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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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 June 30, 2011

[   ] 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:000-52686

QUANTUM SOLAR POWER CORP.(Exact name of registrant as specified in its charter)

|NEVADA                                                               | 27-1616811                                    
|-------------------------------------------------------------------- | ----------------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)          
|                                                                     |                                               
|Suite 300-1055 W. Hastings Street                                    |                                               
|Vancouver, British Columbia, CANADA.                                 | V6E 2E9                                       
|(Address of principal executive offices)                             | (Zip Code)                                    
|                                                                     |                                               
|Registrants telephone number, including area code                   | (604) 681-7311                                
|                                                                     |                                               
|Securities registered under Section 12(b) of the Exchange
      Act: | NONE.                                         
|Securities registered under Section 12(g) of the Exchange
      Act: | Common Stock, $0.001 Par Value per
      Share

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined by Rule 405 of the Securities Act. Yes
[   ]     No [X]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes
[   ]     No [X]

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 registrant 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 (s. 229.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files). Yes [   ]     No [   ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (s229.405 of this chapter) is not
contained herein, and will not be contained, to the best of 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                 
      [X]
|--------------------------------------------------------------------------------- | --------------------------------------------------
|Non-accelerated filer   [   ] (Do not
      check if a smaller reporting company) | Smaller reporting company [   ]                   

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

State the aggregate market value of the voting and non-voting
  common equity held by non-affiliates computed by reference to the price at which
  the common equity was sold, or the average bid and asked price of such common
  equity, as of the last business day of the registrants most recently completed
  second fiscal quarter. $168,921,432 on the basis of the average of the
  price at which the common equity was sold stock on December 31, 2010.

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable
date:146,987,692 as at August 23, 2011.

---

QUANTUM SOLAR POWER CORP.

ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30,
2011

TABLE OF CONTENTS

|               |                                                                                                                    | **PAGE**
|-------------- | ------------------------------------------------------------------------------------------------------------------ | --------
|               |                                                                                                                    |         
|PART I         |                                                                                                                    | 3       
|               |                                                                                                                    |         
|ITEM 1.        | BUSINESS                                                                                                           | 3       
|ITEM 1A.       | RISK FACTORS                                                                                                       | 9       
|ITEM 2.        | PROPERTIES                                                                                                         | 15      
|ITEM 3.        | LEGAL PROCEEDINGS                                                                                                  | 15      
|ITEM 4.        | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                | 15      
|               |                                                                                                                    |         
|PART II        |                                                                                                                    | 16      
|               |                                                                                                                    |         
|ITEM 5.        | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
      MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 16      
|ITEM 6.        | SELECTED FINANCIAL DATA                                                                                            | 17      
|ITEM 7.        | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS.                       | 18      
|ITEM 7A.       | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                         | 21      
|ITEM 8.        | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.                                                                       | 23      
|ITEM 9.        | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE                         | 24      
|ITEM 9A.       | CONTROLS AND PROCEDURES.                                                                                           | 24      
|ITEM 9B.       | OTHER INFORMATION.                                                                                                 | 26      
|               |                                                                                                                    |         
|PART III       |                                                                                                                    | 27      
|               |                                                                                                                    |         
|ITEM 10.       | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                             | 27      
|ITEM 11.       | EXECUTIVE COMPENSATION.                                                                                            | 29      
|ITEM 12.       | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
      AND RELATED STOCKHOLDER MATTERS               | 31      
|ITEM 13.       | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE.                                   | 34      
|ITEM 14.       | PRINCIPAL ACCOUNTING FEES AND SERVICES.                                                                            | 34      
|ITEM 15.       | EXHIBITS, FINANCIAL STATEMENT SCHEDULES.                                                                           | 35      
|               |                                                                                                                    |         
|**SIGNATURES** | 37                                                                                                                

2

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PART I

The information in this discussion contains forward-looking
statements. These forward-looking statements involve risks and uncertainties,
including statements regarding the Company's capital needs, business strategy
and expectations. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expect," "plan," "intend," "anticipate," "believe,"
"estimate, "predict," "potential" or "continue," the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks described below, and, from time to time, in other reports the Company
files with the United States Securities and Exchange Commission (the SEC).
These factors may cause the Company's actual results to differ materially from
any forward-looking statement. The Company disclaims any obligation to publicly
update these statements, or disclose any difference between its actual results
and those reflected in these statements.

As used in this Annual Report, the terms we, us, our,
Quantum, and the Company refer to Quantum Solar Power Corp., unless
otherwise indicated. All dollar amounts in this Annual Report are expressed in
U.S. dollars, unless otherwise indicated.

ITEM
1.                 
BUSINESS.

OVERVIEW

The following discussion and analysis summarizes our plan of
operation for the next twelve months and our results of operations for the year
ended June 30, 2011. This discussion should be read in conjunction with the
Managements Discussion and Analysis or Plan of Operation.

Quantum Solar Power Corp. formerly QV, Quantum Ventures, Inc.
was incorporated under the laws of the State of Nevada on April 14, 2004. From
2004 to 2009 we had been engaged in the software development business. Our
business plan was to develop and commercialize the MediFlow Software Program, a
medical tracking software program that will assist healthcare professionals in
diagnosing and recommending treatment for patients. We decided to shift our
business focus to solar energy in late 2009.

Our principal executive office is located in Vancouver, British
Columbia, Canada. Our principal business is the research, development and
marketing of next generation solar power generation devices utilizing our patent
pending technology (the Next Generation Device or NGD Technology) for
photovoltaic devices that do not use silicon or other, rare earth elements. Once
we have completed development, we expect to derive substantially all revenues
from royalty based licensing arrangements.

We are currently in the business of developing and marketing
our NGD Technology for the production of solar energy utilizing our NGD
Technology. The NGD Technology which is covered by two provisional U.S.
patents, differs from conventional solar technology as it does not require
expensive silicon based absorber components or rare earth elements. Our
researchers at Simon Fraser University in British Columbia, Canada have
developed and built a proof of concept prototype of a next generation device
utilizing the NGD Technology (see Technology Acquisition and
NGDTM Technology below).

We are a development stage company. We have not earned any
revenue to date nor have we engaged in any licensing agreements to date. We do
not anticipate earning revenue until we have completed the development and
testing of our NGD Technology. We are presently in the development stage of our
business and we can provide no assurance that we will be able to complete
commercial development or successfully sell or license products incorporating
our solar power generation devices, once development and testing is complete. We
have limited operations. We conduct all of our research and development on a
contractual basis with Simon Fraser University. We have relied on the sale of
our securities and loans or capital infusions from our officers and directors to
fund our operations to date.

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RECENT CORPORATE DEVELOPMENTS

Since the filing of our Quarterly Report for the fiscal quarter
ended March 31, 2011 with the SEC, we experienced the following significant
corporate developments:

Public Relations Agreement

On June 21, 2011, we entered into a public relations agreement
(the Vorticom Agreement), with Vorticom Inc. (Vorticom). Under the terms of
the Vorticom Agreement, Vorticom has agreed to provide us with public relations
services in the media and with other marking communication activities. The
Vorticom Agreement is effective July 5, 2011 and is for a term of 12 months. In
consideration of Vorticoms business advisory services, we will pay $5,625 USD
per month and grant 1,875 warrants (the Warrants) each month, to purchase
shares of our common stock at an exercise price of $1.00 until the earlier of
July 5, 2012 or the termination of the Agreement. The Warrants are to be issued
quarterly. We have agreed to reimburse Vorticom for applicable out-of-pocket
expenses. We may cancel the Agreement at any time by providing 30 days notice.

Advantag  Agreement

On July 18, 2011, we entered into a consulting agreement (the “Advantag Agreement”), with Advantag Aktiengesellschaft (“Advantag”), whereby Advantag has agreed to assist us with listing on the Frankfurt Stock Exchange. The Advantag Agreement will be in effect for the duration of the listing process. In consideration of Advantag’s services we will pay a total of 18,000 EUR to Advantag as follows:

| | (i)   | 6,000 EUR at the time of execution;                                                          
| | ----- | ---------------------------------------------------------------------------------------------
| |       |                                                                                              
| | (ii)  | 6,000 EUR at the time the prospectus is drafted, prior to
      its filing; and              
| |       |                                                                                              
| | (iii) | 6,000 EUR following successful approval by the Federal
      Financial Supervisory Authority.

We will also pay hourly rates for any consulting services not
directly related to the prospectus.

Appointment of Directors and Chairman

On July 22, 2011, we appointed Steven Pleging as a Director and
Chairman of the Board of Directors of the Company. Also on July 22, 2011, we
appointed Andras Pattantyus-Abraham, our Chief Technology Officer as a Director
of the Company.

Quorum Agreement

On August 5, 2011, we entered into a consulting agreement (the
Quorum Agreement), with Quorum Capital Corporation (QCC). Under the terms of
the Quorum Agreement, QCC has agreed to provide consulting services to assist us
in our activities in Germany. The Quorum Agreement is effective July 8, 2011 and
is for a term of 6 months renewing for an additional 6 months automatically at
the end of each term. In consideration of QCC consulting services, we will pay
$5,000 CDN on exercise of the agreement and $2,000 CDN per month commencing
September 8, 2011. We will also grant 2,000,000 options (the Options) to QCC,
to purchase shares of our common stock at an exercise price of $1.00 USD until
July 7, 2014. 333,335 of the Options are to be issued on execution and the
remainder of the Options will be issued in monthly increments of 333,333
commencing August 8, 2011. We have agreed to pay a rate of $125 CDN per hour for
any additional hours of work performed and to reimburse QCC for approved
expenses. We may cancel the Agreement at any time by providing 30 days notice.

On August 8, 2011, the Company issued 666,668 of the Options to
QCC in accordance with the terms of the Agreement pursuant to the provisions of
Regulation S of the Securities Act of 1933 (the Act). QCC represented that it
was not a "U.S. Person" as defined under Regulation S and is not acquiring the
shares for the account or benefit of a U.S. Person.

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Foreign Private Placement Offering

On August 9, 2011, our Board of Directors approved a private
placement offering of up to 3,000,000 shares of our common stock at a price of
$1.00 per share (the Foreign Private Placement). This offering will be made to
persons who are not U.S. Persons as defined under Regulation S of the Act.

We intend use the net proceeds from these financings to further
develop its NGDTMTechnology and for working capital purposes. There
is no assurance that the Foreign Private Placement will be completed on the
above terms or at all.

Appointment of Director and Vice President of Corporate
Development

On August 23, 2011, our Board of Directors appointed Stella Guo
as our Vice President of Corporate Development and as a Director effective
September 1, 2011.

We entered into an employment agreement (the Employment
Agreement) with Ms. Guo, dated August 23, 2011, whereby Ms. Guo will act as
Vice President of Corporate Development of the Corporation effective September
1, 2011. Under the terms of the Agreement, Ms. Guo will receive a salary of
$100,000 US per year and options to purchase 1,000,000 shares of the
Corporations common stock at a price of $1.00 per share until August 31, 2014,
in accordance with the Corporations 2011 Stock Incentive Plan (the "2011 Stock
Incentive Plan"). The Employment Agreement is for a term of one year, renewable
automatically for an additional year at the end of the first and, if renewed, a
second year if no notice of termination has been provided.

Executive Services Agreement

On August 31, 2011, we entered into an executive services
agreement (the Executive Services Agreement) dated for reference August 8,
2011, among Team Solar BV (TSBV), Steven Pleging and the Company. Under the
Executive Services Agreement, TSBV will provide the services of Mr. Pleging who
will act as our Chairman and TSBV will receive 12,000 EUR each month, during the
first three months and 15,000 EUR each month for each subsequent month the
Executive Services Agreement is in effect.

Mr. Pleging is required to achieve the following targets under
the Agreement:

| | (a) | obtain cash flow to us of EUR 3,000,000 either through
      equity, industry partnering or licensing by January 8, 2012 (the First
      Target); and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                         
| | (b) | generate additional cash flow to us of EUR 5,000,000 by
      April 8, 2013 (the Second Target).                                                      

TSBV or at its option Mr. Pleging, shall receive a bonus of
250,000 shares of the our common stock if Mr. Pleging achieves the First Target
and the Executive Services Agreement has not been otherwise terminated. In the
event Mr. Pleging fails to meet the First Target but raises at least EUR
1,000,000 TSBV or at it option Mr. Pleging, will be entitled to receive a
proportional amount of the 250,000 shares.

The term is for a period of one year, renewing automatically if
notice of termination has not been provided by August 7, 2012. We may terminate
the Executive Services Agreement if Mr. Pleging fails to achieve the First
Target or the Second Target.

If the Executive Services Agreement is extended at the end of
the Term, TSBV or at its option Mr. Pleging, shall receive an additional 250,000
shares of our common stock and Mr. Pleging shall receive options to purchase
1,500,000 shares of our common stock at a price determined by our Board of
Directors in accordance with our 2011 Stock Option Plan (the Options).

TECHNOLOGY ACQUISITION

We acquired the NGDTM Technology on December 16,
2009 by an agreement (the Technology Acquisition Agreement) with Canadian
Integrated Optics (IOM) Limited, (CIO). In consideration of the NGD
Technology, we issued 71,500,000 shares of our common stock to CIO (of which CIO
transferred over 99%

5

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pursuant to the terms of a takeover bid, under Canadian
Securities Laws) and Desmond Ross, our former director and executive officer,
returned 47,000,000 shares to the treasury. Under the Technology Acquisition
Agreement, we also agreed to pay CIO, or such other parties designated by CIO,
for ongoing development and research costs under CIOs existing research
agreement (the CIO Research Agreement) with Simon Fraser University (SFU).
The initial term of the CIO Research Agreement was until July 30, 2010.

Subsequent to entering into the Technology Acquisition
Agreement, CIO entered into an amendment agreement to the CIO Research
Agreement, whereby SFU agreed to extend the term until December 31, 2010 and in
consideration of which we paid $310,076 CDN. On December 23, 2010, CIO entered
into another amendment agreement dated January 1, 2011, whereby SFU agreed to
further extend the term until July 31, 2011 and in consideration of which we
will pay $476,482 CDN plus expenses, during the term. On July 28, 2011, CIO
entered into another amendment agreement dated July 2, 2011, whereby SFU agreed
to further extend the term until December 31, 2011 and in consideration of which
we will pay $599,593 CDN plus expenses, during the term.

During the fiscal year ended June 30, 2011 we paid $2,312,977 USD under the CIO Research Agreement.

NGD TECHNOLOGY

Our NGD Technology is a patent pending, technology and proof
of concept prototype for producing solar power without the necessity of
utilizing expensive silicon based absorber components or other rare earth
elements.

Solar cells based on the NGD Technology can reach a regime of
cost and efficiency not obtainable with conventional solar cells. As a result,
we believe our NGD Technology has the potential to enable the manufacture of
solar cells at significantly less cost per Watt than current producers.

Thin Film solar cell technologies have proven inexpensive to
manufacture but are at present only capable of efficiencies in the 10% power
conversion efficient (PCE) range. Crystalline silicon solar cells are in the
15% to 20% PCE range but are very expensive to manufacture due to the cost of
silicon processing. The reason for both these shortfalls is directly linked with
the semiconductors used in the fabrication process.

All currently available solar cell technologies rely on a
photovoltaic effect in which an incoming solar photon knocks loose a negative
charge, leaving behind a positive charge, in a semiconducting material such as
silicon. The positive and negative charges are then collected through separate
conducting layers to be delivered as current to a load. Defects within the
semiconductor layer can affect the power conversion efficiency by reducing the
voltage and the current delivered to the load. Elimination of these defects can
only occur through expensive purification and processing.

The NGDTM Technology’s principle of operation avoids the detrimental effects of defects within the semiconductor absorber layers by disposing of it altogether, and thus has the potential to simultaneously satisfy the requirements of high power conversion efficiencies and low costs. In addition, by eliminating expensive and exotic materials and manufacturing in a continuous rather than batch or wafer based process, we believe module costs can be reduced well below $1 per Watt-peak (Wp), the nominal price of a solar module widely recognized as the standard of solar commercial enablement.

The market for solar energy has been limited by the costs of
panels and by their low efficiencies. Quantum expects that with its low cost,
high efficiency NGD that the economics of solar power will prove to be superior
to alternatives and that new and unforeseen markets will open for solar devices.

The solar panel business has been in a high growth phase over
the past years however it is not sustainable since the growth has been
fundamentally based on the availability of tax incentives, subsidies and other
inducements. The economics of unsubsidized solar power are not attractive except
in certain niche applications where choices are limited and the high costs can
be justified.

An average crystalline silicon cell solar module has an
efficiency of 15%, an average thin film cell solar module has an efficiency of
6%. Thin film manufacturing costs potentially are lower, though. Crystalline
silicon cell technology forms about 90% of solar cell demand. The balance comes
from thin film technologies.

6

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Approximately 45% of the cost of a silicon cell solar module is
driven by the cost of the silicon wafer, a further 35% is driven by the
materials required to assemble the solar module.

Thin film manufacturer First Solar is reported in some
publications to have approximately $6 billion in contracts between 2010 and
2013. If First Solar were to have the opportunity to accept contracts worth $1
trillion and had the manufacturing capability to fulfill these contracts they
would still be inhibited and negatively governed by material availability.
According to the U.S. Geological Survey, there is enough tellurium available in
global reserves to meet only 0.02 Terawatts (TRW) of energy provision using
existing thin film technology. The same applies to San Jose, California-based
Nanosolars Indium supply. Both companies current material choices (according to
the Andrea Feltrin, Alex Freundlich Report, Photovoltaics and Nanostructures
Laboratories, Center for Advanced Materials and Physics Department, University
of Houston, Texas) limits these companies forever to sub-Gigawatt energy
production (maximum 0.02 TRW per year).



Current Thin Film companies are coming close to competing
commercially with coal but the materials they use such as tellurium and indium
are very rare and capable of meeting only 0.13% of the worldwide energy demand
even if they accessed the entire worldwide reserves of these materials.

THE INDUSTRY

Energy is the most critical issue of the new century. Energy is
a necessary part of the solution to all of the other great problems of our age
which include access to clean water, wholesome food, a sustainable environment,
an end to poverty, widely available education, democracy and a stable
population. The provision of electrical energy was a $1 trillion per year in
2007 and expected to grow to $2 trillion by 2025. There are a variety of ways in
which electrical energy can be generated; many involve burning fossil fuels
(coal, oil, natural gas, etc.) with the concerns regarding CO2 related climate
change this is becoming a less acceptable solution.

Renewable energy is the fastest growth segment of the
electrical generation market. Solar power may ultimately be the answer to the
energy needs of the world. In 2011, however, solar power remains ill-equipped
for prime time deployment. This is due to the costs of installing such systems
and therefore of the cost of the electrical energy they generate being much
higher than the alternatives. There are at least two easily addressed causes for
the high cost of solar, one is the costs of the panels themselves and the other
is their energy conversion efficiency.

We have developed a revolutionary and disruptive new product
solution for the conversion of solar energy to electricity.

CUSTOMERS

We will not have direct interaction with end users customers.
We plan to license the NGD Technology to original equipment manufacturers
(OEMs) and derive our revenue from licensee fees and royalties from sales by
OEMs. There is no assurance that we will be able to license the technology to
OEMs or if we are able to license the technology, that OEMs will be able to
derive any revenues from which we would receive royalties.

COMPETITION

The renewable energy, solar energy and solar module sectors are
highly competitive and continually evolving as participants strive to
distinguish themselves within their markets and compete within the larger
electric power industry. In addition, we expect to compete with future entrants
to the photovoltaic industry that offer

7

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new technological solutions. We may also face competition from
semiconductor manufacturers and semiconductor equipment manufacturers or their
customers, several of which have already announced their intention to start
production of photovoltaic cells, solar modules or turnkey production lines.
Some of these competitors may be part of larger corporations and have greater
financial resources and greater brand name recognition than we do and may, as a
result, be better positioned to adapt to changes in the industry or the economy
as a whole.

We also face competition from companies that currently offer or
are developing other renewable energy technologies (including wind, hydropower,
geothermal, biomass and tidal technologies) and other power generation sources
that burn conventional fossil fuels.

RESEARCH AND DEVELOPMENT ACTIVITIES

We are currently conducting research and development on the
NGD Technology. We expended $2,322,046 on research and development during the
fiscal year ended June 30, 2011.

PATENTS AND TRADEMARKS

We own two US provisional patent applications listed below:

Patent:
      
      
      Filing Date
      Present StatusPhase I
    2393- 104PRA
    United States Provisional Patent
      Application No. 61/424,252
    December 17, 2010
    PendingPhase II
    2393- 105PRA
    United States Provisional Patent
      Application No. 61/434,727
    January 20, 2011
    Pending


We also intend to file for patents in others countries under
the Patent Cooperation Treaty.

EMPLOYEES

We have six full time employees, four of our executive
officers, Mr. Ehrmantraut, Mr. Pleging, Ms. Guo and Dr. Pattantyus-Abraham and
two other full-time employees.

AVAILABLE INFORMATION

We are a reporting issuer and we file our annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Exchange Act with the SEC.

The public may read and copy any materials we file with the SEC
at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549.
State that the public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330.

The SEC maintains an Internet site that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC and state the address of that site (http://www.sec.gov).

Our internet address is http://www.quantumsp.com. We have made available, free
of charge, through our Internet website, our annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the SEC.

8

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ITEM
1A.              
RISK FACTORS.

If photovoltaic technology is not suitable for widespread
adoption, or if sufficient demand for solar modules does not develop or takes
longer to develop than we anticipate, we may never earn revenues or become
profitable.

The solar energy market is at a relatively early stage of
development and the extent to which solar modules will be widely adopted is
uncertain. If photovoltaic technology proves unsuitable for widespread adoption
or if demand for solar modules fails to develop sufficiently, we may be unable
to grow our business or generate sufficient net sales to sustain profitability.
In addition, demand for solar modules in our targeted may not develop or may
develop to a lesser extent than we anticipate. Many factors may affect the
viability of widespread adoption of photovoltaic technology and demand for solar
modules, including the following:

|1. | cost-effectiveness of the electricity generated by
      photovoltaic power systems compared to conventional energy sources and
      products, including conventional energy sources, such as natural gas, and
      other non-solar renewable energy sources, such as wind;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | availability and substance of government subsidies,
      incentives and renewable portfolio standards to support the development of
      the solar energy industry;                                                                                                        
|3. | performance and reliability of photovoltaic systems
      compared to conventional and other non-solar renewable energy sources and
      products;                                                                                                                          
|4. | success of other renewable energy generation
      technologies, such as hydroelectric, tidal, wind, geothermal, solar
      thermal, concentrated photovoltaic, and biomass;                                                                                                
|5. | fluctuations in economic and market conditions that
      affect the price of, and demand for, conventional and non-solar renewable
      energy sources, such as increases or decreases in the price of oil,
      natural gas and other fossil fuels; and                  
|6. | fluctuations in capital expenditures by end-users of
      solar modules, which tend to decrease when the economy slows and interest
      rates increase.                                                                                                                   

An increase in interest rates or lending rates or tightening
of the supply of capital in the global financial markets (including a reduction
in total tax equity availability) could make it difficult for end-users to
finance the cost of a photovoltaic system and could reduce the demand for
solar modules utilizing our NGD Technology and/or lead to a reduction in the
average selling price for photovoltaic modules.

Many of potential solar technology customers will depend on
debt financing to fund the initial capital expenditure required to develop,
build and purchase a photovoltaic system. As a result, an increase in interest
rates or lending rates could make it difficult for our potential customers to
secure the financing necessary to develop, build, purchase or install a
photovoltaic system on favorable terms, or at all, and thus lower demand for our
solar modules which could limit our growth or reduce our net sales. Due to the
overall economic outlook, our end-users may change their decision or change the
timing of their decision to develop, build, purchase or install a photovoltaic
system. In addition, we believe that a significant percentage of our end-users
install photovoltaic systems as an investment, funding the initial capital
expenditure through a combination of equity and debt. An increase in interest
rates and/or lending rates could lower an investors return on investment in a
photovoltaic system, increase equity return requirements or make alternative
investments more attractive relative to photovoltaic systems, and, in each case,
could cause these end-users to seek alternative investments. A reduction in the
supply of project debt financing or tax equity investments could reduce the
number of solar projects that receive financing and thus lower demand for solar
modules.

Existing regulations and policies and changes to these
regulations and policies may present technical, regulatory and economic barriers
to the purchase and use of photovoltaic products, which may significantly reduce
demand for our solar modules.

The market for electricity generation products is heavily
influenced by foreign, federal, state and local government regulations and
policies concerning the electric utility industry, as well as policies
promulgated by electric utilities. These regulations and policies often relate
to electricity pricing and technical interconnection of customer-owned
electricity generation. In the United States and in a number of other countries,
these regulations and policies have been modified in the past and may be
modified again in the future. These

9

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regulations and policies could deter end-user purchases of
photovoltaic products and investment in the research and development of
photovoltaic technology. For example, without a mandated regulatory exception
for photovoltaic systems, utility customers are often charged interconnection or
standby fees for putting distributed power generation on the electric utility
grid. If these interconnection standby fees were applicable to photovoltaic
systems, it is likely that they would increase the cost to our end-users of
using photovoltaic systems which could make them less desirable, thereby harming
our business, prospects, results of operations and financial condition. In
addition, electricity generated by photovoltaic systems mostly competes with
expensive peak hour electricity, rather than the less expensive average price of
electricity. Modifications to the peak hour pricing policies of utilities, such
as to a flat rate for all times of the day, would require photovoltaic systems
to achieve lower prices in order to compete with the price of electricity from
other sources.

We anticipate that solar modules utilizing our technology and
their installation will be subject to oversight and regulation in accordance
with national and local ordinances relating to building codes, safety,
environmental protection, utility interconnection and metering and related
matters. It is difficult to track the requirements of individual states and
design equipment to comply with the varying standards. Any new government
regulations or utility policies pertaining to our solar modules may result in
significant additional expenses to us, our resellers and their customers and, as
a result, could cause a significant reduction in demand for our solar modules.

We face intense competition from manufacturers of
crystalline silicon solar modules, thin film solar modules and solar thermal and
concentrated photovoltaic systems; if global supply exceeds global demand, it
could lead to a reduction in the average selling price for photovoltaic modules.

The solar energy and renewable energy industries are both
highly competitive and continually evolving as participants strive to
distinguish themselves within their markets and compete with the larger electric
power industry. Within the global photovoltaic industry, we face competition
from crystalline silicon solar module manufacturers, other thin film solar
module manufacturers and companies developing solar thermal and concentrated
photovoltaic technologies.

Even if demand for solar modules continues to grow, the rapid
expansion plans of many solar cell and module manufacturers could create periods
where supply exceeds demand.

During any such period, our competitors could decide to reduce
their sales price in response to competition, even below their manufacturing
cost, in order to generate sales. As a result our partners may be unable to sell
solar modules based on our technology at attractive prices, or for a profit,
during any period of excess supply of solar modules, which would reduce our net
sales and adversely affect our results of operations. Also, we may decide to
lower our average selling price to certain customers in certain markets in
response to competition.

Our failure to further refine our technology and develop and
introduce improved photovoltaic products could render solar modules based on our
technology uncompetitive or obsolete and reduce our net sales and market share.

We will need to invest significant financial resources in
research and development to continue to improve our module conversion efficiency
and to otherwise keep pace with technological advances in the solar energy
industry. However, research and development activities are inherently uncertain
and we could encounter practical difficulties in commercializing our research
results. We seek to continuously improve our products and processes, and the
resulting changes carry potential risks in the form of delays, additional costs
or other unintended contingencies. In addition, our significant expenditures on
research and development may not produce corresponding benefits. In addition,
other companies could potentially develop a highly reliable renewable energy
system that mitigates the intermittent power production drawback of many
renewable energy systems, or offers other value-added improvements from the
perspective of utilities and other system owners, in which case such companies
could compete with us even if the levelized cost of electricity associated with
such new system is higher than that of our systems. Our solar modules may be
rendered obsolete by the technological advances of our competitors, which could
reduce our net sales and market share.

10

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Our failure to protect our intellectual property rights may
undermine our competitive position and litigation to protect our intellectual
property rights or defend against third-party allegations of infringement may be
costly.

Protection of our proprietary processes, methods and other
technology is critical to our business. Failure to protect and monitor the use
of our existing intellectual property rights could result in the loss of
valuable technologies. We rely primarily on patents, trademarks, trade secrets,
copyrights and contractual restrictions to protect our intellectual property.
Our existing provisional patents and future patents could be challenged,
invalidated, circumvented or rendered unenforceable. Our pending patent
applications may not result in issued patents, or if patents are issued to us,
such patents may not be sufficient to provide meaningful protection against
competitors or against competitive technologies.

We also rely upon unpatented proprietary manufacturing
expertise, continuing technological innovation and other trade secrets to
develop and maintain our competitive position. While we generally enter into
confidentiality agreements with our associates and third parties to protect our
intellectual property, such confidentiality agreements are limited in duration
and could be breached and may not provide meaningful protection for our trade
secrets or proprietary manufacturing expertise. Adequate remedies may not be
available in the event of unauthorized use or disclosure of our trade secrets
and manufacturing expertise. In addition, others may obtain knowledge of our
trade secrets through independent development or legal means. The failure of our
patents or confidentiality agreements to protect our processes, equipment,
technology, trade secrets and proprietary manufacturing expertise, methods and
compounds could have a material adverse effect on our business. In addition,
effective patent, trademark, copyright and trade secret protection may be
unavailable or limited in some foreign countries, especially any developing
countries into which we may expand our operations. In some countries we have not
applied for patent, trademark or copyright protection.

Third parties may infringe or misappropriate our proprietary
technologies or other intellectual property rights, which could have a material
adverse effect on our business, financial condition and operating results.
Policing unauthorized use of proprietary technology can be difficult and
expensive. Also, litigation may be necessary to enforce our intellectual
property rights, protect our trade secrets or determine the validity and scope
of the proprietary rights of others. We cannot assure you that the outcome of
such potential litigation will be in our favor. Such litigation may be costly
and may divert management attention and other resources away from our business.
An adverse determination in any such litigation may impair our intellectual
property rights and may harm our business, prospects and reputation. In
addition, we have no insurance coverage against litigation costs and would have
to bear all costs arising from such litigation to the extent we are unable to
recover them from other parties.

We have yet to attain profitable operations and we will need
additional financing to fund continued development of solar energy products.

We have incurred a net loss of $6,376,254 for the period from
inception to June 30, 2011, and have earned no revenues to date. We expect to
spend additional capital in order produce and market solar energy products which
we are licensed to do, and establish our infrastructure and organization to
support anticipated operations. We cannot be certain whether we will ever earn a
significant amount of revenues or profit, or, if we do, that we will be able to
continue earning such revenues or profit. Also, any economic weakness may limit
our ability to continue development and ultimately market our products and
services. Any of these factors could cause our stock price to decline and result
in investors losing a portion or all of their investment. These factors raise
substantial doubt that we will be able to continue as a going concern. We have
cash in the amount of $343,289 as at June 30, 2011.

Subsequent to our year end we received subscriptions for
530,000 shares of our common stock under our Foreign Private Placement offering
at a price of $1.00 per share.

We believe that we have obtained sufficient financing to fund
our anticipated expenditures for the next four months. However, business
activities beyond the next four months will require additional funding in the
event that our cash on hand is insufficient for any additional work proposed.

Our financial statements included with this Annual Report have
been prepared assuming that we will continue as a going concern. If we are not
able to earn revenues, then we may not be able to continue as a going concern
and our financial condition and business prospects will be adversely affected.
These factors raise

11

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substantial doubt that we will be able to continue as a going
concern and adversely affect our ability to obtain additional financing.

Our short operating history makes our business difficult to
evaluate, accordingly, we have a limited operating history upon which to base an
evaluation of our business and prospects.

Our business is in the early stage of development and we have
not generated any revenues or profit to date. We commenced our operations in
April, 2004. Because of our limited operating history, investors may not have
adequate information on which they can base an evaluation of our business and
prospects. To date, we have done the following:

|1. | Completed organizational activities;                
|-- | ----------------------------------------------------
|2. | Developed a business plan;                          
|3. | Obtained interim funding;                           
|4. | Engaged consultants for professional services;
  and
|5. | Acquired NGD Technology.                           

In order to establish ourselves as a technology supplier, we
are dependent upon continued funding and the successful development of the NGD
Technology and products. Failure to obtain funding for continued development and
marketing would result in us having difficulty establishing licensing agreements
for our technology or achieving profitability. Investors should be aware of the
increased risks, uncertainties, difficulties and expenses we face as a
development stage company and our business may fail and investors may lose their
entire investment.

We have a limited operating history upon which to base an
evaluation of our business and prospects. Our business and prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets such as renewable energy. These
risks include the initial completion of a developed product, the demand for the
companys product, the companys ability to adapt to rapid technological change,
the level of product and price competition, the companys success in setting up
and expanding distribution channels and whether the company can develop and
market new products and control costs.

To address these risks, we must successfully implement our
business plan and marketing strategies. We may not successfully implement all or
any of our business strategies or successfully address the risks and
uncertainties that we encounter. We have no history of earning revenues and
there is no assurance that we will be able to generate revenues from sales or
that the revenues generated will exceed the operating costs of our business.

Operating results are difficult to predict, with the result
that we may not achieve profitability and our business may fail.

Our future financial results are uncertain due to a number of
factors, many of which are outside our control. These factors include:

|1. | Our ability to successfully license our technology to
      OEMs and the ability of licensees to attract customers;
|-- | --------------------------------------------------------------------------------------------------------------------
|2. | Our ability to generate revenue through the licensing of
      the NGD Technology;                                 
|3. | The amount and timing of costs relating to expansion of
      our operations;                                       
|4. | The announcement or introduction of competing
      distributors and products of competitors; and                   
|5. | General economic conditions and economic conditions
      specific to the solar power generation.                   

We believe that we can compete favorably on these factors.
However, we will have no control over how successful our competitors are in
addressing these factors. These factors could negatively impact on our financial
results, with the result that we may not achieve profitability and our business
may fail.

We will require additional financing and may not be able to
continue operations if additional financing is not obtained.

12

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As of June 30, 2011, we had cash in the amount of $343,289. Our
total expenditures over the next twelve months are anticipated to be
approximately $12,600,000, the majority of which is due to the development and
marketing of our products and general, legal, accounting and administrative
expenses associated with our reporting obligations under the Exchange Act.
Depending on the success of our initial marketing efforts, we estimate that we
will require further funding to implement an advertising campaign to establish
and enhance awareness of our products.

The accompanying financial statements have been prepared
assuming that we will continue as a going concern. As discussed in Note 1 of our
June 30, 2011 year end audited financial statements, we are in the development
stage of operations, have had losses from operations since inception, and have
insufficient working capital available to meet ongoing financial obligations
over the next fiscal year. After the fiscal year end, we will require additional
financing for any operational expenses and to pursue our plan of operation. We
will require additional capital and financing in order to continue otherwise our
business will fail. We have no agreements for additional financing and there can
be no assurance that additional funding will be available to us on acceptable
terms in order to enable us to complete our plan of operation.

We will depend on recruiting and retaining qualified
personnel and the inability to do so would seriously harm our business.

Our success is dependent in part on the services of certain key
management personnel, including Steven Pleging, our Chairman, Daryl J.
Ehrmantraut, our Chief Executive Officer and President, Dr. Andras
Pattantyus-Abraham, our Chief Technology Officer, Graham R. Hughes, our Chief
Financial Officer, Secretary and Treasurer, and Stella Guo, our Vice President
of Corporate Development. We have an employment agreement with Mr. Ehrmantraut,
Mr. Pleging and Ms. Guo. We do not have employment agreements with Mr. Hughes or
Dr. Pattantyus-Abraham. We do not have any employment agreements with any third
parties providing services to us. The experience of these individuals is an
important factor contributing to our success and growth and the loss of one or
more of these individuals could have a material adverse effect on our company.
Our future success also depends on our attracting, retaining and motivating
highly skilled personnel and we may be unable to retain our key personnel or
attract, assimilate or retain other highly qualified personnel in the
future.

We may become liable for defects or patent disputes that
arise and this could negatively affect our business.

We may become liable for any defects that exist in the NGD
Technology, or any patent disputes. If we are deemed to be liable for any
defects or licensing issues, this will have a material adverse impact on our
financial condition and results of operation.

Because we are significantly smaller and less established we
may lack the financial resources necessary to compete effectively and sustain
profitability.

Our future success depends on our ability to compete
effectively with other distributors of other solar technology. Many of these
competitors are more established, offer more products, services and features,
have a greater number of clients, locations, and employees, and also have
significantly greater financial, technical, marketing, public relations, name
recognition, and other resources than we have. While our objective is to
continue to develop our technology, if we do not compete effectively with
current and future competitors, we may not generate enough revenue to be
profitable. Any of these factors could cause our stock price to decline and
result in investors losing a portion or all of their investment. Increased
competition may result in increased operating costs and the inability to
generate revenues, any one of which could materially adversely affect our
business, results of operations and financial condition. Many of our current and
potential competitors have significantly greater financial, marketing, customer
support, technical and other resources than us. As a result, such competitors
may be able to attract potential customers away from us, and they may be able to
devote greater resources to the development and promotion of their products than
we can.

We do not intend to pay dividends in the near future.

We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future. Our board of directors
determines whether to pay dividends on our issued and outstanding shares. The

13

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declaration of dividends will depend upon our future earnings,
our capital requirements, our financial condition and other relevant factors.
The Nevada Revised Statutes, however, do prohibit us from declaring dividends
where, after giving effect to the distribution of the dividend:

|1. | We would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                             
|2. | Our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed to satisfy the rights of
      stockholders who have preferential rights superior to those receiving the
      distribution.

Our board does not intend to declare any dividends on our
shares for the foreseeable future.

Our business is exposed to foreign currency fluctuations
causing negative changes in exchange rates to result in greater costs.

A portion of our expenses and capital spending will be
transacted in Canadian dollars. We do not have a foreign currency hedging
program in place. Due to the unpredictable behavior of foreign currency exchange
rate fluctuations we cannot assure that this will not have a material adverse
impact on our financial condition and results of operation.

Because our stock is a penny stock, stockholders will be
more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
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 quotation
system.

Because our securities constitute "penny stocks" within the
meaning of the rules, the rules apply to us and to our securities. The rules may
further affect the ability of owners of shares to sell our securities in any
market that might develop for them. As long as the quotation price of our common
stock is less than $5.00 per share, the common stock will be subject to Rule
15g-9 under the Exchange Act. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk
disclosure document prepared by the SEC, that:

|1. | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                          
|2. | contains a description of the broker's or dealer's duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation to such duties or other requirements of
      securities laws;
|   |                                                                                                                                                                                                                                          
|3. | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
|   |                                                                                                                                                                                                                                          
|4. | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
|   |                                                                                                                                                                                                                                          
|5. | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
|   |                                                                                                                                                                                                                                          
|6. | contains such other information and is in such form,
      including language, type, size and format, as the SEC shall require by
      rule or regulation.                                                                              

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, the

14

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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 acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock.

ITEM
1B.              UNRESOLVED
STAFF COMMENTS

None.

ITEM
2.                 
PROPERTIES.

Our principal office is located at Suite #35, located in the
Guinness Tower, 3rd Floor at 1055 West Hastings Street, Vancouver,
British Columbia, V6E 2E9 Canada. We have a six month lease and pay $2,687.00
CDN per month. The lease is set to expire on February 28, 2012.

Our property is adequate, suitable, has enough capacity to operate
  our business and is in good condition. We own no real estate holdings and we
  have no policy to acquire assets for possible capital gain or income.

ITEM
3.                 
LEGAL PROCEEDINGS.

None.

ITEM
4.                 
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

15

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PART II

|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
      STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
      SECURITIES.
|------- | -------------------------------------------------------------------------------------------------------------------------

Quotations for our common stock are currently on the
Over-The-Counter Bulletin Board (the OTC Bulletin Board) under the symbol
"QSPW." The following is the high and low close information for our common stock
during each fiscal quarter of our last two fiscal years.

QUARTER
    HIGH ($)
    LOW ($)1stQuarter 2010
    0.51
    0.512ndQuarter 2010
    2.20
    0.513rdQuarter 2010
    2.50
    2.004thQuarter 2010
    2.50
    2.001stQuarter 2011
    2.50
    1.752ndQuarter 2011
    2.25
    2.243rdQuarter 2011
    2.80
    1.504thQuarter 2011
    1.51
    0.51


The high and low close price information provided above was
obtained from the OTC Bulletin Board. The market quotations provided reflect
inter-dealer prices, without retail mark-up, markdown or commission and may not
represent actual transactions.

Holders of Our Common Stock

As of August 23, 2011, there were 146,987,692 shares of our
common stock issued and outstanding that are held of record by 216registered stockholders. We believe that a number of stockholders hold stock
on deposit with their brokers or investment bankers registered in the name of
stock depositories.

Performance Graph



The performance graph above shows the total stockholder return
of investment made on June 30, 2011 for our common stock, the NASDAQ composite
and the Russell 3000 Technology. All values assume reinvestment of the full
amount of all dividends. We have selected the Russell 3000 Technology index for
comparison purposes, as we do not believe we can reasonably identify an
appropriate peer group index. The comparisons

16

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show in the graph below is not indicative of, nor is it
intended to forecast, the future performance of our common stock.

Dividends

We have not declared any dividends on our common stock since
our inception. There are no dividend restrictions that limit our ability to pay
dividends on our common stock in our Articles of Incorporation or Bylaws. Our
governing statute, Chapter 78 of the Nevada Revised Statute (NRS), does
provide limitations on our ability to declare dividends. Section 78.288 of the
NRS prohibits us from declaring dividends where, after giving effect to the
distribution of the dividend:

|(a) | we would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                                                                                                                                                                                                                                                     
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b) | our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed, if we were to be
      dissolved at the time of distribution, to satisfy the preferential rights
      upon dissolution of stockholders who may have preferential rights and
      whose preferential rights are superior to those receiving the distribution
      (except as otherwise specifically allowed by our Articles of
      Incorporation).

Recent Sales of Unregistered Securities

On August 10, 2011, we issued 60,000 shares to a consultant.
The shares were issued as compensation under the terms of a consulting
agreement. The issuance was completed pursuant to the provisions of Regulation S
of the Act. The consultant represented that he was not a U.S. Person as that
term is defined in Regulation S of the Act and was not acquiring the shares for
the account or benefit of any U.S. Person.

ITEM
6.                 
SELECTED FINANCIAL DATA.

June
      30,2011
    2010
    2009
    2008
    2007Sales
    $Nil
    $Nil
    $Nil
    $Nil
    $NilGross Profit
    $Nil
    $Nil
    $Nil
    $Nil
    $NilNet Income
    $Nil
    $Nil
    $Nil
    $Nil
    $NilNet Income Per
      Share, diluted
    $Nil
    $Nil
    $Nil
    $Nil
    $Nil


June
      30,2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007Revenues
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Operating Expenses
    $
    4,728,538
    
    $
    1,360,963
    
    $
    28,747
    
    $
    166,032
    
    $
    15,652Net Loss
    $
    (4,728,538
    )
    $
    (1,360,963
    )
    $
    (28,747
    )
    $
    (166,032
    )
    $
    (15,652
    )Net Loss Per
      Share, basic and diluted
    $
    (0.03
    )
    $
    (0.01
    )
    $
    (0.00
    )
    $
    (0.00
    )
    $
    (0.00
    )


For the period from inception on April 14, 2004 to June 30,
2011, we have not earned any operating revenue. We had an accumulated net loss
of $6,376,254 from the period of inception to June 30, 2011. We incurred total
expenses of $6,270,254 from inception to June 30, 2011.

June 30,2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007Working Capital
    $
    182,548
    
    $
    (391,425
    )
    $
    5,747
    
    $
    34,494
    
    $
    526Total Assets
    $
    1,843,081
    
    $
    1,662,213
    
    $
    13,247
    
    $
    41,994
    
    $
    8,026Stockholders Equity
    $
    1,680,664
    
    $
    1,184,544
    
    $
    5,747
    
    $
    34,494
    
    $
    526


As of June 30, 2011, we had cash on hand of $343,289. Since our
inception, we have used our common stock to raise money for our operations and
for our acquisition. We have not attained profitable operations and are
dependent upon obtaining financing to pursue our plan of operation. For these
reasons, our auditors

17

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stated in their report to our audited financial statements for
the year ended June 30, 2011, that there is substantial doubt that we will be
able to continue as a going concern.

We have no revenues to date from our inception. We anticipate
continuing to rely on equity sales of our common stock in order to continue to
fund our business operations. Issuances of additional shares will result in
dilution to our existing stockholders. There is no assurance that we will
achieve any of additional sales of our equity securities or arrange for debt or
other financing for to fund our planned business activities.

ITEM 7.
    MANAGEMENT'S DISCUSSION
      AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS.


PLAN OF OPERATION

The following discussion and analysis summarizes our plan of
operation for the next twelve months, our results of operations for the year
ended June 30, 2011 and changes in our financial condition from June 30,
2010.

If we can obtain sufficient financing we intend to continue the
final development of our NGD Technology, and identify and engage original
equipment manufacturers (OEMs) interested in licensing our technology. We
anticipate that the licensing agreements will be between us and OEMs with the
expertise and facilities required to mass manufacture solar cells based on our
NGD Technology and that the OEMs will distribute the solar cells worldwide
using their existing sales and marketing channels and at their expense. The cost
of manufacture will be solely the responsibility of the OEMs. We expect to
receive revenue on royalties based on the number of cells produced by the OEMs.
This business model should allow us to maximize capital resources available at
startup and through our OEM licensees positively address the demand for high
efficiency solar cell devices. This business model should enable us to increase
revenues and create brand recognition without the time, capital and risk
associated with manufacturing plant construction.

There is no assurance that we will be able to obtain sufficient
financing to proceed with our plan of operation.

RESULTS OF OPERATION

For the period from inception on April 14, 2004 to June 30,
2011, we have not earned any operating revenue. We had an accumulated net loss
of $6,376,254 since inception. We incurred total operating expenses of
$6,270,254 since inception.

We have not earned any revenues since inception. We do not
anticipate earning revenues until such time as we complete further development
of, and enter into licensing agreements for our NGD Cell Technology. We are
presently in the development stage of our business and we can provide no
assurance that we will be able to generate revenues from sales of our product or
that the revenues generated will exceed the operating costs of our business.

Administrative Expenses

We have incurred administrative expenses in the amount of
$6,270,254 for the period from April 14, 2004 (inception) to June 30, 2011.
Administrative expenses for this period included the following expenses:

18

---

|Administrative Expenses       |   |           |  |   | June 30   |  |   |        |  |   | Inception (April 14, | 
|----------------------------- | - | --------- |  | - | --------- |  | - | ------ |  | - | -------------------- | 
|                              |   | 2011      |  |   | 2010      |  |   | 2009   |  |   | 2004) to             | 
|                              |   |           |  |   |           |  |   |        |  |   | June
      30, 2011  | 
|Amortization of Equipment     | $ | 1,112     |  | $ | 556       |  | $ | -      |  | $ | 1,668                | 
|Amortization of Patents       |   | 76,741    |  |   | 38,370    |  |   | -      |  |   | 115,111              | 
|General And Administrative    |   | 539,105   |  |   | 269,693   |  |   | 28,747 |  |   | 989,551              | 
|Professional Fees             |   | 543,419   |  |   | 209,397   |  |   | -      |  |   | 752,816              | 
|Research and Development      |   | 2,322,046 |  |   | 683,238   |  |   | -      |  |   | 3,005,284            | 
|Stock Based Compensation      |   | 1,246,115 |  |   | 159,709   |  |   | -      |  |   | 1,405,824            | 
|Total Administrative Expenses | $ | 4,728,538 |  | $ | 1,360,963 |  | $ | 28,747 |  | $ | 6,270,254            | 

Our administrative expenses for the fiscal year ended 2011 have
increased primarily as a result of increased operations in the development of
our NGDTMTechnology. This has resulted in increased research and
development activities and general and administrative expenses. All expenses
increased from fiscal 2010 to 2011.

Professional fees related to the acquisition of the NGDTMTechnology and meeting our ongoing reporting requirements with the
Securities and Exchange Commission.

We anticipate our operating expenses will increase as we
undertake our plan of operation. The increase will be attributable to our
development, of our NGD solar cell technology. We also anticipate our ongoing
operating expenses will also increase as a result of our ongoing reporting
requirements under the Exchange Act.

Net Loss

We incurred a loss in the amount of $6,376,254 for the period
from inception to June 30, 2011. Our loss was attributable to the costs of
operating expenses which primarily consisted of research and development costs,
general and administrative expenses and professional fees paid in connection
with acquiring our assets, preparing and filing our Current, Quarterly and
Annual Reports.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital                         |   |                        |   |   |                        |   |  |                      | 
|--------------------------------------- | - | ---------------------- | - | - | ---------------------- | - |  | -------------------- | 
|                                        |   |                        |   |   |                        |   |  |                      | 
|                                        |   |                        |   |   |                        |   |  | Percentage           | 
|                                        |   | At
      June 30, 2011 |   |   | At
      June 30, 2010 |   |  | Increase /(Decrease) | 
|Current Assets                          | $ | 344,965                |   | $ | 86,244                 |   |  | 300.0%               | 
|Current Liabilities                     |   | (162,417               | ) |   | (477,669               | ) |  | (66.0)%              | 
|Working Capital Surplus
      (Deficit) | $ | 182,548                |   | $ | (391,425               | ) |  | (146.6)%             | 

|                        |   | At June
      30, 2010 |   |   | At June
      30, 2009 |   |  | Percentage          | 
|----------------------- | - | ---------------------- | - | - | ---------------------- | - |  | ------------------- | 
|                        |   |                        |   |   |                        |   |  | Increase / Decrease | 
|Current Assets          | $ | 86,244                 |   | $ | 13,247                 |   |  | 551.0%              | 
|Current Liabilities     |   | (477,669               | ) |   | (7,500                 | ) |  | 6,268.9%            | 
|Working Capital Surplus | $ | (391,425               | ) | $ | 5,747                  |   |  | (6,910.9)%          | 

|Cash Flows                                        |   |                     |   |   |                     |   |   |                     |  
|------------------------------------------------- | - | ------------------- | - | - | ------------------- | - | - | ------------------- | -
|                                                  |   | Year Ended          |   |   | Year Ended          |   |   | Year Ended          |  
|                                                  |   | June
      30, 2011 |   |   | June
      30, 2010 |   |   | June
      30, 2009 |  
|Cash Flows used in Operating
      Activities     | $ | (3,440,271          | ) | $ | (590,754            | ) | $ | (28,747             | )
|Cash Flows used in Investing Activities           |   | -                   |   |   | (3,336              | ) |   | -                   |  
|Cash Flows provided by
      Financing Activities |   | 3,713,330           |   |   | 651,073             |   |   | -                   |  
|Net Increase (decrease) in Cash During Period     | $ | 273,059             |   | $ | 56,983              |   | $ | (28,747             | )

19

---

As at June 30, 2011, we had cash of $343,289 and a working
capital surplus of $182,548.

The change in our working capital at June 30, 2011 from our
year ended June 30, 2010 are primarily a result of the decreases in accounts
payable and accrued liabilities, subscription received in advance and our
revolving line of credit with CIO. The increase in our cash used during the
period ended on June 30, 2011, from the comparable periods of the preceding
fiscal years are due to the cost of our research and development activities
related to our NGDTM Technology and our professional fees related to
the preparation of our current, quarterly and annual reports filed on Forms 8-K,
10-Q and 10-K respectively, with the SEC and from the fact that we had no
revenue on June 30, 2011.

The decreases in our working capital at June 30, 2010 from our
year ended June 30, 2009 are primarily a result a result of the increases in
accounts payable and accrued liabilities, subscriptions received in advance and
our revolving line of credit with CIO. The increase in our cash used during the
period ended on June 30, 2010, from the comparable periods of the preceding
fiscal years are due to the cost of our acquisition of the NGDTM
Technology and our professional fees related to the acquisition thereto and the
preparation of our current, quarterly and annual reports filed on Forms 8-K,
10-Q and 10-K respectively, with the SEC and from the fact that we had no
revenue on June 30, 2010.

Future Financings

As of June 30, 2011, we had cash on hand of $343,289. Since our
inception, we have used our common stock to raise money for our operations and
for our acquisition. We have not attained profitable operations and are
dependent upon obtaining financing to pursue our plan of operation. For these
reasons, our auditors stated in their report to our audited financial statements
for the year ended June 30, 2011, that there is substantial doubt that we will
be able to continue as a going concern.

We have no revenues to date from our inception. We anticipate
continuing to rely on equity sales of our common stock in order to continue to
fund our business operations. Issuances of additional shares will result in
dilution to our existing stockholders. There is no assurance that we will
achieve any of additional sales of our equity securities or arrange for debt or
other financing for to fund our planned business activities.

Foreign Private Placement

Our Board of Directors approved a private placement offering of
up to 3,000,000 shares of our common stock at a price of $1.00 per share (the
Foreign Private Placement). This offering will be made to persons who are not
U.S. Persons as defined under Regulation S of the Securities Act. We have not
issued any securities under this offering as at June 30, 2011.

We intend to use the net proceeds from these financings to
further develop its NGDTM Technology and for working capital
purposes. There is no assurance that the Foreign Private Placement will be
completed on the above terms or at all.

The above does not constitute an offer to sell or a
solicitation of an offer to buy any of Quantums securities in the United
States. The securities have not been registered under the Securities Act and may
not be offered or sold within the United States or to U.S. persons unless an
exemption from such registration is available.

Significant Trends, Uncertainties and Challenges

We believe that the significant trends, uncertainties and
challenges that directly or indirectly affect our financial performance and
results of operations include:

- Our ability to achieve module efficiencies and other performance targets,
  and to obtain necessary or desired certifications for our photovoltaic
  modules, in a timely manner;
- Our ability to license the technology to effective manufacturers and/or
  distributers;
- Our ability to achieve projected operational performance and cost metrics;

20

---

- Our ability to consummate strategic relationships with key partners,
  including original equipment manufacturer (OEM) customers, system integrators,
  value added resellers and distributors who deal directly with manufacturers
  and end-users.
- The effect that currency fluctuations may have on our capital equipment
  purchases, manufacturing costs and the price of our planned photovoltaic
  modules;
- Changes in the supply and demand for photovoltaic modules as well as
  fluctuations in selling prices for photovoltaic modules worldwide;
- Our ability to raise additional capital on terms favorable to us;
- Our future strategic partners expansion of their manufacturing facilities,
  operations and personnel; and
- Our ability and the ability of our distributors, suppliers and customers to
  manage operations and orders during financial crisis and financial downturn.

Contractual Obligations

Contractual Obligations
      Payments Due By PeriodTotal
      Less than 1 Year
      1-3 Years
      3-5 Years
      More Than 5 YearsResearch 
        Agreement
      $599,593
      $599,593
      -
      -
      --
      -
      -


Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources

CRITICAL ACCOUNTING POLICIES

Our critical accounting policies are included in the Notes to
our Financial Statements contained in this Annual Report on Form 10-K.

ITEM
7A.               
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Foreign Currency Exchange Risk

The Company is actively engaged in research and development
activities internationally and is exposed to foreign currency risk. We currently
conduct significant research and development operations on a contractual basis
at Simon Fraser University in British Columbia, Canada.

We do not hold any derivative instruments and do not engage in
any hedging activities. Because most of our purchases and sales will made in
Canadian dollars, any exchange rate change affecting the value of the in
Canadian dollar relative to the U.S. dollar could have an effect on our
financial results as reported in U.S. dollars. If the Canadian dollar were to
depreciate against the U.S. dollar, amounts reported in U.S. dollars would be
correspondingly reduced. If the in Canadian dollar were to appreciate against
the U.S. dollar, amounts reported in U.S. dollars would be correspondingly
increased.

Although our reporting currency is the U.S. dollar, we may
conduct business and incur costs in the local currencies of other countries in
which we may operate, make sales and buy materials. As a result, we are

21

---

subject to currency translation risk. Further, changes in
exchange rates between foreign currencies and the U.S. dollar could affect our
future net sales and cost of sales and could result in exchange losses.

We cannot accurately predict future exchange rates or the
overall impact of future exchange rate fluctuations on our business, results of
operations and financial condition.

Interest Rate Risk

Our exposure to market risks for changes in interest rates
relates primarily to our cash equivalents. This can also have an effect on the
ability of manufacturers and consumers to obtain sufficient financing to
license, manufacture, distribute or purchase a device using our technology.

Commodity and Component Risk

Failure to receive timely delivery of production tools by our
future licensees equipment suppliers could delay manufacturing capacity and
materially and adversely affect our results of operations and financial
condition in future periods. The failure of any suppliers to perform could
disrupt our future licensees supply chain and impair our operations.

If delivery of production tools or raw materials are not made
on schedule or at all, then our licensees might be unable to carry out our
commercialization and manufacturing plans, produce photovoltaic modules in the
volumes and at the times that we expect or generate sufficient revenue from
operations, and our business, results of operations and financial condition
could be materially and adversely affected.

Credit Risk

We currently do not hold financial instruments that subject us
to credit risk.

22

---

ITEM
8.                 
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Financial Statements

|1. | Reports of Independent Registered Public Accounting
      Firms:               
|-- | -------------------------------------------------------------------------------
|   |                                                                                
|2. | Audited Financial Statements for the year ended June 30,
      2011, including:

| | a. | Balance Sheets as at June 30, 2011 and
2010;                                                                                          
| | -- | --------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                       
| | b. | Statements of Operations for the years ended June 30,
      2011, 2010 and 2009 and accumulated from inception to June 30,
      2011;
| |    |                                                                                                                                       
| | c. | Statements of Cash Flows for the years ended June 30,
      2011, 2010 and 2009 and accumulated from inception to June 30,
      2011;
| |    |                                                                                                                                       
| | d. | Statement of Stockholders Equity for the period from
      inception to June 30, 2011; and                                           
| |    |                                                                                                                                       
| | e. | Notes to the Financial
Statements.                                                                                                    

23

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of 
  Quantum Solar
  Power Corp. 
  (A Development Stage Company)

We have audited the accompanying balance sheet of Quantum Solar
  Power Corp. (the Company) as of June 30, 2011 and 2010, and the related
  statements of operations, stockholders' equity, and cash flows for the years
  ended June 30, 2011 and 2010 and for the period from April 14, 2004 (Inception)
  to June 30, 2011. Quantum Solar Power Corp.'s management is responsible for
  these financial statements. Our responsibility is to express an opinion on these
  financial statements based on our audits.

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. An audit
  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 audits provide 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 the Company
  as of June 30, 2011 and 2010, and the results of its operations and its cash
  flows for the years ended June 30, 2011 and 2010 and for the period from April
  14, 2004 (Inception) to June 30, 2011 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
  1 to the financial statements, the Company generated negative cash flows from
  operating activities during the past year. The Company has an accumulated
  deficit of approximately $6,748,254 for the year ended June 30, 2011. This
  raises substantial doubt about the Company's ability to continue as a going
  concern. The financial statements do not include any adjustments that might
  result from the outcome of this uncertainty.

We also have audited, in accordance with the standards of the
  Public Company Accounting Oversight Board (United States), the Companys
  internal control over financial reporting as of June 30, 2011, based on criteria
  established in Internal Control-Integrated Framework issued by the
  Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our
  report dated September 12, 2011 expressed an adverse opinion on the Companys
  internal control over financial reporting because of material weaknesses.

|                   | "Davidson & Company LLP"
|------------------ | ------------------------
|Vancouver, Canada  | Chartered Accountants   
|                   |                         
|September 12, 2011 |                         

F-1

---

REPORT OF INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of 
  Quantum Solar
  Power Corp. 
  (A Development Stage Company)

We have audited the internal control over financial reporting
  of Quantum Solar Power Corp. (the Company) as of June 30, 2011 based on
  criteria established in Internal Control  Integrated Frameworkissued by
  the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
  Companys management is responsible for maintaining effective internal control
  over financial reporting and for its assessment of the effectiveness of internal
  control over financial reporting included in the accompanying Managements
  Report on Internal Control Over Financial Reporting. Our responsibility is to
  express an opinion on the Companys internal control over financial reporting
  based on our audit.

We conducted our audit 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 effective internal control over financial reporting was maintained in
  all material respects. Our audit included obtaining an understanding of internal
  control over financial reporting, assessing the risk that a material weakness
  exists, and testing and evaluating the design and operating effectiveness of
  internal control based on the assessed risk. Our audit also included performing
  such other procedures as we considered necessary in the circumstances. We
  believe that our audit provides a reasonable basis for our opinion.

A companys internal control over financial reporting is a
  process designed 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. A
  companys internal control over financial reporting includes those policies and
  procedures that (1) pertain to the maintenance of records that, in reasonable
  detail, accurately and fairly reflect the transactions and dispositions of the
  assets of the company; (2) provide reasonable assurance that transactions are
  recorded as necessary to permit preparation of financial statements in
  accordance with generally accepted accounting principles, and that receipts and
  expenditures of the company are being made only in accordance with
  authorizations of management and directors of the company; and (3) provide
  reasonable assurance regarding prevention or timely detection of unauthorized
  acquisition, use, or disposition of the companys assets that could have a
  material effect on the financial statements.

Because of the inherent limitations, internal control over
  financial reporting may not prevent or detect misstatements. Also, projections
  of any evaluation of effectiveness to future periods are subject to the risk
  that controls may become inadequate because of changes in conditions, or that
  the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or combination of
  deficiencies, in internal control over financial reporting, such that there is a
  reasonable possibility that a material misstatement of the Companys annual or
  interim financial statements will not be prevented or detected on a timely
  basis. The following material weaknesses have been identified and included in
  managements assessment: Management concluded that the Companys entity-level
  controls related to the control environment, control activities, and monitoring
  functions have not been designed adequately. With respect to the control
  environment, control activities, and monitoring functions, management determined
  that these material weaknesses were primarily attributable to a lack of
  formalized policies and procedures, lack of independent directors and audit
  committee, lack of segregation of duties in the expenditure cycle, lack of
  controls to monitor financial reporting, lack of formalized accounting approval
  and review procedures, and a lack of compliance and internal control function.
  These material weaknesses contributed to the other material weaknesses described
  below as well as to an environment where there is a reasonable possibility that
  a material misstatement of the Companys annual or interim financial statements
  will not be prevented or detected on a timely basis. Management also concluded
  that inadequate segregation of duties and independent review have resulted in
  ineffective controls in the expenditures, financial closing and reporting and
  treasury processes. These material weaknesses were considered in determining the
  nature, timing, and extent of audit tests applied in our audits of the financial
  statements as of and for the year ended June 30, 2011 of the Company, and this
  report does not affect our report on those financial statements.

F-2

---

In our opinion, because of the effect of the material
  weaknesses identified above on the achievement of the objectives of the control
  criteria, the Company has not maintained effective internal control over
  financial reporting as of June 30, 2011, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of
  Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the
  Public Company Accounting Oversight Board (United States), the balance sheets of
  the Company as of June 30, 2011 and the related statements of operations,
  stockholders equity and cash flows for the years then ended and our report
  dated September 12, 2011 expressed an unqualified opinion.











|                   | "Davidson & Company LLP"
|------------------ | ------------------------
|Vancouver, Canada  | Chartered Accountants   
|                   |                         
|September 12, 2011 |                         

F-3

---

Report of  Independent Registered Public Accounting Firm



To  The Stockholders and Board of Directors 
  of  Quantum Solar Power Corp. 
        
       We have audited the accompanying  consolidated balance sheet of Quantum Solar Power Corp. (A Development Stage  Company) as of June 30, 2009 and the related consolidated statements of  operations, changes in consolidated stockholders’ equity and cash flows for the  year ended June 30, 2009. These financial statements are  the responsibility of the Company’s management. Our responsibility is to  express an opinion on these consolidated financial statements based on our  audit.

We conducted our audit 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.  An audit includes examining, on a test basis,  evidence supporting the amounts and disclosures in the financial statements. An  audit also includes assessing the accounting principles used and significant  estimates made by management, as well as evaluating the overall financial  statement presentation. We believe that our audit provides a reasonable basis  for our opinion.

In our opinion, the consolidated financial  statements referred to above present fairly, in all material respects, the  financial position of Quantum Solar Power Corp. as of June 30, 2009, and the  results of its operations and its cash flows for the year ended June 30, 2009  in conformity with accounting principles generally accepted in the United  States.

The accompanying consolidated financial  statements referred to above have been prepared assuming that the Company will  continue as a going concern.  As more  fully described in Note 1, the Company’s need to seek new sources or methods of  financing or revenue to pursue its business strategy, raise substantial doubt  about the Company’s ability to continue as a going concern.  Management’s plans as to these matters are  also described in Note 1. The financial statements do not include any adjustments  that might result from the outcome of this uncertainty.



/s/ Jewett, Schwartz, Wolfe & Associates

Jewett,  Schwartz, Wolfe & Associates

Hollywood,  Florida 
October  20, 2009

F-4

---

|QUANTUM SOLAR POWER CORP.                 
|------------------------------------------
|(A Development Stage Company)             
|BALANCE SHEETS                            
|(Expressed in
      United States Dollars)

|                                                                                                                                                                                                                                                                                                                                                              |   | June 30,   |   |   | June 30,   |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                                                                                                                                                                                                                                                                                                                              |   | 2011       |   |   | 2010       |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|ASSETS                                                                                                                                                                                                                                                                                                                                                        |   |            |   |   |            |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|Current                                                                                                                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Cash                                                                                                                                                                                                                                                                                                                                                          | $ | 343,289    |   | $ | 70,230     |  
|Receivables                                                                                                                                                                                                                                                                                                                                                   |   | -          |   |   | 4,638      |  
|Security deposits                                                                                                                                                                                                                                                                                                                                             |   | 1,676      |   |   | 11,376     |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|Total Current Assets                                                                                                                                                                                                                                                                                                                                          |   | 344,965    |   |   | 86,244     |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|Equipment(Note 3)                                                                                                                                                                                                                                                                                                                                             |   | 1,668      |   |   | 2,780      |  
|Patents(Note 4)                                                                                                                                                                                                                                                                                                                                               |   | 1,496,448  |   |   | 1,573,189  |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|Total Assets                                                                                                                                                                                                                                                                                                                                                  | $ | 1,843,081  |   | $ | 1,662,213  |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                                                                          |   |            |   |   |            |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|Current                                                                                                                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Accounts payable and accrued
      liabilities                                                                                                                                                                                                                                                                                                                | $ | 162,417    |   | $ | 382,456    |  
|Subscriptions received in advance                                                                                                                                                                                                                                                                                                                             |   | -          |   |   | 76,500     |  
|Line of credit (Note 5)                                                                                                                                                                                                                                                                                                                                       |   | -          |   |   | 18,713     |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|Total Liabilities                                                                                                                                                                                                                                                                                                                                             |   | 162,417    |   |   | 477,669    |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|Stockholders' equity                                                                                                                                                                                                                                                                                                                                          |   |            |   |   |            |  
|Preferred stock, $0.001 par
      value 
               10,000,000
      shares authorized - no shares issued and
      outstanding 
         Common stock, $0.001 par value
      400,000,000 shares authorized
      and 
               146,927,692
      (2010  142,130,000) shares outstanding as
      of 
               June 30,
      2011 (Note 6) |   | 146,927    |   |   | 142,130    |  
|Commitment to issue shares
      (Note 6)                                                                                                                                                                                                                                                                                                                     |   | 60,000     |   |   | 112,632    |  
|Additional paid in capital (Note 6)                                                                                                                                                                                                                                                                                                                           |   | 8,221,991  |   |   | 2,577,498  |  
|Accumulated deficit during
      development stage                                                                                                                                                                                                                                                                                                            |   | (6,748,254 | ) |   | (1,647,716 | )
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|Total Stockholders' Equity                                                                                                                                                                                                                                                                                                                                    |   | 1,680,664  |   |   | 1,184,544  |  
|                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |  
|Total Liabilities and Stockholders'
      Equity                                                                                                                                                                                                                                                                                                              | $ | 1,843,081  |   | $ | 1,662,213  |  

The accompanying notes are an integral part of these financial
  statements.

F-5

---

|QUANTUM SOLAR POWER CORP.                 
|------------------------------------------
|(A Development Stage Company)             
|STATEMENTS OF OPERATIONS                  
|(Expressed in
      United States Dollars)

|                                                           |   |                |   |   |                |   |   |                |   |   | For the              |  
|---------------------------------------------------------- | - | -------------- | - | - | -------------- | - | - | -------------- | - | - | -------------------- | -
|                                                           |   |                |   |   |                |   |   |                |   |   | Period From April    |  
|                                                           |   | For the Year   |   |   | For the Year   |   |   | For the Year   |   |   | 14, 2004 (Inception) |  
|                                                           |   | Ended June 30, |   |   | Ended June 30, |   |   | Ended June 30, |   |   | to June 30,          |  
|                                                           |   | 2011           |   |   | 2010           |   |   | 2009           |   |   | 2011                 |  
|                                                           |   |                |   |   |                |   |   |                |   |   |                      |  
|OPERATING EXPENSES                                         |   |                |   |   |                |   |   |                |   |   |                      |  
|Amortization of equipment                                  | $ | 1,112          |   | $ | 556            |   | $ | -              |   | $ | 1,668                |  
|Amortization of patents                                    |   | 76,741         |   |   | 38,370         |   |   | -              |   |   | 115,111              |  
|General and administrative                                 |   | 539,105        |   |   | 269,693        |   |   | 28,747         |   |   | 989,551              |  
|Professional fees                                          |   | 543,419        |   |   | 209,397        |   |   | -              |   |   | 752,816              |  
|Research and development                                   |   | 2,322,046      |   |   | 683,238        |   |   | -              |   |   | 3,005,284            |  
|Stock-based compensation (Note 6)                          |   | 1,246,115      |   |   | 159,709        |   |   | -              |   |   | 1,405,824            |  
|                                                           |   |                |   |   |                |   |   |                |   |   |                      |  
|                                                           |   | (4,728,538     | ) |   | (1,360,963     | ) |   | (28,747        | ) |   | (6,270,254           | )
|                                                           |   |                |   |   |                |   |   |                |   |   |                      |  
|OTHER ITEM                                                 |   |                |   |   |                |   |   |                |   |   |                      |  
|Impairment of intangible
      assets                      |   | -              |   |   | -              |   |   | -              |   |   | (106,000             | )
|                                                           |   |                |   |   |                |   |   |                |   |   |                      |  
|Loss and comprehensive loss for
      the year             | $ | (4,728,538     | ) | $ | (1,360,963     | ) | $ | (28,747        | ) | $ | (6,376,254           | )
|                                                           |   |                |   |   |                |   |   |                |   |   |                      |  
|Basic and diluted loss per common
      share              | $ | (0.03          | ) | $ | (0.01          | ) | $ | (0.00          | ) |   |                      |  
|                                                           |   |                |   |   |                |   |   |                |   |   |                      |  
|Weighted average number of common
      shares outstanding |   | 145,252,662    |   |   | 103,385,258    |   |   | 117,300,000    |   |   |                      |  

The accompanying notes are an integral part of these financial
  statements.

F-6

---

|QUANTUM SOLAR POWER CORP.                 
|------------------------------------------
|(A Development Stage Company)             
|STATEMENTS OF STOCKHOLDERS EQUITY        
|(Expressed in
      United States Dollars)

|                                              |  | Common
      Stock |   |   |         |   |   |            |   |   |            |   |   |                |  
|--------------------------------------------- |  | ------------------ | - | - | ------- | - | - | ---------- | - | - | ---------- | - | - | -------------- | -
|                                              |  |                    |   |   |         |   |   | Additional |   |   | Commitment |   |   | Accumulated    |  
|                                              |  |                    |   |   |         |   |   | Paid in    |   |   | to Issue   |   |   | Deficit During |  
|                                              |  | Shares             |   |   | Amount  |   |   | Capital    |   |   | Shares     |   |   | the Dev. Stage |  
|Balance, April 14, 2004 (Inception)           |  | -                  |   | $ | -       |   | $ |            |   | $ | -          |   | $ | -              |  
|Common shares issued at par                   |  | 117,200,000        |   |   | 15      |   |   | 92,485     |   |   | -          |   |   | -              |  
|Net loss                                      |  | -                  |   |   | -       |   |   | -          |   |   | -          |   |   | (9,557         | )
|Balance, June 30, 2004                        |  | 117,200,000        |   |   | 15      |   |   | 92,485     |   |   | -          |   |   | (9,557         | )
|Net loss                                      |  | -                  |   |   | -       |   |   | -          |   |   | -          |   |   | (40,111        | )
|Balance, June 30, 2005                        |  | 117,200,000        |   |   | 15      |   |   | 92,485     |   |   | -          |   |   | (49,668        | )
|Net loss                                      |  | -                  |   |   | -       |   |   | -          |   |   | -          |   |   | (26,654        | )
|Balance, June 30, 2006                        |  | 117,200,000        |   |   | 15      |   |   | 92,485     |   |   | -          |   |   | (76,322        | )
|Net loss                                      |  | -                  |   |   | -       |   |   | -          |   |   | -          |   |   | (15,652        | )
|Balance, June 30, 2007                        |  | 117,200,000        |   |   | 15      |   |   | 92,485     |   |   | -          |   |   | (91,974        | )
|Common shares issued at $2.00
      per share |  | 100,000            |   |   | 100     |   |   | 199,900    |   |   | -          |   |   | -              |  
|Net loss                                      |  | -                  |   |   | -       |   |   | -          |   |   | -          |   |   | (166,032       | )
|Balance, June 30, 2008                        |  | 117,300,000        |   |   | 115     |   |   | 292,385    |   |   | -          |   |   | (258,006       | )
|Net loss                                      |  | -                  |   |   | -       |   |   | -          |   |   | -          |   |   | (28,747        | )
|Balance, June 30, 2009                        |  | 117,300,000        |   |   | 115     |   |   | 292,385    |   |   | -          |   |   | (286,753       | )
|Private placement                             |  | 280,000            |   |   | 280     |   |   | 559,720    |   |   | -          |   |   | -              |  
|Share issuance costs                          |  | -                  |   |   | -       |   |   | (4,140     | ) |   | -          |   |   | -              |  
|Stock-based compensation                      |  | -                  |   |   | -       |   |   | 159,709    |   |   | -          |   |   | -              |  
|Commitment to issue shares                    |  | -                  |   |   | -       |   |   | -          |   |   | 112,632    |   |   | -              |  
|Acquisition of patents                        |  | 71,500,000         |   |   | 71,500  |   |   | 1,540,059  |   |   | -          |   |   | -              |  
|Shares issued for services                    |  | 50,000             |   |   | 50      |   |   | 99,950     |   |   | -          |   |   | -              |  
|Par value reclassification                    |  | -                  |   |   | 117,185 |   |   | (117,185   | ) |   | -          |   |   | -              |  
|Return to treasury                            |  | (47,000,000        | ) |   | (47,000 | ) |   | 47,000     |   |   | -          |   |   | -              |  
|Net loss                                      |  | -                  |   |   |         |   |   | -          |   |   | -          |   |   | (1,360,963     | )
|Balance, June 30, 2010                        |  | 142,130,000        |   |   | 142,130 |   |   | 2,577,498  |   |   | 112,632    |   |   | (1,647,716     | )
|Dividend-warrants                             |  | -                  |   |   | -       |   |   | 372,000    |   |   | -          |   |   | (372,000       | )
|Private placement                             |  | 4,049,560          |   |   | 4,049   |   |   | 4,045,511  |   |   | -          |   |   | -              |  
|Return to nonqualified investors              |  | (8,000             | ) |   | (8      | ) |   | (15,992    | ) |   | -          |   |   | -              |  
|Exercise of warrants                          |  | 372,000            |   |   | 372     |   |   | 3,348      |   |   | -          |   |   | -              |  
|Share issued as finders fees                 |  | 161,500            |   |   | 161     |   |   | 161,339    |   |   | -          |   |   | -              |  
|Share issuance costs                          |  | -                  |   |   | -       |   |   | (390,237   | ) |   | -          |   |   | -              |  
|Stock-based compensation                      |  | -                  |   |   | -       |   |   | 1,246,115  |   |   | -          |   |   | -              |  
|Shares issued for services                    |  | 222,632            |   |   | 223     |   |   | 222,409    |   |   | (112,632   | ) |   | -              |  
|Commitment to issue shares                    |  | -                  |   |   | -       |   |   | -          |   |   | 60,000     |   |   | -              |  
|Net loss                                      |  | -                  |   |   | -       |   |   | -          |   |   | -          |   |   | (4,728,538     | )
|Balance, June 30, 2011                        |  | 146,927,692        |   | $ | 146,927 |   | $ | 8,221,991  |   | $ | 60,000     |   | $ | (6,748,254     | )

The accompanying notes are an integral part of these financial
  statements.

F-7

---

|QUANTUM SOLAR POWER CORP.                 
|------------------------------------------
|(A Development Stage Company)             
|STATEMENTS OF CASH FLOWS                  
|(Expressed in
      United States Dollars)

|                                                                      |   |               |   |   |               |   |   |               |   |   | For the Period |  
|--------------------------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | - | - | -------------- | -
|                                                                      |   | For the       |   |   | For the       |   |   | For the       |   |   | April 14, 2004 |  
|                                                                      |   | Year Ended    |   |   | Year Ended    |   |   | Year Ended    |   |   | (Inception) to |  
|                                                                      |   | June 30, 2011 |   |   | June 30, 2010 |   |   | June 30, 2009 |   |   | June 30, 2011  |  
|                                                                      |   |               |   |   |               |   |   |               |   |   |                |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                  |   |               |   |   |               |   |   |               |   |   |                |  
|Loss for the year                                                     | $ | (4,728,538    | ) | $ | (1,360,963    | ) | $ | (28,747       | ) | $ | (6,376,254     | )
|Items not affecting cash:                                             |   |               |   |   |               |   |   |               |   |   |                |  
|Amortization of equipment                                             |   | 1,112         |   |   | 556           |   |   | -             |   |   | 1,668          |  
|Amortization of intangible assets                                     |   | 76,741        |   |   | 38,370        |   |   | -             |   |   | 115,111        |  
|Impairment of intangible
      assets                                 |   | -             |   |   | -             |   |   | -             |   |   | 106,000        |  
|Stock-based compensation                                              |   | 1,246,115     |   |   | 159,709       |   |   | -             |   |   | 1,405,824      |  
|Shares for management services                                        |   | -             |   |   | 100,000       |   |   | -             |   |   | 100,000        |  
|Shares for consulting and management bonuses                          |   | 170,000       |   |   | 112,632       |   |   | -             |   |   | 282,632        |  
|Changes in non-cash working capital items:                            |   |               |   |   |               |   |   |               |   |   |                |  
|Decrease (increase) in receivables                                    |   | 4,638         |   |   | (4,638        | ) |   | -             |   |   | -              |  
|Decrease (increase) in prepaid
      expenses                         |   | 9,700         |   |   | (11,376       | ) |   | -             |   |   | (1,676         | )
|(Decrease) increase in accounts payable and
      accrued liabilities |   | (220,039      | ) |   | 374,956       |   |   | -             |   |   | 171,417        |  
|Net cash used in operating activities                                 |   | (3,440,271    | ) |   | (590,754      | ) |   | (28,747       | ) |   | (4,195,278     | )
|CASH FLOWS FROM INVESTING ACTIVITIES                                  |   |               |   |   |               |   |   |               |   |   |                |  
|Equipment                                                             |   | -             |   |   | (3,336        | ) |   | -             |   |   | (3,336         | )
|Purchase of technology rights                                         |   | -             |   |   | -             |   |   | -             |   |   | (15,000        | )
|Purchase of intangible assets                                         |   | -             |   |   | -             |   |   | -             |   |   | (100,000       | )
|Net cash used in investing activities                                 |   | -             |   |   | (3,336        | ) |   | -             |   |   | (118,336       | )
|                                                                      |   |               |   |   |               |   |   |               |   |   |                |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                  |   |               |   |   |               |   |   |               |   |   |                |  
|Proceeds from line of credit
      and loans payable                  |   | -             |   |   | 43,713        |   |   | -             |   |   | 43,713         |  
|Proceeds from issuance of common stock                                |   | 3,973,060     |   |   | 560,000       |   |   | -             |   |   | 4,825,560      |  
|Proceeds from exercise of
      warrants                              |   | 3,720         |   |   | -             |   |   | -             |   |   | 3,720          |  
|Share issuance costs                                                  |   | (228,737      | ) |   | (4,140        | ) |   | -             |   |   | (232,877       | )
|Refunds to nonqualified
      investors                               |   | (16,000       | ) |   | -             |   |   | -             |   |   | (16,000        | )
|Subscriptions received in advance                                     |   | -             |   |   | 76,500        |   |   | -             |   |   | 76,500         |  
|Cash used to pay line of
      credit and loans payable               |   | (18,713       | ) |   | (25,000       | ) |   | -             |   |   | (43,713        | )
|Net cash provided by financing activities                             |   | 3,713,330     |   |   | 651,073       |   |   | -             |   |   | 4,656,903      |  
|                                                                      |   |               |   |   |               |   |   |               |   |   |                |  
|Change in cash during the year                                        |   | 273,059       |   |   | 56,983        |   |   | (28,747       | ) |   | 343,289        |  
|Cash, beginning of year                                               |   | 70,230        |   |   | 13,247        |   |   | 41,994        |   |   | -              |  
|Cash, end of year                                                     | $ | 343,289       |   | $ | 70,230        |   | $ | 13,247        |   | $ | 343,289        |  
|Supplemental disclosures with respect to
      cash flows (Note 7)    |   | -             |   |   | -             |   |   | -             |   |   | -              |  

The accompanying notes are an integral part of these financial
  statements.

F-8

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|1. | NATURE AND CONTINUANCE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Quantum Solar Power Corp. (the Company) was
      incorporated in Nevada on April 14, 2004. The Company is a development
      stage company engaged in the business of developing and commercializing
      next generation solar power technology under the name Next Generation
      Device abbreviated NGD. Quantums NGD is a patent pending, functioning,
      laboratory model that demonstrates its utility in solar power
      conversion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company operates in one reportable segment being the
      research and development of solar power technology in Canada and the
      United States of America. Revenues will be substantially derived from
      royalty based licensing arrangements in this reporting segment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | These financial statements have been prepared consistent
      with accounting policies generally accepted in the United States (U.S.
      GAAP) assuming the Company will continue as a going concern. Currently,
      the Company has no sales and has incurred a net loss of $4,728,538 for the
      year ended June 30, 2011 and an accumulated loss of $6,376,254 for the
      period from April 14, 2004 (inception) to June 30, 2011. The Company also
      relies on patents and contractual restrictions to protect intellectual
      property. The existing provisional and future patents could be challenged.
      The future of the Company is dependent upon its ability to obtain
      financing and protect its proprietary process upon future profitable
      operations from development and commercialization of an NGD. Management
      has plans to seek additional capital through private placements and public
      offerings of its common stock. These factors raise substantial doubt that
      the Company will be able to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Management's plans for the continuation of the Company as
      a going concern include financing the Company's operations through
      issuance of its common stock. If the Company is unable to complete its
      financing requirements or achieve revenue as projected, it will then
      modify its expenditures and plan of operations to coincide with the actual
      financing completed and actual operating revenues. There are no
      assurances, however, with respect to the future success of these
      plans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The accompanying financial statements do not include any
      adjustments to the recorded assets or liabilities that might be necessary
      should the Company fail in any of the above objectives and is unable to
      operate for the coming year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The accompanying financial statements have been prepared
      in accordance with U.S. GAAP and are expressed in U.S. dollars. The
      financial statements have been prepared under the guidelines of Accounting
      and Reporting by Development Stage Enterprises. A development stage
      enterprise is one in which planned principal operations have not
      commenced, or if its operations have commenced, there have been no
      significant revenues therefrom. As of June 30, 2011, the Company had not
      commenced its planned principal operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The preparation of financial statements in conformity
      with generally accepted accounting principles in the United States of
      America requires management to make estimates and assumptions that affect
      the reported amounts of assets and liabilities, and disclosure of
      contingent assets and liabilities, at the date of these financial
      statements, and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from those estimates.
      Significant accounts that require estimates relate to the valuation of
      deferred tax assets, stock- based compensation, the estimated useful life
      of equipment, and the valuation of shares issued for technology, bonuses
      and services.                                                                                                                                                                                                                                                                                                         

F-9

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|2. | SIGNIFICANT ACCOUNTING POLICIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Start-up expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company has adopted Standard of Position (SOP)
      No.98-5 Reporting the Costs of Start-up Activities, which requires that
      costs associated with start-up activities be expensed as incurred.
      Accordingly, start-up costs associated with the Company's formation have
      been included in the Company's general and administrative expenses for the
      period from inception on April 14, 2004 to June 30, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Companys functional currency is the United States
      dollar. There are significant transactions in Canadian dollars; these are
      recorded in US dollars using the exchange rates in effect on the date the
      transaction is recorded. The Company used the United States dollar as its
      reporting currency for consistency with registrants of the Securities and
      Exchange Commission. Assets and liabilities that are denominated in a
      foreign currency are translated at the exchange rate in effect at the year
      end and capital accounts are translated at historical rates. Income
      statement accounts are translated at the average rates of exchange
      prevailing during the period. Translation adjustments from the use of
      different exchange rates from period to period are included in the
      comprehensive income statement account in stockholders equity, if
      applicable. There were no translation adjustments as of June 30,
      2011.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Loss per Share and Potentially Dilutive
      Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Basic loss per share is computed by dividing the net loss
      available to common stockholders by the weighted average number of common
      shares outstanding in the period. Diluted loss per share takes into
      consideration common shares outstanding (computed under basic earnings per
      share) and potentially dilutive securities. The effect of 1,800,000
      outstanding options and 50,000 outstanding warrants were not included in
      the computation of diluted earnings per share because it was anti-dilutive
      due to the Companys losses.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Fair value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company measures the fair value of financial assets
      and liabilities based on the guidance of Fair Value Measurements which
      defines fair value, establishes a framework for measuring fair value, and
      expands disclosures about fair value measurements. Effective July 1, 2008,
      the Company adopted the policy for financial assets and liabilities, as
      well as for any other assets and liabilities that are carried at fair
      value on a recurring basis. The adoption of the provisions of this
      accounting policy did not materially impact the Companys financial
      position and results of operations.                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The policy defines fair value as the exchange price that
      would be received for an asset or paid to transfer a liability (an exit
      price) in the principal or most advantageous market for the asset or
      liability in an orderly transaction between market participants on the
      measurement date. The policy also establishes a fair value hierarchy,
      which requires an entity to maximize the use of observable inputs and
      minimize the use of unobservable inputs when measuring fair value. The
      policy describes three levels of inputs that may be used to measure fair
      value:                                                                                                                                                                                                                                                                                                                                                                                        

Level 1  quoted prices in
  active markets for identical assets and liabilities

Level 2  quoted prices for
  similar assets and liabilities in active markets or inputs that are
  observable

Level 3  inputs that are
  unobservable (for example cash flow modeling inputs based on assumptions)

F-10

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|2. | SIGNIFICANT ACCOUNTING POLICIES(contd).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Fair value of financial instruments(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Fair values                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The fair value of receivables, line of credit and
      accounts payable and accrued liabilities approximate their financial
      statement carrying amounts due to the short-term maturities of these
      instruments.                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In general, fair values determined by Level 1 inputs
      utilize quoted prices (unadjusted) in active markets for identical assets.
      Fair values determined by Level 2 inputs utilize data points that are
      observable such as quoted prices, interest rates and yield curves. Fair
      values determined by Level 3 inputs are unobservable data points for the
      asset or liability, and included situations where there is little, if any,
      market activity for the asset. The Companys cash was measured using Level
      1 inputs.                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Foreign currency risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company operates in Canada, which gives rise to the
      risk that cash flows may be adversely impacted by exchange rate
      fluctuations. The Company has not entered into any forward exchange
      contracts or other derivative instrument to hedge against foreign exchange
      risk.                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Credit risk is the risk of loss associated with a
      counterpartys inability to fulfill its payment obligations. Management
      believes that the credit risk concentration with respect to financial
      instruments included in cash is remote. Receivables are due primarily from
      consultants and are non-interest bearing.                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Comprehensive loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | As of June 30, 2011 the Company has no items that
      represent comprehensive loss and therefore, has not included a schedule of
      comprehensive loss in the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company accounts for income taxes under an asset and
      liability approach, whereby deferred income tax liabilities or assets at
      the end of each year are determined using the tax rate expected to be in
      effect when the taxes are actually paid or recovered. A valuation
      allowance is recognized on deferred tax assets when it is more likely than
      not that some or all of these deferred tax assets will not be
      realized.                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Impairment of assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company periodically reviews its long-lived assets
      when applicable to determine if any events or changes in circumstances
      have transpired which indicate that the carrying value of its assets may
      not be recoverable. The Company determines impairment by comparing the
      undiscounted future cash flows estimated to be generated by its assets to
      their respective carrying amounts. If impairment is deemed to exist, the
      asset will be written down to fair value. During the years ended June 30,
      2011, 2010 and 2009, the Company determined that there was no
      impairment.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Computer equipment is recorded at cost less accumulated
      amortization. Amortization is provided annually on assets placed in use on
      a straight-line basis over 3 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-11

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|2. | SIGNIFICANT ACCOUNTING POLICIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Research and development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | All research costs are charged to operations in the year
      of expenditure. Development costs are capitalized if they meet the
      criteria for capitalization and amortized over the period of the expected
      life. Development costs are written off when there is no longer an
      expectation of future benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company uses the fair value based method of
      accounting for stock options granted to employees and directors and
      compensatory warrants issued on private placements in accordance with the
      recommendations of the Financial Accounting Standards Board Accounting
      Standards Codification (FASB ASC) 718, Compensation  Stock
      Compensation. Under this method, the fair value of the stock options at
      the date of the grant, as determined using the Black-Scholes option
      pricing model, is recognized to expense over the vesting period, and the
      fair value of compensatory warrants at the date of issuance, as determined
      using the Black-Scholes model, is recognized as share issuance costs, with
      the offsetting credit to contributed surplus.                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Recent accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Recent accounting pronouncements that the Company has
      adopted or will be required to adopt in the future are summarized
      below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In September 2009, the Financial Accounting Standards
      Board (FASB) issued authoritative guidance regarding
      multiple-deliverable revenue arrangements. This guidance addresses how to
      separate deliverables and how to measure and allocate consideration to one
      or more units of accounting. Specifically, the guidance requires that
      consideration be allocated among multiple deliverables based on relative
      selling prices. The guidance establishes a selling price hierarchy of (1)
      vendor-specific objective evidence, (2) third-party evidence and (3)
      estimated selling price. This guidance is effective for annual periods
      beginning after June 15, 2010 but may be early adopted as of the beginning
      of an annual period. The Company adopted the standard and it has no impact
      on the financial statements.              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In January 2010, the FASB issued ASU 2010-06, Improving
      Disclosures about Fair Value Measurements, which amends ASC 820, Fair
      Value Measures and Disclosures. ASU 2010-06 requires disclosure of
      transfers into and out of Level 1 and Level 2 fair value measurements, and
      also requires more detailed disclosure about the activity within Level 3
      fair value measurements. The changes to the ASC as a result of this update
      are effective for annual and interim reporting periods beginning after
      December 15, 2009 (adopted July 1, 2010), except for requirements related
      to Level 3 disclosures, which are effective for annual and interim
      reporting periods beginning after December 15, 2010 (July 1, 2011 for the
      Company). This guidance requires new disclosures only, and had no impact
      on the financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In February 2010, the FASB issued ASU 2010-09,
      Subsequent Events (Topic 855). This update provides amendments to
      Subtopic 855-10-50-4 and related guidance within U.S. GAAP to clarify that
      an SEC registrant is not required to disclose the date through which
      subsequent events have been evaluated. This change alleviates potential
      conflicts between Subtopic 855-10 and the SECs requirements. The Company
      has adopted this standard and it will have no impact on the financial
      statements.                                                                                                                                                                                                                                                                                                                                                         

F-12

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|2. | SIGNIFICANT ACCOUNTING POLICIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Recent accounting pronouncements(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In July 2010, the FASB issued an Accounting Standards
      Update No. 2010-20, Receivables, Disclosure about the Credit Quality of
      Financing Receivables and Allowances for Credit Losses. The standard
      requires additional disclosure related to the credit quality of financing
      receivables, troubled debt restructurings and significant purchases or
      sales of financing receivables during the period. The standard requires
      that these disclosures and existing disclosures be presented on a
      disaggregated basis, similar to the manner that the entity uses to
      evaluate its credit losses. Disclosures of information as of the end of a
      reporting period are effective for interim and annual periods ending after
      December 15, 2010 and disclosures of activity that occurred during a
      reporting period are effective for interim and annual periods beginning
      after December 15, 2010. The Company has adopted this standard on July 1,
      2010, and it will have no impact on the financial statements for the year
      ended June 30, 2011, due to the receivables being short-term in nature and
      are therefore not financing receivables.                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In April 2010, the FASB issued ASU 2010-13, Compensation
      - Stock Compensation (Topic 718), amending ASC 718. ASU 2010-13 clarifies
      that a share-based payment award with an exercise price denominated in the
      currency of a market in which the entitys equity securities trade should
      not be classified as a liability if it otherwise qualifies as equity. ASU
      2010-13 also improves GAAP by improving consistency in financial reporting
      by eliminating diversity in practice. ASU 2010-13 is effective for interim
      and annual reporting periods beginning after December 15, 2010 (July 1,
      2011 for the Company). The Company is currently evaluating the impact of
      ASU 2010-09, but does not expect its adoption to have a material impact on
      the Companys financial reporting and disclosures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In December 2010, the FASB issued ASU No. 2010-28When to
      Perform Step 2 of the Goodwill Impairment Test for Reporting Units with
      Zero or Negative Carrying Amounts. This update provides amendments to
      Accounting Standards Codification (ASC) Topic 350Intangibles, Goodwill
      and Other that requires an entity to perform Step 2 impairment test even
      if a reporting unit has zero or negative carrying amount. The first step
      is to identify potential impairments by comparing the estimated fair value
      of a reporting unit to its carrying value, including goodwill. If the
      carrying value of a reporting unit exceeds the estimated fair value, a
      second step is performed to measure the amount of impairment, if any. The
      second step is to determine the implied fair value of the reporting units
      goodwill, measured in the same manner as goodwill is recognized in a
      business combination, and compare that amount with the carrying amount of
      the goodwill. If the carrying value of the reporting unit goodwill exceeds
      the implied fair value of that goodwill, an impairment loss is recognized
      in an amount equal to that excess. ASU No. 2010-28 is effective beginning
      January 1, 2011. As a result of this standard, goodwill impairments may be
      reported sooner than under current practice. The Company does not expect
      ASU No. 2010-28 to have a material impact on the financial
      statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In December 2010, the FASB issued ASU 2010-29, which
      contains updated accounting guidance to clarify the acquisition date that
      should be used for reporting pro forma financial information when
      comparative financial statements are issued. This update requires that a
      company should disclose revenue and earnings of the combined entity as
      though the business combination(s) that occurred during the current year
      had occurred as of the beginning of the comparable prior annual reporting
      period only. This update also requires disclosure of the nature and amount
      of material, nonrecurring pro forma adjustments. The provisions of this
      update, which are to be applied prospectively, are effective for business
      combinations for which the acquisition date is on or after the beginning
      of the first annual reporting period beginning on or after December 15,
      2010, with early adoption permitted. The impact of this update on the
      Companys financial statements will depend on the size and nature of
      future business combinations.                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In May 2011, the FASB issued ASU No. 2011-04, Fair Value
      Measurement (Topic 820): Amendments to Achieve Common Fair Value
      Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which is
      intended to improve comparability of fair value measurements presented and
      disclosed in financial statements prepared in accordance with U.S.
      generally accepted accounting principles and International Financial
      Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-13

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|2. | SIGNIFICANT ACCOUNTING POLICIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Recent accounting pronouncements(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Standards. This standard clarifies the application of
      existing fair value measurement requirements including (1) the application
      of the highest and best use valuation premise, (2) the methodology to
      measure the fair value of an instrument classified in a reporting entitys
      shareholders equity, (3) disclosure requirements for quantitative
      information on Level 3 fair value measurements and (4) guidance on
      measuring the fair value of financial instruments managed within a
      portfolio. In addition, the standard requires additional disclosures of
      the sensitivity of fair value to changes in unobservable inputs for Level
      3 securities. This standard is effective for interim and annual reporting
      periods ending on or after December 15, 2011. The adoption of this
      guidance is not expected to have a significant impact on the Companys
      financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In June 2011, the FASB issued ASU No. 2011-05,
      Presentation of Comprehensive Income, which requires that comprehensive
      income be presented either in a single continuous statement of
      comprehensive income or in two separate but consecutive statements. The
      standard also requires entities to disclose on the face of the financial
      statements reclassification adjustments for items that are reclassified
      from other comprehensive income to net earnings. This standard no longer
      allows companies to present components of other comprehensive income only
      in the statement of equity. This standard is effective for interim and
      annual reporting periods beginning after December 15, 2011. The adoption
      of this guidance is not expected to have a significant impact on the
      Companys financial statements other than the prescribed change in
      presentation.             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|3. | EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                    |   | 2011  |  |   | 2010         | 
| | ------------------ | - | ----- |  | - | ------------ | 
| |                    |   |       |  |   |              | 
| |                    |   |       |  |   | Accumulated  | 
| |                    |   | Cost  |  |   | Amortization | 
| |                    |   |       |  |   |              | 
| | Computer equipment | $ | 3,336 |  | $ | 1,668        | 

|4. | TECHNOLOGY PURCHASE AGREEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On April 15, 2008, the Company entered into a License
      agreement (The Agreement) with Canadian Integrated Optics International
      Ltd. of Douglas, Isle of Man (CIOI), to manufacture and market CIOIs
      patent pending solar technology based on a new approach for the generation
      of solar power. On May 7, 2008 the Agreement was subsequently amended and
      executed by CIOI and on May 16, 2008 the agreement was executed by the
      Company and is subject to certain terms and conditions. The purchase price
      paid in cash for the License was $100,000. These costs were later
      written-off and charged to operations in fiscal 2008.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In December 2009, the Company executed an agreement with
      CIOI to purchase technology and associated provisional patents related to
      the development of certain solar technology in exchange for 71,500,000
      common stock of the Company valued at $1,611,559. The two provisional
      patents and the pending patent application have an estimated useful life
      of 21 years. The Company has recorded $115,111 in accumulated amortization
      as at June 30, 2011.                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5. | LINE OF CREDIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On February 20, 2010, the Company entered into an
      unsecured, non-interest bearing revolving line of credit with CIOI of up
      to $250,000 in available financing. The Company had withdrawn $43,713 from
      this line of credit which was repaid in full by June 30, 2011. The line of
      credit has $Nil balance as at June 30, 2011.                                                                                                                                                                                                                                                                                                                                 

F-14

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|6. | STOCKHOLDERS EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On May 7, 2004, the Company issued 69,200,000 of its
      common shares for cash of $86,500.                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On June 30, 2004, the Company issued 48,000,000 of its
      common shares for cash of $6,000.                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company has completed a private placement on April
      15, 2008 to issue 100,000 common shares at a price of $2.00 per share. The
      net proceeds received were $200,000. No commissions were paid and no
      registration rights have been granted.                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On December 16, 2009, the Company entered into an
      agreement with CIOI as amended, wherein the Company agreed to purchase all
      of their solar cell technology in consideration of 71,500,000 restricted
      shares of common stock. As part the transaction, the Companys President
      returned and cancelled 47,000,000 shares of the Companys common
      stock.                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In April 2010, 50,000 shares valued at $100,000 were
      issued as compensation for a performance bonus to a director of the
      Company.                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In April 2010, the Company completed a private placement
      to issue 280,000 shares at a price of $2.00 per share. The net proceeds
      received were $560,000.                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | During the year ended June 30, 2011, 274,060 shares were
      issued through a private placement at a stock price of $1.00 per share;
      net proceeds were $274,060 of which $76,500 was received during the year
      ended June 30, 2010. The Board granted 372,000 warrants to those
      shareholders who had purchased shares at $2.00 per share to allow them to
      purchase a matching number of shares at $0.01 in order to make them whole
      as a result of the change in the share sale price.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | During the year ended June 30, 2011, 62,632 shares were
      issued for consulting services and 50,000 for a management performance
      bonus relating to services performed.                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | During the year ended June 30, 2011, a further 3,765,500
      shares were issued through two private placements and a total of $228,737
      in share issue costs were paid. In addition, 372,000 shares were issued
      when the warrants described above were exercised. Net proceeds were
      $3,769,220, all of which were received during the year. A refund of
      $16,000 was paid to several investors who previously paid for 8,000 shares
      and were found not to be qualified.                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | During the year ended June 30, 2011, 60,000 shares valued
      at $60,000 for consulting services and 50,000 shares valued at $50,000 for
      a management performance bonus relating to services provided were issued
      during the year.                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In February, 2011, 10,000 shares were issued through a
      private placement at $1 per share for proceeds of $10,000. A total of
      161,500 shares valued at $161,500 were issued as finders fees.                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Commitment to issue shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | According to the terms of a contract entered into during
      the year ended June 30, 2010, the Company agreed to issue 10,000 shares
      per month to a consultant. As at June 30, 2011, the Company has a
      commitment to issue 60,000 common shares at a value of
      $60,000.                                                                                                                                                                                                                           

F-15

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|6. | STOCKHOLDERS EQUITY(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Stock options and warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On February 28, 2011, the Company implemented a formal
      stock option plan under which it is authorized to grant options to
      directors, officers, employees and eligible consultants of the Company
      enabling them to acquire up to 14,650,000 shares of the Company. Under the
      plan, the exercise price of each option equals the market price of the
      Companys stock, less applicable discount, as calculated on the date of
      grant. The options can be granted for a maximum term of 5 years. Vesting
      provisions are set at the discretion of the Company. The Plan has not been
      approved by the Companys stockholders.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Stock options and warrants are summarized as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                                                                                      |  | Warrants  |   |   | Stock Options |  
| | ------------------------------------------------------------------------------------ |  | --------- | - | - | ------------- | -
| |                                                                                      |  |           |   |   |               |  
| |                                                                                      |  |           |   |   | Weighted      |  
| |                                                                                      |  |           |   |   | Average       |  
| |                                                                                      |  | Number of |   |   | Exercise      |  
| |                                                                                      |  | Warrants  |   |   | Price         |  
| |                                                                                      |  |           |   |   |               |  
| | Balance outstanding at April 14,
      2004 
           (inception) to June 30, 2009 |  | -         |   | $ | -             |  
| |                                                                                      |  |           |   |   |               |  
| | Granted                                                                              |  | -         |   |   | -             |  
| |                                                                                      |  |           |   |   |               |  
| | Balance outstanding at June 30, 2010                                                 |  | -         |   |   | -             |  
| |                                                                                      |  |           |   |   |               |  
| | Granted                                                                              |  | 372,000   |   |   | 0.01          |  
| | Granted                                                                              |  | 50,000    |   |   | 1.90          |  
| | Exercised                                                                            |  | (372,000  | ) |   | (0.01         | )
| | Granted                                                                              |  | -         |   |   | -             |  
| |                                                                                      |  |           |   |   |               |  
| | Balance outstanding
      at June 30, 2011                                           |  | 50,000    |   | $ | 1.90          |  
| |                                                                                      |  |           |   |   |               |  
| | Exercisable at
      June 30, 2011                                                   |  | 50,000    |   | $ | 1.90          |  

The following table summarizes
  information about stock options outstanding at June 30, 2011:

| |          |  | Number of Shares |  |   | Exercise Price |  |  | Expiry Date       | 
| | -------- |  | ---------------- |  | - | -------------- |  |  | ----------------- | 
| |          |  |                  |  |   |                |  |  |                   | 
| | Options  |  | 500,000          |  | $ | 0.50           |  |  | January 1, 2013   | 
| |          |  | 50,000           |  | $ | 0.50           |  |  | July 9, 2011*     | 
| |          |  | 50,000           |  | $ | 0.50           |  |  | July 15, 2011*    | 
| |          |  | 250,000          |  | $ | 1.60           |  |  | February 28, 2012 | 
| |          |  | 900,000          |  | $ | 1.60           |  |  | March 6, 2016     | 
| |          |  | 50,000           |  | $ | 1.10           |  |  | June 19, 2014     | 
| |          |  |                  |  |   |                |  |  |                   | 
| | Warrants |  | 50,000           |  | $ | 1.90           |  |  | January 14, 2012  | 

*Expired subsequent to June 30, 2011

F-16

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|6. | STOCKHOLDERS EQUITY(contd)                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                        
|   | Stock-based compensation                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                        
|   | The Company used the Black-Scholes option pricing model
      to determine the fair value of options granted.                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                        
|   | During fiscal 2011, the Company granted 1,300,000 options
      (2010  500,000) to directors, former directors, employees and consultants
      of the Company, with a weighted average fair value of $0.73 (2010 - $1.91)
      per option, which are being recognized over the vesting periods of the
      options.
|   |                                                                                                                                                                                                                                                                                                                        
|   | Total stock-based compensation for the year ended June
      30, 2011 was $1,246,115 (2010  $159,709).                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                        
|   | The fair value of stock options has been estimated with
      the following assumptions:                                                                                                                                                                                                                               

| |                          |  | 2011             |  |  | 2010          |  |  | 2009 | 
| | ------------------------ |  | ---------------- |  |  | ------------- |  |  | ---- | 
| |                          |  |                  |  |  |               |  |  |      | 
| | Dividend yield           |  | 0.00%            |  |  | 0.00%         |  |  | -    | 
| | Expected volatility      |  | 143.30%          |  |  | 239%          |  |  | -    | 
| | Risk free interest rate  |  | 2.62%            |  |  | 2.03%         |  |  | -    | 
| | Expected life of options |  | 3.85
      years |  |  | 2
      years |  |  | -    | 

|7. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH
      FLOWS
|-- | --------------------------------------------------------

| |                            |   |                     |  |   |                     |  |   |                     |  |   | For the
      period   | 
| | -------------------------- | - | ------------------- |  | - | ------------------- |  | - | ------------------- |  | - | ---------------------- | 
| |                            |   |                     |  |   |                     |  |   |                     |  |   | from April 14,         | 
| |                            |   | Year ended          |  |   | Year ended          |  |   | Year ended          |  |   | 2004 (inception)       | 
| |                            |   | June
      30, 2011 |  |   | June
      30, 2010 |  |   | June
      30, 2009 |  |   | to
      June 30, 2011 | 
| |                            |   |                     |  |   |                     |  |   |                     |  |   |                        | 
| | Cash paid for interest     | $ | -                   |  | $ | -                   |  | $ | -                   |  | $ | -                      | 
| |                            |   |                     |  |   |                     |  |   |                     |  |   |                        | 
| | Cash paid for income taxes | $ | -                   |  | $ | -                   |  | $ | -                   |  | $ | -                      | 

Significant non-cash transactions for
  the year ended June 30, 2011 included:

| | a) | issuing 112,632 common shares at a value of $112,632 from
      commitment to issue shares to share capital and additional paid in
      capital;                                          
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                            
| | b) | granting 372,000 warrants for a fair value of $372,000 to
      various shareholders as a dividend;                                                                                        
| |    |                                                                                                                                                                                            
| | c) | issuing 161,500 common shares at a value of $161,500 as
      finders fees; and                                                                                                           
| |    |                                                                                                                                                                                            
| | d) | granting 170,000 common shares at a value of $170,000 for
      consulting services and management bonuses, of which 110,000 were issued
      and 60,000 are a commitment to issue shares.

Significant non-cash transactions for
  the year ended June 30, 2010 included:

| | a) | issuing 71,500,000 common shares in the acquisition of
      patents at a total value of $1,611,559;       
| | -- | -----------------------------------------------------------------------------------------------------------
| |    |                                                                                                            
| | b) | returning to treasury and cancelling 47,000,000 common
      shares at par value of $47,000; and           
| |    |                                                                                                            
| | c) | reclassifying additional paid in capital of $117,185 to
      capital stock to reflect par value of $0.001.

F-17

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|8. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                     
|   | During fiscal 2011, the Company paid or accrued
      $2,312,977 (2010: $683,238) in research and development costs with CIOI, a
      former significant shareholder, of which $85,504 (2010: $325,518) is
    included in accrued liabilities as at June 30, 2011.
|   |                                                                                                                                                                                                                                                                     
|   | During fiscal 2010, the Company also entered into an
      unsecured, non-interest bearing revolving line of credit with CIOI of
      which $Nil was outstanding as at June 30, 2011 (2010: $18,713).                                                              
|   |                                                                                                                                                                                                                                                                     
|   | These transactions are in the normal course of operations
      and are measured at the exchange amount, which is the amount of
      consideration established and agreed to by the parties.                                                                       
|   |                                                                                                                                                                                                                                                                     
|9. | INCOME TAXES                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                     
|   | A reconciliation of current income taxes at statutory
      rates with the reported taxes is as follows:                                                                                                                                                            

| |                                             |   | 2011       |   |   | 2010       |  
| | ------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                             |   |            |   |   |            |  
| | Loss before income taxes                    | $ | (4,728,538 | ) | $ | (1,360,963 | )
| |                                             |   |            |   |   |            |  
| | Expected tax recovery                       | $ | (1,654,988 | ) | $ | (476,337   | )
| | Other                                       |   | 427,592    |   |   | 50,721     |  
| | Unrecognized benefits of non-capital losses |   | 1,227,396  |   |   | 425,616    |  
| |                                             |   |            |   |   |            |  
| | Total income taxes                          | $ | -          |   | $ | -          |  

Details of future income tax assets are
  as follows:

| |                                |   | 2011       |   |   | 2010     |  
| | ------------------------------ | - | ---------- | - | - | -------- | -
| |                                |   |            |   |   |          |  
| | Future tax assets              |   |            |   |   |          |  
| | Non-capital loss carryforwards | $ | 1,750,105  |   | $ | 522,736  |  
| |                                |   |            |   |   |          |  
| | Future Tax Liabilities         |   |            |   |   |          |  
| | Capital assets                 |   | (15,532    | ) |   | (5,177   | )
| |                                |   |            |   |   |          |  
| |                                |   | 1,734,573  |   |   | 517,559  |  
| | Valuation allowance            |   | (1,734,573 | ) |   | (517,559 | )
| |                                |   |            |   |   |          |  
| | Net future tax assets          | $ | -          |   | $ | -        |  

The Company has non-capital losses of
  approximately $5,000,000 which may be carried forward and applied against
  taxable income in future years. These losses, if unutilized, will expire through
  to 2021. The future income tax benefits of these losses and other tax assets
  have not been reflected in these financial statements and have been offset by a
  valuation allowance.

F-18

---

|QUANTUM SOLAR POWER CORP.           
|------------------------------------
|(A Development Stage Company)       
|NOTES TO THE FINANCIAL STATEMENTS   
|(Expressed in United States Dollars)
|JUNE 30, 2011                       

|10. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On July 18, 2011, the Company entered into a consulting
      agreement with Advantag Aktiengesellschaft (Advantag), whereby Advantag
      has agreed to assist the Company with listing on the Frankfurt Stock
      Exchange. The Advantag Agreement will be in effect for the duration of the
      listing process. In consideration of Advantags services, the Company will
      pay a total of 18,000 EUR to Advantag as follows: 6,000 EUR at the time of
      execution, 6,000 EUR at the time the prospectus is drafted prior to its
      filing and 6,000 EUR following successful approval by the Federal
      Financial Supervisory Authority. The Company will also pay hourly rates
      for any consulting services not directly related to the
      prospectus.                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On August 5, 2011, the Company entered into a consulting
      agreement with Quorum Capital Corporation (Quorum). Under the terms of
      the Quorum Agreement, Quorum has agreed to provide consulting services to
      assist the Company in Germany. The Quorum Agreement is effective July 8,
      2011 and is for a term of 6 months renewing for an additional 6 months
      automatically at the end of each term. In consideration of Quorums
      consulting services, the Company will pay $5,000 CDN on exercise of the
      agreement and $2,000 CDN per month commencing September 8, 2011. The
      Company will also grant 2,000,000 options to Quorum, to purchase shares at
      an exercise price of $1.00 USD until July 7, 2014. 333,335 of the Options
      are to be issued on execution and the remainder of the Options will be
      issued in monthly increments of 333,333 commencing August 8, 2011. The
      Company has agreed to pay a rate of $125 CDN per hour for any additional
      hours of work performed and to reimburse Quorum for approved expenses. The
      Company may cancel the Agreement at any time by providing 30 days
      notice.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On August 9, 2011, the Company approved a private
      placement offering of up to 3,000,000 shares at a price of $1.00 per share
      of which $450,000 was received subsequent to June 30, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On August 23, 2011 the Company entered into an employment
      agreement whereby Ms. Stella Guo will act as Vice President of Corporate
      Development of the Company effective September 1, 2011. Under the terms of
      the Agreement, Ms. Guo will receive a salary of $100,000 US per year and
      options to purchase 1,000,000 shares at a price of $1.00 per share until
      August 31, 2014, in accordance with the Companys 2011 Stock Incentive
      Plan. The Employment Agreement is for a term of one year, renewable
      automatically for an additional year at the end of the first and, if
      renewed, a second year if no notice of termination has been
      provided.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On August 31, 2011, the Company entered into an executive
      services agreement dated for reference August 8, 2011, among Team Solar
      BV, Steven Pleging and the Company. Under the Executive Services
      Agreement, Team Solar will provide the services of Mr. Pleging who will
      act as Chairman and Team Solar will receive 12,000 EUR each month, during
      the first three months and 15,000 EUR each month for each subsequent month
      the Executive Services Agreement is in effect. Additionally, subject to
      meeting certain targets, Team Solar or at its option Mr. Pleging, shall
      receive a bonus of 250,000 shares. The term is for a period of one year,
      renewing automatically. The Company may terminate the agreement if Mr.
      Pleging fails to achieve certain targets.                                                                                                                                                                                                                                                                                                                                                                   

F-19

---

|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE.
|------- | -------------------------------------------------------------------------------------------

On August 9, 2010, we dismissed Jewett, Schwartz, Wolfe &
Associates (Wolf & Associates), as our independent public accountants. Our
Board of Directors approved the dismissal of Wolf & Associates.

Wolf & Associates reports on our financial statements for
the years ended June 30, 2009 and 2008 did not contain an adverse opinion or
disclaimer of opinion, nor were they modified or qualified as to uncertainty,
audit scope or accounting principles with the exception of a statement regarding
the uncertainty of our ability to continue as a going concern.

There have been no disagreements during the fiscal years ended
June 30, 2009 and 2008 and the subsequent interim period up to and including the
date of dismissal between the Company and Wolf & Associates on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which, if not resolved to the satisfaction of Wolf &
Associates, would have caused them to make reference to the subject matter of
the disagreement in connection with Wolf & Associates report for the
financial statements for the past year and any subsequent interim period up to
and including to the date of Wolf & Associates dismissal.

We requested in writing that Wolf & Associates provide a
letter addressed to the Securities and Exchange Commission stating whether or
not they agree with the above disclosures. We received a copy of Wolf &
Associates letter and it was filed as an exhibit to our Current Report on Form
8-K filed with the SEC on August 20, 2010.

On August 9, 2010, we appointed Davidson & Company LLP,
Chartered Accountants, ("Davidson") as our new independent registered public
accounting firm. Our Board of Directors approved the engagement of Davidson. We
elected to change accounting firms because of Davidsons Canadian and U.S.
expertise. In addition, we wanted our accounting firm to be closer to our
operations in British Columbia, Canada.

We did not consult with Davidson during the fiscal years ended
June 30, 2009 and 2008 and any subsequent interim period prior to their
engagement regarding: (i) the application of accounting principles to a specific
completed or proposed transaction or the type of audit opinion that might be
rendered on our financial statements, and either a written report was provided
to us or advice was provided that the newly appointed accountant concluded was
an important factor in reaching a decision as to the accounting, auditing or
financial reporting issue; or (ii) any matter that was either the subject of a
disagreement or a reportable event in response to paragraph (a)(1)(iv) of Item
304 of Regulation S-K, promulgated under the Securities Exchange Act of 1934, as
amended.

ITEM
9A.               
CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of June 30, 2011 (the Evaluation Date). This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were not effective as of the Evaluation Date
as a result of the material weaknesses in internal control over financial
reporting discussed below.

Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified in this report, we believe that our financial statements contained in
our Annual Report on Form 10-K for the year ended June 30, 2011 fairly present
our financial condition, results of operations and cash flows in all material
respects.

Management's Annual Report on Internal Control Over
Financial Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

24

---

Internal control over financial reporting includes those
policies and procedures that: (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of our assets; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of its
management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in
the effectiveness of any system of internal control, and accordingly, even
effective internal control can provide only reasonable assurance with respect to
financial statement preparation and may not prevent or detect material
misstatements. In addition, effective internal control at a point in time may
become ineffective in future periods because of changes in conditions or due to
deterioration in the degree of compliance with our established policies and
procedures.

A material weakness is a significant deficiency, or combination
of significant deficiencies, that results in there being a more than remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.

Under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, management conducted an
evaluation of the effectiveness of our internal control over financial
reporting, as of the Evaluation Date, based on the framework set forth in
Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on its evaluation under
this framework, management concluded that our internal control over financial
reporting was not effective as of the Evaluation Date.

Management assessed the effectiveness of the Companys internal
control over financial reporting as of Evaluation Date and identified the
following material weaknesses:

Inadequate Segregation of Duties: We have an inadequate
number of personnel to properly implement control procedures.

Insufficient Written Policies & Procedures:We have
insufficient written policies and procedures for accounting and financial
reporting.

Inadequate Financial Statement Closing Process:We have
an inadequate financial statement closing process.

Management is committed to improving its internal controls and
will (1) continue to use third party specialists to address shortfalls in
staffing and to assist the Company with accounting and finance responsibilities,
(2) increase the frequency of independent reconciliations of significant
accounts which will mitigate the lack of segregation of duties until there are
sufficient personnel, (3) prepare and implement sufficient written policies and
checklists for financial reporting and closing processes and (4) may consider
appointing outside directors and audit committee members in the future.

Management has discussed the material weaknesses noted above
with our independent registered public accounting firm. Due to the nature of
these material weaknesses, there is a more than remote likelihood that
misstatements which could be material to the annual or interim financial
statements could occur that would not be prevented or detected.

Davidson & Company LLP, our registered independent public accounting firm, audited the effectiveness of our internal control over financial reporting and issued a report on our internal control over financial reporting which is included under Item 8 - Financial Statements and Supplementary Data in this Annual Report.

25

---

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial
reporting that occurred during the fiscal quarter ended June 30, 2011 that have
materially affected, or that are reasonably likely to materially affect, our
internal control over financial reporting.

Limitations on the effectiveness of controls and procedures

Our management, including our Chief Executive Officer and the
Chief Financial Officer, do not expect that the our controls and procedures will
prevent all potential errors or fraud. A control system, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met.

ITEM
9B.               
OTHER INFORMATION.

None.

26

---

PART III

ITEM
10.               
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The following tables set forth information regarding our
executive officers and directors as of September 10, 2011:

|Name                      | Age | Positions                                                       
|------------------------- | --- | ----------------------------------------------------------------
|Steven Pleging            | 49  | Chairman and
      Director                                     
|Daryl J. Ehrmantraut      | 59  | Chief Executive Officer,
      President and Director           
|Andras Pattantyus-Abraham | 37  | Chief Technology
      Officer  and Director                    
|Graham R. Hughes          | 61  | Chief Financial Officer,
      Secretary, Treasurer and Director
|Stella Guo                | 39  | Vice President of
      Corporate Development and Director      

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

Steven Pleging has served as Chairman and as a Director
since July 22, 2011. Prior to founding TeamSolar BV, Mr. Pleging served as CEO
of Ecostream International BV, www.ecostream.com, one of the leading suppliers
of solar power systems in Europe. Prior to joining Ecostream, Mr. Pleging served
for over a decade as Business line Manager for the Solar division of Philips
Lighting where he managed the entry of Philips into the solar marketplace with
an innovative concept of solar inverters for the European market and extensive
partner collaboration. Pledging received a Bachelor in Economics from HES
Amsterdam.

Daryl J. Ehrmantrautwas appointed our President, Chief
Executive Officer and a Director on January 4, 2010. Mr. Ehrmantraut previously
served for 5 years until January 1, 2010 as CEO of Elemetric Instruments, a
scientific instrumentation company which commercialized Los Alamos National Lab
patented element detection technology, Mr. Ehrmantraut previously served as
President of Triton Technology a privately held company in the information
technology and services industry from 2002 to 2003. Mr. Ehrmantraut served as
Vice President of Sales and Marketing, Bfound Business Unit for Signalsoft
Corp., a company in the electrical/electronic manufacturing industry from 1999
to 2001. He served as President of Osiris Systems Corporation, a privately held
company in the computer software industry. He also held various management
positions from 1972 to 1999 in the computer and electronics industry.

Andras Pattantyus-Abraham joined Quantum Solar in
December 2009. On March 3, 2010, he was appointed Chief Technology Officer. On
July 22, 2011, Dr. Pattantyus-Abraham was appointed as a Director. Prior to
joining the company, Dr. Pattantyus-Abraham was a Principal Scientist for
Sargent Research Group, Electrical and Computer Engineering, University of
Toronto. From 2007 to 2009, he was Postdoctoral Fellow at Sargent Research
Group. In 2007 and 2008, Dr. Pattantyus-Abraham served as a Research Consultant
for an Optoelectronics startup and for Applied Biophysics Research Group,
University of British Colombia. From 2004 to 2006, Dr. Pattantyus-Abraham was a
Postdoctoral Fellow of Photonic Nanostructures Research Group, University of
British Columbia.

Graham R. Hughes has served as our Chief Financial
Officer, Secretary, Treasurer and Director since November 27, 2007. Mr. Hughes
is a Certified General Accountant in private practice for over 25 years. Mr.
Hughes is an Instructor of Accountancy at the British Columbia Institute of
Technology in Vancouver, Canada. Mr. Hughes served as President and Director of
Western Hemisphere Mining Corp. from 2005 to 2007. He also served as Secretary
and Director for a number of companies from 1986 to 1991.

Stella Guoworked as Regional Director of BP Solar in
China from March 2008 to February 2011. From March 2005 to March 2006, she was
the Commercial Director of the BP Solar Xian Joint Venture. From March 2004 to
March 2005 she was a Legal Manager for BP Legal in Southern China. Ms. Guo
served as a Legal Advisor for BP in Hong Kong and Australia from 1999 to 2004.
Ms. Guo obtained a Bachelor in Commercial Law at SunYat-Sen University in China
and a Master in Commercial Law at the University of Melbourne in Australia. She
is fluent in English, Cantonese and Mandarin.

27

---

Term of Office

Members of our board of directors are appointed to hold office
until the next annual meeting of our stockholders or until his or her successor
is elected and qualified, or until he or she resigns or is removed in accordance
with the provisions of the Nevada Revised Statutes (the NRS). Our officers are
appointed by our board of directors and hold office until removed by the board.

Significant Employees

We have no other significant employees.

COMMITTEES OF THE BOARD OF DIRECTORS

Audit Committee

Our audit committee currently consists of our Board of
Directors. Mr. Ehrmantraut and Mr. Hughes are both Executive Officers and
therefore not independent directors.

The audit committee is responsible for:

|(1) | selection and oversight of our independent
    accountant;                                                                                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | establishing procedures for the receipt, retention and
      treatment of complaints regarding accounting, internal controls and
      auditing matters;
|(3) | establishing procedures for the confidential, anonymous
      submission by our employees of concerns regarding accounting and auditing
      matters;  
|(4) | engaging outside advisors; and                                                                                                                          
|(5) | funding for the outside auditory and any outside advisors
      engagement by the audit committee.                                                      

Our board of directors has adopted an Audit Committee Charter
which provides appropriate guidance to Audit Committee members as to their
duties.

Audit Committee Financial Expert

Graham R. Hughes, our Chief Financial Officer, Secretary and
Treasurer and Director, qualifies as an audit committee financial expert.

Code of Ethics

We adopted a Code of Ethics applicable to our Chief Executive
Officer, Chief Financial Officer, Corporate Controller and certain other finance
executives, which is a "code of ethics" as defined by applicable rules of the
SEC. Our Code of Ethics was attached as an exhibit to our Quarterly Report on
Form 10-Q for the quarter ended March 31, 2010, filed with the SEC on May 17,
2010. If we make any amendments to our Code of Ethics other than technical,
administrative, or other non-substantive amendments, or grant any waivers,
including implicit waivers, from a provision of our Code of Ethics to our chief
executive officer, chief financial officer, or certain other finance executives,
we will disclose the nature of the amendment or waiver, its effective date and
to whom it applies in a Current Report on Form 8-K filed with the SEC.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who own more than 10% of a registered class
of our securities (Reporting Persons), to file reports of ownership and
changes in ownership with the SEC. Reporting Persons are required by SEC
regulations to furnish us with copies of all forms they file pursuant to Section
16(a). Based solely on our review of such reports received by the Company, other
than as described below, we believe that, during the year ended June 30, 2011,
all Reporting Persons complied with all Section 16(a) filing requirements
applicable to them.

28

---

The following persons have failed to file, on a timely basis,
the identified reports required by Section 16(a) of the Exchange Act:

Name and Principal Position
    Number of Late Insider
      Reports
    Transactions Not Timely
      Reported
    Known Failures to File a
      Required FormDaryl J. Ehrmantraut
      President, Chief Executive Officer and Director
    None
    None
    NoneGraham R. Hughes Chief Financial Officer,
      Secretary Treasurer and Director
    One
    One
    NoneAndras Pattantyus-Abraham
            Chief Technology Officer  and Director
    None
    None
    NoneHuitt Tracey Former Director
    None
    None
    NoneRobert Kramer Former
      Director
    None
    None
    NoneCanadian Integrated Optics (IOM) Limited
      10% Holder
    None
    None
    OneMoatcroft Limited 10%
      Holder
    None
    None
    One


ITEM
11.               
EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table sets forth the total compensation paid to
or earned by our named executive officers, as that term is defined in Item
402(c)(2) of Regulation S-K as of our fiscal years ended June 30, 2011 and 2010:

Name & Principal
      Position
    Year
    Salary($)
    **Bonus**($)
    Stock
      **Awards** ($)
    Option
      Awards ($)
    Non- Equity
      Incentive Plan Compen- sation
      ($)
    Non- qualified
      Deferred Compen- sation
      Earnings ($)
    All Other
      Compen- sation ($)
    Total
      ($)Daryl J. Ehrmantraut President, Chief
      Executive Officer and Director (1)
    2011 2010 2009
    120,000 60,000 -
      -
    - - -
    50,000 100,000 -
      -
    319,417 159,709 -
      -
    - - -
    - - -
    - - -
    489,417 319,709 -
      -Graham R. Hughes Chief Financial Officer, Secretary
      Treasurer and Director (2)
    2011 2010 2009
    - - -
    - - -
    - - -
    - - -
    - - -
    - - -
    - - -
    - - -Andras Pattantyus- Abraham Chief
      Technology Officer and Director (2)
    2011 2010 2009
    - - -
    - - -
    - - -
    - - -
    - - -
    - - -
    - - -
    - - -Robert Kramer Former Director(4)
    2011 2010 2009
    - - -
    - - -
    - - -
    - - -
    - - -
    - - -
    - - -
    - - -


29

---

Huitt Tracey Former
      Director(5)
    2011 2010 2009
    - - -
    ---
    - - -
    - - -
    - - -
    ---
    - - -
    - - -Desmond Ross Former President, Former Chief
      Executive Officer and Former Director (3)
    2011 2010 2009
    - - -
    ---
    - - -
    - - -
    - - -
    ---
    - - -
    - - -


Notes:

|(1) | Daryl J. Ehrmantraut was appointed as our CEO and
      President and a Director on January 4, 2010. Mr. Ehrmantraut will receive
      compensation of $10,000 per month in addition to bonus and equity
      compensation as deemed proper by the Board of Directors.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | We do not currently have a compensation arrangement with
      Dr. Pattantyus-Abraham or Graham R. Hughes. We have not paid any
      compensation to these officers during the fiscal years ended June 30, 2011
      and 2010.                                        
|(3) | Desmond Ross resigned as a director and executive officer
      on January 4, 2010.                                                                                                                                                                                     
|(4) | Mr. Kramer resigned as a Director on July 15,
  2011                                                                                                                                                                                                                    
|(5) | Mr. Tracey resigned as a Director on July 16,
  2011                                                                                                                                                                                                                    

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table provides information concerning unexercised
options for each our named executive officers, as that term is defined in Item
402(f)(2) of Regulation S-K, as of our fiscal year ended June 30, 2011:

OPTION AWARDS
      STOCK AWARDSName and 
        Principal 
        Position
      Number of 
        Securities 
        Underlying 
        Unexercised
        Options (#) 
        Exercisable
      Number of 
        Securities 
        Underlying 
        Unexercised 
        Options (#) 
        Unexercisable
      Equity 
        Incentive 
        Plan 
        Awards: 
        Number of 
        Securities 
        Underlying 
        Unexercised 
        Unearned 
        Options
      Option 
        Exercise 
        Price
      Option 
        Expiration 
        Date
      Number of 
        Shares or 
        Units of 
        Stock that 
        have not 
        Vested
      Market 
        Value of 
        Shares 
        or Units 
        of Stock 
        that have 
        not 
        Vested
      Equity 
        Incentive 
        Plan 
        Awards: 
        Number 
        of 
        Unearned 
        Shares, 
        or Units 
        or Other 
        Rights 
        that have 
        not 
        Vested 
        (#)
      Equity 
        Incentive 
        Plan 
        Awards: 
        Market or 
        Payout 
        Value of 
        Unearned 
        Shares, 
        or Units 
        or Other 
        Rights 
        that have 
        not 
        Vested 
        (#)Daryl J. 
        Ehrmantraut, 
        President, CEO  & Director
      250,000
      250,000
      --
      $0.50
      01/13/2013
      -
      -
      -
      -Graham R. 
        Hughes, CFO, 
        Secretary 
        Treasurer & 
        Director
      --
      --
      -
      -
      --
      -
      -
      -
      -Andras
        Pattantyus-
        Abraham, CTO &
Director
      --
      --
      -
      -
      --
      -
      -
      -
      -


Note:

|(1) | Pursuant to the terms of Mr. Ehrmantrauts employment
      agreement, he is to receive 500,000 stock options vesting over twelve
      fiscal quarters commencing January 1, 2010.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Compensation Discussion and Analysis

We seek to provide a level of compensation for our executive
officers that is competitive with publicly-traded companies similar in both size
and industry. We hope to attract, retain, and reward executive officers who
contribute to our success, to align executive officer compensation with our
performance, and to motivate executive officers to achieve our business
objectives. We compensate our senior management through a mix of base salary,
bonus and equity compensation.

30

---

Our Board of Directors determines the compensation of our
executive officers. The Board also administers any stock option issuances. The
Board reviews base salary levels for our executive officers at the end of each
fiscal year and recommends raises and bonuses based upon our achievements,
individual performance, and competitive and market conditions. The Board may
delegate certain of its responsibilities, as it deems appropriate, to committees
or to our officers, but it has not elected to do so. The Board has engaged
management consultants to provide a market analysis of cash, equity and short
term incentives for comparisons to our current compensation package and based on
that analysis provide recommendations of compensation adjustments and overall
compensation philosophy to the Board of Directors.

Compensation Committee

We do not have a standing compensation committee. Our entire
Board of Directors participates in the consideration of executive officer and
director compensation. Because of the small size of the Company, we feel it is
prohibitive to develop a formal compensation committee at this time. We have
relied on the fiduciary duties of our Directors in determining what levels of
compensation are in the best interests of the Company.

Employment Agreements

On January 1, 2010 we entered into a CEO employment agreement
with Daryl J. Ehrmantraut (the CEO Employment Agreement). Under the terms of
the agreement, Mr. Ehrmantraut is paid an annual salary of $120,000. In addition
to Mr. Ehrmantrauts base salary, he is eligible to receive a bonus for each
calendar quarter in an amount, if any, as determined by our Board of Directors
at its discretion. Mr. Ehrmantraut received 500,000 options to purchase shares
of our common stock vested quarterly over a three year period commencing on the
execution date of the CEO Employment Agreement. The Option exercise price is
$0.50 and they expire January 13, 2013. Under the terms of the CEO Employment
Agreement, Mr. Ehrmantraut is required to devote the substantial portion of his
entire business time, attention and energy exclusively to the business and
affairs of the Company.

On August 23, 2011, we entered into an employment agreement
with Stella Guo (the Employment Agreement) dated effective September 1, 2011.
Under the terms of the agreement, Ms. Guo is paid an annual salary of $100,000.
Ms. Guo received 1,000,000 options to purchase shares of our common stock vested
quarterly over a three year period commencing on the effective date of the
Employment Agreement. The Option exercise price is $1.00 and they expire August
31, 2014. Under the terms of the Employment Agreement, Ms. Guo is required to
devote the substantial portion of her entire business time, attention and energy
to the business and affairs of the Company.

On August 31, 2011, we entered into an Executive Services
Agreement with Team Solar BV (TSBV) and Steven Pleging (the Executive
Services Agreement) dated for reference August 8, 2011. Under the terms of the
agreement, TSBV shall receive 36,000 EUR during the first three months and
135,000 EUR during the remaining nine months. Subject to certain conditions of
the Executive Services Agreement, TSBV at its option Mr. Pleging could receive
up to 500,000 shares of our common stock and Mr. Pleging could receive options
to purchase 1,500,000 shares of our common stock at a price determined by our
Board of Directors. Mr. Pleging is required to devote a substantial portion of
his entire business time, attention and energy to the business and affairs of
the Company.

|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|-------- | -----------------------------------------------------------------------------------------------------

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of August 31,
2011 by: (i) each person (including any group) known to us to own more than five
percent (5%) of any class of our voting securities, (ii) each of our directors
and each of our named executive officers, and (iii) officers and directors as a
group. Unless otherwise indicated, the shareholders listed possess sole voting
and investment power with respect to the shares shown.

31

---

Title of Class
      Name and Address of
        Beneficial Owner
      Amount and Nature of Beneficial Ownership
      Percentage of Common
        Stock(1)DIRECTORS AND OFFICERSCommon Stock
      Daryl J. Ehrmantraut 
        President, Chief Executive Officer, Director
      400,000(2)
        (Direct)
      *Common Stock
      Graham R. Hughes 
        Chief Financial Officer, Secretary, Treasurer, 
        Director
      1,000,000 
        (Direct)
      *Common Stock
      Andras Pattantyus-Abraham 
        Chief Technology Officer and
Director
      Nil
      NilCommon Stock
      Steven Pleging 
        Chairman and Director
      Nil
      NilCommon Stock
      Stella Guo 
        Vice President of Corporate Development 
        and Director
      83,333(3)
      *Common Stock
      All Officers and Directors 
        as a Group (5 persons)
      1,483,333(2)
        (Direct)
      1.0%5% STOCKHOLDERSCommon Stock
      Moatcroft Limited 
        8 St George's Street 
        Douglas, Isle of Man 
        IM1 1AH
      31,000,000 
        (Direct)
      21.1%Common Stock
      Scarlet Harlingten 
        L402, 1550 Coal Harbour Quay 
        Vancouver, BC V6G 3G1
      10,141,800 
        (Direct)
      6.9%Common Stock
      Mellinda-Mae Harlingten 
        1275 Hamilton Street 
        Vancouver, BC V6B 1E2
      10,000,000 
        (Direct)
      6.8%


Note:* Less than 1%

|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons actual
      ownership or voting power with respect to the number of shares of our
      Common Stock actually outstanding on the date of this Annual Report. As at
      August 23, 2011, we had 146,987,692, shares of our Common Stock issued and
      outstanding.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(2) | Mr. Ehrmantraut holds 150,000 shares of our Common Stock
      and has a vested option to acquire 250,000 shares of our Common Stock at a
      price of $0.50 per share until January 13, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

32

---

|(3) | Ms. Guo has a vested option to acquire 83,333 shares of
      our Common Stock at a price of $1.00 per share until August 31,
    2014.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

CHANGE IN CONTROL

We are not aware of any arrangement that might result in a
change of control.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information concerning
all equity compensation plans previously approved by stockholders and all
previous equity compensation plans not previously approved by stockholders, as
at June 30, 2011.

EQUITY COMPENSATION PLAN INFORMATION AS
        AT JUNE 30, 2011Plan
        Category
      Number of securities
        to be issued upon exercise of outstanding
        options, warrants and rights (a)
      Weighted-average exercise price
        of outstanding options, warrants and
        rights (b)
      Number of securities
        remaining available for future issuance under
        equity compensation plans (excluding securities
        reflected in column (a)) (c)Equity Compensation Plans approved by security holders
      Nil
      N/A
      NilEquity Compensation Plans not approved by
        security holders
      950,000
      $1.57
      13,700,000Total
      950,000
      $1.57
      13,700,000


Mr. Ehrmantraut was granted 500,000 stock options under his
employment agreement dated January 1, 2010. These options were granted prior to
the adoption of our 2011 Stock Option Plan.

Subsequent to the year end Stella Guo was granted 1,000,000
stock options with an exercise price of $1.00 per share.

2011 Stock Option Plan

On February 28, 2011, our Board of Directors adopted the 2011
Stock Incentive Plan (the "2011 Plan"). The purpose of the 2011 Plan is to
enhance the long-term stockholder value of the Company by offering opportunities
to directors, officers, employees and eligible consultants of the Company
(Participants) to acquire and maintain stock ownership in the Company in order
to give these persons the opportunity to participate in the Company's growth and
success, and to encourage them to remain in the service of the Company.

The 2011 Plan allows the Company to grant options to its
officers, directors and employees. In addition, the Company may grant options to
individuals who act as consultants to the Company, so long as those consultants
do not provide services connected to the offer or sale of the Companys
securities in capital raising transactions and do not directly or indirectly
promote or maintain a market for the Companys securities.

A total of 14,650,000 shares of the Companys common stock are
available for issuance under the Plan.

The Plan provides for the grant of incentive stock options and
non-qualified stock options. Incentive stock options granted under the Plan are
those intended to qualify as incentive stock options as defined under

33

---

Section 422 of the Internal Revenue Code. However, in order to
qualify as incentive stock options under Section 422 of the Internal Revenue
Code, the Plan must be approved by the stockholders of the Company within 12
months of its adoption. The Plan has not been approved by the Companys
stockholders. Non-qualified stock options granted under the Plan are option
grants that do not qualify as incentive stock options under Section 422 of the
Internal Revenue Code.

ITEM 13.
    CERTAIN RELATIONSHIPS
      AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE.


None of the following parties has, during the past two fiscal
years, had any material interest, direct or indirect, in any transaction with us
or in any presently proposed transaction that has or will materially affect us,
other than as noted in this section:

| | (i)   | Any of our directors or executive officers;                                                                                                                                
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Any person proposed as a nominee for election as a
      director;                                                                                                         
| | (iii) | Any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our
      outstanding shares of common stock;
| | (iv)  | Any of our promoters; and                                                                                                                                                  
| | (v)   | Any member of the immediate family (including spouse,
      parents, children, siblings and in-laws) of any of the foregoing
      persons.                                

Pursuant to the terms of a takeover bid, under Canadian
Securities Laws, Canadian Integrated Optics (IOM) Ltd. (CIO), our largest
shareholder, has transferred over 99% of its 71,500,000 shares of our common
stock to 47 different shareholders. As a result of the transaction, CIO no
longer holds a significant amount of our common shares.

We still contract with CIO to perform our Research and
Development activities at Simon Fraser University in British Columbia.

Director Independence

Our common stock is quoted on the OTC Bulletin Board
inter-dealer quotation system, which does not have director independence
requirements. Under NASDAQ Rule 5605(a)(2), a director is not considered to be
independent if he or she is also an executive officer or employee of the
corporation. All of our directors are considered executive officers under Rule
3b-7 of the Exchange Act. Therefore, none of our directors are independent.

As a result of our limited operating history and minimal
resources, our management believes that it will have difficulty in attracting
independent directors. In addition, we would likely be required to obtain
directors and officers insurance coverage in order to attract and retain
independent directors. Our management believes that the costs associated with
maintaining such insurance is prohibitive at this time.

ITEM
14.               
PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees

The aggregate fees billed for the two most recently completed
fiscal years ended June 30, 2011 and June 30, 2010 for professional services
rendered by the principal accountant for the audit of our annual financial
statements and review of the financial statements included our Quarterly Reports
on Form 10-Q or Form 10-QSB and services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for these fiscal periods were as follows:

Year Ended June 30,
      2011
    Year Ended June 30,
      2010Audit Fees
    $90,000
    $60,000Audit Related Fees
    -
    $12,500


34

---

Tax Fees
    -
    -All Other Fees
    -
    -Total
    $90,000
    $72,500


Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

The policy of our Audit Committee is to pre-approve all audit
and permissible non-audit services to be performed by our independent auditors
during the fiscal year. Non-audit services that are prohibited to be provided by
our independent auditors may not be pre-approved. In addition, prior to the
granting of any pre-approval, our Audit Committee must be satisfied that the
performance of the services in question will not compromise the independence of
the independent auditors.

No services related to Audit-Related Fees, Tax
Fees or All Other Fees described above were approved by the Audit
Committee pursuant to the waiver of pre-approval provisions set forth in the
applicable rules of the SEC.

ITEM
15.               
EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following exhibits are either provided with this Annual
Report on Form 10-K or are incorporated herein by reference.

The following exhibits are either provided with this Quarterly
Report or are incorporated herein by reference.

|Exhibit |                                                                                                                                                                            
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                                                                    
|3.1     | Articles of Incorporation.(1)                                                                                                                                              
|3.2     | Certificate of Change Pursuant to NRS 78.209 increasing
      the issued and authorized capital of common stock to 350,000,000 shares,
      par value $0.001 per share.(3)
|3.3     | Certificate of Change Pursuant to NRS 78.209 increasing
      the issued and authorized capital of common stock to 400,000,000 shares,
      par value $0.001 per share.(3)
|3.4     | Certificate of Amendment to Articles of
      Incorporation.(3)                                                                                                            
|3.5     | Certificate of Amendment to Articles of
      Incorporation.(3)                                                                                                            
|3.6     | Bylaws, as amended.(1)                                                                                                                                                     
|10.1    | Technology Acquisition Agreement between Quantum and
      Canadian Integrated Optics (IOM) Ltd. dated December 16,
      2009.(3)                                         
|10.2    | CEO Employment Agreement between Quantum and Daryl J.
      Ehrmantraut dated January 1, 2010.(4)                                                                          
|10.3    | Investor relations Consulting Services Contract between
      Quantum and Green Street Capital Partners, LLC dated January 6, 2010.
      (2)                              
|10.4    | Office Space Lease Agreement between Quantum and Santa Fe
      Business Incubator, Inc. dated January 19, 2010. (2)                                                       
|10.5    | Revolving Line of Credit Agreement between Quantum and
      Canadian Integrated Optics (IOM) Ltd. dated February 20,
      2010.(3)                                       
|10.6    | Consulting Agreement between Quantum and Caisey
      Harlingten dated April 19, 2010. (4)                                                                                 
|10.7    | Office Space Lease Agreement between Quantum and Santa Fe
      Business Incubator, Inc. dated July 27, 2010. (4)                                                          
|10.8    | Office Space Lease Agreement between Quantum and Guinness
      Business Center Ltd. dated June 21, 2010 and Addendum dated August 17,
      2010. (4)                     
|10.9    | Finders Fee Agreement between Quantum and 1536476
      Alberta Ltd. dated for reference August 30, 2010. (4)                                                             
|10.10   | Investor Relations Consulting Agreement between Quantum
      and Teatyn Enterprises Inc. dated for reference January 15,
      2011.(5)                                   
|10.11   | 2011 Stock Incentive Plan.(6)                                                                                                                                              

35

---

|Exhibit |                                                                                                                                                                       
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                                                               
|10.12   | Task Order Agreement
        between Quantum and SgurrEnergy Ltd. dated April 28, 2011.(7)                                                                            
|10.13   | Investor Relations Consulting
        Agreement between Quantum and John Thornton dated for reference March
        1, 2011(8)                                        
|10.14   | Public Relations
        Agreement dated June 21, 2011 between the Company and Vorticom Inc.(9)                                                                       
|10.15   | Consulting Agreement dated July
        18, 2011 between the Company and Advantag Aktiengesellschaft.(10)                                                             
|10.16   | English translation
        of the Consulting Agreement dated July 18, 2011 between the Company and
        Advantag Aktiengesellschaft.(10)                          
|10.17   | Consulting Agreement dated for
        reference July 8, 2011 between the Company and Quorum Capital Corporation.(11)                                                 
|10.18   | Executive Services
        Agreement dated for reference August 8, 2011 between the Company, Team
        Solar BV and Steven Pleging(12)                             
|10.19   | Employment
        Agreement dated effective September 1, 2011 between the Company and Stella
        Guo.                                                            
|14.1    | Code of Ethics.(3)                                                                                                                                                    
|31.1    | Certification
        of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                               
|31.2    | Certification
        of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                               
|32.1    | Certification
        of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2    | Certification
        of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|99.1    | Audit Committee Charter.(3)                                                                                                                                           

|(1)  | Previously filed as an exhibit to our Registration
      Statement on Form S-1 originally filed with the SEC on September 21,
      2004.                      
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2)  | Previously filed as an exhibit to our Quarterly Report on
      Form 10-Q for the period ended December 31, 2009 filed with the SEC on
      February 17, 2010.
|(3)  | Previously filed as an exhibit to our Quarterly Report of
      Form 10-Q for the period ended March 31, 2010 filed with the SEC on May
      17, 2010.        
|(4)  | Previously filed as an exhibit to our Annual Report on
      Form 10-K for the year ended June 30, 2010 filed with the SEC on September
      13, 2010.        
|(5)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed with the SEC on February 3, 2011.                                                 
|(6)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed with the SEC on March 4, 2011.                                                    
|(7)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed with the SEC on May 3, 2011.                                                      
|(8)  | Previously filed as an exhibit to our Quarterly Report of
      Form 10-Q for the period ended March 31, 2011 filed with the SEC on May
      10, 2010.        
|(9)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed with the SEC on June 27, 2011.                                                    
|(10) | Previously filed as an exhibit to our Current Report on
      Form 8-K filed with the SEC on July 20, 2011.                                                    
|(11) | Previously filed as an exhibit to our Current Report on
      Form 8-K filed with the SEC on August 11, 2011.                                                  
|(12) | Previously filed as an exhibit to our Current Report on
      Form 8-K filed with the SEC on September 1, 2011.                                                

36

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SIGNATURES

Pursuant to the requirements 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.

|       |                    |  |     | QUANTUM SOLAR POWER CORP.                             
|------ | ------------------ |  | --- | ------------------------------------------------------
|       |                    |  |     |                                                       
|       |                    |  |     |                                                       
|       |                    |  |     |                                                       
|Dated: | September 12, 2011 |  | By: | /s/
      Daryl J. Ehrmantraut                        
|       |                    |  |     | DARYL J. EHRMANTRAUT                                  
|       |                    |  |     | Chief Executive Officer and President                 
|       |                    |  |     | (Principal Executive Officer)                         
|       |                    |  |     |                                                       
|       |                    |  |     |                                                       
|Dated: | September 12, 2011 |  | By: | /s/
      Graham R. Hughes                            
|       |                    |  |     | GRAHAM R. HUGHES                                      
|       |                    |  |     | Chief Financial Officer, Secretary and
      Treasurer
|       |                    |  |     | (Principal Accounting 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.

Dated:
    September 12, 2011
    
    By:
    /s/
      Daryl J. EhrmantrautDARYL J. EHRMANTRAUTDirectorDated:
    September 12, 2011
    
    By:
    /s/
      Graham R. HughesGRAHAM R. HUGHESDirectorDated:
    September 12, 2011
    
    By:
    /s/
      Steven PlegingSTEVEN PLEGINGDirectorDated:
    September 12, 2011
    
    By:
    /s/
      Andras Pattantyus-AbrahamANDRAS PATTANTYUS-ABRAHAMDirectorDated:
    September 12, 2011
    
    By:
    /s/
      Stella GuoSTELLA GUODirector


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