----

----

----

----

| Q | QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|---|-----------------------------------------------------------------------------------------------------------------|

| o | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|---|------------------------------------------------------------------------------------------------------------------|

| Nevada                                  |   | 20-4854758                                          |
|-----------------------------------------|--------|-----------------------------------------------------|
| (State                of incorporation) |   | (I.R.S.                Employer Identification No.) |

----

|                         |                                                                              | Page   |
|------------------------------|-----------------------------------------------------------------------------------|--------|
|                         |                                                                              |   |
| PART                  I.     | FINANCIAL                  INFORMATION                                            | 1      |
|                         |                                                                              |   |
| ITEM                  1.     | FINANCIAL                  STATEMENTS                                             | 1      |
|                         |                                                                              |   |
| ITEM                  2.     | MANAGEMENT’S                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS | 21     |
|                         |                                                                              |   |
| ITEM                  3A(T). | CONTROLS                  AND PROCEDURES                                          | 27     |
|                         |                                                                              |   |
| PART                  II     | OTHER                  INFORMATION                                                | 28     |
|                         |                                                                              |   |
| ITEM                  1      | LEGAL                  PROCEEDINGS                                                | 28     |
|                         |                                                                              |   |
| ITEM                  2      | UNREGISTERED                  SALES OF EQUITY SECURITIES AND USE OF PROCEEDS      | 28     |
|                         |                                                                              |   |
| ITEM                  3      | DEFAULTS                  UPON SENIOR SECURITIES                                  | 28     |
|                         |                                                                              |   |
| ITEM                  4      | SUBMISSION                  OF MATTERS TO A VOTE OF SECURITY HOLDERS              | 28     |
|                         |                                                                              |   |
| ITEM                  5      | OTHER                  INFORMATION                                                | 28     |
|                         |                                                                              |   |
| ITEM                  6      | EXHIBITS                                                                          | 29     |
|                         |                                                                              |   |
| SIGNATURE                    |                                                                              | 30     |

----

|   Financial                    Statements                                                                  |   |
|----------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                 |   |
|                                                                                                                 |   |
| Consolidated                    Balance Sheets                                                                       | 2      |
|                                                                                                                 |   |
| Consolidated                    Statements of Operations                                                             | 3      |
|                                                                                                                 |   |
| Consolidated                      Statements of Changes in Stockholders’ Equity                      (Deficit) | 4      |
|                                                                                                                 |   |
| Consolidated                    Statements of Cash                    Flows                                          | 6      |
|                                                                                                                 |   |
| Notes                    to Financial Statements                                                                     | 7      |

----

|                                                                                                 |   | November                    30, |       |   | August                    31, |   |
|------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|-------------------------------|--------|
|                                                                                                 |   | 2007                            |       |   | 2007                          |   |
|                                                                                                 |   | (Unaudited)                     |       |   |                          |   |
|                                                                                                 |   |                            |       |   |                          |   |
| ASSETS                                                                                               |
|                                                                                                 |   |                            |       |   |                          |   |
| CURRENT                    ASSETS                                                                    |   |                            |       |   |                          |   |
| Cash                    and cash                    equivalents                                      |   | $                               | 2,640,958  |   |                          | $      | 3,671,900 |   |
| Prepaid                    expenses                                                                  |   |                            | 58,049     |   |                          |   | 53,526 |   |
| Debt                    issuance                    costs                                            |   |                            | 1,315,004  |   |                          |   | 446,776 |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| Total                    current                    assets                                           |   |                            | 4,014,011  |   |                          |   | 4,172,202 |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| Property                    and equipment, net of                    accumulated depreciation        |   |                            | 704,066    |   |                          |   | 371,566 |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| OTHER                    ASSETS                                                                      |   |                            |       |   |                          |   |   |   |
| Patents                    and                    trademarks                                         |   |                            | 1,056,361  |   |                          |   | 994,297 |   |
| Deposits                                                                                             |   |                            | 7,060      |   |                          |   | 7,060 |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| Total                    other                    assets                                             |   |                            | 1,063,421  |   |                          |   | 1,001,357 |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| TOTAL                    ASSETS                                                                      |   | $                               | 5,781,498  |   |                          | $      | 5,545,125 |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| LIABILITIES                    AND STOCKHOLDERS'                    EQUITY (DEFICIT)                 |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| CURRENT                    LIABILITIES                                                               |   |                            |       |   |                          |   |   |   |
| Accounts                    payable and accrued                    expenses                          |   | $                               | 64,916     |   |                          | $      | 680,000 |   |
| Accrued                    officer                    compensation                                   |   |                            | 503,975    |   |                          |   | 453,975 |   |
| Advances                    from                    officer                                          |   |                            | 5,020      |   |                          |   | 25,020 |   |
| Notes                    payable, related                    party                                   |   |                            | -          |   |                          |   | 803,500 |   |
| Accrued                    interest, related party                    notes payable                  |   |                            | 120,599    |   |                          |   | 120,599 |   |
| Convertible                    notes                    payable                                      |   |                            | 4,174,500  |   |                          |   | 4,892,000 |   |
| Accrued                    interest, convertible                    notes payable                    |   |                            | 125,008    |   |                          |   | 58,206 |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| Total                    current                    liabilities                                      |   |                            | 4,994,018  |   |                          |   | 7,033,300 |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| TOTAL                    LIABILITIES                                                                 |   |                            | 4,994,018  |   |                          |   | 7,033,300 |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| Commitments                    and                    contingencies                                  |   |                            | -          |   |                          |   | - |   |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| STOCKHOLDERS'                    EQUITY                    (DEFICIT)                                 |   |                            |       |   |                          |   |   |   |
| Preferred                    stock, $0.001 par value,                    10,000,000 shares           |   |                            |       |   |                          |   |   |   |
| authorized;                    no shares issued or                    outstanding                    |   |                            | -          |   |                          |   | - |   |
| Common                    stock, $.001 par value;                    100,000,000 shares authorized;  |   |                            |       |   |                          |   |   |   |
| 24,415,044                    shares and 17,575,000                    shares issued and outstanding |   |                            |       |   |                          |   |   |   |
| at                    November 30, 2007 and August                    31, 2007, respectively         |   |                            | 20,078     |   |                          |   | 176 |   |
| Additional                    paid-in                    capital                                     |   |                            | 5,885,844  |   |                          |   | 800,992 |   |
| Deficit                    accumulated during the                    development stage               |   |                            | (5,118,442 | )      |                          |   | (2,289,343 | ) |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| Total                    stockholders' equity                    (deficit)                           |   |                            | 787,480    |   |                          |   | (1,488,175 | ) |
|                                                                                                 |   |                            |       |   |                          |   |   |   |
| TOTAL                    LIABILITIES AND                    STOCKHOLDERS' EQUITY                     |   | $                               | 5,781,498  |   |                          | $      | 5,545,125 |   |

----

|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     | Inception                                |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|------------|--------|-------------------------------------------------------------------|--------|----------|------------------------------------------|--------|
|                                                                                                                          |   |  For                          the three months                          ended |       |   | (Sept                          16,                          2005) |   |
|                                                                                                                          |   | November                          30,                                              |       |   | November                          30,                             |   |     | to                          November 30, |   |
|                                                                                                                          |   | 2007                                                                               |       |   | 2006                                                              |   |     | 2007                                     |   |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |
| Net                          revenue                                                                                          |   | $                                                                                  | -          |   |                                                              | $      | -        |                                     |   | $ | - |   |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Operating                          expenses                                                                                   |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| General                          and                          administrative                                                  |   |                                                                               | 165,002    |   |                                                              |   | 27,149   |                                     |   |   | 375,344 |   |
| Officer                          compensation                                                                                 |   |                                                                               | 90,000     |   |                                                              |   | 90,000   |                                     |   |   | 945,000 |   |
| Professional                          fees                                                                                    |   |                                                                               | 1,097,779  |   |                                                              |   | 80       |                                     |   |   | 1,331,811 |   |
| Rent                                                                                                                          |   |                                                                               | 18,278     |   |                                                              |   | -        |                                     |   |   | 117,512 |   |
| Research                          and                          development                                                    |   |                                                                               | 285,692    |   |                                                              |   | 60,283   |                                     |   |   | 799,278 |   |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Total                          operating                          expenses                                                    |   |                                                                               | 1,656,751  |   |                                                              |   | 177,512  |                                     |   |   | 3,568,945 |   |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Other                          income                          (expense)                                                      |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Interest                          expense,                          net                                                       |   |                                                                               | (1,170,748 | )      |                                                              |   | (5,000   | )                                        |   |   | (1,544,697 | ) |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Net                          loss before income                          taxes                                                |   |                                                                               | (2,827,499 | )      |                                                              |   | (182,512 | )                                        |   |   | (5,113,642 | ) |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Provision                          for income                          taxes                                                  |   |                                                                               | 1,600      |   |                                                              |   | -        |                                     |   |   | 4,800 |   |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Net                          Loss                                                                                             |   |                                                                               | (2,829,099 | )      |                                                              |   | (182,512 | )                                        |   |   | (5,118,442 | ) |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Accumulated                          Deficit                                                                                  |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Balance,                          beginning of                          period                                                |   |                                                                               | (2,289,343 | )      |                                                              |   | (588,084 | )                                        |   |   | - |   |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Balance,                          end of                          period                                                      |   | $                                                                                  | (5,118,442 | )      |                                                              | $      | (770,596 | )                                        |   | $ | (5,118,442 | ) |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Basic                          - Earnings (loss) per                          share                                           |   | $                                                                                  | (0.16      | )      |                                                              | $      | (0.88    | )                                        |   |   |   |   |
|                                                                                                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
| Basic                          - Weighted Average Number                          of                                          |   |                                                                               |       |   |                                                              |   |     |                                     |   |   |   |   |
|                                        of Shares Outstanding |   |                                                                               | 18,055,257 |   |                                                              |   | 207,198  |                                     |   |   |   |   |

----

|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   | Deficit     |   |   |      |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|---------------------------------|--------|--------|------------|--------|--------|-------------------------------|--------|--------|--------------|--------|--------|---------|--------|--------|-------------|--------|--------|-----------|--------|
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   | Accumulated |   |   | Total     |   |
|                                                                                                                                                         |   | Preferred                    Stock |   |   | Common                    Stock |   |   | Additional |   |   | During                    the |   |   | Stockholders |   |
|                                                                                                                                                         |   | Number                             |   |   |                            |   |   | Number     |   |   | To                    be      |   |   |         |   |   | Paid-In |   |   | Development |   |   | Equity    |   |
|                                                                                                                                                         |   | ofShares                           |   |   | Amount                          |   |   | ofShares   |   |   | issued                        |   |   | Amount       |   |   | Capital |   |   | Stage       |   |   | (Deficit) |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |
| Balance,                    September 16,                    2005                                                                                            |   |                               | -      |   |                            | $      | -      |       |   |   | -                             |   |   | $            | -      |   |    | $      | -      |        |   | $      | -         |   |   | $ | - |   |   | $ | - |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Cash                    received for 20,000 shares of                    common stock to be issued, November 30, 2005                                        |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | -      |   |    |   | 20     |        |   |   | 19,980    |   |   |   | - |   |   |   | 20,000 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Cash                    received for 30,000 shares of                    common stock to be issued, November 30, 2005                                        |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | -      |   |    |   | 30     |        |   |   | 29,970    |   |   |   | - |   |   |   | 30,000 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Cash                    received for 25,000 shares of                    common stock to be issued, March 14, 2006                                           |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | -      |   |    |   | 25     |        |   |   | 24,975    |   |   |   | - |   |   |   | 25,000 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Cash                    received for 50,000 shares of                    common stock to be issued, August 4, 2006, net of offering                    costs |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | 50     |   |    |   | -      |        |   |   | 46,950    |   |   |   | - |   |   |   | 47,000 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Cash                    received for 50,000 shares of                    common stock to be issued, August 18, 2006                                          |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | 50     |   |    |   | -      |        |   |   | 49,950    |   |   |   | - |   |   |   | 50,000 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock for                    services, July 2006                                                                       |   |                               | -      |   |                            |   | -      |       |   |   | 75,000                        |   |   |         | -      |   |    |   | 75     |        |   |   | 74,925    |   |   |   | - |   |   |   | 75,000 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Additional                    paid-in capital in                    exchange for services                                                                    |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | -      |   |    |   | -      |        |   |   | 150,000   |   |   |   | - |   |   |   | 150,000 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Net                    loss                                                                                                                                  |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | -      |   |    |   | -      |        |   |   | -         |   |   |   | (783,596 | ) |   |   | (783,596 | ) |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Balance,                    August 31,                    2006                                                                                               |   |                               | -      |   |                            |   | -      |       |   |   | 75,000                        |   |   |         | 100    |   |    |   | 150    |        |   |   | 396,750   |   |   |   | (783,596 | ) |   |   | (386,596 | ) |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock, net of                    offering costs, for cash, September 2006                                              |   |                               | -      |   |                            |   | -      |       |   |   | 150,000                       |   |   |         | -      |   |    |   | 150    |        |   |   | 110,600   |   |   |   | - |   |   |   | 110,750 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock, net of                    offering costs, for cash, November 2006                                               |   |                               | -      |   |                            |   | -      |       |   |   | 30,000                        |   |   |         | -      |   |    |   | 30     |        |   |   | 22,470    |   |   |   | - |   |   |   | 22,500 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock, net of                    offering costs, for cash, February 2007                                               |   |                               | -      |   |                            |   | -      |       |   |   | 250,000                       |   |   |         | -      |   |    |   | 250    |        |   |   | 181,750   |   |   |   | - |   |   |   | 182,000 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock, net of                    offering costs, for cash, March 2007                                                  |   |                               | -      |   |                            |   | -      |       |   |   | 25,000                        |   |   |         | -      |   |    |   | 25     |        |   |   | 18,725    |   |   |   | - |   |   |   | 18,750 |   |
|                                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of 175,000 shares of                    common stock, June 2007                                                                  |   |                               | -      |   |                            |   | -      |       |   |   | 175,000                       |   |   |         | (100   | )      |    |   | 100    |        |   |   | -         |   |   |   | - |   |   |   | - |   |

----

|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   | Deficit     |   |   |      |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|---------------------------------|--------|--------|------------|--------|--------|-------------------------------|--------|--------|--------------|--------|--------|---------|--------|--------|-------------|--------|--------|-----------|--------|
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   | Accumulated |   |   | Total     |   |
|                                                                                                                                         |   | Preferred                    Stock |   |   | Common                    Stock |   |   | Additional |   |   | During                    the |   |   | Stockholders |   |
|                                                                                                                                         |   | Number                             |   |   |                            |   |   | Number     |   |   | To                    be      |   |   |         |   |   | Paid-In |   |   | Development |   |   | Equity    |   |
|                                                                                                                                         |   | ofShares                           |   |   | Amount                          |   |   | ofShares   |   |   | issued                        |   |   | Amount       |   |   | Capital |   |   | Stage       |   |   | (Deficit) |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |
| Issuance                    of 55,000 shares of                    common stock for cash proceeds of $55,000, June                    2007   |   |                               | -      |   |                            |   | -      |       |   |   | 55,000                        |   |   |         | -      |   |    |   | 55     |        |   |   | 54,945    |   |   |   | - |   |   |   | 55,000 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of 16,800,000 shares of                    common stock for cash proceeds of $168, June 2007                     |   |                               | -      |   |                            |   | -      |       |   |   | 16,800,000                    |   |   |         | -      |   |    |   | 16,800 |        |   |   | (16,632   | )      |   |   | - |   |   |   | 168 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock for                    conversion of note payable, August 2007                                   |   |                               | -      |   |                            |   | -      |       |   |   | 15,000                        |   |   |         | -      |   |    |   | 15     |        |   |   | 14,985    |   |   |   | - |   |   |   | 15,000 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Net                    loss                                                                                                                  |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | -      |   |    |   | -      |        |   |   | -         |   |   |   | (1,505,747 | ) |   |   | (1,505,747 | ) |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Balance,                    August 31,                    2007                                                                               |   |                               | -      |   |                            |   | -      |       |   |   | 17,575,000                    |   |   |         | -      |   |    |   | 17,575 |        |   |   | 783,593   |   |   |   | (2,289,343 | ) |   |   | (1,488,175 | ) |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of Series A                    warrants                                                                          |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | -      |   |    |   | -      |        |   |   | 1,408,167 |   |   |   | - |   |   |   | 1,408,167 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of Series B                    warrants                                                                          |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | -      |   |    |   | -      |        |   |   | 563,624   |   |   |   | - |   |   |   | 563,624 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock for                    services, October 2007                                                    |   |                               | -      |   |                            |   | -      |       |   |   | 6,000                         |   |   |         | -      |   |    |   | 6      |        |   |   | 5,994     |   |   |   | - |   |   |   | 6,000 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock for                    conversion of related party note payable, October                    2007 |   |                               | -      |   |                            |   | -      |       |   |   | 803,500                       |   |   |         | -      |   |    |   | 804    |        |   |   | 802,696   |   |   |   | - |   |   |   | 803,500 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Share                    exchange with Springbank                    Resources resulting in recapitalization                                 |   |                               | -      |   |                            |   | -      |       |   |   | 4,337,500                     |   |   |         | -      |   |    |   | -      |        |   |   | 419       |   |   |   | - |   |   |   | 419 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock for                    services, November 2007                                                   |   |                               | -      |   |                            |   | -      |       |   |   | 425,544                       |   |   |         | -      |   |    |   | 426    |        |   |   | 425,118   |   |   |   | - |   |   |   | 425,544 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock for                    conversion of notes payable, November 2007                                |   |                               | -      |   |                            |   | -      |       |   |   | 1,067,500                     |   |   |         | -      |   |    |   | 1,067  |        |   |   | 1,066,433 |   |   |   | - |   |   |   | 1,067,500 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock for                    services, November 2007                                                   |   |                               | -      |   |                            |   | -      |       |   |   | 200,000                       |   |   |         | -      |   |    |   | 200    |        |   |   | 829,800   |   |   |   | - |   |   |   | 830,000 |   |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Net                    loss                                                                                                                  |   |                               | -      |   |                            |   | -      |       |   |   | -                             |   |   |         | -      |   |    |   | -      |        |   |   | -         |   |   |   | (2,829,099 | ) |   |   | (2,829,099 | ) |
|                                                                                                                                         |   |                               |   |   |                            |   |   |       |   |   |                          |   |   |         |   |   |    |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| Balance,                    November 30,                    2007                                                                             |   |                               | -      |   |                            | $      | -      |       |   |   | 24,415,044                    |   |   | $            | -      |   |    | $      | 20,078 |        |   | $      | 5,885,844 |   |   | $ | (5,118,442 | ) |   | $ | 787,480 |   |

----

|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|------------|--------|-------------------------------------------------------|--------|----------|-------------------------------------------------------|--------|
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     | Inception                                             |   |
|                                                                                                                                             |   | For                    the three months                    ended |       |   | (Sept                    16,                    2005) |   |
|                                                                                                                                             |   | November                    30,                                  |       |   | November                    30,                       |   |     | to                    November                    30, |   |
|                                                                                                                                             |   | 2007                                                             |       |   | 2006                                                  |   |     | 2007                                                  |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |
| Cash                    Flows from                    Operating Activities                                                                       |   |                                                             |       |   |                                                  |   |     |
| Net                    loss                                                                                                                      |   | $                                                                | (2,829,099 | )      |                                                  | $      | (182,512 | )                                                     |   | $ | (5,118,442 | ) |
| Adjustment                    to reconcile net loss                    to net cash provided by (used in) operating                    activities |   |                                                             |       |   |                                                  |
| Depreciation                                                                                                                                     |   |                                                             | 1,792      |   |                                                  |   | -        |                                                  |   |   | 3,893 |   |
| Common                    stock issued for                    services                                                                           |   |                                                             | 1,261,544  |   |                                                  |   | -        |                                                  |   |   | 1,516,544 |   |
| Warrants                    issued for                    services                                                                               |   |                                                             | 1,971,791  |   |                                                  |   | -        |                                                  |   |   | 1,971,791 |   |
| Recapitalization                    adjustment                                                                                                   |   |                                                             | 419        |   |                                                  |   | -        |                                                  |   |   | 419 |   |
| Changes                    in operating assets and                    liabilities                                                                |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Increase                    in prepaid                    expenses                                                                               |   |                                                             | (4,523     | )      |                                                  |   | -        |                                                  |   |   | (58,049 | ) |
| Increase                    in debt issuance                    costs                                                                            |   |                                                             | (868,228   | )      |                                                  |   | -        |                                                  |   |   | (1,315,004 | ) |
| Increase                    in                    deposits                                                                                       |   |                                                             | -          |   |                                                  |   | -        |                                                  |   |   | (7,060 | ) |
| (Decrease)                    increase in accounts                    payable and accrued expenses                                               |   |                                                             | (615,084   | )      |                                                  |   | (13,382  | )                                                     |   |   | 64,916 |   |
| Increase                    in accrued officer                    compensation                                                                   |   |                                                             | 50,000     |   |                                                  |   | 68,000   |                                                  |   |   | 503,975 |   |
| Increase                    in accrued                    interest                                                                               |   |                                                             | 66,802     |   |                                                  |   | -        |                                                  |   |   | 245,607 |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Net                    cash used in operating                    activities                                                                      |   |                                                             | (964,586   | )      |                                                  |   | (127,894 | )                                                     |   |   | (2,191,410 | ) |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Cash                    Flows from                    Investing Activities                                                                       |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Purchase                    of property and                    equipment                                                                         |   |                                                             | (334,292   | )      |                                                  |   | (23,866  | )                                                     |   |   | (707,959 | ) |
| Additions                    to patents and                    trademarks                                                                        |   |                                                             | (62,064    | )      |                                                  |   | -        |                                                  |   |   | (156,361 | ) |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Net                    cash used in investing                    activities                                                                      |   |                                                             | (396,356   | )      |                                                  |   | (23,866  | )                                                     |   |   | (864,320 | ) |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Cash                    Flows from                    Financing Activities                                                                       |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Proceeds                    from issuance of common                    stock, net of offering costs                                              |   |                                                             | -          |   |                                                  |   | 160,000  |                                                  |   |   | 404,168 |   |
| Proceeds                    from common stock be to                    issued                                                                    |   |                                                             | -          |   |                                                  |   | -        |                                                  |   |   | 142,000 |   |
| (Repayments)                    / advances from                    officer                                                                       |   |                                                             | (20,000    | )      |                                                  |   | (10,500  | )                                                     |   |   | 5,020 |   |
| Proceeds                    from convertible notes                    payable                                                                    |   |                                                             | 350,000    |   |                                                  |   | -        |                                                  |   |   | 5,242,000 |   |
| Proceeds                    from notes payable,                    related party                                                                 |   |                                                             | -          |   |                                                  |   | -        |                                                  |   |   | 50,000 |   |
| Repayment                    on notes payable,                    related party                                                                  |   |                                                             | -          |   |                                                  |   | -        |                                                  |   |   | (146,500 | ) |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Net                    cash provided by financing                    activities                                                                  |   |                                                             | 330,000    |   |                                                  |   | 149,500  |                                                  |   |   | 5,696,688 |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Net                  (decrease) increase in cash                  and cash equivalents                                                           |   |                                                             | (1,030,942 | )      |                                                  |   | (2,260   | )                                                     |   |   | 2,640,958 |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Cash                  and cash equivalents,                  beginning of period                                                                 |   |                                                             | 3,671,900  |   |                                                  |   | 3,569    |                                                  |   |   | - |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Cash                  and cash equivalents, end of                  period                                                                       |   | $                                                                | 2,640,958  |   |                                                  | $      | 1,309    |                                                  |   | $ | 2,640,958 |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Supplemental                    disclosure of cash flow information                                                                              |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Income                    taxes                    paid                                                                                          |   | $                                                                | -          |   |                                                  | $      | -        |                                                  |   | $ | 800 |   |
| Interest                    paid                                                                                                                 |   | $                                                                | -          |   |                                                  | $      | -        |                                                  |   | $ | - |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
|                                                                                                                                             |   |                                                             |       |   |                                                  |   |     |                                                  |   |   |   |   |
| Supplemental                    disclosure of noncash financing and investing                    activities:                                     |   |                                                             |       |   |                                                  |   |     |                                                  |   |
| Issuance                    of shares of common stock                    for services                                                            |   | $                                                                | 1,261,544  |   |                                                  | $      | -        |                                                  |   | $ | 1,516,544 |   |
| Issuance                    of warrants for                    services                                                                          |   | $                                                                | 1,971,791  |   |                                                  | $      | -        |                                                  |   | $ | 1,971,791 |   |
| Acquisition                    of patents for note                    payable                                                                    |   | $                                                                | -          |   |                                                  | $      | -        |                                                  |   | $ | 900,000 |   |
| Issuance                    of common stock for                    conversion of notes payable                                                   |   | $                                                                | 1,067,500  |   |                                                  | $      | -        |                                                  |   | $ | 1,337,500 |   |
| Issuance                    of common stock for                    conversion of related party note payable                                      |   | $                                                                | 803,500    |   |                                                  | $      | -        |                                                  |   | $ | 803,500 |   |

----

| 1. | NATURE                  OF OPERATIONS                  AND SUMMARY OF SIGNIFICANT ACCOUNTING                  POLICIES |
|----|------------------------------------------------------------------------------------------------------------------------|

Location        Based Technologies, Inc. (the“Company” “LBT”) was incorporated under the laws of the State of California on        September 16, 2005. On July 7, 2006, the Company established PocketFinder,        LLC        (“LLC”), a California Limited Liability Company.  On May 29, 2007,        PocketFinder, Inc. filed amended articles with the Secretary of State to        change        its name to Location Based Technologies, Corp.

----

| 1. | NATURE                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                  (Continued) |
|----|-------------------------------------------------------------------------------------------------------------------|

Basis        of        Presentation

----

| 1. | NATURE                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                  (Continued) |
|----|-------------------------------------------------------------------------------------------------------------------|

----

| 1. | NATURE                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                  (Continued) |
|----|-------------------------------------------------------------------------------------------------------------------|

----

| 1 | NATURE                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES                  (Continued) |
|---|------------------------------------------------------------------------------------------------------------------|

----

| 1. | NATURE                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                  (Continued) |
|----|-------------------------------------------------------------------------------------------------------------------|

----

| 1. | NATURE                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                  (Continued) |
|----|-------------------------------------------------------------------------------------------------------------------|

----

| 1. | NATURE                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                  (Continued) |
|----|-------------------------------------------------------------------------------------------------------------------|

| 2. | PROPERTY                  AND                  EQUIPMENT |
|----|----------------------------------------------------------|

|                                            | November                  30, |   | August                  31, |   |
|-------------------------------------------------|-------------------------------|--------|-----------------------------|--------|
|                                            | 2007                          |   | 2007                        |   |
|                                            |                          |   |                        |   |
| Website                development costs        |                          |   | 675,475                     |   |   |   | 361,825 |   |
| Computer                and video equipment     |                          |   | 20,938                      |   |   |   | 10,076 |   |
| Office                  furniture               |                          | $      | 11,546                      |   |   | $ | 1,766 |   |
|                                            |                          |   |                        |   |   |   |   |   |
|                                            |                          |   | 707,959                     |   |   |   | 373,667 |   |
| Less:                  accumulated depreciation |                          |   | (3,893)                     |   |   |   | (2,101) |   |
|                                            |                          |   |                        |   |   |   |   |   |
| Total                  property and equipment   |                          | $      | 704,066                     |   |   | $ | 371,566 |   |

----

| 3. | CONVERTIBLE                  NOTES                  PAYABLE |
|----|-------------------------------------------------------------|

| 4. | NOTES                  PAYABLE –                  RELATED PARTY |
|----|-----------------------------------------------------------------------|

----

| 5. | COMMITMENTS                  AND                  CONTINGENCIES |
|----|-----------------------------------------------------------------|

| For                    the Years Ending November 30, |   |   |    |
|------------------------------------------------------|--------|--------|---------|
|                                                 |   |   |    |
| 2008                                                 |   | $      | 74,026  |   |
| 2009                                                 |   |   | 43,928  |   |
|                                                 |   |   |    |   |
| Total                                                |   | $      | 117,954 |   |

| 6. | EQUITY |
|----|--------|

----

| 6. | EQUITY                  (Continued) |
|----|-------------------------------------|

----

| 6. | EQUITY                  (Continued) |
|----|-------------------------------------|

----

| 7. | STOCK                  OPTIONS AND                  WARRANTS |
|----|--------------------------------------------------------------|

| 8. | PROVISION                  FOR INCOME                  TAXES |
|----|--------------------------------------------------------------|

----

| 8. | PROVISION                  FOR INCOME TAXES (Continued) |
|----|---------------------------------------------------------|

| Net                    operating loss carry forward |   | $      | 2,037,000  |   |
|-----------------------------------------------------|--------|--------|------------|--------|
| Valuation                    allowance              |   |   | (2,037,000 | )      |
|                                                |   |   |       |   |
| Net                    deferred tax asset           |   | $      | -          |   |

| Tax                      at statutory rate |   | $      | 39.83%  |   |
|--------------------------------------------|--------|--------|---------|--------|
| Valuation                      allowance   |   |   | (39.83% | )      |
|                                       |   |   |    |   |
|                                       |   | $      | -       |   |

| 9. | SUBSEQUENT                  EVENTS |
|----|------------------------------------|

----

----

| Ÿ | Parents                of young children (primarily 5 to 12 years of age) who seek the peace                of                mind of being able to know that their children are where they are                supposed                to be when they are supposed to be                there. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | Families                with members who are Autistic or have Downs Syndrome, Alzheimer’s,                etc. |
|--------|----------------------------------------------------------------------------------------------------------------------|

| Ÿ | Elder                Care support and applications. |
|--------|-----------------------------------------------------|

| Ÿ | Pet                care and location capability. |
|--------|--------------------------------------------------|

| Ÿ | Asset                tracking and location capability: cars, trucks, fleet management,                luggage,                and other personal assets. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | Establish                relationships with key retail distributors who are recognized for                providing high quality electronics with high volume family                traffic. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | Utilize                direct response print public relations outreach in special interest                magazines and newsletters. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | Affinity                group marketing and outreach. |
|--------|-------------------------------------------------------|

| Ÿ | “White                label” affiliates which will target niche markets such as court controlled                parolees. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|

----

| Ÿ | Personal                Locator device sales to Retailers. |
|--------|------------------------------------------------------------|

| Ÿ | Personal                Locator device sales through Affinity groups and through our web                site. |
|--------|---------------------------------------------------------------------------------------------------------------|

| Ÿ | Personal                Locator device accessories. |
|--------|-----------------------------------------------------|

| Ÿ | Monthly                re-occurring service fees. |
|--------|---------------------------------------------------|

| Ÿ | Potential                licensing fees. |
|--------|------------------------------------------|

| Ÿ | Organizations                that will self-brand the PocketFinder for specialized niche markets                (so-called “white label”affiliates). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | A                mass market retail price of under                $150.00; |
|--------|----------------------------------------------------------------------------|

| Ÿ | A                basic monthly service fee of under $20.00 with multiple convenient                access                points (mobile phone, land line, or via the                internet); |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | Ease                of use at the location interface point as well as with the                device; |
|--------|-------------------------------------------------------------------------------------------------------|

| Ÿ | Rugged                design that meets the rigors of an active child. It is waterproof                and                handles weather extremes of heat and                cold. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Ÿ | Consulting                Agreement, dated July 10, 2006 and amended November 1, 2007, with                Roger                Anderson to receive encryption, data compression and IVR consulting                services from Mr. Anderson regarding the design and implementation                of the                PocketFinderTM                device.  The agreement remains in effect until the assigned                tasks are completed, but in any event no longer than ten                years.  Mr. Anderson receives an hourly amount for his services                and is entitled to earn up to 250,000 shares of our common stock                upon                reaching certain benchmarks.  Shares issued to Mr. Anderson will                be issued in reliance on the exemption provided by Section 4(2) of                the                Securities Act of 1933.  Such shares will be “restricted”                securities as defined in SEC Rule                144. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | PocketFinder                Branding and Website – Contract Agreement with Coregenic LLC, as of                September 20, 2006, wherein Coregenic is to provide website development,                technical software and marketplace research and analysis, including                branding services.  Such services are to be rendered in four                phases for a total of $23,900. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | Coregenic                Professional Services Contract, dated September 27, 2006, was entered                into                so that Coregenic could provide us with personnel necessary to facilitate                development of our product and business. Such personnel include                programmers, administrative staff, technical advisors, security advisors,                security auditors, and network topology provisioning specialists.                The                agreement terminates upon satisfactory completion of agreed upon                services.                Personnel are provided at the rate of $100 per                hour. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | Consulting                Agreement, dated October 3, 2006 and amended November 1, 2007, with                Michael Beydler for “back office” network and platform design consulting                services in relation to the development and implementation of ourPocketFinderTMdevice,                as well as our website.  The agreement remains in effect until                such time as the development of the website is complete, but in no                event                longer than ten years.  Mr. Beydler’s compensation is 250,000                shares of our common stock upon reaching certain benchmarks. Shares                issued                to Mr. Beydler will be issued in reliance on the exemption provided                by                Section 4(2) of the Securities Act of 1933.  Such shares will be                “restricted” securities as defined in SEC Rule                144. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | Product                Design Agreement, dated May 1, 2007 and amended November 1, 2007,                with                Aero Technology UK Ltd. for the purpose of assisting us with the                required                circuitry, software, mechanics and radio frequency generation and                reception functions required to make the PocketFinderTMdevice                usable.  The contractor is entitled to payments totaling                $1,200,000 plus 250,000 shares of our common stock payable in five                increments based upon reaching certain benchmarks.  Payments                will be made when milestones are achieved.  Shares issued to the                contractor will be issued in reliance on the exemption provided by                Section                4(2) of the Securities Act of 1933.  Such shares will be                “restricted” securities as defined in SEC Rule                144. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Ÿ | Costs                involved in the completion of the hardware, software and interface                customization, and website necessary to commence the commercialization                of                the PocketFinder                Personal Locator; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ | The                costs of outsourced manufacturing; |
|--------|-------------------------------------------------------|

| Ÿ | The                costs of commercialization activities, including product marketing,                sales                and distribution; and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| Ÿ | Our              revenues, if any from successful commercialization of the PocketFinder Personal              Locator.                           |

----

|   | · | An                increase in general and administrative costs to $165,002 for the                three                months ended November 30, 2007, as compared to $27,149 for the three                months ended November 30, 2006. The increase is the result of increased                advertising costs, computer expenses and stock transfer agent and                Edgar                filing fees as a result of being a public                company. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                significant increase in professional fees to $1,097,779 for the three                months ended November 30, 2007, as compared to $80 for the three                months                ended November 30, 2006. The increase is primarily due to the recognition                of $830,000 in stock based compensation issued to consultants for                services                rendered. In addition, the Company has incurred increased legal and                accounting fees as a result of the reporting requirements of being                a                public company. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An                increase in research and development costs for the three months ended                November 30, 2007, to $285,692 as compared to $60,283 for the three                months                ended November 30, 2006, as significant efforts were made to develop                and                build the first prototypes and development of the website and mapping                interface services. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Exhibit                No.* | Document                Description                                                                                                                                                                                                                                                                            |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                         | Articles                of                Incorporation of Springbank Resources, Inc. (now known as Location                Based                Technologies, Inc.) (1)                                                                                                                                       |
| 3.2                         | Amended                  and Restated Bylaws of Location Based Technologies, Inc.                  (2)                                                                                                                                                                                                         |
| 4.1                         | Form                of Convertible                Note (convertible at the option of the company) issued by PocketFinder,                LLC, a company the liabilities of which were assumed by the registrant                ($3,175,000 represented by six of such notes, were issued)                (3)   |
| 4.2                         | Form                of Convertible                Note (convertible at the option of the noteholder) issued by PocketFinder,                LLC, a company the liabilities of which were assumed by the registrant                ($2,067,000 represented by 26 of such notes, were issued)                (3) |
| 10.1                        | Executive                Employment                Agreement, dated October 11, 2007, between New LBT and David Morse                (3)                                                                                                                                                                       |
| 10.2                        | Executive                Employment                Agreement, dated October 11, 2007, between New LBT and Joseph Scalisi                (3)                                                                                                                                                                    |
| 10.3                        | Executive                Employment                Agreement, dated October 11, 2007, between New LBT and Desiree Mejia                (3)                                                                                                                                                                     |
| 10.4                        | Stock                Option Award                Agreement between Location Based Technologies, Corp. and David Morse,                dated August 30, 2007 (obligation assumed by New LBT)                (3)                                                                                                 |
| 10.5                        | Stock                Option Award                Agreement between Location Based Technologies, Corp. and Joseph Scalisi,                dated August 30, 2007 (obligation assumed by New LBT)                (3)                                                                                              |
| 10.6                        | Stock                Option Award                Agreement between Location Based Technologies, Corp. and Desiree                Mejia,                dated August 30, 2007 (obligation assumed by New LBT)                (3)                                                                                |
| 10.7                        | Series                A Warrant,                dated August 15, 2007, in favor of Northstar Investments, Inc., issued                by                Location Based Technologies, Corp. (obligation assumed by New LBT)                (3)                                                                  |
| 10.8                        | Series                B Warrant                dated August 15, 2007, in favor of Northstar Investments, Inc. (obligation                assumed by New LBT) (3)                                                                                                                                               |
| 10.9                        | Finders                Fee                Agreement, dated March 9, 2007, between Northstar Investments, Inc.                and                PocketFinder, LLC (obligation assumed by New LBT)                (3)                                                                                           |
| 10.10                       | Consulting                Agreement, dated July 16, 2007, between Northstar Investments, Inc.                and                PocketFinder, LLC (obligation assumed by New LBT)                (3)                                                                                                           |
| 10.11                       | 2007                Stock Incentive                Plan of Location Based Technologies, Corp., adopted September 10,                2007                (obligation assumed by New LBT) (3)                                                                                                                    |
| 10.12                       | Product                  Design                  Agreement, dated May 1, 2007, between Location Based Technologies                  and Aero                  Technology UK, Ltd. (obligation assumed by New LBT)                  (3)                                                                         |
| 10.13                       | PocketFinder                Branding and Website – Control Agreement, dated September 20, 2006,                between Coregenic LLC and PocketFinder, LLC (obligation assumed by                New                LBT)(3)                                                                              |
| 10.14                       | Coregenic                Professional Services Contract, dated September 27, 2006, between                Coregenic LLC and PocketFinder, LLC (obligation assumed by New LBT)                (3)                                                                                                               |
| 10.15                       | Consulting                  Agreement, dated October 3, between Location Based Technologies                  and                  Michael Beydler (obligation assumed by New LBT)                  (3)                                                                                                         |
| 10.16                       | Consulting                  Agreement, dated July 10, 2006, between Location Based Technologies                  and                  Roger Anderson (obligation assumed by New LBT)                  (3)                                                                                                      |
| 10.17                       | Loan                Promissory Note                in the amount of $900,000, dated November 28, 2005, with PocketFinder,                Inc. as maker and David Morse as payee, secured by the intellectual                property of maker (obligation assumed by New LBT)                (3)               |
| 10.18                       | M2M                Telecommunications Services Agreement (portions of Attachment D to                this                have been omitted pursuant to a request for confidential treatment                which                has been filed with the Commission) (4)                                        |
| 31.1                        | Sarbanes                Oxley Act Section 302 Certification of Chief Executive                Officer                                                                                                                                                                                                          |
| 31.2                        | Sarbanes                Oxley Act Section 302 Certification of Principal Financial                Officer                                                                                                                                                                                                      |
| 32                          | Sarbanes                Oxley Act Section 906 Certification of Chief Executive Officer and                Principal Financial Officer                                                                                                                                                                          |
| 99.1                        | Code                  of Business Conduct (5)                                                                                                                                                                                                                                                                  |
| 99.2                        | Code                of Ethics for                Senior Financial Officers (6)                                                                                                                                                                                                                                 |
|                        |                                                                                                                                                                                                                                                                                                           |

| (1) | Filed                as Exhibit 3.(I) to registrant’s registration statement on Form SB-2 filed                with the SEC December 15, 2006 (Commission File No. 333-139395) (the“SRI                SB-2”) and incorporated herein by this reference. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Filed                as Exhibit 3.2 to registrant's Current Report on Form 8-K filed with                the                SEC on January 4, 2008 (the "Jan. 4, 2008 8-K") and incorporated                herein by                this reference.                       |

| (3) | Filed                as like-numbered exhibits to the registrant’s Current Report on Form 8-K                filed with the SEC on October 12, 2007 (the “October 12, 2007 8-K”) and                incorporated herein by this reference. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | Filed                as Exhibit 99.1 to registrant’s Current Report on Form 8-K filed with the                SEC on December 5, 2007 and incorporated herein by this                reference.                                                        |
| (5) | Filed              as Exhibit 14.1 to the Jan. 4, 2008 8-K and incorporated herein by              this              reference.                                                                                                                              |
| (6) | Filed                as Exhibit 14.2 to the Jan. 4, 2008 8-K and incorporated herein by                this                reference.                                                                                                                        |
| *   | Exhibit                numbers follow the numbering pattern for exhibits set forth in Item                601 of                Regulation S-B                                                                                                               |

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|                                   | LOCATION                BASED TECHNOLOGIES,                INC. |                                                    |
|----------------------------------------|-----------------------------------------------------------------|---------------------------------------------------------|
|                                   |                                                            |                                                    |   |
| Date:                  January 7, 2008 | By:                                                             | /s/ David                M. Morse                  |   |
|                                   |                                                            | David                M. Morse                           |   |
|                                   |                                                            | Co-President                and Chief Executive Officer |   |
|                                   |                                                            |                                                    |   |