amount does not include any amounts which may be
      necessary to pay off existing debt or accrued expenses.  We presently
      believe the source of funds will primarily consist of debt financing, which
      may
      include debt instruments that may include loans from our officers or directors,
      or the sale of our equity securities in private placements or other equity
      offerings or instruments.





**Basis
      of presentation**





The
      consolidated financial statements for the year ending July 31, 2007 include
      the
      accounts of the Company and Nuvo, its subsidiary.  For the year ending
      July 31, 2006, the consolidated financial statements include the accounts of
      the
      Company and its subsidiaries, Interactive and JamDirect, Inc.  All of
      the Company accounts have been eliminated in consolidation.  Certain
      reclassifications to amounts reported in the July 31, 2006 consolidated
      financial statements have been made to conform to the July 31, 2007
      presentation.





**Significant
      accounting policies:**





**Use
      of estimates**





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect certain





F-11
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**1.**
            **Organization,
                basis of presentation and summary of significant accounting policies
                (continued):**





**Significant
      accounting policies (continued):**





reported
      amounts and disclosures. Accordingly, actual results will differ from those
      estimates.





**Intellectual
      Property**





The
      Company records intangible assets in accordance with Statement of Financial
      Accounting Standard (SFAS) Number 142, “Goodwill and Other Intangible
      Assets.” Goodwill and other intangible assets deemed to have indefinite lives
      are not subject to annual amortization. Intangible assets which have finite
      lives are amortized on a straight line basis over their remaining useful life;
      they are also subject to annual impairment reviews.




**Revenue
      recognition**





The
      Company recognizes revenue in accordance with Staff Accounting Bulletin No.
      104,
“Revenue Recognition in Financial Statements”.  This statement
      established that revenue can be recognized when persuasive evidence of an
      arrangement exists, the services have been delivered, all significant
      contractual obligations have been satisfied, the fee is fixed or determinable
      and collection is reasonably assured.  Fees earned from the sales of
      gambling machines and tickets for entertainment events are generally recognized
      upon receipt of cash from customers, which indicates that such customers have
      accepted the terms of the sale.





**Cash
      and cash equivalents**





The
      Company considers all highly liquid investments with original maturities of
      three months or less to be cash equivalents.





**Concentration
      on credit risks**





The
      Company is subject to concentrations of credit risk primarily from cash and
      assets from discontinued operations.





The
      Company minimizes its credit risks associated with cash, including cash
      classified as assets from discontinued operations, by periodically evaluating
      the credit quality of its primary financial institutions.





**Customer
      concentration**





The
      Company had no customers that accounted for at least 10% of its revenues during
      fiscal 2006. The Company intends to continue to minimize its customer
      concentration risks by diversifying its existing customer base.








F-12
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**











**1.**
            **Organization,
                basis of presentation and summary of significant accounting policies
                (continued):**





**Significant
      accounting policies (continued):**





**Stock-based
      compensation**





Effective
      January 1, 2006, the Company adopted Statement of Financial Accounting Standards
      No. 123 (revised 2004), Share Based Payment (“SFAS No, 123R”).  SFAS
      No. 123R establishes the financial accounting and reporting standards for
      stock-based compensation plans.  As required by SFAS No. 123R, the
      Company will recognize the cost resulting from al stock-based payment
      transactions including shares issued under its stock option plans in the
      financial statements.  There are 1,850,000 stock options outstanding
      as of July 31, 2007.





Prior
      to
      January 1, 2006, the Company accounted for stock-based employee compensation
      plans (including shares issued under its stock option plans) in accordance
      with
      APB Opinion No. 25 and followed the pro forma net income, pro forma income
      per
      share, and stock-based compensation plan disclosure requirements set forth
      in
      the Statement of Financial Accounting Standards No. 123, Accounting for
      Stock-Based Compensation (“SFAS No. 123”).  The Company did not issue
      any stock options during the years ended July 31, 2007 and 2006.





**Fair
      value of financial instruments**





The
      carrying value of cash, assets of discontinued operations, accounts payable
      and
      accrued expenses approximate their fair value due to their short-term
      maturities. The carrying amount of the note payable and due to related parties
      approximate their fair value based on the Company's incremental borrowing
      rate.





**Comprehensive
      income or loss**





The
      July
      31, 2006 financial statements of the Company's discontinued foreign subsidiary,
      Torpedo, are measured using the local currency (the Canadian Dollar "CAD")
      as
      the functional currency. Assets and liabilities of Torpedo are translated at
      exchange rates as of the balance sheet date. Revenues and expenses are
      translated at average rates of exchange in effect during the period. The
      resulting cumulative translation adjustments have been recorded as a component
      of comprehensive loss, included as a separate item in shareholders' deficit.
      Gains and losses from foreign currency transactions are included in loss from
      discontinued operations.





Included
      in this category is the change resulting from foreign currency translation
      adjustments from the Company’s foreign subsidiary which amounted to
      approximately $147,000 and for the year ended July 31, 2006.





**Income
      taxes**





Income
      taxes are accounted for in accordance with SFAS No. 109, Accounting for Income
      Taxes. SFAS No. 109 requires the recognition of deferred tax assets and
      liabilities to reflect the future tax consequences of events that have been
      recognized in the Company's financial statements or tax returns. Measurement
      of
      the deferred items is based on enacted tax laws. In the event the future
      consequences of differences between financial reporting





F-13
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**1.**
            **Organization,
                basis of presentation and summary of significant accounting policies
                (continued):**





**Significant
      accounting policies (continued):**





**Income
      taxes (continued)**





bases
      and
      tax bases of the Company's assets and liabilities result in a deferred tax
      asset, SFAS No. 109 requires an evaluation of the probability of being able
      to
      realize the future benefits indicated by such assets. A valuation allowance
      related to a deferred tax asset is recorded when it is more likely than not
      that
      some or all of the deferred tax asset will not be realized.





**Loss
      per common share**




Loss
      per
      share of common stock is computed based on the weighted average number of common
      shares outstanding during the period.  Stock options, warrants and
      common stock underlying convertible promissory  notes at July 31, 2007
      and 2006 were 8,912,107 and 3,750,000, respectively, are not
      considered in the calculation as the impact of the potential common shares
      would
      be to decrease loss per share and therefore no diluted loss per share figures
      are presented.





**Accounting
      for obligations and instruments potentially settled in the Company’s common
      stock**





In
      connection with any obligations and instruments potentially to be settled in
      the
      Company's stock, the Company accounts for the instruments in accordance with
      EITF Issue No. 00-19, *Accounting for Derivative Financial Instruments
      Indexed to, and Potentially Settled in a Company’s Own
      Stock.*  This issue addresses the initial balance sheet
      classification and measurement of contracts that are indexed to, and potentially
      settled in, the Company's stock.





Under
      EITF 00-19, contracts are initially classified as equity or as either assets
      or
      liabilities, depending on the situation. All contracts are initially measured
      at
      fair value and subsequently accounted for based on the then current
      classification. Contracts initially classified as equity do not recognize
      subsequent changes in fair value as long as the contracts continue to be
      classified as equity. For contracts classified as assets or liabilities, the
      Company reports changes in fair value in earnings and discloses these changes
      in
      the financial statements as long as the contracts remain classified as assets
      or
      liabilities. If contracts classified as assets or liabilities are ultimately
      settled in shares, any previously reported gains or losses on those contracts
      continue to be included in earnings. The classification of a contract is
      reassessed at each balance sheet date.





**Derivative
      instruments**





In
      connection with the issuances of equity instruments or debt, the Company may
      issue options or warrants to purchase common stock. In certain circumstances,
      these options or warrants may be classified as liabilities, rather than as
      equity. In addition, the equity instrument or debt may contain embedded
      derivative instruments, such as conversion options or listing requirements,
      which in certain circumstances may be required to be bifurcated from the
      associated host instrument and accounted for separately as a
      derivative





F-14
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**1.**
            **Organization,
                basis of presentation and summary of significant accounting policies
                (continued):**





**Significant
      accounting policies (continued):**





**Derivative
      instruments (continued)**





liability
      instrument. The Company accounts for derivative instruments under the provisions
      of SFAS No. 133, *Accounting for Derivative Instruments and Hedging
      Activities*.





**Recent
      accounting pronouncements**





In
      June
      2006, the Financial Accounting Standards Board (“FASB”) issued FIN 48,
      "Accounting for Uncertainty in Income Taxes--an interpretation of FASB Statement
      No. 109," which seeks to reduce the diversity in practice associated with the
      accounting and reporting for uncertainty in income tax positions. This
      Interpretation prescribes a comprehensive model for the financial statement
      recognition, measurement, presentation and disclosure of uncertain tax positions
      taken or expected to be taken in an income tax return. FIN 48 presents a
      two-step process for evaluating a tax position. The first step is to financial
      instrument that pertains to a beneficial interest other than another derivative
      financial instrument. This statement is effective for fiscal years beginning
      after September 15, 2006. The Company currently does not engage in the
      activities described in SFAS 155. Consequently, management believes SFAS 155
      will not have a material impact on the Company’s results of operations,
      financial position or cash flow.




In
      March
      2006, the FASB issued SFAS 156, “Accounting for Servicing of Financial Assets-
      an amendment of FASB Statement No. 140.” This Statement requires an entity to
      recognize a servicing asset and liability each time it undertakes an obligation
      to service a financial asset. This statement is effective for fiscal years
      beginning after September 15, 2006. The Company currently does not engage in
      the
      activities described in SFAS 156. Consequently, determine whether it is
      more-likely-than-not that a tax position will be sustained upon examination,
      based on the technical merits of the position. The second step is to measure
      the
      benefit to be recorded from tax positions that meet the more-likely-than-not
      recognition threshold, by determining the largest amount of tax benefit that
      is
      greater than 50 percent likely of being realized upon ultimate settlement,
      and
      recognizing that amount in the financial statements. FIN 48 is effective for
      fiscal years beginning after December 15, 2006. Management believes the adoption
      of FIN 48 will not have a material impact on the Company’s results of
      operations, financial position or cash flow.




In
      September 2006, the Securities and Exchange Commission issued Staff Accounting
      Bulletin ("SAB") No. 108, "Considering the Effects of Prior Year Misstatements
      when Quantifying Misstatements in Current Year Financial Statements." SAB No.
      108 was issued in order to eliminate the diversity in practice surrounding
      how
      public companies quantify financial statement misstatements. SAB No. 108
      requires that registrants quantify errors using both a balance sheet (iron
      curtain) approach and an income statement (rollover) approach then evaluate
      whether either approach results in a misstated amount that, when all relevant
      quantitative and qualitative factors are considered, is material. SAB No. 108
      is
      effective for fiscal years ending after November 15, 2006. The Company has
      adopted the bulletin during 2006. The adoption did not have a material effect
      on
      results of operations, financial position, or cash flows.





F-15
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**1.**
            **Organization,
                basis of presentation and summary of significant accounting policies
                (continued):**





**Significant
      accounting policies (continued):**





**Recent
      accounting pronouncements (continued)**





In
      February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments - an amendment of FASB Statements No. 133 and 140.” This
      Statement resolves issues addressed in Statement 133 Implementation Issue No.
      D1, “Application of Statement 133 to Beneficial Interests in Securitized
      Financial Assets.” This Statement permits fair value re-measurement for any
      hybrid financial instrument that contains an embedded derivative that otherwise
      would require bifurcation, clarifies which interest-only strips and
      principal-only strips are not subject to the requirements of Statement 133,
      establishes a requirement to evaluate interests in securitized financial assets
      to identify interests that are freestanding derivatives or that are hybrid
      financial instruments that contain an embedded derivative requiring bifurcation,
      clarifies that concentrations of credit risk in the form of subordination are
      not embedded derivatives, and amends Statement 140 to eliminate the prohibition
      on a qualifying special-purpose entity from holding a derivative management
      believes SFAS 156 will not have a material impact on the Company’s results of
      operations, financial position or cash flow.




In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which
      provides enhanced guidance for using fair value to measure assets and
      liabilities. SFAS No. 157 provides a common definition of fair value and
      establishes a framework to make the measurement of fair value in generally
      accepted accounting principles more consistent and comparable. SFAS No. 157
      also
      requires expanded disclosures to provide information about the extent to which
      fair value is used to measure assets and liabilities, the methods and
      assumptions used to measure fair value, and the effect of fair value measures
      on
      earnings. SFAS No. 157 is effective for financial statements issued in fiscal
      years beginning after November 15, 2007 and to interim periods within those
      fiscal years. The Company is currently in the process of evaluating the effect,
      if any, the adoption of SFAS No. 157 will have on its results of operations,
      financial position, or cash flows.




In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans,” which will require the Company
      to recognize the funded status of defined benefit plans in its statement of
      financial position. This statement will be effective as of the Company’s year
      ending August 31, 2007. The Company currently does not have pension benefit
      plans. Consequently, management believes SFAS 158 will not have a material
      impact on the Company’s results of operations, financial position or cash
      flow.





**2.**
            **Sale
                of subsidiary:**





Torpedo’s
      operations were primarily located in Montreal, Canada.  In conjunction
      with the Torpedo bankruptcy proceedings, a trustee was appointed to oversee
      the
      Torpedo estate. The Trustee's functions are to recover the maximum value of
      Torpedo's assets and discharge bankruptcy claims based on priority and pursuant
      to Canadian bankruptcy laws. The carrying amounts of Torpedo's assets and
      liabilities subject to compromise at July 31, 2006, are as follows:





F-16
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**2.**
            **Sale
                of subsidiary (continued):**





Assets :Cash,
                held in trust
            
            $
            7,549Liabilities
                subject to compromise: (1)Notes
                payable
            
            $
            415,676Due
                to related party
            
            
            138,353Accounts
                payable and accrued expenses
            
            
            1,770,958$
            2,324,987





Liabilities
      subject to compromise above do not include intercompany payables which have
      been
      eliminated in the July 31, 2006 consolidated balance sheet.  The notes
      payable consist of three notes with carrying values ranging from approximately
      $30,000 to $225,000 and bearing interest ranging from 8% to 10%.  The
      notes are unsecured and are in default.  Due to related party consists
      of amounts owed to VP Sports and are comprised of management fees and accrued
      interest payable.





In
                June 2007 we executed a Stock Purchase Agreement with CLB pursuant
                to
                which CLB acquired all of the stock of Torpedo in exchange for
                $0.10.





**3.**
            **Accrued
                liabilities, related
                parties:**





Accrued
      liabilities, related parties at July 31, 2007 and 2006 are as
      follows:





2007
            
            
            2006Officer
                bonus
            
            $
            275,561Management
                fees
            
            
            33,250
            
            
            $
            215,250Accrued
                interest
            
            
            2,543
            
            
            
            311,986$
            311,354
            
            
            $
            527,236





**4.**
            **Convertible
                debentures payable:**





In
      April
      2006, the Company executed a Securities Purchase Agreement (the “Purchase
      Agreement”) with various accredited investors (the “Holder” or “Holders”) for
      the issuance and sale of up to $700,000 of 6% unsecured convertible debentures
      in private transactions.  As of July 31, 2006, the Company completed
      the sale of the aggregate $385,000 in Debentures under the Purchase
      Agreement.  We received $324,950 from these transactions net of
      $60,050 of debt issuance costs paid to our placement agents, Divine Capital
      Markets, LLC (included in the accompanying balance sheet), which will be
      amortized as debt issuance costs over the three year term of the convertible
      notes.  For the years ended July 31, 207 and 2006, debt issuance costs
      were $20,016 and $4,909, respectively.  At July 31, 2007, accrued
      interest payable on these notes was $28,839.





The
      Debentures are due three years from the final Closing Date under the Purchase
      Agreement (the “Maturity Date”), unless prepayment of the Debentures is required
      in certain events, as described below.  The Debentures are convertible
      at a conversion price (the “Conversion Price”) for each share of common stock
      equal to 75% of the lowest closing bid price per share (as reported by
      Bloomberg, LP) of the Corporation’s common stock for the twenty (20) trading
      days immediately preceding the date of conversion.  In





F-17
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**4.**
            **Convertible
                debentures payable
                (continued):**





addition,
      the Debentures provide for adjustments for dividends payable other than in
      shares of common stock, for reclassification, exchange or substitution of the
      common stock for another security or securities of the Corporation or pursuant
      to a reorganization, merger, consolidation, or sale of assets, where there
      is a
      change in control of the Corporation.





The
      outstanding principal balance of each Debenture bears interest, in arrears,
      at
      six percent (6%) per annum, payable (i) upon conversion, or (ii) on the Maturity
      Date, in shares of our common stock at the Conversion Price.  Upon the
      occurrence of an Event of Default (as defined in the Purchase Agreement), then
      the Corporation is required to pay interest to the Holder of each outstanding
      Debenture, at the option of the Holders (i) at the rate of lesser of eighteen
      percent (18%) per annum and the maximum interest rate allowance under applicable
      law, and (ii) the Holders may at their option declare the Debentures, together
      with all accrued and unpaid interest (the “Acceleration Amount”), to be
      immediately due and payable.





The
      Corporation may at its option call for redemption all or part of the Debentures
      prior to the Maturity Date, as follows:





The
      Debentures called for redemption shall be redeemable for an amount (the
“Redemption Price”) equal to (x) if called for redemption prior to the date
      which is nine months from the date of issuance (the “Issuance Date”), 115%, if
      called for redemption on or after the date that is nine months after the
      Issuance Date but prior to the first anniversary of the Issuance Date, 131%,
      in
      either case of the principal amount called for redemption, plus (y) interest
      accrued through the day immediately preceding the date of
      redemption.





(i)
            If
                fewer than all outstanding Debentures are to be redeemed, then all
                Debentures shall be partially redeemed on a *pro*rata
                basis.





In
      connection with the Purchase Agreement, the Company entered into a Registration
      Rights Agreement, dated as of April 24, 2006 (“Registration Rights Agreement”),
      with the Holders of the Debentures to provide certain registration rights under
      the Securities Act of 1933, as amended (the “Securities Act”), and the rules and
      regulations thereunder.  Pursuant to the Registration Rights
      Agreement, the Company contemplates making an offering of common stock (or
      other
      equity securities convertible into or exchangeable for common stock) registered
      for sale under the Securities Act or proposes to file a Registration Statement
      covering any of its securities other than (i) a registration of Form S-8 or
      S-4,
      or any successor or similar forms; and (ii) a shelf registration under Rule
      415
      for the sole purpose of registering shares to be issued in connection with
      the
      acquisition of assets, the Company will at each such time give prompt written
      notice to the Holders’ representative and the Holders of its intention to do
      so.  Upon the written request of any Holder made within thirty (30)
      days after the receipt of any such notice, the Company has agreed to use its
      best efforts to effect the registration of all such registrable securities
      which
      the Company has been so requested to register by the Holders, to the extent
      requisite to permit the disposition by the requesting Holders of their
      registrable securities pursuant to the Registration
      Statement.  Accordingly, in connection with the Registration Rights
      Agreement, the Company recorded an expense and accrued estimated registration
      rights penalties of $161,700, which are included in the accompanying financial
      statements for the year ending July 31, 2006.





F-18
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**4.**
            **Convertible
                debentures payable
                (continued):**





The
      Debentures cannot be converted until nine (9) months after the issuance date
      of
      each Debenture.  During the year ended July 31, 2007, the Holders
      converted $85,875 of the Debentures to 2,000,000 shares of common stock at
      an
      average conversion price of $0.043 per share.





The
      Company determined that the conversion feature of the convertible Debentures
      represents an embedded derivative since the Debentures are convertible into
      a
      variable number of shares upon conversion.  Accordingly, the
      convertible Debentures are not considered to be conventional debt und EITF
      00-19
      and the embedded conversion feature must be bifurcated from the debt host and
      accounted for as a derivative liability.  The Company believes that
      the aforementioned embedded derivatives and freestanding warrants meet the
      criteria of SFAS 133 and EITF 00-19, and should be accounted separately as
      derivatives with a corresponding value recorded as
      liability.  Accordingly, the fair value if these derivative
      instruments have been recorded as a liability on the consolidated balance sheet
      with the corresponding amount recorded as a liability on the consolidated
      balance sheet with the corresponding amount recorded as a discount to the
      Debentures.  Such discount will be accreted from the date of issuance
      to the maturity date of the Debentures.  The change in the fair value
      of the liability for derivative contracts will be credited to other income
      (expense) in the consolidated statements of operations.  The $385,000
      face amount of the Debentures were stripped of their conversion feature due
      to
      the accounting for the conversion feature as a derivative, which was recorded
      using the residual proceeds to the conversion option would be attributed to
      the
      debt.  The beneficial conversion feature (an embedded derivative)
      included in this Debenture resulted in an initial debt discount of $385,000
      and
      an initial loss on the valuation of derivative liabilities of
      $75,874.





At
      July
      31, 2007, the Company revalued this derivative liability.  For the
      period from April 24, 2006 to July 31, 2006, the Company reduced the initial
      recorded losses (of $75,874) and the accrued liability on the valuation by
      $130,874.  At July 31, 2007, based on the value of the derivative
      liability, the Company recorded an expense of $15,655 and increased the
      liability on the valuation by $15,655.





The
      Company issued 1,500,000 shares of its common stock to Divine Capital Markets,
      LLC and/or its designees as consideration for its services as the placement
      agent in connection with the financing transaction described
      above.  The Company recorded a stock compensation expense of $120,000
      (based upon the market value of the Company’s common stock on the date of
      issuance), which is included in general and administrative expenses for the
      year
      ended July 31, 2006.





**5.**
            **Convertible
                and other promissory notes and long-term debt, including related
                parties:**





Convertible
      and other promissory notes and long-term debt, including related parties at
      July
      31, 2007 consist of the following:





Notes
                payable
            
            $
            191,233Notes
                payable, related parties **[A]**
            
            
            184,499Convertible
                debentures, net of discount of $144,850 (2007) and $352,968
                (2006)
            
            
            154,275530,007





F-19
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**5.**
            **Convertible
                and other promissory notes and long-term debt, including related
                parties
                (continued):**





Less
                current portion
            
            
            375,732Long-term
                debt, net of current portion
            
            $
            154,275





**[A]**                 The
      following table summarizes the activity for the year ended July 31,
      2007:





Beginning
                balance
            
            $
            1,442,524Issuance
                of new notes
            
            
            226,793Repayment
                of notes
            
            
            (372,351
            )Issuance
                of common stock in consideration of cancellation of notes
            
            
            (847,183
            )Notes
                included in spin-off of subsidiaries
            
            
            (265,284
            )$
            184,499





**6.**
            **Stockholders’
                deficit:**





**Common
      stock**





In
      December 2005, the Company issued 5,227,000 shares of common stock to VP Sports,
      Inc., an affiliate through common control of our Chief Executive Office and
      Chief Financial Officer, pursuant to the Merger Agreement.





During
      the year ended July 31, 2006, the Company issued 1,500,000 shares of its common
      stock to a placement agent as fees related to the debenture
      offering.  The Company valued the shares at $120,000 or $0.08 per
      share (the market price of the common stock on the date of issuance) and is
      included in selling, general and administrative expenses for the year ended
      July
      31, 2006.





On
      May
      29, 2007, the Company issued 900,000 shares of its common stock upon the
      conversion of $40,500 of convertible debentures.  The shares were
      converted at $0.045 per share.





On
      July
      2, 2007, the Company issued 1,100,000 shares of its common stock upon the
      conversion of $45,375 of convertible debentures.  The shares were
      converted at $0.04125 per share.





On
      June
      14, 2007, the Company issued 1,800,000 shares of its common stock to a third
      party for services.  The shares were valued at $0.06 per share and
      $108,000 is included in selling, general and administrative expense for the
      year
      ended July 31, 2007.





In
      July
      2007, we issued 500,000 shares of our common stock to CLB Investment Corporation
      (“CLB”) in consideration of its assumption of approximately an additional
      $418,000 of notes and accrued and unpaid interest, accounts payable and accrued
      expenses.





F-20
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**




**6.**
            **Stockholders’
                deficit (continued):**





**Stock
      options and warrants**





In
      March
      2002, the Company adopted the 2002 Stock Option Plan, covering up to 1,000,000
      shares of the Company's common stock, and in July 2003, the Company adopted
      the
      2003 Stock Option Plan covering up to 2,500,000 shares of the Company's common
      stock.





Torpedo
      USA issued options and warrants prior to its merger, which was assumed by the
      Company.  A summary of the activity of the Company’s outstanding
      options and warrants during fiscal 2007 and 2006 is as follows:





Options
                and warrants
            
            
            Weighted
                average exercise priceOutstanding,
                August 1, 2005
            
            
            5,377,000
            
            
            $
            0.17Granted
            
            
            -
            
            
            
            -Exercised
            
            
            -
            
            
            
            -Expired
            
            
            (1,427,000
            )
            
            
            (0.19
            )Outstanding
                and exercisable atJuly
                31, 2006
            
            
            3,950,000
            
            
            $
            0.17Granted
            
            
            5,262,107
            
            
            
            0.10Exercised
            
            
            -
            
            
            
            -Expired
            
            
            (300,000
            )
            
            
            (0.15
            )Outstanding
                and exercisable atJuly
                31, 2007
            
            
            8,912,107
            
            
            $
            0.09





Range
                of exercise prices
            Warrants
                outstanding and exercisable
            Weighted
                average remaining contractual life
            Weighted
                average exercise price$  0.05
            300,000
            0.00
            $  0.050.10
            4,862,107
            1.19
            0.100.12
            1,000,000
            0.49
            0.120.20
            2,750,000
            0.43
            0.20





The
      weighted average remaining contractual life of the terms of the warrants and
      options is 2.0 years.





All
      options and warrants issued by Torpedo USA were issued prior to the merger
      on
      February 1, 2005 and have been expensed prior to such
      date.  Accordingly, no expense associated with the assumption of the
      warrants and options by the Company has been included in the accompanying
      consolidated statement of operations.





**7.**
            **Income
                taxes:**





Deferred
      income taxes reflect the net tax effect of temporary differences between the
      carrying amounts of assets and liabilities for financial reporting purposes
      and
      the amounts used for income tax purposes. Significant components of the net
      deferred taxes, as of July 31, 2006,





F-21
 **CHINA
              NUVO SOLAR ENERGY, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **FOR
              THE YEARS ENDING JULY 31, 2007 AND
              2006**











**7.**
            **Income
                taxes (continued):**





are
      as
      follows:





Deferred
                tax assets:Net
                operating loss carryforward
            
            $
            336,000Less
                valuation allowance
            
            
            (336,000
            )Total
                net deferred tax assets
            
            
            -





The
      Company may have had a change of ownership as defined by the Internal Revenue
      Code Section 382. As a result, a substantial annual limitation may be imposed
      upon the future utilization of its net operating loss carryforwards. At this
      point, the Company has not completed a change in ownership study and the exact
      impact of such limitations is unknown. The company has no accrued tax liability,
      as the income was derived from the sale of a subsidiary and the liabilities
      were
      alleviated through formal bankruptcy proceedings.





The
      federal statutory tax rate reconciled to the effective tax rate during fiscal
      2007 and 2006, respectively, is as follows:






2007
            
            
            2006Tax
                at U.S. Statutory Rate
            
            
            35.0
            %
            
            
            35.0
            %State
                tax rate, net of federal benefits
            
            
            5.0
            %
            
            
            5.0
            %Change
                in valuation allowance
            
            
            (40.0
            )
            
            
            (40.0
            )0.0
            %
            
            
            0.0
            %





**8.**
            **Subsequent
                events:**





On
      October 21, 2007, the Board of Directors of the Company authorized the sale
      of
      up to $700,000 of 6% convertible debentures.  In October 2007, the
      Company received $198,080, net of costs of $41,200 paid to our placement agents,
      Divine Capital Markets, LLC (“Divine”), which will be amortized as debt issuance
      costs over the three-year term of the debentures, beginning in October
      2007.  Additionally, the Company issued 1,100,000 shares of its common
      stock to Divine and/or its designees as consideration for its
      services.




F-22