UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K




(Mark
One)


x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934





FOR
THE FISCAL YEAR ENDED May 31, 2010





OR





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





For
the transition period
from       to




COMMISSION
FILE NUMBER 333-161321









AXIOLOGIX
EDUCATION CORPORATION


(Exact
name of registrant as specified in its charter)




NEVADA
              
              61-1585332(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (I.R.S.
      Employer
                Identification
      No.)501
      Scarborough Dr., Suite 308E
                Egg
      Harbor Township, NJ
              
              08234(Address
      of principal executive offices)
              
              (Zip
      Code)




Registrant’s
telephone number, including area code: (609) 646-2005





Securities
registered pursuant to Section 12(b) of the Act:


None





Securities
registered pursuant to Section 12(g) of the Act:





None







Indicate
by check mark whether the registrant is a well-known seasoned issuer, as define
in Rule 405 of the Securities Act).  Yes ̈Nox





Indicate
by check mark whether the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yes ̈Nox





Indicate
by check mark whether the issuer (1)  filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act 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.  Yes  x   No   ̈





Indicate
by check mark whether the issuer has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the past 12 months
(or for such shorter period that the registrant was required to submit and post
such files).  Yes  x   No   ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not 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-K or
any amendment to this Form 10-K.    ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




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





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes  ̈ No x





State the aggregate market value of the
voting and non-voting equity held by non-affiliates of the Registrant computed
by reference to the price at which the common equity was last sold, or the
average bid and asked price of such common equity, as of August 27, 2010: 
$6,189,261





Indicate
by check mark whether the issuer filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.  Yes  x   No   ̈





As of August 27, 2010, 26,001,626
shares of the Registrant’s Common Stock were outstanding.





Axiologix
Education Corporation





FORM
10-K


For
the Fiscal Year Ended May 31, 2010





INDEX




PART
      IItem
      1.
                    
                    Business
                    1Item
      1A.
                    
                    Risk
      Factors
                    7Item
      2.
                    
                    Properties
                    15Item
      3.
                    
                    Legal
      Proceedings
                    15Item
      4.
                    
                    [Removed
      and Reserved]
                    15PART
      IIItem
      5.
                    
                    Market
      for Common Equity, Related Stockholder Matters and Issuer Purchases of
      Equity Securities
                    15Item
      6.
                    
                    Selected
      Financial Information
                    16Item
      7.
                    
                    Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                    16Item
      8.
                    
                    Financial
      Statements
                    20Item
      9.
                    
                    Changes
      In and Disagreements with Accountants on Accounting and Financial
      Disclosure
                    20Item
      9A.
                    
                    Controls
      and Procedures
                    20Item
      9B.
                    
                    Other
      Information
                    21PART
      IIIItem
      10.
                    
                    Directors,
      Executive Officers and Corporate Governance
                    22Item
      11.
                    
                    Executive
      Compensation
                    25Item
      12.
                    
                    Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                    26Item
      13.
                    
                    Certain
      Relationships and Related Transactions, and Director
      Independence
                    27Item
      14.
                    
                    Principal
      Accountant Fees and Services
                    28Item
      15.
                    
                    Exhibits,
      Financial Statement Schedules
                    29Signatures
                    30


i


PART
I




Item
1.Description of Business.




In
addition to the historical information contained herein, the discussion in this
Form 10-K contains certain forward-looking statements, within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, that involve risks and uncertainties, such as
statements concerning: growth and anticipated operating results; developments in
our markets and strategic focus; product development and reseller relationships
and future economic and business conditions. The cautionary statements made in
this Form 10-K should be read as being applicable to all related
forward-looking statements whenever they appear in this Form 10-K. Our
actual results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed under the
section captioned “Risk Factors” in Item 1.A. of this Form 10-K as
well as those cautionary statements and other factors set forth elsewhere
herein.





Information
regarding market and industry statistics contained in this Form 10-K is included
based on information available to us that we believe is accurate.  It is
generally based on industry and other publications that are not produced for
purposes of securities offerings or economic analysis.  We have not
reviewed or included data from all sources, and cannot assure investors of the
accuracy or completeness of the data included in this Form 10-K.  We do not
assume any obligation to update any forward-looking statement.  As a
result, investors should not place undue reliance on these forward-looking
statements.





General





We are a
start-up company comprised of management and sales executives in education who
have experience and a proven successful track record in sales performance over
the past two decades.  Our main focus is on the sales and marketing of
educational software titles serving schools with grade levels from Kindergarten
through Higher Education.  We are concentrating on raising student
achievement through research-based school designs, uniquely aligned assessment
systems, interactive professional development, integrated use of technology, and
other proven productivity applications in education.




As a part
of our expansion plans, we have targeted and made informal commitments for the
hire of several top producers in sales, marketing, and managed software
implementation in education technology.  These top producers have committed
to come on board and become part of our educational software dealership that
offers niche productivity solutions in the education market.  In August
2010, we hired three of these individuals and plan to hire additional
individuals as our capital resources permit.




We intend
to have several potential exclusive reseller relationships with educational
software companies for the re-sale of their on-line managed software
applications that complement each other.  The strategic positioning of
these products complementing each other, coupled with the proven track record of
the aforementioned top-producing sales executives, is expected to propel our
sales revenue.  This includes the sale of packaged on-line software
licensing, consulting services, training and support, and other complimentary
educational software tools.




In August
2010, we entered into an exclusive reseller agreement with Edumedia Software
Solutions Corporation (“Edumedia”) for the sale of E*pad, an on-line managed
software application that manages performance assessments for teachers to be
deployed among their students.   Under the terms of the agreement, we
have paid to Edumedia $91,800 as a research and development contribution, issued
to Edumedia 940,000 shares of our common stock and agreed to pay to Edumedia 50%
of the revenues we collect from the sale of their products.  The agreement
has an initial term of 18 months.   Our principal officer and a
director, John P. Daglis, was formerly the Chief Executive Officer of
Edumedia.




We are in
discussion regarding other potential exclusive resellerships with Seacliff
Educational Solutions (for their eBoard® and Curricuplan® on-line software
products) and Contour Data (for their Student Tracker Software), all of which
are described in the following Products below.  Although these potential
exclusive resellerships have not been formalized with written agreements yet,
these companies have given us verbal authorization to begin representing their
products and services in anticipation of us hiring the aforementioned “top
producers” in sales, marketing, and managed software deployment.  We expect
that terms will range from a 20% - 50% mark-up depending upon the amount of
technical support, help desk services, and professional development we provide
to these companies.


1




Since the
passage of the “No Child Left Behind” legislation to the recent commitments to
Education in the latest stimulus plan that President Obama has so strongly
endorsed, the education industry has been facing a growing premium on
intellectual capital, education reform, and a focus on assessment and
accountability.  Within the $767 billion stimulus plan that was passed in
February 2009, $105.9 billion of it is allocated specifically to
education.  According to the U.S. Department of Education, there is a
balance of over $38 billion still left to be disbursed as of June 2010. 
$600 million of the stimulus plan is focused on technology applications and well
rounded assessment using technology.  This movement has spawned increasing
demand for solutions that yield performance results, namely: accountability,
improved records and operational efficiency, better information, improved
learning, and better methodologies of teaching— results that our software
solutions deliver.




We were
incorporated on April 29, 2009 under the laws of the state of Nevada.  We
maintain our statutory registered agent's office at 4421 Edward Avenue, Las
Vegas, Nevada 89108.  Our business office is located at 501 Scarborough Dr.
Suite 308E, Egg Harbor Township, NJ 08234.  Our telephone number is
609-646-2005 and our fax number is 609-939-0717.  We pay rent of $1,400 per
month.




Products




Under our
Reseller Agreement with Edumedia, we have the exclusive right to market and sell
the following product:




E*pad




E*pad
features a multimedia student portfolio for students combined with a performance
assessment manager which is a research-based approach to structuring the
collection, interpretation, and assessment of evidence regarding student
learning.




Key
Features:




·
            Assessments
      that are aligned to national and state standards and
    rubrics;




·
            Provides
      structured activities for teachers to use with students
  ;




·
            Allows
      teachers to create new assessments as well as to modify existing
      ones;




·
            Focuses
      on improving the learning of all
students;




·
            Provides
      a highly interactive assessment
environment;




·
            Supports
      a collegial learning community for sharing materials and
      activities;




·
            Contains
      an assessment framework to help educators make systematic use of evidence
      of learning;




·
            Provides
      a structured process for analyzing evidence of student
      learning;




·
            Allows
      students to develop a portfolio of their exemplary work;
    and




·
            Supports
      an interactive educational environment where teachers can work
      collaboratively and share strategies with colleagues to improve future
      assessments.


2





Key
Benefits:




·
            User
      friendly;




·
            Internet
      Based;




·
            Encourages
      higher levels of student
achievement;




·
            Promotes
      student centered learning;




·
            Facilitates
      interdisciplinary and collaborative
teaching;




·
            Fosters
      cooperative learning projects;




·
            Allows
      students to create a “digital portfolio” of their exemplary
      accomplishments; and




·
            Facilitates
      increased involvement of parents.




We are in
discussion regarding other potential exclusive resellerships with Seacliff
Educational Solutions and Contour Data regarding the following
products:




eBoard




eBoard is
another software application that is an easy to use web page that allows
educators to quickly post information online for parents and students. 
eBoard is simple but powerful and keeps students and parents up to date and
involved by posting homework, projects, events, and schedules
online.




Key
Features:




·
            Archive
      function;




·
            Rich
      Text Editing;




·
            iNote
      Discussion;




·
            eBoard
      Calendar;




·
            Passwords;




·
            Customization;




·
            Administrator
      site; and




·
            Online
      Help.




Key
Benefits:




·
            Ease
      of use, simple on-line format;




·
            Enables
      the users to collaborate online using safe and secure discussions for book
      talks, homework, help, blogs,
etc.;


3




·
            Teachers
      can attach class specific content including notes, presentations,
      pictures, etc., and integrate technology by posting web links, templates,
      and documents;




·
            Teachers
      can share classroom resources with other teachers, as well as archive and
      store digital content to access from home or school;
  and




·
            Communicate
      with committees and other educators using private
  eBoards.




Curricuplan




Curricuplan
is a solution for web based curriculum planning.  Using Curricuplan, school
districts design, review, and share a database of high quality standards based
instructional content online.




Key
Features:




·
            Web-based;




·
            Multiple
      Authors;




·
            Flexible
      Template;




·
            Integrated
      State Standards;




·
            Online
      Approval Process;




·
            Peer
      Reflections;




·
            Searchable
      Database;




·
            Online
      Help; and




·
            SIF
      Compliant.




Key
Benefits:




·
            Ease
      of use in an environment where educators can create, revise, and reflect
      on unit and lesson plans;




·
            Collaborate
      district wide on curriculum
development;




·
            Share
      effective instructional strategies and
  resources;




·
            Identify
      standards that have been met;




·
            Review
      and approve instructional content
online;




·
            Integrate
      technology into the curriculum;




·
            Track
      instructional plans throughout the
district;




·
            Mentor
      and provide resources for new teachers;
and


4




·
            Reflect
      after instruction to provide feedback for
  revisions.




Student
Tracker




Student
Tracker is an Integrated Student Administration System that tracks attendance,
scheduling, grading, and manages individual records for each student.  This
application also has a Special Education component that maintains government
mandated custom forms for Individualized Education Plans (IEP’s) for students
enrolled in the schools’ child studies department.




Key
Features:




·
            Attendance
      Module;




·
            Special
      Education Module;




·
            Grading
      Module;




·
            Scheduling
      Module;




·
            Document
      processing system provides forms, documents, and letters that can easily
      be modified to meet your specific state and district
      requirements;




·
            Logs
      professional improvement hours for all staff
  members;




·
            On-site
      training and technical support via toll-free telephone, electronic mail
      and Internet; and




·
            Data
      conversion from paper or existing software
  available.




Key
Benefits:




·
            Records
      student attendance, discipline, grades, and medical history (from the teacher’s
      desktop);




·
            Allows
      the monthly attendance report to be completed in minutes instead of
      hours;




·
            Automated
      parental notices for truancy;




·
            Simplifies
      and automates grading and
scheduling;




·
            Generates
      student schedules from a master class
list;




·
            Allows
      for the electronic recording of grades and printing report
      cards;




·
            Creates
      State compliant IEPs, evaluations & parental
  notices;




·
            Gives
      educators complete control of document content and
  format;




·
            Generates
      October, December, and end-of-year tables in
  minutes;




·
            Retains
      chronological history of all IEPs, documents and parental contact;
      and




·
            Discipline
      and Transportation Modules are also
available.


5




Sales
and Marketing Strategy




Product
Positioning Strategy:




We intend
to position our products as complementary to Integrated Learning Systems (ILS)
and other similar offerings.  ILSs provide instructional content,
assessment and management tools, and allow students to study at their own
level.  ILSs also pace and track students’ work and progress for teachers
to review.  Given the mandate to achieve yearly progress in student
outcomes under No Child Left Behind Legislation, the tracking feature of ILSs is
likely to be welcomed by educational providers.  However, most ILSs lack
performance assessments as content, and multimedia/digital portfolio features as
well as teaching tools for tracking assignments online.  As such, we intend
to position our products as complementary, add-on components that fill the gaps
lacking in ILSs.




Customer
Acquisition and Product Awareness:




We plan
on paying close attention to client servicing, especially on offering extensive
training (in the form of workshops) to teachers and other educational
institution staff on product usage.




We intend
to achieve product awareness by introducing our products to key purchase
decision makers, typically a combination of the Superintendent, Federal Programs
Administrator, Curriculum Supervisor and/or Technology Coordinator of the school
district, which are all relationships that we have begun to establish and
build.




We will
also provide ongoing staff development on technology in various Education
Technology Training Centers, i.e., federally and state sponsored countrywide
showrooms, for training New Jersey educators in new technologies.  These
showrooms will provide an excellent opportunity for us to introduce the unique
characteristics of our products to teachers, technology administrators, and
coordinators.




To
strengthen product awareness further, we are planning on organizing regular
conferences with Technology Coordinators and Curriculum Supervisors to provide
hands-on-use of our software.  These conferences will initially take place
in our initial target markets, namely New Jersey, Pennsylvania, Ohio, New York,
and Delaware.  In addition, we plan on regularly attending National and
Regional trade shows to cultivate and expand new business
relationships.





Distribution
Strategy:




Given our
current relationships and proximity to New Jersey and New York, we will
initially distribute our products locally in New Jersey and expand to the
surrounding states as well as Tennessee and Indiana  during 2010.  In
this initial Geographic area, New Jersey, New York and Pennsylvania are among
the states that spend the most on education in the US.  We plan on
following up these markets with the Mid Atlantic and Central states through
2011.  Our management believes that once a major market such as the Mid
Atlantic States and Central States are penetrated, the model can be duplicated
with Direct Marketing on a national level.  As such, a national and
international marketing strategy is expected to be rolled-out toward year-end
2011.




We plan
to utilize the following distribution channels: In-house sales representatives,
authorized resellers, independent sales representatives, and national
distributors.




Competition




There are
several specific task software companies that offer niche based programs
providing digital portfolios, curriculum alignment to state standards,
assessment through rubrics with prescriptive learning, and lesson
planning.  There is only one company currently working with automated
on-line performance assessments, the Education Testing Service (ETS) in
Princeton, New Jersey, which has not begun marketing theirs as of their last
fiscal quarter.  Management has been unable to find any titles that have
all of the aforementioned features in a single on-line package.  What
differentiates the products offered by a specific task software company from the
E*pad is the fact that they have not provided Performance Tasks to gain teacher
acceptance, and they have not packaged all of the aforementioned features into
one on-line application.  At this stage, it is too early to identify and
assess the market performances of similar competing software programs with
E*pad.  The national trend in educational techniques is just now maturing
to permit commercial acceptance of Performance assessments into the
market.


6





Below is
a more detailed description about competition as it relates to the other
specific applications we plan to sell:





eBoard:
There are several other assignment tracking software titles which function
on-line as eBoard does; however, the unique concept of using post-it note
graphics to post assignments distinguishes this application from any other one
in the assignment tracking arena.  This feature simplifies the function of
entering an assignment and allows users to navigate through the site intuitively
while seeing the assignments on a multifunctional post-it.





Curricuplan:
There are several other curriculum management titles which function on-line as
Curricuplan does; however, Curricuplan allows for curriculum alignment in lesson
planning that demonstrates compliance with state mandated core curriculum
content standards and across curriculum application among multiple subject areas
simultaneously.





Student
Tracker:  While there are also several individualized education plan (IEP)
reporting titles available, the Student tracker has the unique feature of
integrating the reporting feature with MS-Word, giving the user the added
convenience of structuring the format of the resulting report with a customized
appearance to each school district’s preference.





Compliance
with Government Regulation




We are
not currently subject to direct federal, state or local regulation and we do not
believe that government regulation will have a material impact on the way we
conduct our business.




Employees




We
currently have six employees, two of which are in administrative roles, three
employees that are engaged in business development, marketing and
communications, and our Chief Executive Officer and President.




Research
and Development Expenditures




We have
incurred $191,950 on research and development of performance assessments for
on-line educational software exercises with participating pilot partner school
districts since our inception.




Patents and
Trademarks




We do not
own, either legally or beneficially, any patents or trademarks.




Item
1A.Risk Factors.




In
addition to the other information in this Form 10-K, the following factors
should be considered in evaluating Axiologix Education Corporation and our
business.





RISKS
RELATED TO OUR BUSINESS





IF
WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.





Our
business plan calls for ongoing expenses in connection with the marketing and
development of educational software programs.  We have not generated any
revenue from operations to date.


7





While at
May 31, 2010, we had cash on hand of $4,011 we have accumulated a deficit of
$2,416,418 in business development and administrative expenses.  At this
rate, we anticipate that additional funding will be needed for general
administrative expenses and marketing costs.





In order
to expand our business operations, we anticipate that we will have to raise
additional funding.  If we are not able to raise the capital necessary to
fund our business expansion objectives, we may have to delay the implementation
of our business plan.




Obtaining
additional funding will be subject to a number of factors, including general
market conditions, investor acceptance of our business plan and initial results
from our business operations.  These factors may impact the timing, amount,
terms or conditions of additional financing available to us.  The most
likely source of future funds available to us is through the sale of additional
shares of common stock or advances from our directors and officers.




WE
LACK AN OPERATING HISTORY AND HAVE NOT GENERATED ANY REVENUES OR PROFIT TO
DATE.  THERE IS NO ASSURANCE OUR FUTURE OPERATIONS WILL RESULT IN
PROFITABLE REVENUES.  IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE
PROFITABLY, WE MAY HAVE TO CEASE OPERATIONS.




We were
incorporated in April 2009.  We have not started our proposed business
operations or realized any revenues and we have been involved primarily in
organizational activities.  We have no operating history upon which an
evaluation of our future success or failure can be made.  Our ability to
achieve and maintain profitability and positive cash flow is dependent upon our
ability to earn profit by marketing and developing educational software
programs.  We cannot guarantee that we will be successful in generating
revenues and profit in the future.  Failure to generate revenues and profit
will cause us to suspend or cease operations.





IF
WE FAIL TO FINALIZE OUR EXCLUSIVE RESELLERSHIPS, WE MAY HAVE TO REDUCE OR CEASE
OPERATIONS.





We
recently entered into an exclusive reseller agreement with  Edumedia
Software Solutions Corporation. We are currently in negotiations with two other
software companies to obtain exclusive resellership rights.  To date, we
have not yet finalized the other two agreements.  There is no guarantee
that we will be able to finalize these or other exclusive resellership
agreements, and if we fail to finalize them we may have to reduce or cease our
operations.





IF
JOHN P. DAGLIS, OUR PRINCIPAL OFFICER, SHOULD RESIGN OR DIE, WE WILL NOT HAVE A
CHIEF EXECUTIVE OFFICER.  THIS COULD RESULT IN OUR OPERATIONS SUSPENDING,
AND YOU COULD LOSE YOUR INVESTMENT.




We depend
on the services of our principal officer and a director, John P. Daglis, for the
future success of our business.  The loss of the services of Mr. Daglis
could have an adverse effect on our business, financial condition and results of
operations.  If he should resign or die we will not have a chief executive
officer.  If that should occur, until we find another person to act as our
chief executive officer, our operations could be suspended.  In that event
it is possible you could lose your entire investment.  We do not carry any
key personnel life insurance policies on Mr. Daglis and we do not have a
contract for his services.


8


BECAUSE
WE HAVE ONLY ONE EXECUTIVE OFFICER WHO HAS NO FORMAL TRAINING IN FINANCIAL
ACCOUNTING AND MANAGEMENT, WHO IS RESPONSIBLE FOR OUR MANAGERIAL AND
ORGANIZATIONAL STRUCTURE, IN THE FUTURE, THERE MAY NOT BE EFFECTIVE DISCLOSURE
AND ACCOUNTING CONTROLS TO COMPLY WITH APPLICABLE LAWS AND REGULATIONS WHICH
COULD RESULT IN FINES, PENALTIES AND ASSESSMENTS AGAINST US.




We have
only one executive officer.  He has no formal training in financial
accounting and management; however, he is responsible for our managerial and
organizational structure, which includes preparation of disclosure and
accounting controls.  While Mr. Daglis has no formal training in financial
accounting matters, he has been reviewing our financial statements that have
been audited and reviewed by our auditors.  Should he not have sufficient
experience, he may be incapable of creating and implementing the controls which
may cause us to be subject to sanctions and fines by the SEC which ultimately
could cause you to lose your investment, however, because of the small size of
our expected operations, we believe that he will be able to monitor the controls
he will create and will be accurate in assembling and providing information to
investors.




To
address this risk, we have engaged Cardiff Partners, LLC to provide finance and
accounting support services.   As part of this engagement, Cardiff
will be reviewing and proposing revisions to the Company’s disclosure,
accounting and financial reporting controls.




WE
MAY HAVE DIFFICULTY ATTRACTING AND RETAINING SKILLED PERSONNEL.  OUR
FAILURE TO DO SO COULD CAUSE US TO GO OUT OF BUSINESS.




Our
future success will depend in large part on our ability to attract and retain
highly skilled management, sales, marketing, and finance and product development
personnel.  Competition for such personnel is intense, and there can be no
assurance that we will be successful in attracting or retaining such
personnel.  Failure to attract and retain such personnel could have a
material adverse effect on our operations and financial condition or cause us to
go out of business.




WE
WILL NEED SIGNIFICANT CAPITAL REQUIREMENTS TO CARRY OUT OUR BUSINESS PLAN, AND
WE WILL NOT BE ABLE TO FURTHER IMPLEMENT OUR BUSINESS STRATEGY UNLESS SUFFICIENT
FUNDS ARE RAISED, WHICH COULD CAUSE US TO DISCONTINUE OUR
OPERATIONS.




We will
require significant expenditures of capital in order to acquire and develop our
planned operations.  We plan to obtain the necessary funds through private
equity offerings.  We may not be able to raise sufficient amounts from our
planned sources.  In addition, if we drastically underestimate the total
amount needed to fully implement our business plan, our ability to continue our
business will be adversely affected.




Our
ability to obtain additional financing is subject to a number of factors,
including market conditions, investor acceptance of our business plan, and
investor sentiment.  These factors may make the timing, amount, terms and
conditions of additional financing unattractive or unavailable to us.  If
we are unable to raise additional financing, we will have to significantly
reduce our spending, delay or cancel planned activities or substantially change
our current corporate structure.  In such an event, we intend to implement
expense reduction plans in a timely manner.  However, these actions would
have material adverse effects on our business, revenues, operating results, and
prospects, resulting in a possible failure of our business.




NON-ADOPTION
OF WEB-BASED EDUCATION AND TRAINING PRODUCTS BY THE GENERAL MARKET COULD CAUSE
OUR BUSINESS TO FAIL.




Our
Web-based products represent a new and emerging approach for the education and
market.  Our success depends substantially upon the widespread adoption of
Web-based products for education.  The early stage of development of the
market for Web-based education makes it difficult for us to predict customer
demand accurately.  The failure of this market to develop, or a delay in
the development of this market — whether due to technological, competitive or
other reasons — would severely limit the growth of our business and adversely
affect our financial performance and could cause our business to
fail.




WE
MAY BE SUSCEPTIBLE TO AN ADVERSE EFFECT ON OUR BUSINESS DUE TO THE CURRENT
WORLDWIDE ECONOMIC CRISIS.




Our
market and sales results could be greatly impacted by the current worldwide
economic crisis, making it difficult to reach sales goals, as well as software
and market development goals.


9




WE
HAVE NO EXPERIENCE AS A PUBLIC COMPANY.  OUR INABILITY TO SUCCESSFULLY
OPERATE AS A PUBLIC COMPANY COULD CAUSE YOU TO LOSE YOUR ENTIRE
INVESTMENT.




We have
never operated as a public company.  We have no experience in complying
with the various rules and regulations, which are required of a public
company.  As a result, we may not be able to operate successfully as a
public company, even if our operations are successful.  We plan to comply
with all of the various rules and regulations, which are required of a public
company.  However, if we cannot operate successfully as a public company,
your investment may be materially adversely affected.  Our inability to
operate as a public company could be the basis of your losing your entire
investment.




OUR
FAILURE TO TIMELY FILE CERTAIN PERIODIC REPORTS WITH THE SEC POSES SIGNIFICANT
RISKS TO OUR BUSINESS, EACH OF WHICH COULD MATERIALLY AND ADVERSELY AFFECT OUR
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.




We did
not timely file with the SEC our current reports on Form 8-K which were filed on
April 6, 2010,  May 18, 2010 and August 13, 2010  and our Quarterly
Report on Form 10-Q for the quarterly period ended February 28, 2010. 
Consequently, we were not compliant with the periodic reporting requirements
under the Securities Exchange Act of 1934, as amended.  Our failure to
timely file those and possibly future periodic reports with the SEC could
subject us to enforcement action by the SEC and shareholder lawsuits.  Any
of these events could materially and adversely affect our financial condition
and results of operations and our ability to register with the SEC public
offerings of our securities for our benefit or the benefit of our security
holders.




OUR
INTERNAL CONTROL OVER FINANCIAL REPORTING AND OUR DISCLOSURE CONTROLS AND
PROCEDURES HAVE BEEN INEFFECTIVE, AND FAILURE TO IMPROVE THEM COULD LEAD TO
ERRORS IN OUR FINANCIAL STATEMENTS THAT COULD REQUIRE A RESTATEMENT OR UNTIMELY
FILINGS, WHICH COULD CAUSE INVESTORS TO LOSE CONFIDENCE IN OUR REPORTED
FINANCIAL INFORMATION, AND A DECLINE IN OUR STOCK PRICE.




Our Chief
Executive Officer and Chief Financial Officer, after evaluating the
effectiveness of our “disclosure controls and procedures”, as defined in the
Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e), as of the end of
the fiscal year period ended May 31, 2010, concluded that as of May 31, 2010,
our internal controls over financial reporting were not effective to provide
reasonable assurance that information required to be disclosed in our reports
filed or submitted under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified by the SEC,
and that material information relating to our company is made known to
management, including our Chief Executive Officer and Chief Financial Officer,
particularly during the period when our periodic reports are being prepared, to
allow timely decisions regarding required disclosure.  Failure to timely
and accurately report our financial status to the SEC could subject us to
enforcement action by the SEC and shareholder lawsuits, which may have an
adverse impact on our business.




To
address this risk, we have engaged Cardiff Partners, LLC to provide finance and
accounting support services.   As part of this engagement, Cardiff
will be reviewing and proposing revisions to the Company’s disclosure,
accounting and financial reporting controls.




WE
ERRONEOUSLY POSTED VALUATION DATA ON  OUR WEBSITE WHICH COULD BE CONSIDERED
“OFFERS” UNDER THE SECURITIES ACT AND THIS VALUATION DATA HAD NO REASONABLE
BASIS TO QUALIFY FOR ANY COMMUNICATIONS SAFE-HARBOR ADOPTED IN THE SECURITIES
OFFERING REFORM SUCH AS RULES 163A, 168, OR 169.  BECAUSE OF THIS WE MAY
HAVE BEEN IN VIOLATION OF SECURITIES LAWS AND MAY BE SUBJECT TO FINES OR
SANCTIONS, WHICH COULD HAVE A MATERIALLY ADVERSE IMPACT ON OUR BUSINESS. 
YOU SHOULD ONLY MAKE INVESTMENT DECISIONS AFTER CAREFULLY REVIEWING OUR
PROSPECTUS, INCLUDING THE RISK FACTORS DESCRIBED IN THIS SECTION




We
erroneously posted valuation data on our website which could be considered
“offers” under the Securities Act and this valuation had no reasonable basis to
qualify for any communications safe-harbor adopted in the securities offering
reform such as rules 163a, 168, or 169.  If this valuation data that was
previously posted on our website does not qualify for any communications
safe-harbor adopted in the securities offering reform such as rules 163a, 168,
or 169 we may be in violation of securities laws and may be subject to fines or
sanctions, which could have a materially adverse impact on our
business.


10





IF
THE VALUATION DATA THAT WAS ERRONEOUSLY POSTED ON OUR WEBSITE IS DETERMINED TO
CONSTITUTE AN UNREGISTERED OFFERING, PURCHASERS MAY HAVE THE RIGHT FOR A PERIOD
OF ONE YEAR FROM THE DATE OF PURCHASE TO OBTAIN RECOVERY OF THE CONSIDERATION
PAID IN CONNECTION WITH THEIR PURCHASE, PLUS STATUTORY INTEREST.  IF WE ARE
REQUIRED TO REFUND AMOUNTS PAID TO US FOR SHARE SUBSCRIPTIONS, THIS MAY HAVE A
MATERIALLY ADVERSE IMPACT ON OUR BUSINESS.





If the
valuation data erroneously posted on our website is determined to constitute an
unregistered offering, purchasers may have the right for a period of one year
from the date of purchase to obtain recovery of the consideration paid in
connection with their purchase, plus statutory interest.  If we are
required to refund amounts paid to us for share subscriptions, this may have a
materially adverse impact on our business and future expansion plans due to our
currently limited financial position.





RISKS RELATED TO OUR
INDUSTRY




IF
POTENTIAL CLIENTS OR COMPETITORS USE OPEN SOURCE SOFTWARE TO DEVELOP PRODUCTS
THAT ARE COMPETITIVE WITH OUR PRODUCTS AND SERVICES, WE MAY FACE DECREASED
DEMAND AND PRESSURE TO REDUCE THE PRICES FOR OUR PRODUCTS WHICH COULD HAVE AN
ADVERSE EFFECT ON OUR BUSINESS AND CAUSE OUR BUSINESS TO FAIL.




The
growing acceptance and prevalence of open source software may make it easier for
competitors or potential competitors to develop software applications that
compete with our products, or for clients and potential clients to internally
develop software applications that they would otherwise have licensed from
us.  One of the aspects of open source software is that it can be modified
or used to develop new software that competes with proprietary software
applications, such as ours.  Such competition can develop without the
degree of overhead and lead time required by traditional proprietary software
companies.  If potential clients use open source software to internally
develop software or if a current or potential competitor develops products using
open source software that are competitive with our products and services, we may
face decreased demand for our products and services which could have an adverse
effect on our business and cause our business to fail.




THE
MARKET FOR WEB-BASED EDUCATION TOOLS IS EXTREMELY FRAGMENTED AND COMPETITIVE AND
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY WITH OUR EXISTING COMPETITORS OR NEW
ENTRANTS INTO THE MARKETS WE SERVE




The
market for web-based education tools is fragmented and highly competitive. 
Increased competition may result in lost sales and may force us to lower
prices.  We expect that competition in this market will increase
substantially in the future.  There can be no assurance that we can
maintain or improve our competitive position.  Many of our current and
potential competitors have longer operating histories, greater name recognition
and greater financial, technical, sales, marketing, support and other resources
than we do.


11




WE
HAVE A NEED FOR CONTINUAL INTRODUCTION OF NEW PRODUCTS, AND UPDATE OF EXISTING
PRODUCTS TO ADAPT TO FREQUENT CHANGES IN TECHNOLOGY.  IF WE ARE UNABLE TO
INTRODUCE NEW PRODUCTS, UPDATE EXISTING PRODUCTS OR ADAPT TO CHANGES IN
TECHNOLOGY OUR BUSINESS COULD FAIL.




The
market for education and training products is characterized by rapidly changing
technologies, frequent new product and service introductions and evolving
industry standards.  The growth in the use of the Web and intense
competition in its industry exacerbate these market characteristics.  Our
future success will depend on our ability to adapt to rapidly changing
technologies and customer demands by continually improving the features and
performance of our products.  While we have new products and features
scheduled for commercial launch, it cannot be assured that we will be successful
in releasing them as scheduled, or that y will meet with market
acceptance.  If we are unable to adapt to changing technologies, improve
features of our current products or successful release our products, our
business could fail and you could lose your entire investment.




WE
ARE SUSCEPTIBLE TO UNDETECTED SOFTWARE ERRORS, OR “BUGS”, THAT COULD REDUCE
REVENUE, MARKET SHARE, AND DEMAND FOR OUR PRODUCTS AND CAUSE OUR BUSINESS TO
FAIL




Product
performance problems could result in lost or delayed revenue, loss of market
share, failure to achieve market acceptance, diversion of development resources
or injury to our reputation, any of which could have a material adverse effect
on our business and financial performance.  Software products such as ours
may contain undetected errors, or bugs, which result in product failures or poor
product performance.  Our products may be particularly susceptible to bugs
or performance degradation because of the emerging nature of Web-based
technologies and the stress that may be placed on our products by the full
deployment of our products to users.  If these problems occur our business
may fail.




WE
ARE SUSCEPTIBLE TO CLAIMS OF INTELLECTUAL PROPERTY INFRINGEMENT.  IF A
CLAIM OF INFRINGEMENT IS SUCCESSFUL AGAINST US, OUR BUSINESS COULD
FAIL.




If any of
our products violate the proprietary rights of third parties, we may be required
to reengineer our products or to obtain licenses to continue offering our
products without substantial reengineering.  Any efforts to reengineer our
products or obtain licenses from third parties may not be successful and, in any
case, could have a material adverse effect on our business and financial
performance by substantially increasing our costs or potentially causing our
business to fail.




RISKS
RELATED TO OUR COMMON STOCK





OUR
OFFICERS AND DIRECTORS OWN A SUBSTANTIAL PERCENTAGE OF OUR OUTSTANDING COMMON
STOCK, WHICH GIVES THEM CONTROL OVER CERTAIN MAJOR DECISIONS ON WHICH OUR
STOCKHOLDERS VOTE, WHICH MAY DISCOURAGE AN ACQUISTION OF US.





Our
principal officer beneficially owns approximately 18.58% of our outstanding
common stock, and our officers and directors, as a group, beneficially own
approximately 49.59% of our outstanding common stock.  The interests of our
officers and directors may differ from the interests of other stockholders, and
they may, by virtue of their ownership stake, be able to exert substantial
influence or otherwise control many corporate actions requiring stockholder
approval, including the following actions:





·
            electing
      or defeating the election of
directors;





·
            amending
      or preventing amendment of our articles of incorporation or
      bylaws;





·
            effecting
      or preventing a merger, sale of assets or other corporate transaction;
      and





·
            controlling
      the outcome of any other matter submitted to the stockholders for
      vote.





The stock
ownership of our officers and directors may discourage a potential acquirer from
seeking to acquire shares of our common stock or otherwise attempting to obtain
control of us, which in turn could reduce our stock price or prevent our
stockholders from realizing a premium over our stock price.


12




OUR
SHARES OF COMMON STOCK ARE SUBJECT TO THE “PENNY STOCK” RULES OF THE SECURITIES
AND EXCHANGE COMMISSION AND THE TRADING MARKET IN OUR SECURITIES WILL BE
LIMITED, WHICH WILL MAKE TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE
VALUE OF AN INVESTMENT IN OUR STOCK.




The SEC
has adopted rules that regulate broker-dealer practices in connection with
transactions in "penny stocks.”  Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system).  Penny stock rules
require a broker-dealer, prior to a transaction in a penny stock not otherwise
exempt from those rules, to deliver a standardized risk disclosure document
prepared by the SEC, which specifies information about penny stocks and the
nature and significance of risks of the penny stock market.  A
broker-dealer must also provide the customer with bid and offer quotations for
the penny stock, the compensation of the broker-dealer, and sales person in the
transaction, and monthly account statements indicating the market value of each
penny stock held in the customer's account.  In addition, the penny stock
rules require that, prior to a transaction in a penny stock not otherwise exempt
from those rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction.  These disclosure
requirements may have the effect of reducing the trading activity in the
secondary market for stock that becomes subject to those penny stock
rules.  If a trading market for our common stock develops, our common stock
will probably become subject to the penny stock rules, and shareholders may have
difficulty in selling their shares.




THE
PRICE AND TRADING VOLUME OF OUR COMMON STOCK WILL BE HIGHLY VOLATILE AND COULD
ADVERSELY AFFECT YOUR ABILITY TO SELL YOUR SHARES AND THE AVAILABLE PRICE FOR
THE SHARES WHEN SOLD.




Our
common stock became eligible for trading on the OTC Bulletin Board on March 23,
2010 under the trading symbol “AXLX.OB.”  We expect the market for our
stock will be highly volatile.  We cannot assure you that there will be a
market in the future for our common stock.  Trading of securities on the
OTC Bulletin Board is often sporadic and investors may have difficulty buying
and selling or obtaining market quotations, which may have a depressive effect
on the market price for our common stock.  You may not be able to sell your
shares at your purchase price or at any price at all.




ANY
ADDITIONAL FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL RESULT
IN DILUTION TO EXISTING SHAREHOLDERS.




We must
raise additional capital in order for our business plan to succeed.  Our
most likely source of additional capital will be through the sale of additional
shares of common stock.  Such stock issuances will cause stockholders'
interests in our company to be diluted.  Such dilution will negatively
affect the value of investors’ shares.




YOUR
PERCENTAGE OWNERSHIP IN US MAY BE DILUTED BY FUTURE ISSUANCES OF CAPITAL STOCK,
WHICH COULD REDUCE YOUR INFLUENCE OVER MATTERS ON WHICH STOCKHOLDERS
VOTE.




Our Board
of Directors has the authority, without action or vote of our stockholders, to
issue all or any part of our authorized but unissued shares of common stock,
including shares issuable upon the exercise of options or shares that may be
issued to satisfy our payment obligations.  Issuances of additional common
stock would reduce your influence over matters on which our stockholders
vote.


13




WE
ARE REGISTERING THE RESALE OF 3,600,000 SHARES OF COMMON STOCK WHICH MAY BE
ISSUED TO DUTCHESS OPPORTUNITY FUND, II, L.P. UNDER OUR INVESTMENT AGREEMENT AND
2,501,806 SHARES OF OUR COMMON STOCK WHICH ARE HELD BY OUR EXISTING
STOCKHOLDERS.  THE RESALE OF SUCH SHARES BY DUTCHESS OR OUR EXISTING
STOCKHOLDERS COULD DEPRESS THE MARKET PRICE OF OUR COMMON STOCK AND YOU MAY NOT
BE ABLE TO SELL YOUR INVESTMENT FOR WHAT YOU PAID FOR IT.




We are
obligated to register the resale of 3,600,000 shares of common stock that we may
issue to Dutchess Opportunity Fund, II, L.P. (“Dutchess”) pursuant to our
Investment Agreement with Dutchess.  Concurrently, we plan to register for
resale 2,501,806 shares of our common stock which are held by existing
shareholders.  The sale of these shares into the public market by Dutchess
or our existing stockholders could depress the market price of our common stock
and you may not be able to sell your investment for what you paid for
it.




EXISTING
STOCKHOLDERS COULD EXPERIENCE SUBSTANTIAL DILUTION UPON THE ISSUANCE OF COMMON
STOCK PURSUANT TO THE DUTCHESS INVESTMENT AGREEMENT.




Our
Investment Agreement with Dutchess contemplates our issuance of up to 3,600,000
shares of our common stock to Dutchess, subject to certain restrictions and
obligations.  If the terms and conditions of the Investment Agreement are
satisfied, and we choose to exercise our put rights to the fullest extent
permitted and sell 3,600,000 shares of our common stock to Dutchess, our
existing stockholders’ ownership will be diluted by such sales. 
Consequently, the value of your investment may decrease.




DUTCHESS
WILL PAY LESS THAN THE THEN-PREVAILING MARKET PRICE FOR OUR COMMON STOCK UNDER
THE INVESTMENT AGREEMENT.




The
common stock to be issued to Dutchess pursuant to the Investment Agreement will
be purchased at a 4% discount to the lowest daily volume weighted average price
(“VWAP”), of our common stock during the five consecutive trading day period
beginning on the trading day immediately following the date of delivery of a put
notice by us to Dutchess, subject to certain exceptions.  Dutchess has a
financial incentive to sell our common stock upon receiving the shares to
realize the profit equal to the difference between the discounted price and the
market price.  If Dutchess sells the shares, the price of our common stock
could decrease.




WE
MAY NOT BE ABLE TO ACCESS SUFFICIENT FUNDS UNDER THE DUTCHESS INVESTMENT
AGREEMENT WHEN NEEDED.




Our
ability to put shares to Dutchess and obtain funds under the Investment
Agreement is limited by the terms and conditions in the Investment Agreement,
including restrictions on when we may exercise our put rights, restrictions on
the amount we may put to Dutchess at any one time, which is determined in part
by the trading volume of our common stock, and a limitation on Dutchess’
obligation to purchase if such purchase would result in Dutchess beneficially
owning more than 4.99% of our common stock.  Accordingly, the Investment
Agreement may not be available to satisfy all of our funding needs.




WE
DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE WHICH MAY MAKE IT MORE
DIFFICULT FOR YOU TO EARN A RETURN ON YOUR INVESTMENT WITH US.




We have
never paid any dividends on our common stock.  We do not expect to pay cash
dividends on our common stock at any time in the foreseeable future.  The
future payment of dividends directly depends upon our future earnings, capital
requirements, financial requirements and other factors that our board of
directors will consider.  Since we do not anticipate paying cash dividends
on our common stock, return on your investment, if any, will depend solely on an
increase, if any, in the market value of our common stock.  Therefore, you
may have difficulty earning a return on your investment with
us.


14





Item
      2.
            Description
      of Properties.




Offices




Our
business office is located at 501 Scarborough Dr. Suite 308E, Egg Harbor
Township, NJ 08234.  We pay rent of $1,400 per month.  Our offices
include a 650 square foot shared receptionist area, a 400 square foot office and
a 530 square foot shared conference room.




We do not
currently own or lease any other real property.





Item
      3.
            Legal
      Proceedings.





There are
no other legal proceedings are currently pending or, to our knowledge,
threatened against us that, in the opinion of our management, could reasonably
be expected to have a material adverse effect on our business or financial
condition or results of operations.





Item
      4.
            (Removed
      and Reserved)




PART
II




Item
      5.
            Market
      for Common Equity and Related Stockholder
  Matters.




Our
common stock is quoted on the OTC Bulletin Board under the symbol “AXLX.” Our
common stock was initially quoted on the OTC Bulletin Board on March 23,
2010.  Prior to July 15, 2010, no shares had been traded and there was no
public market price for our shares




There
were 187 holders of record of our common stock as of August 27, 2010.  The last sale price
for our common stock as reported on August 27, 2010 was $0.56.





From
March through August 2010, the Company entered into stock purchase agreements
with accredited investors for the sale of 730,000 of its common stock at a
purchase price of $0.10 per share generating proceeds of $73,000.





From
March through August 2010, the Company issued 4,905,000 shares of common stock
for services.  The shares were valued at $0.10 per share which was the
price of the most recent sale of the Company’s stock at the time of
issuance.





From
March through August 2010, the Company issued 7,198,196 shares to Officers and
Directors for compensation.  The shares were valued at $0.10 per share
which was the price of the most recent sale of the Company’s stock at the time
of issuance.





From
March through August 2010, the Company entered into purchase agreements with
Directors and Officers for the sale of 2,400,000 units.  Each unit consists
of one share of common stock and one warrant.  The warrants have an
exercise price of $0.05 share and expire in 1 year.





From
March through August 2010, the Company entered into stock purchase agreements
with accredited investors for the sale of 697,607 of its common stock at a
purchase price of $0.33 per share generating proceeds of $230,210.





From
March through August 2010, the Company issued 1,427,909 shares of common stock
for services.


15





From
March through August 2010, the Company issued 125,000 shares to Wassim Ramadan,
Member of Board of Directors, for executive compensation.





From
March through August 2010, the Company redeemed and cancelled 121,666 shares of
common stock.





In July
2010, the Company entered into purchase agreements with Directors and Officers
for the sale of 135,151 units.  Each unit consists of one share of common
stock and one warrant.  The warrants have an exercise price of $0.165 per
share and expire in 1 year.





We did
not pay dividends on our common stock for the fiscal year ended May 31, 2010 and
have no plans to do so in the foreseeable future.





We do not
have an equity compensation plan.





Item
6.Selected Financial Data.





Not
applicable.





Item
7.Management’s Discussion and Analysis of Financial Condition and Results
of Operations.




“Safe
Harbor” Statement under the Private Litigation Reform Act of 1995




This
Annual Report, other than historical information, may include forward-looking
statements, including statements with respect to financial results, product
introductions, market demand, sales channels, industry trends, sufficiency of
cash resources and certain other matters. These statements are made under the
“safe harbor” provisions of the Private Securities Litigation Reform Act of 1995
and involve risks and uncertainties which could cause actual results to differ
materially from those in the forward-looking statements, including those
discussed in the section entitled “Risk Factors” in Item 1.A. and elsewhere
in this Annual Report on Form 10-K and other filings with the Securities
and Exchange Commission.




This
section of this report includes a number of forward-looking statements that
reflect our current views with respect to future events and financial
performance.  Forward looking statements are often identified by words
like: believe, expect, estimate, anticipate, intend, project and similar
expressions or words which, by their nature, refer to future events.  You
should not place undue certainty on these forward-looking statements, which
apply only as of the date of this report.  These forward looking statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from historical results or our predictions.




Overview




Axiologix
Education Corporation ("Axiologix", "the Company", “our” or "we") was
incorporated in the State of Nevada as a for-profit company on April 29, 2009.
 Axiologix is an educational software and services provider for school
systems K-20.  Management plans to focus on raising student achievement
through its research-based school design, uniquely aligned assessment systems,
interactive professional development, integrated use of technology and other
proven program features.  We do not have any subsidiaries.





Liquidity
and Capital Resources





As of
May 31, 2010, we had cash and cash equivalents of $4,011 and a working
capital deficiency of $239,903.  As of May 31, 2010 our accumulated deficit
was $2,416,418.  For the year ended May 31, 2010 our net loss was
$2,242,239


16





Our loss was funded by proceeds from
the sale of our common stock andconvertible promissory
notes. During the year
ended May 31, 2010, we raised in net proceeds $534,396through financing activities and our
cash position decreased by $981.





We used
net cash of $535,377 in operating activities for the year ended May 31, 2010.
 We did not use any money in investing activities for the year ended May
31, 2010.





During
the year ended May 31, 2010 our monthly cash requirement was approximately
$54,000.





We intend
to meet our cash requirements for the next 12 months through external sources: a
combination of debt financing and equity financing through private placements.
 We are currently not in good short-term financial standing.  We
anticipate that we may not generate any revenues in the near future and we will
not have enough positive internal operating cash flow until we can generate
substantial revenues, which may take the next few years to fully realize.
 There is no assurance we will achieve profitable operations.  We have
historically financed our operations primarily by cash flows generated from the
sale of our equity securities and through cash infusions from officers and
outside investors in exchange for debt and/or common stock.





These
financial statements have been prepared on the assumption that we are a going
concern, meaning we will continue in operation for the foreseeable future and
will be able to realize assets and discharge liabilities in the ordinary course
of operations.  Different bases of measurement may be appropriate when a
company is not expected to continue operations for the foreseeable future.
 Our continuation as a going concern is dependent upon our ability to
attain profitable operations and generate funds there-from, and/or raise equity
capital or borrowings sufficient to meet current and future obligations.
 Management plans to raise equity financings over the next twelve months to
finance operations.  There is no guarantee that we will be able to complete
any of these objectives.  We have incurred losses from operations since
inception and at May 31, 2010, have a working capital deficiency and an
accumulated deficit that creates substantial doubt about our ability to continue
as a going concern.





We intend
to raise funds to meet our cash requirements from private placements, loans, or
possibly a registered public offering (either self-underwritten or through a
broker-dealer) within the next few months.  At this time we do not have any
commitments from any broker-dealer to provide us with financing.  There is
no guarantee that we will be successful in raising any capital.  There is
no assurance that we will be able to obtain such additional funds on favorable
terms, if at all.  If we fail in raising capital, our business may fail and
we may curtail or cease our operations.





Results
of Operations for the year ended May 31, 2010 and from inception to May 31,
2010.





No
Revenues





Since our
inception on April 29, 2009 to May 31, 2010, we have not earned any revenues.
 As of May 31, 2010, we have an accumulated deficit of $2,416,418.  At
this time, our ability to generate any significant revenues continues to be
uncertain.  Our financial statements contain an additional explanatory
paragraph in Note 3, which identifies issues that raise substantial doubt about
our ability to continue as a going concern.  Our financial statements do
not include any adjustment that might result from the outcome of this
uncertainty.


17




Expenses





Operating
expenses totaled $2,184,035 for the year ended May 31, 2010.  Since our
inception on April 29, 2009 to May 31, 2010, we have incurred total operating
expenses of $2,357,811.





Our
general and administrative expenses consist of bank charges, travel, meals and
entertainment, office maintenance, communication expenses (internet, fax, and
telephone), courier, postage costs, office supplies.  Our general and
administrative expenses for the year ended May 31, 2010 totaled
$579,221.  Since our inception on April 29, 2009 until May 31, 2010,
general and administrative expenses have totaled $685,397.





Non-cash
stock based compensation expense totaled $1,471,364 for the year ended May 31,
2010 and consists of 7,198,196 shares of common stock issued for executive
compensation totaling $719,820, 2,813,438 shares of common stock issued for
services totaling $292,844, 940,000 shares of common stock issued to Edumedia
pursuant to the exclusive resellership agreement totaling $111,250, and units
consisting of one common share and one warrant issued to Directors and Officers
issued at a discount to market. Since our inception on April 29, 2010 until May
31, 2010 we have incurred $1,480,464 of non-cash stock based compensation
expense.





We
incurred $133,450 on research and development expenses for the year ended May
31, 2010.  Since our inception on April 29, 2009 until May 31, 2010 we
have incurred $191,950 on research and development expenses.  Going
forward, we anticipate that we will spend approximately $1,600,000 on research
and development during the next 12 months.





Net
Loss





We
incurred a net loss of $2,242,239 for the year ended May 31, 2010.  From
inception on April 29, 2009 to May 31, 2010, we have incurred a net loss of
$2,416,418.  Our basic and diluted net loss per common share was $0.26 for
the year ended May 31, 2010.





Critical
Accounting Policies





The
accounting policies and the use of accounting estimates are set forth in the
footnotes to the audited financial statements.





In preparing our financial statements,
we must select and apply various accounting policies. Our most significant
policies are described in Note 2 – Summary of Significant Accounting
Policies set forth in the notes to the audited financial statements. In order to
apply our accounting policies, we often need to make estimates based on
judgments about future events. In making such estimates, we rely on historical
experience, market and other conditions, and on assumptions that we believe to
be reasonable. However, the estimation process is by its nature uncertain given
that estimates depend on events over which we may not have control. If market
and other conditions change from those that we anticipate, our results of
operations, financial condition and changes in financial condition may be
materially affected. In addition, if our assumptions change, we may need to
revise our estimates, or to take other corrective actions, either of which may
also have a material effect on our results of operations, financial condition or
changes in financial condition. Members of our senior management have discussed
the development and selection of our critical accounting estimates, and our
disclosure regarding them, with our board of directors, and do so on a regular
basis.





We believe that the following estimates
have a higher degree of inherent uncertainty and require our most significant
judgments. In addition, had we used estimates different from any of these, our
results of operations, financial condition or changes in financial condition for
the current period could have been materially different from those
presented.


18





Share
Based Payments





Generally,
all forms of share-based payments, including stock option grants, restricted
stock grants and stock appreciation rights, are measured at their fair value on
the awards’ grant date, and based on the estimated number of awards that are
ultimately expected to vest.  Share-based payment awards issued to
non-employees for services rendered are recorded at either the fair value of the
services rendered or the fair value of the share-based payment, whichever is
more readily determinable.  The expense resulting from share-based payments
are recorded as non-cash stock based compensation, which is a operating
expense.





Recently
Adopted and Recently Enacted Accounting Pronouncements





In
April 2009, the FASB issued guidance now codified as FASB ASC Topic 820,
“Fair Value Measurements and
Disclosures,”which amends previous guidance to require disclosures
about fair value of financial instruments in interim as well as annual financial
statements in the current economic environment.  This pronouncement was
effective for periods ending after June 15, 2009.  The adoption of
this pronouncement did not have a material impact on the Company’s business,
financial condition or results of operations; however, these provisions of FASB
ASC Topic 820 resulted in additional disclosures with respect to the fair value
of the Company’s financial instruments.





In
May 2009, the FASB issued guidance now codified as FASB ASC Topic 855,
“Subsequent Events,”
which establishes general standards of accounting for, and disclosures of,
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued.  This pronouncement was effective
for interim or fiscal periods ending after June 15, 2009.  The
adoption of this pronouncement did not have a material impact on the Company’s
business, results of operations or financial position; however, the provisions
of FASB ASC Topic 855 resulted in additional disclosures with respect to
subsequent events.





In
June 2009, the Financial Accounting Standards Board (FASB) issued guidance
now codified as FASB Accounting Standards Codification (ASC) Topic 105, “Generally Accepted Accounting
Principles,” as the single source of authoritative non-governmental U.S.
GAAP.  FASB ASC Topic 105 does not change current U.S. GAAP, but is
intended to simplify user access to all authoritative U.S. GAAP by providing all
authoritative literature related to a particular topic in one place.  All
existing accounting standard documents will be superseded and all other
accounting literature not included in the FASB Codification will be considered
non-authoritative.  These provisions of FASB ASC Topic 105 were effective
for interim and annual periods ending after September 15, 2009 and,
accordingly, were effective for the Company for the current fiscal reporting
period.  The adoption of this pronouncement did not have an impact on the
Company’s business, financial condition or results of operations, but will
impact the Company’s financial reporting process by eliminating all references
to pre-codification standards.  On the effective date of FASB ASC Topic
105, the Codification superseded all then-existing non-SEC accounting and
reporting standards, and all other non-grandfathered non-SEC accounting
literature not included in the Codification became
non-authoritative.





In
January 2010, the Financial Accounting Standards Board ("FASB") issued updated
guidance to amend the disclosure requirements related to recurring and
nonrecurring fair value measurements.  This update requires new disclosures
on significant transfers of assets and liabilities between Level 1 and
Level 2 of the fair value hierarchy (including the reasons for these
transfers) and the reasons for any transfers in or out of Level 3.
 This update also requires a reconciliation of recurring Level 3
measurements about purchases, sales, issuances and settlements on a gross basis.
 In addition to these new disclosure requirements, this update clarifies
certain existing disclosure requirements.  For example, this update
clarifies that reporting entities are required to provide fair value measurement
disclosures for each class of assets and liabilities rather than each major
category of assets and liabilities.  This update also clarifies the
requirement for entities to disclose information about both the valuation
techniques and inputs used in estimating Level 2 and Level 3 fair
value measurements.  This update became effective for the Company with the
interim and annual reporting period beginning January 1, 2010, except for
the requirement to provide the Level 3 activity of purchases, sales,
issuances, and settlements on a gross basis, which will become effective for the
Company with the interim and annual reporting period beginning January 1,
2011.  The Company will not be required to provide the amended disclosures
for any previous periods presented for comparative purposes.  Other than
requiring additional disclosures, adoption of this update will not have a
material effect on the Company's consolidated financial
statements.


19





Inflation





The
amounts presented in the financial statements do not provide for the effect of
inflation on our operations or financial position.  The net operating
losses shown would be greater than reported if the effects of inflation were
reflected either by charging operations with amounts that represent replacement
costs or by using other inflation adjustments.





Off-Balance
Sheet Arrangements





As of May
31, 2010, we had no off-balance sheet transactions that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
our financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources.





Quantitative
and Qualitative Disclosures About Market Risk




We
do not have any material exposure to market risk associated with our cash and
cash equivalents. Our note payables are at a fixed rate and, thus, are not
exposed to interest rate risk.





Item 8.Financial Statements.





The
information required by this item is included on pages F-1 through
F-7.





Item 9.Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure.





Not
applicable.





Item 9A. Controls and Procedures





We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports made pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)  is
recorded, processed, summarized and reported within the timelines specified in
the Securities and Exchange Commission’s rules and forms, and that such
information is accumulated and communicated to our management, including our
Chief Executive Officer and Principal Financial Officer, as appropriate, to
allow timely decisions regarding required disclosure.   In
designing and evaluating the disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can only provide reasonable assurance of achieving the desired control
objectives, and in reaching a reasonable level of assurance, management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.




As
required by Rule 13a-15(b) under the Exchange Act, we carried out an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Principal Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the fiscal year covered by this report.




Based on
the foregoing, our Chief Executive Officer and Principal Financial Officer
concluded that our disclosure controls and procedures were not effective as of
the end of period covered by this report in recording, processing, summarizing
and reporting information required to be disclosed within the timelines
specified in the Securities and Exchange Commission’s rules and forms and timely
alerting him to material information relating to our company required to be
disclosed in our periodic reports with the Securities and Exchange
Commission.




20




As a
result, we did not timely file with the Securities and Exchange Commission our
current reports on Form 8-K (which were filed on April 6, 2010,  May
18, 2010 and August 13, 2010)  and our Quarterly Report on Form 10-Q
for the quarterly period ended February 28, 2010.  Consequently, we
were not compliant with the periodic reporting requirements under the Exchange
Act.




Management’s Report on Internal
Control Over Financial Reporting




Our Chief
Executive Officer and Principal Financial Officer is responsible for
establishing and maintaining adequate internal control over financial reporting,
as such term is defined in Rule 13a-15(f) of the Exchange Act.




Internal
control over financial reporting is promulgated under the Exchange Act as a
process designed by, or under the supervision of, our Chief Executive Officer
and Principal Financial Officer and effected by our board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:




•
        Pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of our assets;




•        Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles
generally accepted in the United States and that our receipts and expenditures
are being made only in accordance with authorizations of our management and
directors; and




•        Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition or disposition of our assets that could have a material effect on
the financial statements.




Readers
are cautioned that internal control over financial reporting, no matter how well
designed, has inherent limitations and may not prevent or detect misstatements.
Therefore, even effective internal control over financial reporting can only
provide reasonable assurance with respect to the financial statement preparation
and presentation.




Our
management, under the supervision and with the participation of our Chief
Executive Officer and Principal Financial Officer, has evaluated the
effectiveness of our internal controls over financial reporting as of the end of
the period covered by this report based upon the framework in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). Based on our evaluation, management concluded
that our internal control over financial reporting was not effective as of May
31, 2010.  The Company identified material weaknesses related to
segregation of duties, lack of staff with GAAP experience, and lack of SEC
reporting experience.  In July 2010, we engaged Cardiff Partners to
assist in establishing effective internal controls.




There
were no changes in our internal controls over financial reporting (as such term
is defined in Rule 13a-15(f) under the Exchange Act) that occurred during
our fiscal year ended May 31, 2010, that have materially affected, or are
reasonably likely to materially affect, our internal controls over financial
reporting. In the estimation of our senior management, none of the changes in
the composition of management have materially affected, or are reasonably likely
to materially affect, our internal controls over financial
reporting.





Item 9B.Other Information





None.


21


PART III




Item 10.Directors and Executive Officers of Axiologix Education
Corporation






Our
executive officer and directors and their ages as of August 27, 2010 are as
follows:




Director:




Name
      of Director
                          
                          AgeJohn
      P. Daglis
                          
                          45Wassim
      M. Ramadan
                          
                          40Remigio
      Romito
                          
                          56Dr.
      Vytas B. Siliunas
                          
                          55Dr.
      Rick Schafer
                          
                          57Executive
      Officer:Name
      of Officer
                          
                          Age
                          
                          OfficeJohn
      P. Daglis
                          
                          45
                          
                          President,
      Chief Executive Officer, Treasurer, Chief Financial Officer, Principal
      Accounting OfficerHelen
      Vassallo
                          
                          25
                          
                          Secretary




Biographical
Information




Set forth
below is a brief description of the background and business experience of our
officers and our directors for the past five years.




John
P. Daglis, Director and President, Chief Executive Officer, Treasurer, and Chief
Financial Officer.





Since our inception on April 29, 2009,
John P. Daglis has been our president, chief executive officer, treasurer, chief
financial officer, and a member of the board of directors.





Since
1992, Mr. Daglis was theoriginal founder of
Edumedia, a private educational software company.  Before Edumedia,
Mr. Daglis started his career in technology in 1984 with Tandy Corporation as a
Retail Marketing Representative and an Educational Marketing
Specialist.  In his six year history with Tandy Corporation, he
advanced in Executive Management of the company in charge of Computer Hardware,
Software, Networking, and Services Sales to School Systems out of 26 locations
totaling over $14 million per year.  As the founder and President of
Edumedia, he established the company’s accreditation as a Microsoft Solutions
Provider in Education, an IBM Business Partner, a Certified Education Partner
with Compaq, a Microsoft Academic Authorized reseller, a Hewlett-Packard
Authorized Dealer, and a Symantec Enterprise Developer.  Additional
authorizations include Intel, 3Com, and Nortel Networks, among
others.  Mr. Daglis led the company to a 43% average growth rate in
sales per year from 1992 to 1999.  During these years his company also
gained recognition as the first to offer MPEG technology to schools in the state
of New Jersey (August 1993), and was featured by local newspapers in cover page
articles such as “Taking elementary students to the 21st
Century”, and  “Local entrepreneur’s company helps schools secure
technology grants.”  Mr. Daglis attended Stockton State College,
majoring in Information Systems and Sciences.


22





Wassim
M. Ramadan, Director





Mr.
Ramadan is a member of our board of directors.  From 1997 to the
present Mr. Ramadan has been an Exclusive Agent and Owner of Allstate Insurance
Co./Ramadan Insurance Agency Inc. which is estimated at over $5 million by the
Book of Business and holds over 5,000 accounts.  Mr. Ramadan brings to
the company an extensive background of international relations.  He
has published a number of articles concerning politics and international policy,
as well as economics.  Mr. Ramadan has led several seminars
at Allstate and has conducted a series of educational training to many
Allstate agents.  He is also a real estate investment entrepreneur
both locally and internationally and is fluent Arabic and French.  Mr.
Ramadan has held positions such as the Manager of Economic Studies and
Feasibility Analysis Department at I.C.M.I.F. in Beirut and Editor of the
English Section of “The Economist,” a magazine of Arab
Development.  Mr. Ramadan also has over 10 years of experience in
insurance and is licensed in Property and Casualty, Life, Health and Accident,
Series 6 and 63.  Mr. Ramadan is currently an exclusive agent and
owner of Ramadan Insurance Agency.  Mr. Ramadan holds a BA in
Political Science and Public Administration from the American University of
Beirut located in Beirut, Lebanon, an MA in Political Science from Villanova
University in Pennsylvania, and is currently pursuing his Ph.D. in Political
Studies and International Law from Lebanese University also in
Beirut





Remigio
Romito, Director





Mr.
Romito is member of our board of directors.  From August 2005 to the
present, Mr. Romito has been an Account Manager for Gateway, Inc. responsible
for sales to commercial and corporate entities.  From April 2004 to
August 2005 he was an Executive Account Manager at Lexmark International
responsible for sales in the New Jersey Public Sector.  From December
1996 to November 2003 Mr. Romito was a Major Account Manager at Dell, Inc., with
responsibility for sales in New Jersey, Delaware, and Pennsylvania K-12
schools.  Mr. Romito has over 30 years experience in the education
industry as a teacher, computer resource coordinator, and technology sales
executive.  He is also a senior results oriented professional with
experience in sales, marketing, and management of hardware, software, consultant
services, technical services and value-added services.  Mr. Romito
received his Bachelor of Arts Degree in Foreign Language Education from
Youngstown State University, Youngstown, Ohio.  He has also completed
34 hours of coursework towards a Master’s Degree in Education at Youngstown
State University.





Dr.
Vytas B. Siliunas, Director





Mr.
Siliunas is a member of our board of directors.  From January 2004 to
the present, he was the Founder and Managing Partner of South Jersey ENT
Surgical Associates, LLC, in Linwood, NJ.  From September 1994 to
Present, he has been the President of ENT Surgical Practice.He has been a Section
Chief of Otolaryngology of the AtlanticCare Regional Medical Center since 2003,
as well as a member of the American Osteopathic Association, the Osteopathic
College of Ophthalmology & Otolaryngology, the New Jersey Academy of
Otolaryngology, the Pennsylvania Osteopathic Medical Association, and of the
American Academy of Facial & Plastic Reconstruction Surgery.  Dr.
Siliunas received his D.O. Degree from the Chicago College of Osteopathic
Medicine, graduated in the top 5% of his class, and is a member of Sigma Sigma
Phi (Honorary Society).





Dr.
Rick Schafer, Director





Dr.
Schafer is member our board of directors.  He is a graduate of both
Indiana University and the Indiana University School of
Medicine.  After graduating, Dr. Schafer accepted a position at
Lawrence General Hospital located in Massachusetts in the Department of
Pathology and Nuclear Medicine in 1983.  He was promoted to Chief of
the Pathology and Nuclear Medicine Department in 1988, a position he held until
2009.  In addition to being Chief of Pathology and Nuclear Medicine,
Dr. Schafer also served as Chair of the Committee on Quality of Medicine from
1992 through 2008, as well as holding office as the Vice President of the
Medical Staff and a Member of the Medical Executive Committee, both positions he
currently holds.  Additionally, Dr. Schafer served as Chair on a
number of other committees including the Radiation Safety Committee and the
Health Information Committee.  Dr. Schafer serves on the Committee of
Continuing Medical Education for Lawrence General and Holy Family
Hospitals.  He is a member of the American Medical Associates, the
Massachusetts Medical Society, and the Society of Nuclear Medicine, as well as
being an Inspector for College of American Pathologists.  In 1995, Dr.
Schafer received the Massachusetts Medical Society Committee Chair Service Award
in recognition of his outstanding financial leadership.  Dr. Schafer
championed a successful three-year financial strategy to balance the Society’s
operating budget, resulting in a balanced fiscal year operating budget in
2006.




23





Helen
Vassallo, Secretary





Ms.
Vassallo was appointed our Secretary on March 29, 2010.  Since June 2009,
Mrs. Vassallo has served as an executive assistant to Axiologix.  From
September 2008 to June 2009, Mrs. Vassallo was a General Clerk at Manor Care
Health Centre.  From 2002 to 2008 Mrs. Vassallo was a Special Event
Coordinator for Vanguard LARP.  Ms. Vassallo has earned her Bachelor of
Arts in English with an emphasis on Teaching from Rowan University.




To the
best of our knowledge, our officers and directors have neither been convicted in
any criminal proceedings during the past five years nor are parties to any
judicial or administrative proceeding during the last five years that resulted
in a judgment, decree or final order enjoining then from future violations of,
or prohibiting activities subject to, federal or state securities laws or a
finding of any violation of federal or state securities laws or commodities
laws.  No bankruptcy petitions have been filed by or against any
business or property of any of our directors or officers, nor has a bankruptcy
petition been filed against a partnership or business association in which these
persons were general partners or executive officers.




There are
no family relationships among the directors and executive officers of Axiologix
Education Corporation.






Term
of Office






Our
officers and our directors are appointed for a one-year term to hold office
until the next annual general meeting of our shareholders or until removed from
office in accordance with our bylaws. There have been no material changes to the
procedures by which our stockholders may recommend nominees to our Board of
Directors.






Independent
Directors






The rules
of the SEC require that we, because we are not listed on any national securities
exchange, choose a definition of director “independence” for purposes of
determining which directors are independent.  We have chosen to follow
the definition of independence as determined by the Marketplace Rules of The
Nasdaq National Market (“NASDAQ”).  Pursuant to NASDAQ’s definition,
Wassim M. Ramadan, Remigio Romito, Dr. Vytas B. Siliunas and Dr. Rick Schafer
are independent directors.




Organization
of the Board of Directors





Board Committees.There
currently no committees of our board of directors due to our relatively small
size.  As we implement and achieve our business plan, our board of
directors expects to appoint an audit committee, nominating committee and
compensation committee, and to adopt charters relative to each such
committee.  We intend to appoint such persons to the board of
directors and committees of the board of directors as are expected to be
required to meet the corporate governance requirements imposed by a national
securities exchange, although we are not required to comply with such
requirements until we elect to seek listing on a securities
exchange.




Code of Ethics for Chief Executive
Officer and Senior Financial Officers. We intend to adopt a code of
ethics that applies to our officers, directors and employees, including our
Chief Executive Officer and Chief Financial Officer, but have not done so to
date due to our relatively small size.


24


Directors’ and Officers’ Liability
Insurance.When our
financial resources, permit, we anticipate that we will obtain directors’ and
officers’ liability insurance insuring our directors and officers against
liability for acts or omissions in their capacities as directors or officers,
subject to certain exclusions.  Such insurance is expected to insure
us against losses which we may incur in indemnifying our officers and
directors.  In addition, we have entered into indemnification
agreements with our executive officers and directors and such persons also have
indemnification rights under applicable laws, and our articles of incorporation
and bylaws.





Section 16(a)
Beneficial Ownership Reporting Compliance




Due to
our status as a Section 15(d) reporting company, our executive officers,
directors, and persons who beneficially own more than 10% of a registered class
of our equity securities are not required to file with the SEC reports of
ownership and changes in ownership of our equity securities pursuant to Section
16(a) of the Securities Exchange Act of 1934.




Compensation of Directors




We do not
currently pay any cash fees to our directors, but we pay directors’ expenses in
attending board meetings. During the fiscal year ended May 31, 2010, no director
expenses were incurred.




We do
issue equity awards to our directors for services.   See Item 11
for further discussion on compensation to directors.




Significant
Employees






There are
no persons other than our officers and directors above who are expected
by us to make a significant contribution to our business.




Item
11.Executive Compensation.





The table
below summarizes all compensation awarded to, earned by, or paid to our
executive officer by any person for all services rendered in all capacities to
us for the fiscal year ended May 31, 2010 and for the fiscal period from our
inception on April 29, 2009 to May 31, 2009 (our fiscal year
end).


25




SUMMARY
COMPENSATION TABLE
 
 Name and Principal Position
                                                                                    
                                                                                    Year
                                                                                    
                                                                                    Salary ($)
                                                                                    
                                                                                    Bonus ($)
                                                                                    
                                                                                    Stock Awards
                                                                                      ($)(1)
                                                                                    
                                                                                    Option Awards
                                                                                      ($)(1)
                                                                                    
                                                                                    Non-Equity
                                                                                      Incentive Plan
                                                                                      Compensation ($)
                                                                                    
                                                                                    Change in Pension
                                                                                      Value and
                                                                                      Nonqualified
                                                                                      Deferred
                                                                                      Compensation
                                                                                      Earnings ($)
                                                                                    
                                                                                    All Other
                                                                                      Compensation ($)
                                                                                    
                                                                                    
                                                                                    Total (S)John
      P. Daglis
                                                                                    
                                                                                    2010
                                                                                    
                                                                                    118,194
                                                                                    
                                                                                    None
                                                                                    
                                                                                    474,008
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    $
                                                                                    592,202President,
      CEO, Treasurer and a director
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    (4,740,079
      shares Common Stock)(2)2009
                                                                                    
                                                                                    15,003
                                                                                    
                                                                                    None
                                                                                    
                                                                                    8,580
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    $
                                                                                    23,583(85,800
      shares Common Stock)(2)Helen
      Vassallo
                                                                                    
                                                                                    2010
                                                                                    
                                                                                    38,436
                                                                                    
                                                                                    None
                                                                                    
                                                                                    7,000
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    $
                                                                                    45,436Secretary
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    (70,000
      shares Common Stock)(2)2009
                                                                                    
                                                                                    0
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    $
                                                                                    0Wassim
      M. Ramadan,
      director
                                                                                    
                                                                                    2010
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    167,715
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    282,977
                                                                                    
                                                                                    
                                                                                    $
                                                                                    450,692(1,677,152
      shares Common Stock)(2)
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    (2,200,000
      units)(3)2009
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    40
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    $
                                                                                    40(400
      shares Common Stock)(2)Remigio
      Romito,
      director
                                                                                    
                                                                                    2010
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    25,906
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    $
                                                                                    25,906(259,064
      shares Common Stock)(2)2009
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    40
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    $
                                                                                    40(400
      shares Common Stock)(2)Dr.
      Vytas B. Siliunas,
      director
                                                                                    
                                                                                    2010
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    175,996
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    25,725
                                                                                    
                                                                                    
                                                                                    $
                                                                                    201,721(1,759,960
      shares Common Stock)(2)
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    (200,000
      units)(3)2009
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    40
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    $
                                                                                    40(400
      shares Common Stock)(2)Dr.
      Rick Schaffer,
      director
                                                                                    
                                                                                    2010
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    113,194
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    $
                                                                                    113,194(1,131,941
      shares Common Stock)(2)2009
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    None
                                                                                    
                                                                                    
                                                                                    None





(1)
            We
      adopted ASC 505-50 to determine the measurement date of the stock
      issuance and recorded the issuance as capital contribution by the CEO and
      directors with the service they performed prior to inception date April
      29, 2009 and valued those founders’ shares at
  par.





(2)
            Shares
      issued for services provided to
Axiologix





(3)
            Represents
      units consisting of one common share and one warrant which were sold to
      Directors at a discount to market.




Outstanding
Equity Awards at Fiscal Year-End





As of
August 27, 2010, there were no outstanding equity awards held by any named
executive officer.




Employment
Agreements





As of
August 27, 2010, we were not a party to any employment agreement with any named
executive officer.





Compensation Committee Interlocks and Insider
Participation




Due to
the limited number of directors constituting our Board of Directors, the full
Board of Directors considers and participates in the compensation of our
executive officers.





Item
      12.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.





The
following table sets forth certain information regarding beneficial ownership of
our common stock as of August 27, 2010:


26





·
            by
      each person who is known by us to beneficially own more than 5% of our
      common stock;


·
            by
      each of our executive officers and directors;
  and


·
            by
      all of our executive officers and directors as a
  group.




Title of
                                                                          
                                                                          Name and address
                                                                          
                                                                          Amount ofbeneficial
                                                                          
                                                                          
                                                                          PercentClass
                                                                          
                                                                          of  beneficial owner
                                                                          
                                                                          Ownership
                                                                          
                                                                          
                                                                          of class (1)Common
      Stock
                                                                          
                                                                          John
      P. DaglisChief
      Executive Office501
      Scarborough Drive, Suite 308EEgg
      Harbor Township, NJ 08234
                                                                          
                                                                          
                                                                          4,825,879
                                                                          
                                                                          
                                                                          
                                                                          18.56
                                                                          %Common
      Stock
                                                                          
                                                                          Wassim
      M. Ramadan (2)Director501
      Scarborough Drive, Suite 308EEgg
      Harbor Township, NJ 08234
                                                                          
                                                                          
                                                                          3,877,552
                                                                          
                                                                          
                                                                          
                                                                          14.91
                                                                          %Common
      Stock
                                                                          
                                                                          Remigio
      RomitoDirector501
      Scarborough Drive, Suite 308EEgg
      Harbor Township, NJ 08234
                                                                          
                                                                          
                                                                          259,464
                                                                          
                                                                          
                                                                          
                                                                          1.00
                                                                          %Common
      Stock
                                                                          
                                                                          Dr.
      Vytas B. SiliunasDirector501
      Scarborough Drive, Suite 308EEgg
      Harbor Township, NJ 08234
                                                                          
                                                                          
                                                                          1,960,360
                                                                          
                                                                          
                                                                          
                                                                          7.54
                                                                          %Common
      Stock
                                                                          
                                                                          Dr.
      Rick SchaferDirector501
      Scarborough Drive, Suite 308EEgg
      Harbor Township, NJ 08234
                                                                          
                                                                          
                                                                          1,658,379
                                                                          
                                                                          
                                                                          
                                                                          6.38
                                                                          %Common
      Stock
                                                                          
                                                                          Helen
      VassalloCorporate
      Secretary501
      Scarborough Drive, Suite 308EEgg
      Harbor Township, NJ 08234
                                                                          
                                                                          
                                                                          70,000
                                                                          
                                                                          
                                                                          Less
      than 1
                                                                          %Common
      Stock
                                                                          
                                                                          Cardiff
      Partners, LLC501
      Scarborough Drive, Suite 308EEgg
      Harbor Township, NJ 08234
                                                                          
                                                                          
                                                                          1,357,740
                                                                          
                                                                          
                                                                          
                                                                          5.22
                                                                          %Common
      Stock
                                                                          
                                                                          All
      Officers and Directors as a group
                                                                          
                                                                          12,881,482
      shares
                                                                          
                                                                          
                                                                          
                                                                          49.54
                                                                          (1)




(1)
            The
      percent of class is based on 26,001,626 shares of common stock issued and
      outstanding as of as of August 27,
2010.


(2)
            Includes 1,677,552 shares owned
      in his own name, and 2,200,000 owned with his wife, Sawsan K.
      Ramadan.





Item 13.       Certain
Relationships and Related Transactions.




On August
27, 2010, we entered into an exclusive reseller agreement with Edumedia Software
Solutions Corporation, for the sale of E*pad, an on-line managed software
application that manages performance assessments for teachers to be deployed
among their students.   Under the terms of the agreement, we have paid
to Edumedia Software $91,800 as a research and development contribution, issued
to Edumedia Software 940,000 shares of our common stock and agreed to pay to
Edumedia Software 50% of the revenues we collect from the sale of their
products.  The agreement has an initial term of 18 months.   Our
principal officer and a director, John P. Daglis, is also the Chief Executive
Officer of Edumedia Software.  The reseller agreement was approved by our
Board of Directors, with Mr. Daglis abstaining.




27




During
the year ended May 31, 2010, the Chief Executive Officer, John Daglis loaned the
Company $16,900.  The balance remains outstanding at May 31,
2010.




During
the year ended May 31, 2010, the Company paid $5,000 to the Chief Executive
Officer, John Daglis, for an outstanding loan.




Item
14.Exhibits.





(a)
            Financial
      Statements.




The
following financial statements of Axiologix Education Corporation are submitted
as a separate section of this report (See F-pages), and are incorporated by
reference in Item 7:




Report
      Of Independent Registered Public Accounting Firm
                  
                  F-2Balance
      Sheets –  May 31, 2010 and 2009
                  
                  F-3Statements
      of Operations – For the Years Ended May 31, 2010 and 2009 and for the
      period of inception, from April 29, 2009 through May 31,
    2010
                  
                  F-4Statements
      of Cash Flows - For the Years Ended May 31, 2010 and 2009 and for the
      period of inception, from April 29, 2009 through May 31,
    2010
                  
                  F-5Statement
      of Stockholders’ Equity (Deficit)  – For the period of
      inception, from April 29, 2009 through May 31, 2010
                  
                  F-6Notes
      to Financial Statements
                  
                  F-7




(b)Exhibits





The
following Exhibits are filed herewith pursuant to Item 601 of
Regulation S-K or incorporated herein by reference to previous filings as
noted:





Exhibit
      No.
                
                Identification
      of Exhibit3.1
                
                Articles
      of Incorporation  (1)3.2
                
                By-Laws  (1)10.1
                
                Investment
      Agreement, dated May 17, 2010, between the Registrant and Dutchess Equity
      Fund, LP (2)10.2
                
                Registration
      Rights Agreement, dated May 17, 2010, between the Registrant and Dutchess
      Equity Fund, LP (2)10.3
                
                Amendment
      to the Investment Agreement, dated July 13, 2010, between the Registrant
      and Dutchess Equity Fund, LP (2)10.4*
                
                Exclusive
      Worldwide Reseller Agreement, dated August 27, 2010, with Edumedia
      Software Solutions Corporation21.1*
                
                Subsidiaries
      of Registrant23.1*
                
                Consent
      of M&K CPAs, PLLC31.1*
                
                Certification
      of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated
      under the Securities Exchange Act of 193431.2*
                
                Certification
      of Principal Financial Officer pursuant to Rules 13a-14 and 15d-14
      promulgated under the Securities Exchange Act of 193432.1*
                
                Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002




28





*  Filed
herewith





(1)
                Incorporated
      herein by reference to the registrant’s Registration Statement on Form S-1
      filed with the SEC on August 13,
2009.


(2)
                Incorporated
      herein by reference to the registrant’s Current Report on Form 8-K filed
      with the SEC on August 13,
2010.




Item 15.Principal Accountant Fees and Services




On June
30, 2009, our Board of Directors approved the engagement of M&K CPAs, PLLC
(“M&K”) to serve as our principal independent public accountant to audit our
financial statements.  Audit fees billed by our principal independent
public accountants for services rendered for the audit of our annual financial
statements and review of our quarterly financial statements included in Form
10-Q for the last two fiscal years are presented below.  Audit-related
fees, tax fees, and other fees for services billed by our principal independent
public accountant during each of the last two fiscal years are also presented in
the following table:





Years Ended May 31,2010
                      
                      
                      2009M&K
      CPAs, PLLCAudit
      Fees
                      
                      $
                      7,000
                      
                      
                      $
                      8,500Audit-related
      fees (a)
                      
                      
                      -
                      
                      
                      
                      -Tax
      fees (b)
                      
                      
                      -
                      
                      
                      
                      -Registration
      Statement Fees
                      
                      
                      14,650
                      
                      
                      
                      -All
      other fees
                      
                      
                      -
                      
                      
                      
                      -




(a)
              Audit-related
      fees primarily include research services to validate certain accounting
      policies.




(b)
              Tax
      fees include costs for the preparation of our corporate income tax
      return.




Our Board
of Directors established a policy whereby the outside auditors are required to
seek pre-approval on an annual basis of all audit, audit-related, tax and other
services by providing a prior description of the services to be performed. For
the year ended May 31, 2010, 100% of all audit-related services were
pre-approved by the Board of Directors, which concluded that the provision of
such services by M&K was compatible with the maintenance of that firm’s
independence in the conduct of its auditing functions.


29






SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.




Dated:
      August 30, 2010
              AXIOLOGIX
      EDUCATION CORPORATION(Registrant)By:
              /s/
      John P. DaglisPresident,
      Chief Executive Officer,
                Treasurer,
      Chief
                Financial
      Officer and Director(Principal
      Executive Officer)




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.




Signature
              
              Title
              
              Date/s/
      John P. Daglis
              
              President,
      Chief Executive Officer, Treasurer, Chief Financial Officer and
      Director
                (Principal Executive Officer
      and Principal
      Financial and Accounting Officer)
              
              August
      30, 2010John
      P. Daglis/s/
      Dr. Wassim M. Ramadan
              
              Director
              
              August
      30, 2010Dr.
      Wassim M. Ramadan/s/
      Remigio Romito
              
              Director
              
              August
      30, 2010Remigio
      Romito/s/
      Dr. Rick Schafer
              
              Director
              
              August
      30, 2010Dr.
      Rick Schafer/s/
      Dr. Vytas B. Siliunas
              
              Director
              
              August
      30, 2010Dr.
      Vytas B. Siliunas




SUPPLEMENTAL
INFORMATION TO BE FURNISHED WITH REPORTS FILED


PURSUANT
TO SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS




1.
              No
      annual report to security holders covering the company’s fiscal year ended
      May 31, 2010, has been sent as of the date of this
  report.




2.
              No
      proxy soliciting material has been sent to the company’s security holders
      with respect to the 2009 annual meeting of security
    holders.




3.
              If
      such report or proxy material is furnished to security holders subsequent
      to the filing of this Report on Form 10-K, the company will furnish copies
      of such material to the Commission at the time it is sent to security
      holders.




30


ANNUAL
REPORT ON FORM 10-K


ITEM
7


FINANCIAL
STATEMENTS


FISCAL
YEARS ENDED MAY 31, 2010 and 2009


AXIOLOGIX
EDUCATION CORPORATION


Egg
Harbor Township, NJ








AXIOLOGIX
EDUCATION CORPORATION





Financial
      Statements
                
                PageReport
      of Independent Registered Public Accounting Firm
                
                F-2Balance
      Sheets –  May 31, 2010 and 2009
                
                F-3Statements
      of Operations – For the Years Ended May 31, 2010 and 2009 and the for the
      period of inception, from April 29, 2009 through May 31,
    2010
                
                F-4Statements
      of Cash Flows - For the Years Ended May 31, 2010 and 2009 and the for the
      period of inception, from April 29, 2009 through May 31,
    2010
                
                F-5Statement
      of Stockholders’ Equity (Deficit)  – For the period of
      inception, from April 29, 2009 through May 31, 2010
                
                F-6Notes
      to Financial Statements
                
                F-7




F-1


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
the Board of Directors


Axiologix
Education Corporation


(A
Development Stage Enterprise)





We have
audited the accompanying balance sheets of Axiologix Education Corporation (a
development stage enterprise) as of May 31, 2010 and 2009, and the related
statements of operations, changes in stockholders' deficit, and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Axiologix Education Corporation as
of May 31, 2010 and 2009, and the results of its operations, changes in
stockholders' deficit and cash flows for the period described above in
conformity with accounting principles generally accepted in the United States of
America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company had a loss from operations for the year ended May
31, 2010 and a working capital deficit at May 31, 2010, which raises substantial
doubt about its ability to continue as a going concern. Management's plans
regarding those matters also are described in Note 3. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.





/s/
M&K CPAS, PLLC


www.mkacpas.com


Houston,
Texas


August
30, 2010






F-2


Axiologix
Education Corporation
 (A
Development Stage Company)
 Condensed
Balance Sheets
 
 May 31, 2010
                            
                            
                            May 31, 2009ASSETSCurrent
      AssetsCash
                            
                            $
                            4,011
                            
                            
                            $
                            4,992Prepaid
      expense
                            
                            
                            -
                            
                            
                            
                            1,765Due
      from related party
                            
                            
                            -
                            
                            
                            
                            10,153Total
      Current Assets
                            
                            
                            4,011
                            
                            
                            
                            16,910Total
      Assets
                            
                            $
                            4,011
                            
                            
                            $
                            16,910LIABILITIES AND STOCKHOLDERS'
      DEFICITCurrent
      LiabilitiesAccounts
      payable and accrued expenses
                            
                            $
                            78,912
                            
                            
                            $
                            28,433Accrued
      interest
                            
                            
                            31,101
                            
                            
                            
                            656Convertible
      notes payable
                            
                            
                            117,000
                            
                            
                            
                            20,000Due
      to related party
                            
                            
                            16,900
                            
                            
                            
                            5,000Total
      Liabilities
                            
                            
                            243,913
                            
                            
                            
                            54,089Stockholders'
      DeficitCommon
      stock, $0.001 par value; 150,000,000 shares authorized, 19,374,277 and
      10,022,600 shares issued and outstanding, as of May 31, 2010 and May 31,
      2009, respectively
                            
                            
                            19,374
                            
                            
                            
                            10,023Common
      stock payable, 1,560,000 and 0 shares issueable, as of May 31, 2010 and
      May 31, 2009, respectively
                            
                            
                            156,000
                            
                            
                            
                            -Common
      stock subscription receivable
                            
                            
                            (36,000
                            )
                            
                            
                            -Additional
      paid-in capital
                            
                            
                            2,037,142
                            
                            
                            
                            126,977Accumulated
      deficit during the development stage
                            
                            
                            (2,416,418
                            )
                            
                            
                            (174,179
                            )Total
      Stockholders' Deficit
                            
                            
                            (239,902
                            )
                            
                            
                            (37,179
                            )Total
      Liabilities and Stockholders' Deficit
                            
                            $
                            4,011
                            
                            
                            $
                            16,910
 
 See
notes to financial statements
  F-3
 
 Axiologix Education Corporation
 (A
Development Stage Company)
 Condensed
Statements of Operations
 
 For the Period FromFor the Year Ended
                      
                      
                      For the Period Ended
                      
                      
                      April 29, 2009 (Inception)May 31, 2010
                      
                      
                      May 31, 2009
                      
                      
                      to May 31, 2010Revenue
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -Operating
      expensesSelling,
      general and administrative
                      
                      
                      2,050,585
                      
                      
                      
                      115,276
                      
                      
                      
                      2,165,861Research
      and development
                      
                      
                      133,450
                      
                      
                      
                      58,500
                      
                      
                      
                      191,950Total
      operating expenses
                      
                      
                      2,184,035
                      
                      
                      
                      173,776
                      
                      
                      
                      2,357,811Loss
      from operations
                      
                      
                      (2,184,035
                      )
                      
                      
                      (173,776
                      )
                      
                      
                      (2,357,811
                      )Other
      (income) expenseInterest
      income
                      
                      
                      (1,847
                      )
                      
                      
                      (253
                      )
                      
                      
                      (2,100
                      )Interest
      expense
                      
                      
                      60,051
                      
                      
                      
                      656
                      
                      
                      
                      60,707Net
      loss
                      
                      $
                      (2,242,239
                      )
                      
                      $
                      (174,179
                      )
                      
                      $
                      (2,416,418
                      )Net
      loss per share  - basic and diluted
                      
                      $
                      (0.26
                      )
                      
                      $
                      (0.02
                      )Weighted
      average number of shares outstanding  - basic and
      diluted
                      
                      
                      8,590,839
                      
                      
                      
                      9,820,664
 
 See
notes to financial statements
  F-4
 
 Axiologix Education Corporation
 (A
Development Stage Company)
 Condensed
Statements of Cash Flows
 
 For the Year Ended
                                    
                                    
                                    For the Period From
                                    
                                    
                                    For the Period FromMay 31, 2010
                                    
                                    
                                    April 29, 2009 (Inception) to May 31, 2009
                                    
                                    
                                    April 29, 2009 (Inception) to May 31, 2010Cash
      Flows From Operating Activities:Net
      Loss
                                    
                                    $
                                    (2,242,239
                                    )
                                    
                                    $
                                    (174,179
                                    )
                                    
                                    $
                                    (2,416,418
                                    )Adjustment
      to reconcile net loss to net cash used in operationsNon-cash
      stock based compensation
                                    
                                    
                                    1,321,364
                                    
                                    
                                    
                                    9,100
                                    
                                    
                                    
                                    1,330,464Common
      stock issued persuant to reseller agreement
                                    
                                    
                                    111,250
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    111,250Common
      stock issuable for services
                                    
                                    
                                    150,000
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    150,000Changes
      in operating assets and liabilities:Prepaid
      expense
                                    
                                    
                                    1,765
                                    
                                    
                                    
                                    (1,765
                                    )
                                    
                                    
                                    -Due
      from related party
                                    
                                    
                                    10,153
                                    
                                    
                                    
                                    (10,153
                                    )
                                    
                                    
                                    -Accounts
      payable and accrued expenses
                                    
                                    
                                    50,479
                                    
                                    
                                    
                                    28,433
                                    
                                    
                                    
                                    78,912Accrued
      Interest
                                    
                                    
                                    65,052
                                    
                                    
                                    
                                    656
                                    
                                    
                                    
                                    65,708Net
      Cash  Used In Operating Activities
                                    
                                    
                                    (532,176
                                    )
                                    
                                    
                                    (147,908
                                    )
                                    
                                    
                                    (680,084
                                    )Cash
      Flows From Financing Activities:Equity
      offering costs
                                    
                                    
                                    (28,498
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (28,498
                                    )Borrowings
      to related parties
                                    
                                    
                                    16,900
                                    
                                    
                                    
                                    5,000
                                    
                                    
                                    
                                    21,900Repayments
      from related party loan
                                    
                                    
                                    (5,000
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (5,000
                                    )Proceeds
      from issuance of note payable
                                    
                                    
                                    179,500
                                    
                                    
                                    
                                    20,000
                                    
                                    
                                    
                                    199,500Payment
      of note payable
                                    
                                    
                                    (3,200
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (3,200
                                    )Proceeds
      from issuance of units
                                    
                                    
                                    120,000
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    120,000Common
      stock redeemed and cancelled
                                    
                                    
                                    (97,900
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (97,900
                                    )Proceeds
      from sale of common stock
                                    
                                    
                                    349,393
                                    
                                    
                                    
                                    127,900
                                    
                                    
                                    
                                    477,293Net
      Cash Provided by Financing Activities
                                    
                                    
                                    531,195
                                    
                                    
                                    
                                    152,900
                                    
                                    
                                    
                                    684,095Net
      Increase (Decrease) in Cash
                                    
                                    
                                    (981
                                    )
                                    
                                    
                                    4,992
                                    
                                    
                                    
                                    4,011Cash
      at Beginning of Period
                                    
                                    
                                    4,992
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Cash
      at End of Period
                                    
                                    $
                                    4,011
                                    
                                    
                                    $
                                    4,992
                                    
                                    
                                    $
                                    4,011Supplemental
      disclosure of cash flow
      information:Cash
      paid for interest
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -Cash
      paid for taxes
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -Supplemental
      disclosure of non-cash investing and financing
      activities:Common
      shares rescinded
                                    
                                    $
                                    8,653
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    8,653Common
      stock issued and stock owed  for conversion of  notes payable
      and accrued interest
                                    
                                    $
                                    113,906
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    113,906Subscription
      receivable for common shares issued
                                    
                                    $
                                    36,000
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    36,000
 
 See
notes to financial statements
  F-5





Axiologix Education Corporation


(A
Development Stage Company)


Condensed
Statement of Changes in Stockholders' Deficit





DeficitCommon
      stock
                            
                            
                            Common
      stock payable
                            
                            
                            
                            
                            
                            Additional
                            
                            
                            accumulated
      during
                            
                            
                            TotalSubscription
                            
                            
                            Paid-in
                            
                            
                            development
                            
                            
                            Stockholders'Shares
                            
                            
                            Amount
                            
                            
                            Shares
                            
                            
                            Amount
                            
                            
                            Receivable
                            
                            
                            Capital
                            
                            
                            stage
                            
                            
                            DeficitBalance
      April 29, 2009 (Inception)
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -Common
      stock issued to founders ($0.10/Sh)
                            
                            
                            8,740,000
                            
                            
                            
                            8,740
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (8,740
                            )
                            
                            
                            -
                            
                            
                            
                            -Common
      stock issued for cash ($0.10/Sh)
                            
                            
                            1,279,000
                            
                            
                            
                            1,279
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            126,621
                            
                            
                            
                            -
                            
                            
                            
                            127,900Common
      stock issued for services ($0.10/Sh)
                            
                            
                            3,600
                            
                            
                            
                            4
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            356
                            
                            
                            
                            -
                            
                            
                            
                            360Stock
      based compensation to founders
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            8,740
                            
                            
                            
                            -
                            
                            
                            
                            8,740Net
      loss for the period April 29, 2009 (Inception ) to May 31,
      2009
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (174,179
                            )
                            
                            
                            (174,179
                            )Balance
      May 31, 2009
                            
                            
                            10,022,600
                            
                            
                            
                            10,023
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            126,977
                            
                            
                            
                            (174,179
                            )
                            
                            
                            (37,179
                            )Shares
      rescinded
                            
                            
                            (8,652,600
                            )
                            
                            
                            (8,653
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            8,653
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      stock issued for cash and subscription receivable
    ($0.10/Sh)
                            
                            
                            3,744,000
                            
                            
                            
                            3,744
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (30,000
                            )
                            
                            
                            370,649
                            
                            
                            
                            -
                            
                            
                            
                            344,393Common
      stock issued for executive compensation ($0.10/Sh)
                            
                            
                            7,198,196
                            
                            
                            
                            7,198
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            712,621
                            
                            
                            
                            -
                            
                            
                            
                            719,820Common
      stock issued for services ($0.10/Sh)
                            
                            
                            2,763,438
                            
                            
                            
                            2,763
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            273,580
                            
                            
                            
                            -
                            
                            
                            
                            276,344Common
      stock payable for services ($0.10/Sh)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,500,000
                            
                            
                            
                            150,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            150,000Common
      stock payable for conversion of note payable and accrued interest
      ($0.10/Sh)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            60,000
                            
                            
                            
                            6,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            6,000Common
      stock issued for cash ($0.33/Sh)
                            
                            
                            33,334
                            
                            
                            
                            33
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (6,000
                            )
                            
                            
                            10,967
                            
                            
                            
                            -
                            
                            
                            
                            5,000Units
      consisting of common stock and warrants issued for cash
      ($0.05/unit)
                            
                            
                            2,400,000
                            
                            
                            
                            2,400
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            426,302
                            
                            
                            
                            -
                            
                            
                            
                            428,702Common
      stock issued for services ($0.33/Sh)
                            
                            
                            50,000
                            
                            
                            
                            50
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            16,450
                            
                            
                            
                            -
                            
                            
                            
                            16,500Common
      stock issued pursuant to resellership agreement ($0.10/Sh and
      $0.33/Sh)
                            
                            
                            940,000
                            
                            
                            
                            940
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            110,310
                            
                            
                            
                            -
                            
                            
                            
                            111,250Common
      stock issued for services related to equity offering
                            
                            
                            90,909
                            
                            
                            
                            91
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (91
                            )
                            
                            
                            -
                            
                            
                            
                            -Common
      stock issued for notes payable and accrued interest converted to
      stock
                            
                            
                            1,079,097
                            
                            
                            
                            1,079
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            106,827
                            
                            
                            
                            -
                            
                            
                            
                            107,906Common
      stock redeemed and cancelled
                            
                            
                            (294,697
                            )
                            
                            
                            (295
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (97,605
                            )
                            
                            
                            -
                            
                            
                            
                            (97,900
                            )Equity
      offering costs
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (28,498
                            )
                            
                            
                            -
                            
                            
                            
                            (28,498
                            )Net
      loss for the year ended May 31, 2010
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (2,242,239
                            )
                            
                            
                            (2,242,239
                            )Balance,
      May 31, 2010
                            
                            
                            19,374,277
                            
                            
                            $
                            19,374
                            
                            
                            
                            1,560,000
                            
                            
                            $
                            156,000
                            
                            
                            $
                            (36,000
                            )
                            
                            $
                            2,037,142
                            
                            
                            $
                            (2,416,418
                            )
                            
                            $
                            (239,902
                            )




See
notes to financial statements


F-6


AXIOLOGIX
EDUCATION CORPORATION


(A
Development Stage Company)


NOTES
TO FINANCIAL STATEMENTS





NOTE
1 – ORGANIZATION AND BUSINESS OPERATIONS





Axiologix
Education Corporation was incorporated under the laws of Nevada, USA, on April
29, 2009.  The Company has limited operations and in accordance with ASC
915, is considered a development stage company that has had no revenues from
inception to date.





Initial
operations have included organization, capital formation, target market
identification, and marketing plans.  Management is planning to commence
operation as educational software and services provider for school systems K-20
by focusing on raising student achievement through its research-based school
design, uniquely aligned assessment systems, interactive professional
development, integrated use of technology and other proven program
features.


NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Basis
of presentation




The
accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of
America.


Reclassification


Certain
amounts from prior periods have been reclassified to conform to the current
period presentation.  There is no effect on net loss, cash flows or
stockholders’ deficit as a result of these reclassifications.


Use
of estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make certain
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Estimates are adjusted to reflect actual
experience when necessary. Significant estimates and assumptions affect many
items in the financial statements. These include estimates of fair value of
common stock and related impact to stock-based compensation. Actual results may
differ from those estimates and assumptions, and such results may affect income,
financial position or cash flows.


Cash
and cash equivalents




The
Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents.  There were no cash
equivalents at May 31, 2010 and 2009, respectively.


The
Company minimizes its credit risk associated with cash by periodically
evaluating the credit quality of its primary financial institution.  The
balance at times may exceed federally insured limits.  At May 31, 2010 and
May 31, 2009, respectively, the balance did not exceed the federally insured
limit.


F-7


Risks
and Uncertainties





The
Company's operations are subject to significant risk and uncertainties including
financial, operational, technological, and regulatory risks including the
potential risk of business failure.


Also see
Note 3 regarding going concern matters.


Loss
per share




In
accordance with accounting guidance now codified as FASB ASC Topic
260, “Earnings per
Share,”basic earnings (loss) per share is computed by dividing net
income (loss) by weighted average number of shares of common stock outstanding
during each period.  Diluted earnings (loss) per share is computed by
dividing net income (loss) by the weighted average number of shares of common
stock, common stock equivalents and potentially dilutive securities outstanding
during the period.


Since the
Company reflected a net loss for the year ended May 31, 2010 and 2009,
respectively, the effect of considering any common stock equivalents, if
outstanding, would have been anti-dilutive.  A separate computation of
diluted earnings (loss) per share is not presented.




The
company issued 2,400,000 warrants in the year ended May 31, 2010. The warrants
have a strike price of $0.05 per share, vest immediately, and have a one year
term. The fair value of the warrants was determined to be $188,702 using the
Black-Scholes model. Key inputs used in the Black-Scholes valuation model
were a strike price of $0.05, term of one year, volatility of 291.91%,
and a discount rate of 0.40%.  No warrants were issued in 2009.  No
warrants have been exercised as of August 30, 2010.




Net
      loss per share  - basic and diluted
                          
                          $
                          (0.26
                          )
                          
                          $
                          (0.02
                          )Weighted
      average number of shares outstanding-
      basic and diluted
                          
                          
                          8,590,839
                          
                          
                          
                          9,797,019





The
securities listed below were not included in the computation of diluted earnings
per share as the effect from their conversion would have been
anti-dilutive:




For
      the Year EndedMay
      31,2010
                                  
                                  
                                  2009Convertible
      notes payable
                                  
                                  
                                  1,481,010
                                  
                                  
                                  
                                  206,560Outstanding
      warrants to purchase common stock
                                  
                                  
                                  2,400,000
                                  
                                  
                                  
                                  -Total
                                  
                                  
                                  3,881,010
                                  
                                  
                                  
                                  206,560


F-8


Share
Based Payments





Generally,
all forms of share-based payments, including stock option grants, restricted
stock grants and stock appreciation rights, are measured at their fair value on
the awards’ grant date, and based on the estimated number of awards that are
ultimately expected to vest.  Share-based payment awards issued to
non-employees for services rendered are recorded at either the fair value of the
services rendered or the fair value of the share-based payment, whichever is
more readily determinable.  The expense resulting from share-based payments
are recorded as non-cash stock based compensation, which is a operating
expense.




Research
and Development Costs




The
Company is engaged in ongoing research and development ("R&D") activities.
The Company accounts for R&D under standards issued by the Financial
Accounting Standards Board ("FASB"). Under these standards, all R&D costs
must be charged to expense as incurred. Accordingly, internal R&D costs are
expensed as incurred. Third-party R&D costs are expensed when the contracted
work has been performed or as milestone results have been achieved. The costs
associated with equipment or facilities acquired or constructed for R&D
activities that have alternative future uses are capitalized and depreciated on
a straight-line basis over the estimated useful life of the asset. The
amortization and depreciation for such capitalized assets are charged to R&D
expenses.




Income
Taxes




The
Company accounts for income taxes in accordance with standards of disclosure
propounded by the FASB, and any related interpretations of those standards
sanctioned by the FASB.  Accordingly, deferred tax assets and liabilities
are determined based on differences between the financial statement and tax
bases of assets and liabilities, as well as a consideration of net operating
loss and credit carry forwards, using enacted tax rates in effect for the period
in which the differences are expected to impact taxable income.  A
valuation allowance is established, when necessary, to reduce deferred tax
assets to the amount that is more likely than not to be realized.




No
provision for income taxes has been recorded due to the net operating loss
carryforwards totaling approximately $833,782 as of May 31, 2010 that will be
offset against future taxable income.  The available net operating loss
carry forwards of approximately $833,782 expire in various years through
2029.  No tax benefit has been reported in the financial statements because
the Company believes there is a 50% or greater chance the carry forwards will
expire unused.  There were no uncertain tax positions taken by the
Company.


F-9


Deferred
tax asset and the valuation account is as follows:




May
      31,2010
                                            
                                            
                                            2009Deferred
      tax asset:NOL
      Carryforward
                                            
                                            $
                                            283,486
                                            
                                            
                                            $
                                            56,127Valuation
      allowances
                                            
                                            
                                            (283,486
                                            )
                                            
                                            
                                            (56,127
                                            )Total
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -The
      components of income tax expense are as follows:Current
      Federal Tax
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -Current
      State Tax
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -Change
      in NOL benefit
                                            
                                            
                                            227,359
                                            
                                            
                                            
                                            56,127Change
      in valuation allowance
                                            
                                            
                                            (227,359
                                            )
                                            
                                            
                                            (56,127
                                            )$
                                            -
                                            
                                            
                                            $
                                            -


Recent
Accounting Pronouncements





In
April 2009, the FASB issued guidance now codified as FASB ASC Topic 820,
“Fair Value Measurements and
Disclosures,”which amends previous guidance to require disclosures
about fair value of financial instruments in interim as well as annual financial
statements in the current economic environment.  This pronouncement was
effective for periods ending after June 15, 2009.  The adoption of
this pronouncement did not have a material impact on the Company’s business,
financial condition or results of operations; however, these provisions of FASB
ASC Topic 820 resulted in additional disclosures with respect to the fair value
of the Company’s financial instruments.





In
May 2009, the FASB issued guidance now codified as FASB ASC Topic 855,
“Subsequent Events,”
which establishes general standards of accounting for, and disclosures of,
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued.  This pronouncement was effective
for interim or fiscal periods ending after June 15, 2009.  The
adoption of this pronouncement did not have a material impact on the Company’s
business, results of operations or financial position; however, the provisions
of FASB ASC Topic 855 resulted in additional disclosures with respect to
subsequent events.





In
June 2009, the Financial Accounting Standards Board (FASB) issued guidance
now codified as FASB Accounting Standards Codification (ASC) Topic 105, “Generally Accepted Accounting
Principles,” as the single source of authoritative non-governmental U.S.
GAAP.  FASB ASC Topic 105 does not change current U.S. GAAP, but is
intended to simplify user access to all authoritative U.S. GAAP by providing all
authoritative literature related to a particular topic in one place.  All
existing accounting standard documents will be superseded and all other
accounting literature not included in the FASB Codification will be considered
non-authoritative.  These provisions of FASB ASC Topic 105 were effective
for interim and annual periods ending after September 15, 2009 and,
accordingly, were effective for the Company for the current fiscal reporting
period.  The adoption of this pronouncement did not have an impact on the
Company’s business, financial condition or results of operations, but will
impact the Company’s financial reporting process by eliminating all references
to pre-codification standards.  On the effective date of FASB ASC Topic
105, the Codification superseded all then-existing non-SEC accounting and
reporting standards, and all other non-grandfathered non-SEC accounting
literature not included in the Codification became
non-authoritative.


F-10


In
January 2010, the Financial Accounting Standards Board ("FASB") issued updated
guidance to amend the disclosure requirements related to recurring and
nonrecurring fair value measurements.  This update requires new disclosures
on significant transfers of assets and liabilities between Level 1 and
Level 2 of the fair value hierarchy (including the reasons for these
transfers) and the reasons for any transfers in or out of Level 3.
 This update also requires a reconciliation of recurring Level 3
measurements about purchases, sales, issuances and settlements on a gross basis.
 In addition to these new disclosure requirements, this update clarifies
certain existing disclosure requirements.  For example, this update
clarifies that reporting entities are required to provide fair value measurement
disclosures for each class of assets and liabilities rather than each major
category of assets and liabilities.  This update also clarifies the
requirement for entities to disclose information about both the valuation
techniques and inputs used in estimating Level 2 and Level 3 fair
value measurements.  This update became effective for the Company with the
interim and annual reporting period beginning January 1, 2010, except for
the requirement to provide the Level 3 activity of purchases, sales,
issuances, and settlements on a gross basis, which will become effective for the
Company with the interim and annual reporting period beginning January 1,
2011.  The Company will not be required to provide the amended disclosures
for any previous periods presented for comparative purposes.  Other than
requiring additional disclosures, adoption of this update will not have a
material effect on the Company's consolidated financial statements.





NOTE
3 – GOING CONCERN





As
reflected in the accompanying financial statements, the Company has a net loss
of $2,242,239 and net cash used in operations of $532,176 for the year ended May
31, 2010.  The Company had a working capital deficit of $239,902 and a
stockholders’ deficit of $2,416,418 at May 31, 2010.





The
Company may seek additional funds to finance its immediate and long-term
operations through debt and/or equity financing.  The successful outcome of
future financing activities cannot be determined at this time and there is no
assurance that if achieved, the Company will have sufficient funds to execute
its intended business plan or generate positive operating results.





These
factors, among others, raise doubt about the Company’s ability to continue as a
going concern.  The accompanying financial statements do not include any
adjustments related to recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.





The
ability of the Company to emerge from the development stage is dependent upon
the Company's successful efforts to raise sufficient capital and then attaining
profitable operations.





In
response to these problems, management has planned the following
actions:





·
Management intends to raise additional funds through public or private placement
offerings.


F-11


·Management
is currently formulating plans with its educational software developers to
generate sales.  There can be no assurances, however, that management’s
expectations of future sales will be realized.





NOTE
4 – FAIR VALUE





The
Company has categorized its assets and liabilities recorded at fair value based
upon the fair value hierarchy specified by GAAP.  All assets and
liabilities are recorded at historical cost which approximates fair value, and
therefore, no items were valued according to these inputs.





The
levels of fair value hierarchy are as follows:





·
            Level
      1 inputs utilize unadjusted quoted prices in active markets for identical
      assets or liabilities that the Company has the ability to
      access;





·
            Level
      2 inputs utilize other-than-quoted prices that are observable, either
      directly or indirectly.  Level 2 inputs include quoted prices for
      similar assets and liabilities in active markets, and inputs such as
      interest rates and yield curves that are observable at commonly quoted
      intervals; and





·
            Level
      3 inputs are unobservable and are typically based on our own assumptions,
      including situations where there is little, if any, market
      activity.





In
certain cases, the inputs used to measure fair value may fall into different
levels of the fair value hierarchy.  In such cases, the Company categorizes
such financial asset or liability based on the lowest level input that is
significant to the fair value measurement in its entirety.  Our assessment
of the significance of a particular input to the fair value measurement in its
entirety requires judgment and considers factors specific to the asset or
liability.





Both
observable and unobservable inputs may be used to determine the fair value of
positions that are classified within the Level 3 category.  All assets
and liabilities are at cost which approximates fair value and there are not
items that were required to be valued on a non recurring basis.





NOTE
5 – CONVERTIBLE NOTES PAYABLE




On April
9, 2009, the Company entered into a Secured Promissory Note with an individual
for a loan of $20,000.  The note carries an annual interest rate of 20%,
and was due on August 12, 2010.  On August 16th, 2010, the Company entered
into an amendment of the Note whereby the fixed conversion price was reduced
from $0.33 to $0.10 per share.  (See Note 9)




During
the year May 31, 2010, the Company entered into Secured Promissory Notes with
third parties for a total of $179,500.  The notes carry monthly interest
rates ranging from 1.66%-20% compounding 30-90 days and are convertible into
common stock at the rate of $0.10 per share. The Company has evaluated the
conversion feature of the notes and determined that there is no beneficial
conversion feature as the fixed conversion price of $0.10 is the same as the
fair value of the common stock at the time of issuance.  Notes have a 30-90
day maturity.    As of May 31, 2010, all outstanding notes were
extended or had not reached their maturity date.


F-12


During
the year ended May 31, 2010, the Company paid $3,200 of principal payments on
its Secured Promissory Notes.  Additionally, the Company converted $84,300
of Secured Promissory Notes into common stock at a $0.10 conversion price plus
accrued interest of $29,606 resulting in the issuance of 1,079,097 common
shares. Conversions were according to the terms of the convertible note
agreements so no gain or loss was recorded at the time of conversion. (See Note
6)





PrincipalBalanceConvertible
      notes payable - May 31, 2009
                          
                          $
                          20,000Issuance
      of convertible notes
                          
                          
                          179,500Cash
      payment to note holder
                          
                          
                          (3,200
                          )Conversion
      of notes payable
                          
                          
                          (84,300
                          )Other
                          
                          
                          5,000Convertible
      notes payable - May 31, 2010
                          
                          $
                          117,000





As of May
31, 2010 and May 31, 2009, the Company had accrued interest payable of $31,101
and $656, respectively.  Interest expense totaled $60,051 and $656 for the
year ended May 31, 2010 and 2009, respectively.





NOTE 6 – STOCKHOLDERS’
DEFICIT





The
Company is authorized to issue up to 150,000,000 shares of its $0.001 common
stock.  At May 31, 2010, there were 19,374,277 shares issued and
outstanding.  At May 31, 2009, there were 10,022,600 shares issued and
outstanding.





As of May
31, 2009, the Company issued 8,740,000 shares of common stock to its founders at
par. 8,652,600 shares were rescinded in fiscal year 2010 and the difference of
87,400 shares were valued at $0.10 and recorded as stock-based compensation
during the period ended May 31, 2009.




During
the period ended May 31, 2009, the Company entered into stock purchase
agreements with various accredited investors for the sale of 1,279,000 shares of
its common stock at a purchase price of $0.10 per share generating proceeds of
$127,900.





During
the period ended May 31, 2009, the Company issued 3,600 shares of common stock
for services.  The value of the shares was $360 or $0.10 per share which
was the price of the most recent sale of the Company’s stock at the time of
issuance.





During
the year ended May 31, 2010, the Company entered into stock purchase agreements
with various accredited investors for the sale of 3,744,000 shares of its common
stock at a purchase price of $0.10 per share generating proceeds of $344,393 and
a subscription receivable of $30,000.


F-13


During
the year ended May 31, 2010, the Company issued 7,198,196 shares of common
stock for executive compensation.  The shares were valued at $0.10 per
share at the time issuance which was the price of the most recent sale of
the Company’s stock at the time of issuance and accordingly the Company recorded
$719,820 of stock based compensation.





During
the year ended May 31, 2010, the Company issued 2,763,438 shares of common stock
for services.  The shares were valued at $0.10 per share at the time
issuance which was the price of the most recent sale of the Company’s stock
at the time of issuance and accordingly the Company recorded $276,344 of stock
based compensation.





During
the year ended May 31, 2010, the Company entered into stock purchase agreements
with various accredited investor for the sale of 33,334 shares of its common
stock at a purchase price of $0.33 per share generating proceeds of $5,000 and a
subscription receivable of $6,000.





During
the year ended May 31, 2010, the Company entered into unit purchase agreements
with Directors and Officers of the Company at $0.05 per unit.  Each unit
consists of one common share and one warrant.  2,400,000 units were sold
generating proceeds of $120,000.  The fair value of the common stock was
$240,000 or $0.10 per share.  The warrants were valued at $188,702
according to the Black-Scholes model.  Because the selling price of the
unit (common shares and warrants) were determined to be below fair market value,
the Company recorded stock based compensation expense of $308,702 for the
incremental difference between the sales price of the unit and the fair market
value of common stock and warrants.





During
the year ended May 31, 2010, the Company issued 50,000 shares of common stock
for services valued at $0.33 per share.  The value of the shares was $0.33
per share which was the price of the most recent sale of the Company’s stock at
the time of issuance. The Company recorded $16,500 of stock based
compensation for these issuances.





During
the year ended May 31, 2010, the Company issued 865,000 shares to Edumedia
pursuant to the exclusive resellership agreement.  At the time of issuance,
it was determined that the fair value of the common stock was $0.10 per share,
accordingly, the Company recorded a stock based compensation expense of $86,500.
The value of the shares was $0.10 per share which was the price of the most
recent sale of the Company’s stock at the time of issuance.  The agreement
entailed no disincentive for non-performance therefore these shares were
expensed upon issuance.





During
the year ended May 31, 2010, the Company incurred $28,498 in equity offering
costs.





During
the year ended May 31, 2010, the Company issued an additional 75,000 shares to
Edumedia pursuant to the exclusive resellership agreement.  At the time of
issuance, it was determined that the fair value of the common stock was $0.33
per share, accordingly, the Company recorded a stock based compensation expense
of $24,750.  The value of the shares was $0.33 per share which was the
price of the most recent sale of the Company’s stock at the time of
issuance.





The
Company entered into an Investment Agreement with Dutchess Opportunity Fund, II,
L.P. (“Dutchess”) on May 17, 2010 and an amendment to that Agreement on July 13,
2010 (collectively, the “Investment Agreement”).    The aggregate
number of shares issuable by the Company and purchasable by Dutchess under the
Investment Agreement is 3,600,000, which was determined by the Company’s Board
of Directors.  In connection with the preparation of the Investment
Agreement and the Registration Rights Agreement, the Company issued Dutchess
90,909 shares of the Company’s common stock as a document preparation fee. 
 These shares were treated as an equity offering cost and value of such
shares was charged to additional paid in capital.


F-14


During
the year ended May 31, 2010, the company issued 1,079,097 shares of common stock
to convertible note holders reducing its principal obligation by $84,300 and
accrued interest of $29,606.  All notes were converted at a fixed
conversion price of $0.10.





During
the year ended May 31, 2010, the Company redeemed and cancelled 294,697 shares
of its common stock for a total of $97,900.  These shares were purchased
from one investor at a price of $0.33 per share.  This represented a
premium on this purchase of $0.23 over the Company’s prior cash sales of common
stock at $0.10 per share.





As of May
31, 2010, the Company has $36,000 of subscription receivables related to the
sale of 300,000 shares at $0.10 per share and 18,182 shares at $0.33 per
share.  See Note 9.





As of May
31, 2010, the Company is obligated to issue 1,500,000 shares of common stock for
$150,000 of services and 60,000 shares are owed for a debt conversion related to
fiscal year 2010.  See Note 9.





NOTE
7 – RELATED PARTY TRANSACTIONS





During
the year ended May 31, 2010, the Company entered into unit purchase agreements
with Directors and Officers of the Company at $0.05 per unit.  Each unit
consists of one common share and one warrant.  Because the selling price of
the unit (common shares and warrants) were determined to be below fair market
value, the Company recorded stock based compensation expense of $308,702 for the
incremental difference between the sales price of the unit and the fair market
value of common stock and warrants.





During
the year ended May 31, 2010, the Chief Executive Officer, John Daglis loaned the
Company $16,900.  The balance remains outstanding at May 31, 2010. 
The outstanding balance is payable upon demand and does not bear interest. 
Interest expense was not imputed as the amount was deemed to be
immaterial.




During
the year ended May 31, 2010, the Company issued 940,000 shares to Edumedia
pursuant to the exclusive resellership agreement.  The Company’s principal
officer and a director, John P. Daglis, is also the Chief Executive Officer of
Edumedia Software.   See Note 9 for further discussion.  The
Company also made cash payments totaling $67,500 during the year ended May 31,
2010.




During
the year ended May 31, 2010, the Company was repaid $10,153 from a related
party.





During
the year ended May 31, 2010, the Company paid $5,000 to the Chief Executive
Officer, John Daglis, for an outstanding loan.


F-15


NOTE
8 – COMMITMENTS





Consulting
Agreement





On
February 15, 2010 the Company entered into a one year agreement with an
unrelated third party to provide consulting services.  In exchange for the
services provided the Company will issue 50,000 shares of common stock per
month.  The agreement was amended on May 13,,2010 to
reduce the number of shares to be issued, in full payment for all services
provided by the consultant, to 150,000 shares.  As of May 31, 2010, the
150,000 shares of common stock were issued pursuant to the amended
agreement.  The fair value of the services provided was $15,000.  No
further obligations exist as of May 31, 2010.





On
January6,2010,
the Company entered into two one-year agreements with unrelated third parties to
provide consulting services.  In exchange for the services provided, the
Company will issue 750,000 shares of common stock to each consultant.  The
shares were not issued as of May 31, 2010, accordingly, the Company has recorded
a $150,000 common stock payable for the 1,500,000 common shares
issuable.





NOTE
9 – SUBSEQUENT EVENTS




During
June, 2010,
the Company issued 60,000 shares of common stock to satisfy the common stock
payable of $6,000 outstanding as of May 31, 2010.





During
June, 2010, the Company issued 1,500,000 shares of common stock to satisfy the
common stock payable of $150,000 pursuant to the consulting agreements discussed
in Note 8.





During
June and July 2010, the Company received $36,000 for payment in full of
subscription receivables outstanding at May 31, 2010.





From
June through August 2010, the Company entered into stock purchase
agreements with various accredited investors for the sale of 664,273 shares of
its common stock at a purchase price of $0.33 per share generating proceeds of
$219,210.





From June
through August 2010, the Company issued 1,222,000 shares of common stock for
services.  The shares were valued at $0.33 per share.





From June
through August 2010, the company issued 1,540,400 shares of common stock in
connection with the conversion of $154,040 of convertible debt and accrued
interest.  The Secured Promissory Notes contained a conversion value of
$0.10 per share.





In August
2010, the company issued 22,273 shares of common stock in connection with the
conversion of $7,350 of convertible debt and accrued interest.  The Secured
Promissory Notes contained a conversion value of $0.33 per
share.





During June and July 2010, the Company
issued 125,000 shares of common stock to Wassim Ramadan, Member of Board
Directors, for executive compensation.





During
July 2010, the Company entered into purchase agreements with Directors and
Officers for the sale of 135,151 units.  Each unit consists of one share of
common stock and one warrant. The warrants have an exercise price of $0.165
share and expire in 1 year.  Because the sale price of the units were
deemed to be below fair market value, the Company will record stock based
compensation charges for difference between the unit sales price and fair value
of common stock and warrants.


F-16


During
July 2010, the Company entered into Secured Promissory Notes with third parties
for a total of $7,000.  The notes carry an interest rate of 5% compounding
30 days and are convertible into common stock at the rate of $0.33 per share.
 The Company has evaluated the conversion feature of the notes and
determined that there is no beneficial conversion feature as the conversion
price of $0.33 is the same as the fair value of the stock at the time of
issuance.





On June
24, 2010, the Company entered into a support services agreement with Cardiff
Partners, LLC for finance and accounting support services.  As compensation
for services under the agreement, the Company will pay to Cardiff Partners
$8,000 per month in cash and issue to Cardiff Partners 1,357,740 shares of its
common stock.  The initial term of the support services agreement is one
year.




On August
27, 2010, the Company entered into an exclusive reseller agreement with Edumedia
Software Solutions Corporation, for the sale of E*pad, an on-line managed
software application that manages performance assessments for teachers to be
deployed among their students.   Under the terms of the agreement, the
Company has paid to Edumedia Software $91,800 as a research and development
contribution ($24,300 of which was paid subsequent to May 31, 2010), issued to
Edumedia Software 940,000 shares of its common stock and agreed to pay to
Edumedia Software 50% of the revenues the Company collects from the sale of
their products.  The agreement has an initial term of 18 months. 
 The Company’s principal officer and a director, John P. Daglis, is also
the Chief Executive Officer of Edumedia Software.


F-17