| NEVADA                                                       | 98-0559606                           |
|--------------------------------------------------------------|--------------------------------------|
| State or other jurisdiction of incorporation or organization | (I.R.S. Employer Identification No.) |
|                                                         |                                 |
| 1365 N. Courtenay Parkway, Suite A                           | 32953                                |
| Merritt Island, FL                                           |                                 |
| (Address of principal executive offices)                     | (Zip Code)                           |

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

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|                          |                                                                                                                                     | Page No. |
|-------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                          |                                                                                                                                     |     |
| PART I. FINANCIAL INFORMATION |                                                                                                                                     |
|                          |                                                                                                                                     |     |
| Item 1.                       | Financial Statements                                                                                                                     | 1        |
|                          |                                                                                                                                     |     |
|                          | Balance Sheets – As of May 31, 2010 (Unaudited) and February 28, 2010 (Audited)                                                    | 1        |
|                          |                                                                                                                                     |     |
|                          | Statements of Operations for the three months ended May 31, 2010 and 2009, and for the period from inception to May 31, 2010 (Unaudited) | 2        |
|                          |                                                                                                                                     |     |
|                          | Statements of Cash Flows for the three months ended May 31, 2010 and 2009, and for the period from inception to May 31, 2010 (Unaudited) | 3        |
|                          |                                                                                                                                     |     |
|                          | Notes to the Financial Statements (unaudited)                                                                                            | 4        |
|                          |                                                                                                                                     |     |
| Item 2.                       | Management’s Discussion and Analysis of Financial Condition and Results of Operation                                               | 13       |
|                          |                                                                                                                                     |     |
| Item 3.                       | Quantitative and Qualitative Disclosures About Market Risk                                                                               | 17       |
|                          |                                                                                                                                     |     |
| Item 4.                       | Controls and Procedures                                                                                                                  | 17       |
|                          |                                                                                                                                     |     |
|                          |                                                                                                                                     |     |
| PART II. OTHER INFORMATION    |                                                                                                                                     |
|                          |                                                                                                                                     |     |
| Item 1.                       | Legal Proceedings                                                                                                                        | 19       |
|                          |                                                                                                                                     |     |
| Item 2.                       | Unregistered Sales of Equity Securities and Use of Proceeds                                                                              | 19       |
|                          |                                                                                                                                     |     |
| Item 3.                       | Defaults Upon Senior Securities                                                                                                          | 19       |
|                          |                                                                                                                                     |     |
| Item 4.                       | Submission of Matters to a Vote of Security Holders                                                                                      | 19       |
|                          |                                                                                                                                     |     |
| Item 5.                       | Other Information                                                                                                                        | 19       |
|                          |                                                                                                                                     |     |
| Item 6.                       | Exhibits                                                                                                                                 | 19       |

----

| ASSETS                                                                                     |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
|--------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
|                                                                                       |   | May 31, 2010                                                                                                                                                                                          |   | February 28, 2010                                                                                                                                                                     |
| CURRENT ASSETS                                                                             |   |   (unaudited)                                                                                                                                                                                    |   |                                                                                                                                                                                  |
| Cash and cash equivalents                                                                  | $      | 10,151                                                                                                                                                                                                | $      | 4,137                                                                                                                                                                                 |
| Deposits                                                                                   |   |                        -                                                           |   | 13,270                                                                                                                                                                                |
| Employee advances                                                                          |   | 35,000                                                                                                                                                                                                |   |                               - |
| Interest receivable - related party                                                        |   | 713                                                                                                                                                                                                   |   | 411                                                                                                                                                                                   |
| Inventory                                                                                  |   | 25,265                                                                                                                                                                                                |   | 877                                                                                                                                                                                   |
| Note receivable - related party                                                            |   | 10,000                                                                                                                                                                                                |   | 10,000                                                                                                                                                                                |
|      Total Current Assets                                         |   | 81,129                                                                                                                                                                                                |   | 28,695                                                                                                                                                                                |
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| OTHER ASSETS                                                                               |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| License, net of amortization of $185,195 and $161,993                                      |   | 2,243,005                                                                                                                                                                                             |   | 2,266,207                                                                                                                                                                             |
| Mineral rights                                                                             |   | 7,349                                                                                                                                                                                                 |   | 7,349                                                                                                                                                                                 |
| Goodwill                                                                                   |   | 101,183                                                                                                                                                                                               |   | 101,183                                                                                                                                                                               |
| Total Other Assets                                                                         |   | 2,351,537                                                                                                                                                                                             |   | 2,374,739                                                                                                                                                                             |
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| TOTAL ASSETS                                                                               | $      | 2,432,666                                                                                                                                                                                             | $      | 2,403,434                                                                                                                                                                             |
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| CURRENT LIABILITIES                                                                        |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
|   Accounts payable                                                               | $      | 85,186                                                                                                                                                                                                | $      | 89,623                                                                                                                                                                                |
|   Accrued interest                                                               |   |                                 3,164 |   | 1,006                                                                                                                                                                                 |
|   Accrued interest - related parties                                             |   | 89,991                                                                                                                                                                                                |   | 69,553                                                                                                                                                                                |
|   Payroll taxes payable                                                          |   | 18,007                                                                                                                                                                                                |   | 9,905                                                                                                                                                                                 |
|   Notes payable - current portion, net of discount of 16,807                     |   | 133,193                                                                                                                                                                                               |   |                               - |
|   Notes payable-related parties - current portion                                |   | 272,500                                                                                                                                                                                               |   | 272,500                                                                                                                                                                               |
|      Total Current Liabilities                                    |   | 602,041                                                                                                                                                                                               |   | 442,587                                                                                                                                                                               |
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| LONG-TERM LIABILITIES                                                                      |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
|   Notes payable                                                                  |   | 20,000                                                                                                                                                                                                |   | 20,000                                                                                                                                                                                |
|   Notes payable-related parties                                                  |   | 388,107                                                                                                                                                                                               |   | 374,000                                                                                                                                                                               |
| Total Long-Term Liabilities                                                                |   | 408,107                                                                                                                                                                                               |   | 394,000                                                                                                                                                                               |
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| Total Liabilities                                                                          |   | 1,010,148                                                                                                                                                                                             |   | 836,587                                                                                                                                                                               |
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| STOCKHOLDERS' EQUITY                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| Common stock, $0.001 par value. 150,000,000 shares authorized, 34,586,000 and              |   | 34,586                                                                                                                                                                                                |   | 32,927                                                                                                                                                                                |
|   32,927,500 shares issued and outstanding at May 31, 2010 and February 28, 2010 |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| Additional paid-in capital                                                                 |   | 3,405,596                                                                                                                                                                                             |   | 2,689,422                                                                                                                                                                             |
| Deficit accumulated during the development stage                                           |   | (2,017,664)                                                                                                                                                                                           |   | (1,155,502)                                                                                                                                                                           |
| Total stockholders' equity                                                                 |   | 1,422,518                                                                                                                                                                                             |   | 1,566,847                                                                                                                                                                             |
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                 | $      | 2,432,666                                                                                                                                                                                             | $      | 2,403,434                                                                                                                                                                             |
|                                                                                       |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                  |

----

|                               |                                   | Quarter endedMay 31, 2010                                                                                                                                                                                                                                                                                                                                                                                            |                                   | Quarter endedMay 31, 2009                                                                                                                                                                                                                                                                                                                                            |        | Inception to Date                                                                                                                                                                                                                                                                                                                                              |
|------------------------------------|----------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| REVENUE                            |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| Interest income                    | $                                      | 302                                                                                                                                                                                                                                                                                                                                                                                                                  | $                                      |                                                            -       | $           | 11,166                                                                                                                                                                                                                                                                                                                                                         |
| Total Revenue                      |                                   | 302                                                                                                                                                                                                                                                                                                                                                                                                                  |                                   | 0                                                                                                                                                                                                                                                                                                                                                                    |        | 11,166                                                                                                                                                                                                                                                                                                                                                         |
|                               |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| OPERATING EXPENSES                 |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| General and administrative         |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| Amortization                       |                                   | 23,202                                                                                                                                                                                                                                                                                                                                                                                                               |                                   |                                                   29,415                                                             |        |                                                 185,195                                                             |
| Bank fees                          |                                   | 1,830                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |                                                        404                        |        |                                                     5,134                                  |
| Consulting                         |                                   | 711,149                                                                                                                                                                                                                                                                                                                                                                                                              |                                   |                                                   29,500                                                        |        |                                              1,298,000                                                                             |
| Computer and internet expense      |                                   | 5,949                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |                                                             - |        |                                                   24,961                                                  |
| Insurance                          |                                   | 21,908                                                                                                                                                                                                                                                                                                                                                                                                               |                                   |                                                     2,169                                        |        |                                                   89,338                                                  |
| Licenses and permits               |                                   | 7,275                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |                                                        300                             |        |                                                   16,028                                                  |
| Marketing and sales                |                                   | 11,500                                                                                                                                                                                                                                                                                                                                                                                                               |                                   |                                                   21,896                                                        |        |                                                   89,008                                                  |
| Office expense                     |                                   | 4,216                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |                                                          57                  |        |                                                   10,607                                                  |
| Payroll expense                    |                                   | 33,935                                                                                                                                                                                                                                                                                                                                                                                                               |                                   |                                                            -       |        |                                                   65,081                                                  |
| Professional expenses              |                                   | 6,325                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |                                                     6,534                                        |        |                                                   82,945                                                  |
| Rent                               |                                   | 1,650                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |                                                     1,650                                             |        |                                                   24,200                                                  |
| Testing                            |                                   | 2,525                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |                                                            -       |        |                                                   19,950                                                  |
| Other expenses                     |                                   | 4,378                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |                                                            -       |        |                                                   19,802                                                  |
|                               |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| Total Operating Expenses           |                                   | 835,842                                                                                                                                                                                                                                                                                                                                                                                                              |                                   | 91,925                                                                                                                                                                                                                                                                                                                                                               |        | 1,930,249                                                                                                                                                                                                                                                                                                                                                      |
|                               |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| INCOME (LOSS) FROM OPERATIONS      | (835,540)                              |                                                                                                                                                                                                                                                                                                                                                                                                                 | (91,925)                               |                                                                                                                                                                                                                                                                                                                                                                 | (1,919,083) |
| Other income and expenses:         |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| Interest expense                   |                                   |                                                              6,184                                       |                                   |                                                            -       |        |                                                     7,190                                  |
| Interest expense - related parties |                                   |                                                            20,438                                                  |                                   |                                                     7,023                                        |        |                                                   91,391                                             |
| Total other income and expenses    |                                   | 26,622                                                                                                                                                                                                                                                                                                                                                                                                               |                                   | 7,023                                                                                                                                                                                                                                                                                                                                                                |        | 98,581                                                                                                                                                                                                                                                                                                                                                         |
|                               |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| INCOME (LOSS) BEFORE INCOME TAX    |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| Provision for income tax           |                                   |                                                                     - |                                   |                                                             - |        |                                                            - |
| NET INCOME (LOSS)                  | $                                      | (862,162)                                                                                                                                                                                                                                                                                                                                                                                                            | $                                      | (98,948)                                                                                                                                                                                                                                                                                                                                                             | $           | (2,017,664)                                                                                                                                                                                                                                                                                                                                                    |
|                               |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
|                               |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| Earnings per share                 |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
|    Basic            |        $ |   (0.02)                                                                                                                                                                                                                                                                                                                                                                                                        |        $ |   (0.01)                                                                                                                                                                                                                                                                                                                                                        |        |                                                                                                                                                                                                                                                                                                                                                           |
|    Diluted          |        $ |   (0.02)                                                                                                                                                                                                                                                                                                                                                                                                        |        $ |   (0.01)                                                                                                                                                                                                                                                                                                                                                        |        |                                                                                                                                                                                                                                                                                                                                                           |
|                               |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
| Weighted Average shares            |                                   |                                                                                                                                                                                                                                                                                                                                                                                                                 |                                   |                                                                                                                                                                                                                                                                                                                                                                 |        |                                                                                                                                                                                                                                                                                                                                                           |
|    Basic            |                                   |   33,918,739                                                                                                                                                                                                                                                                                                                                                                                                    |                                   |   18,791,000                                                                                                                                                                                                                                                                                                                                                    |        |                                                                                                                                                                                                                                                                                                                                                           |
|    Diluted          |                                   |   35,626,543                                                                                                                                                                                                                                                                                                                                                                                                    |                                   |   19,191,000                                                                                                                                                                                                                                                                                                                                                    |        |                                                                                                                                                                                                                                                                                                                                                           |

----

|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               | Quarter ended                                                                                                 |                                                                                                          | Quarter ended                                                                             |                                                                                                          | From      |
|--------------------------------------|--------------------------------------------------------------|---------------------------------------|---------------------------------------------------------------------------------------------------------------|-------------------------------------------|---------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|-----------|
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               | May 31,                                                                                                       |                                                                                                          | May 31,                                                                                   |                                                                                                          | inception |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               | 2010                                                                                                          |                                                                                                          | 2009                                                                                      |                                                                                                          | To date   |
| CASH FLOWS FROM OPERATING ACTIVITIES |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |
|                                 | Net loss                                                     |                                  |  $                                                                                                       | (862,162)                                 | $                                                                                                             | (98,948)                                                           | $                                                                                                             | (2,017,664)                                                                                                   |
|                                 | Adjustments to reconcile to net cash                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |
|                                 |   used by operating activities:                    |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |
|                                 |                                                         |                                  | Amortization expense                                                                                          |                                      |           27,228                                            |                                                               |           29,415                                            |                                                                                                          |         189,221                                   |
|                                 |                                                         |                                  | Stock options issued for services                                                                             |                                      |         530,000                                                       |                                                               |                   - |                                                                                                          |         695,000                                   |
|                                 |                                                         |                                  | Stock options issued for services                                                                             |                                      | -                                                                                                             |                                                               |                   - |                                                                                                          |             8,390             |
|                                 | Changes in assets and liabilities                            |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |
|                                 |                                                         |                                  | Interest receivable                                                                                           |                                      |               (302)                     |                                                               |                   - |                                                                                                          |               (713) |
|                                 |                                                         |                                  | Inventory                                                                                                     |                                      |                                                                                                          |          (24,388)     |                                                                                                          |                   - |                                                                                      |          (25,265)                                                |
|                                 |                                                         |                                  | Deposits                                                                                                      |                                      |                                                                                                          |           13,270 |                                                                                                          |                   - |                                                                                      |                   - |
|                                 |                                                         |                                  | Accounts payable and accrued expenses                                                                         |                                      |            (4,437)                                     |                                                               |             7,420                                 |                                                                                                          |           37,808                        |
|                                 |                                                         |                                  | Accrued interest payable                                                                                      |                                      |           22,596                                            |                                                               |             7,023                                 |                                                                                                          |           94,555                        |
|                                 |                                                         |                                  | Payroll taxes payable                                                                                         |                                      |             8,102                                 |                                                               |                   - |                                                                                                          |           18,007                        |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |                                                                                                          |                                                                                      |                                                                                                          |      |
|                                 |                                                         |                                  |                                                                                                          | Net cash used by operating activities     |                                                                                                          |        (290,093)                |                                                                                                          |          (55,090)                                                |                                                                                      |     (1,000,661)                                                                           |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |                                                                                                          |                                                                                      |                                                                                                          |      |
| CASH FLOWS FROM INVESTING ACTIVITIES |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |
|                                 | Acquisition of license                                       |                                  |                   - |                                      |                   - |                                                               |        (150,000)                                                           |
|                                 | Advance to employee                                          |                                  |          (35,000)                                                |                                      |                                                                                                          |                                                               |          (35,000)                                                |
|                                 | Loan to related party                                        |                                  |                   - |                                      |                   - |                                                               |          (10,000)                                                |
|                                 |                                                         |                                  |                                                                                                          | Net cash used by investing activities     |                                                                                                          |          (35,000)     |                                                                                                          |                   - |                                                                                      |        (195,000)                                                           |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |                                                                                                          |                                                                                      |                                                                                                          |      |
| CASH FLOWS FROM INVESTING ACTIVITIES |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |
|                                 | Proceeds from issuance of common stock                       |                                  |         167,000                                                       |                                      |                   - |                                                               |         434,205                                                       |
|                                 | Proceeds from capital contribution                           |                                  |                   - |                                      |                   - |                                                               |             5,000                                 |
|                                 | Proceeds from notes payable                                  |                                  |         150,000                                                       |                                      |                   - |                                                               |         170,000                                                       |
|                                 | Payment of note payable-related party                        |                                  |   (6,000)                                                                                                |                                      |                                                                                                          |                                                               |   (6,000)                                                                                                |
|                                 | Proceeds from notes payable - related parties                |                                  |           20,107                                            |                                      |           65,000                                            |                                                               |         596,607                                                       |
|                                 |                                                         |                                  |                                                                                                          | Net cash provided by investing activities |                                                                                                          |         331,107            |                                                                                                          |           65,000                                            |                                                                                      |      1,205,812                                                                       |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |                                                                                                          |                                                                                      |                                                                                                          |      |
|                                 | Net increase (decrease) in cash                              |                                  |             6,014                                 |                                      |             9,910                                 |                                                               |           10,151                                            |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |                                                                                                          |                                                                                      |                                                                                                          |      |
|                                 | Cash and cash equivalents, beginning of period               |                                  |             4,137                                 |                                      |                871                 |                                                               |                   - |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |                                                                                                          |                                                                                      |                                                                                                          |      |
|                                 | Cash and cash equivalents, end of period                     |  $                               | 10,151                                                                                                        | $                                         | 10,781                                                                                                        | $                                                                  | 10,151                                                                                                        |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |                                                                                                          |                                                                                      |                                                                                                          |      |
| SUPPLEMENTAL CASH FLOW INFORMATION   |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |
|                                 | Noncash transaction - issuance of common stock               |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |
|                                 |                                                         | in exchange for debt                  | $                                                                                                             | -                                         | $                                                                                                             | -                                                             | $                                                                                                             | 11,000                                                                                                        |
|                                 | Noncash transaction - issuance of common stock               |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |
|                                 |                                                         | in exchange for accrued interest      | $                                                                                                             | -                                         | $                                                                                                             | -                                                             | $                                                                                                             | 1,400                                                                                                         |
|                                 | Noncash transaction - issuance of common stock               |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |
|                                 |                                                         | in exchange for Kushi Resources, Inc. | $                                                                                                             | -                                         | $                                                                                                             | -                                                                  | $                                                                                                             | 61,154                                                                                                        |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |                                                                                                          |                                                                                      |                                                                                                          |      |
|                                 | Noncash transaction - issuance of debt                       |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |
|                                 |                                                         | in exchange for intangible asset      | $                                                                                                             | -                                         | $                                                                                                             | -                                                                  | $                                                                                                             | 75,000                                                                                                        |
|                                 | Noncash transaction - issuance of common stock               |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |
|                                 |                                                         | in exchange for intangible asset      | $                                                                                                             | -                                         | $                                                                                                             | -                                                                  | $                                                                                                             | 2,203,200                                                                                                     |
|                                 | Noncash transaction – debt discount credited to equity |                                  | $                                                                                                             | 20,833                                    | $                                                                                                             | -                                                                  | $                                                                                                             | 20,833                                                                                                        |
|                                 | Interest paid                                                |                                  | $                                                                                                             | -                                         | $                                                                                                             | -                                                                  | $                                                                                                             | -                                                                                                             |
|                                 | Income taxes paid                                            | $                                     | -                                                                                                             | $                                         | -                                                                                                             | $                                                                  | -                                                                                                             |
|                                 |                                                         |                                  |                                                                                                          |                                      |                                                                                                          |                                                               |                                                                                                          |                                                                                                          |                                                                                      |                                                                                                          |      |

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| THERABIOGEN, INC.                            |
|----------------------------------------------|
| (A DEVELOPMENT STAGE COMPANY)                |
| NOTES TO THE  FINANCIAL STATEMENTS |
| MAY 31, 2010AND 2009                         |
|                                         |

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| THERABIOGEN, INC.                            |
|----------------------------------------------|
| (A DEVELOPMENT STAGE COMPANY)                |
| NOTES TO THE  FINANCIAL STATEMENTS |
| MAY 31, 2010AND 2009                         |
|                                         |

----

| THERABIOGEN, INC.                            |
|----------------------------------------------|
| (A DEVELOPMENT STAGE COMPANY)                |
| NOTES TO THE  FINANCIAL STATEMENTS |
| MAY 31, 2010AND 2009                         |
|                                         |

----

| THERABIOGEN, INC.                            |
|----------------------------------------------|
| (A DEVELOPMENT STAGE COMPANY)                |
| NOTES TO THE  FINANCIAL STATEMENTS |
| MAY 31, 2010AND 2009                         |
|                                         |

----

| THERABIOGEN, INC.                            |
|----------------------------------------------|
| (A DEVELOPMENT STAGE COMPANY)                |
| NOTES TO THE  FINANCIAL STATEMENTS |
| MAY 31, 2010AND 2009                         |
|                                         |

----

| THERABIOGEN, INC.                            |
|----------------------------------------------|
| (A DEVELOPMENT STAGE COMPANY)                |
| NOTES TO THE  FINANCIAL STATEMENTS |
| MAY 31, 2010AND 2009                         |
|                                         |

----

| THERABIOGEN, INC.                            |
|----------------------------------------------|
| (A DEVELOPMENT STAGE COMPANY)                |
| NOTES TO THE  FINANCIAL STATEMENTS |
| MAY 31, 2010AND 2009                         |

----

| THERABIOGEN, INC.                            |
|----------------------------------------------|
| (A DEVELOPMENT STAGE COMPANY)                |
| NOTES TO THE  FINANCIAL STATEMENTS |
| MAY 31, 2010AND 2009                         |

----

| THERABIOGEN, INC.                            |
|----------------------------------------------|
| (A DEVELOPMENT STAGE COMPANY)                |
| NOTES TO THE  FINANCIAL STATEMENTS |
| MAY 31, 2010AND 2009                         |

----

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| Phase                 | Exploration Program                                                       | Approximate Cost*             | Status                                                                                                                                 |
|-----------------------|---------------------------------------------------------------------------|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|
| One    | Prospecting, Trenchingand Sampling andHelicopter-SupportedMagnetic Survey | $22,000        | Completed Helicopter-Supported Magnetic Surveyat a cost of $11,648. Thebalance of this phase isexpected to be completed inAugust 2010. |
| Two                   | Coverage of the areawith VLF-EM andmagnetometer surveys                   | between $55,000 and $130,000  | Dependent upon the results ofPhase One.                                                                                                |
| Three                 | Geological mapping andsampling                                            | between $175,000 and $215,000 | Dependent upon the results ofPhase Two.                                                                                                |
|                  | Total Estimated Cost                                                      | between $250,000 and $365,000 |                                                                                                                                   |

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| Category                                | Expenditures Over The Next 12 Months (US$) |
|-----------------------------------------|--------------------------------------------|
| Legal and Accounting Fees               | $47,200                                    |
| Regulatory and Other Operating Expenses | $ 7,000                                    |
| Mineral Property Exploration Expenses   | $12,150                                    |
| TOTAL                                   | $66,350                                    |

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