----

----

|                                                           |                                                                                     |
|----------------------------------------------------------------|------------------------------------------------------------------------------------------|
| þ                                                         | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|                                                           |                                                                                     |
| For the quarterly period ended: July 31, 2010                  |
| Or                                                             |
|                                                           |                                                                                     |
| o                                                              | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                                           |                                                                                     |
| For the transition period from: _____________ to _____________ |

| Nevada                                                        |   | 333-140306             |   | 20-2356853                       |
|---------------------------------------------------------------|--------|------------------------|--------|----------------------------------|
| (State or other jurisdiction ofincorporation or organization) |   | Commissionfile number) |   | (IRS EmployerIdentification No.) |

| Large Accelerated Filer | o | Accelerated Filer | o | Non-Accelerated Filer | o | Smaller Reporting Company | þ |
|-------------------------|---|-------------------|---|-----------------------|---|---------------------------|--------|

----

----

----

| INDEX                          |
|--------------------------------|
|                           |   |   |
|                           | Page No.(s) |
| PART I - FINANCIAL INFORMATION |   |
|                           |   |   |
| Item 1.                        | Financial Statements |   |
|                           |   |   |
|                           | Consolidated Balance Sheets as of July 31, 2010 (Unaudited) and October 31, 2009 | 1 |
|                           | Consolidated Statements of Operations For the Three and Nine Months Ended July 31, 2010, for the Period from April 9, 2009 (Inception) through July 31, 2009, and for the Period fromApril 9, 2009 (Inception) through July 31, 2010  (Unaudited) |  2 |
|                           |   |   |
|                           | Consolidated Statement of Stockholders’ Equity (Deficit) for the Period from April 9, 2009 (inception) through July 31, 2010 (Unaudited) | 3 |
|                           |   |   |
|                           | Consolidated Statements of Cash Flows For the Nine Months Ended July 31, 2010, for the Period from April 9, 2009 (Inception) through July 31, 2009, and for the Period from April 9, 2009 (Inception) through July 31, 2010  (Unaudited) |  4 |
|                           |   |   |
|                           | Notes to the Consolidated Financial Statements (Unaudited) | 5 |
|                           |   |   |
| Item 2.                        | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17 |
|                           |   |   |
| Item 3.                        | Quantitative and Qualitative Disclosures About Market Risk | 24 |
|                           |   |   |
| Item 4.                        | Controls and Procedures |   |
|                           |   | 24 |
| PART II - OTHER INFORMATION    |   |
|                           |   |   |
| Item 1.                        | Legal Proceedings | 25 |
|                           |   |   |
| Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds | 25 |
|                           |   |   |
| Item 3.                        | Defaults Upon Senior Securities | 25 |
|                           |   |   |
| Item 4.                        | Submission of Matters to a Vote of Security Holders | 26 |
|                           |   |   |
| Item 5.                        | Other Information | 26 |
|                           |   |   |
| Item 6.                        | Exhibits | 26 |
|                           |   |   |
| SIGNATURES                     | 27 |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | July 31, 2010 |        |   | October 31, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-------------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | (Unaudited)   |        |   |             |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |        |   |             |   |
| Current assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |        |   |             |   |
|    Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $             | -           |   |             | $      | 2,221 |   |
|    Prepaid expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          | 25,209      |   |             |   | 56,781 |   |
| Total current assets                                                                                                                                                                                                                             |   |          | 25,209      |   |             |   | 116,669 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |        |   |             |   |   |   |
| Property, plant and equipment, net of accumulated depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |          | 4,943,985   |   |             |   | 10,538,970 |   |
| Equipment, net held for sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          | 1,545,000   |   |             |   | 5,150,000 |   |
| License agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          | -           |   |             |   | 1,500,000 |   |
| Capitalized issuance expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          | -           |   |             |   | 57,667 |   |
| Total assets                                                                                                                                                                                        |   | $             | 6,514,194   |   |             | $      | 17,305,639 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |        |   |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |        |   |             |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |        |   |             |   |   |   |
|   Accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $             | 1,523,209   |   |             | $      | 865,067 |   |
|   Related party payables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          | 58,591      |   |             |   | 214,085 |   |
|   Accrued interest payable                                                                                                                                                                                              |   |          | 317,648     |   |             |   | 282,502 |   |
|   Common stock in dispute (500,000 shares held by Company)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          | 2,000,000   |   |             |   | - |   |
|   Notes payable, net of discount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          | 1,513,180   |   |             |   | 1,320,250 |   |
|   Current portion of deferred liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          | -           |   |             |   | 60,000 |   |
| Total current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |          | 5,412,628   |   |             |   | 2,741,904 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |        |   |             |   |   |   |
| Deferred liability, net of current portion                                                                                                                                                                                   |   |          | -           |   |             |   | 1,440,000 |   |
| Derivative liability                                                                                                                                                                                |   |          | 3,959,093   |   |             |   | 4,392,823 |   |
| Deferred income tax liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          | 1,792,934   |   |             |   | 1,792,934 |   |
|             Total liabilities                                                                                                           |   |          | 11,164,655  |   |             |   | 10,367,661 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |        |   |             |   |   |   |
| Stockholders’ equity (deficit):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |        |   |             |   |   |   |
| Preferred Stock, $0.001 par value; 1,000,000 authorized,  22,500 shares designated as Series A Convertible preferred stock; 22,500 shares issued and outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          | 224,600     |   |             |   | 53,973 |   |
| Common stock, $0.001 par value, 74,000,000 shares  authorized, 18,156,077 and 17,581,077  issued and outstanding at July 31, 2010 and October 31, 2009, respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 18,156      |   |             |   | 17,581 |   |
| Additional paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          | 9,611,501   |   |             |   | 3,386,023 |   |
| Earnings (deficit) accumulated during the development stage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          | (14,504,718 | )      |             |   | 3,480,401 |   |
| Total stockholders’ equity (deficit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          | (4,650,461  | )      |             |   | 6,937,978 |   |
| Total liabilities and stockholders’  equity (deficit)                                                                                                                               |   | $             | 6,514,194   |   |             | $      | 17,305,639 |   |

----

|                                                                                           |   | Three months endedJuly 31, 2010 |       |   | Nine months endedJuly 31, 2010 |   |        | For the period fromApril 9, 2009 (Inception)July 31, 2009 |   |   | For the period fromApril 9, 2009 (Inception) July 31, 2010 |   |
|------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|--------------------------------|--------|-------------|-----------------------------------------------------------|--------|--------|------------------------------------------------------------|--------|
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   |                                                       |   |
| Revenue:                                                                                       |   | $                               | -          |   |                           | $      | -           |                                                      |   | $      | -                                                          |   |   | $ | - |   |
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   |                                                       |   |   |   |   |   |
| Operating expenses:                                                                       |   |                            |       |   |                           |   |        |                                                      |   |   |                                                       |   |   |   |   |   |
|  Professional fees                                                                        |   |                            | 14,200     |   |                           |   | 522,559     |                                                      |   |   | 137,972                                                    |   |   |   | 871,101 |   |
|      Compensation expense                                             |   |                            | 2,588,099  |   |                           |   | 7,370,455   |                                                      |   |   | -                                                          |   |   |   | 7,370,456 |   |
|      Management services                                              |   |                            | 125,000    |   |                           |   | 375,000     |                                                      |   |   | -                                                          |   |   |   | 465,987 |   |
|      Depreciation and amortization                                    |   |                            | 93,000     |   |                           |   | 339,000     |                                                      |   |   | -                                                          |   |   |   | 593,250 |   |
|      General and administration                                       |   |                            | 136,043    |   |                           |   | 620,483     |                                                      |   |   | 256,635                                                    |   |   |   | 817,197 |   |
| Total operating expenses                                                                  |   |                            | 2,956,342  |   |                           |   | 9,227,497   |                                                      |   |   | 394,607                                                    |   |   |   | 10,117,991 |   |
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   |                                                       |   |   |   |   |   |
| Loss from operations                                                                           |   |                            | (2,956,342 | )      |                           |   | (9,227,497  | )                                                         |   |   | (394,607                                                   | )      |   |   | (10,117,991 | ) |
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   |                                                       |   |   |   |   |   |
| Other expense (income):                                                                        |   |                            |       |   |                           |   |        |                                                      |   |   |                                                       |   |   |   |   |   |
| Interest expense                                                                               |   |                            | 51,660     |   |                           |   | 99,740      |                                                      |   |   | -                                                          |   |   |   | 147,486 |   |
| Loss/(gain) on derivative liability                                                            |   |                            | (240,023   | )      |                           |   | (263,103    | )                                                         |   |   | 8,113,268                                                  |   |   |   | 3,888,957 |   |
| Other income                                                                                   |   |                            | -          |   |                           |   | -           |                                                      |   |   | -                                                          |   |   |   | (16,779 | ) |
| Impairment on assets & equipment held for sale                                             |   |                            | 6,860,985  |   |                           |   | 8,920,985   |                                                      |   |   | -                                                          |   |   |   | 8,920,985 |   |
| Total other expense (income)                                                                   |   |                            | 6,672,622  |   |                           |   | 8,757622    |                                                      |   |   | 8,113,268                                                  |   |   |   | 12,940,649 |   |
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   | -                                                          |   |   |   |   |   |
| Loss before income taxes and extraordinary gain                                                |   |                            | (9,628,964 | )      |                           |   | (17,985,119 | )                                                         |   |   | (8,507,875                                                 | )      |   |   | (23,058,640 | ) |
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   | -                                                          |   |   |   |   |   |
| Income tax provision                                                                           |   |                            | -          |   |                           |   | -           |                                                      |   |   | -                                                          |   |   |   | (1,792,934 | ) |
| Loss before extraordinary gain                                                                 |   |                            | (9,628,964 | )      |                           |   | (17,985,119 | )                                                         |   |   | (8,507,875                                                 | )      |   |   | (24,851,574 | ) |
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   | -                                                          |   |   |   |   |   |
| Extraordinary gain on acquisition                                                              |   |                            | -          |   |                           |   | -           |                                                      |   |   | -                                                          |   |   |   | 10,346,857 |   |
| Net loss                                                                                       |   | $                               | (9,628,964 | )      |                           | $      | (17,985,119 | )                                                         |   | $      | (8,507,875                                                 | )      |   | $ | (14,504,717 | ) |
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   |                                                       |   |   |   |   |   |
| Net loss per common share – basic and diluted                                            |   | $                               | (0.53      | )      |                           | $      | (0.63       | )                                                         |   | $      | (0.49                                                      | )      |   | $ | (1.44 | ) |
| Net income per common share from extraordinary gain on acquisition – basic & diluted |   |                            | 0.00       |   |                           |   | 0.00        |                                                      |   |   | 0.00                                                       |   |   |   | 0.60 |   |
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   |                                                       |   |   |   |   |   |
| Net loss per common share                                                                      |   | $                               | (0.53      | )      |                           | $      | (1.01       | )                                                         |   | $      | (0.49                                                      | )      |   | $ | (0.84 | ) |
|                                                                                           |   |                            |       |   |                           |   |        |                                                      |   |   |                                                       |   |   |   |   |   |
| Weighted average number of common shares outstanding - basic and diluted                       |   |                            | 18,156,077 |   |                           |   | 17,748,293  |                                                      |   |   | 17,201,433                                                 |   |   |   | 17,254,592 |   |

----

|                                                    |   | PreferredStock(Shares) |   |   | PreferredStock($) |   |    | Discount on Preferred Stock($) |   |   | CommonStock(Shares) |   |   | CommonStock($) |       |   | AdditionalPaid-inCapital($) |   |        | (Deficit)Earnings Accumulated During the DevelopmentStage($) |   |   | TotalStockholders’Equity (Deficit)($) |   |   |
|---------------------------------------------------------|--------|------------------------|--------|--------|-------------------|--------|---------|--------------------------------|--------|--------|---------------------|--------|--------|----------------|------------|--------|-----------------------------|--------|-------------|--------------------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|
| Balance at April 9, 2009 (Inception)                    |   |                   | -      |   |              | $      | -       |                           |   | $      |  -             |   |   |           | 9,760,000  |   |                        | $      |  9,760 |                                                         |   | $      | 49,995                                      |   |   | $ | (83,218 | ) |   | $ | (23,463 | ) |
| Reverse Acquisition                                     |   |                   |   |   |              |   |    |                           |   |   |                |   |   |           | 7,321,077  |   |                        |   | 7,321       |                                                         |   |   | (66,745                                     | )      |   |   | 83,218 |   |   |   | 23,794 |   |
| Sale of 12,000 preferred shares                         |   |                   | 12,000 |   |              |   | 120,000 |                           |   |   | (120,000            | )      |   |           |       |   |                        |   |        |                                                         |   |   |                                        |   |   |   |   |   |   |   | - |   |
| Sale of 5,000 preferred shares                          |   |                   | 5,000  |   |              |   | 50,000  |                           |   |   | (50,000             | )      |   |           |       |   |                        |   |        |                                                         |   |   |                                        |   |   |   |   |   |   |   | - |   |
| Sale of 5,500 preferred shares                          |   |                   | 5,500  |   |              |   | 55,000  |                           |   |   | (55,000             | )      |   |           |       |   |                        |   |        |                                                         |   |   |                                        |   |   |   |   |   |   |   | - |   |
| Shares issued for cancellation of warrants              |   |                   |   |   |              |   |    |                           |   |   |                |   |   |           | 500,000    |   |                        |   | 500         |                                                         |   |   | 3,402,773                                   |   |   |   |   |   |   |   | 3,403,273 |   |
| Amortization of discount on preferred shares            |   |                   |   |   |              |   |    |                           |   |   | 53,973              |   |   |           |       |   |                        |   |        |                                                         |   |   |                                        |   |   |   |   |   |   |   | 53,973 |   |
| Net income                                              |   |                   |   |   |              |   |    |                           |   |   |                |   |   |           |       |   |                        |   |        |                                                         |   |   |                                        |   |   |   | 3,480,401 |   |   |   | 3,480,401 |   |
| Balance at October 31, 2009                             |   |                   | 22,500 |   |              |   | 225,000 |                           |   |   | (171,027            | )      |   |           | 17,581,077 |   |                        |   | 17,581      |                                                         |   |   | 3,386,023                                   |   |   |   | 3,480,401 |   |   |   | 6,937,978 |   |
| Shares in dispute, held by Company,                     |   |                   |   |   |              |   |    |                           |   |   |                |   |   |           | (500,000   | )      |                        |   | (500        | )                                                            |   |   | (1,999,500                                  | )      |   |   |   |   |   |   | (2,000,000 | ) |
| Shares issued for services                              |   |                   |   |   |              |   |    |                           |   |   |                |   |   |           |       |   |                        |   |        |                                                         |   |   | 7,370,455                                   |   |   |   |   |   |   |   | 7,370,455 |   |
| Issuance of shares to Harborview                        |   |                   |   |   |              |   |    |                           |   |   |                |   |   |           | 75,000     |   |                        |   | 75          |                                                         |   |   |                                        |   |   |   |   |   |   |   | 75 |   |
| Shares issued for debt on March 3, 2010                 |   |                   |   |   |              |   |    |                           |   |   |                |   |   |           | 1,000,000  |   |                        |   | 1,000       |                                                         |   |   | 854,523                                     |   |   |   |   |   |   |   | 855,523 |   |
| Amortization of discount on  preferred shares |   |                   |   |   |              |   |    |                           |   |   | 170,627             |   |   |           |       |   |                        |   |        |                                                         |   |   |                                        |   |   |   |   |   |   |   | 170,627 |   |
| Net loss                                                |   |                   |   |   |              |   |    |                           |   |   |                |   |   |           |       |   |                        |   |        |                                                         |   |   |                                        |   |   |   | (17,985,119 | ) |   |   | (17,985,119 | ) |
| Balance at July 31, 2010                                |   |                   | 22,500 |   |              | $      | 225,000 |                           |   | $      | (400                | )      |   |           | 18,156,077 |   |                        | $      | 18,156      |                                                         |   | $      | 9,611,501                                   |   |   | $ | (14,504,718 | ) |   | $ | 4,650,461 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | For the Nine Month Period ended July 31, 2010 |        |   | For the period fromApril 9, 2009 (Inception) July 31, 2009 |   |       | For the period fromApril 9, 2009 (Inception) July 31, 2010 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|-------------|--------|-----------------------------------------------------------------|--------|------------|-----------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               |        |   |                                                            |   |       |                                                            |   |
| Cash flows from operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                               |        |   |                                                            |   |       |                                                            |   |
| Net loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                                                  | (17,985,119 | )      |                                                            |   | (8,507,875 | )                                                               |   | $ | (14,504,718 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Gain on acquisition, net of cash paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                               | -           |   |                                                            |   | -          |                                                            |   |   | (10,284,842 | ) |
| Impairment on assets & equipment held for sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                               | 8,920,985   |   |                                                            |   | -          |                                                            |   |   | 8,920,985 |   |
| Discount on note payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                               | -           |   |                                                            |   | -          |                                                            |   |   | (215,000 | ) |
| Discount on preferred stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               | -           |   |                                                            |   | -          |                                                            |   |   | (171,027 | ) |
| Stock compensation expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                               | 7,370,455   |   |                                                            |   | -          |                                                            |   |   | 7,370,455 |   |
| Loss/(gain) on derivative liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                               | (263,103    | )      |                                                            |   | 7,999,888  |                                                            |   |   | 3,966,629 |   |
| Depreciation and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                               | 387,780     |   |                                                            |   | -          |                                                            |   |   | 642,030 |   |
| Capitalized issuance expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                               | 57,667      |   |                                                            |   | -          |                                                            |   |   | - |   |
| Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                               | -           |   |                                                            |   | 37,760     |                                                            |   |   | 23,794 |   |
| Changes in operating assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Prepaid expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                               | 31,572      |   |                                                            |   | (50,000    | )                                                               |   |   | (25,209 | ) |
| Accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                               | 1,548,811   |   |                                                            |   | 487,748    |                                                            |   |   | 2,177,253 |   |
| Related party payables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                               | (155,494    | )      |                                                            |   | -          |                                                            |   |   | (155,494 | ) |
| Income taxes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               | -           |   |                                                            |   | -          |                                                            |   |   | 1,792,934 |   |
| Net cash provided by (used in) operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                               | (86,446     | )      |                                                            |   | (32,479    | )                                                               |   |   | (462,210 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Cash flows from investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Cash paid for Liquafaction acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                               | -           |   |                                                            |   | -          |                                                            |   |   | (62,015 | ) |
|                Net cash used in investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                               | -           |   |                                                            |   | -          |                                                            |   |   | (62,015 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Cash flows from financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Sale of Series A convertible preferred stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                               | -           |   |                                                            |   | 32,479     |                                                            |   |   | 225,000 |   |
| Sale of common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               | 75          |   |                                                            |   | -          |                                                            |   |   | 75 |   |
| Cash from notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                               | 84,150      |   |                                                            |   | -          |                                                            |   |   | 299,150 |   |
| Net cash  provided by financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               | 84,225      |   |                                                            |   | 32,479     |                                                            |   |   | 524,225 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Net change in cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                               | (2,221      | )      |                                                            |   | -          |                                                            |   |   | - |   |
| Cash, beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                               | 2,221       |   |                                                            |   | -          |                                                            |   |   | - |   |
| Cash, end of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                                                  | -           |   |                                                            |   | -          |                                                            |   | $ | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Supplemental disclosures:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Cash paid during the period for interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                                                  | -           |   |                                                            | $      | -          |                                                            |   | $ | - |   |
| Cash paid during the period for income taxes                                                                                             |   | $                                                  | -           |   |                                                            | $      | -          |                                                            |   | $ | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
| Noncash investing and financing:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                               |        |   |                                                            |   |       |                                                            |   |   |   |   |
|    Common stock issued for debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                                                  | 855,523     |   |                                                            | $      | -          |                                                            |   | $ | 855,523 |   |

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| Level 1 |   | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.                                              |
|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Level 2 |   | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3 |   | Pricing inputs that are generally observable inputs and not corroborated by market data.                                                                    |

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|     1.       | Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. |
|----------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|     2.       | Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). |
|----------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|     1.      | Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. |
|----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|     2.       | Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3. |
|----------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|     1.    | An entity that either (a) is an SEC filer or(b) is a conduit bond obligor for conduit debt securities that are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local or regional markets) is required to evaluate subsequent events through the date that the financial statements are issued. If an entity meets neither of those criteria, then it should evaluate subsequent events through the date the financial statements are available to be issued. |
|----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|     2.    | An entity that is an SEC filer is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between Subtopic 855-10 and the SEC's requirements. |
|----------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|     3.    | The scope of the reissuance disclosure requirements is refined to include revised financial statements only. The term revised financial statements is added to the glossary of Topic 855. Revised financial statements include financial statements revised either as a result of correction of an error or retrospective application of U.S. generally accepted accounting principles. |
|----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|     1.   | Be commensurate with either of the following: |
|----------------------------------------|-----------------------------------------------|

|                   | a. | The vendor's performance to achieve the milestone |
|--------------------------------------------------------------------------------------------------------|----|---------------------------------------------------|

|                   | b. | The enhancement of the value of the item delivered as a result of a specific outcome resulting from the vendor's performance to achieve the milestone |
|--------------------------------------------------------------------------------------------------------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|     2.   | Relate solely to past performance |
|----------------------------------------|-----------------------------------|

|     3.   | Be reasonable relative to all deliverables and payment terms in the arrangement. |
|----------------------------------------|----------------------------------------------------------------------------------|

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| 1.   | A description of the overall arrangement |
|----------------|------------------------------------------|

| 2.   | A description of each milestone and related contingent consideration |
|----------------|----------------------------------------------------------------------|

| 3.   | A determination of whether each milestone is considered substantive |
|----------------|---------------------------------------------------------------------|

| 4.   | The factors that the entity considered in determining whether the milestone or milestones are substantive |
|----------------|-----------------------------------------------------------------------------------------------------------|

| 5.   | The amount of consideration recognized during the period for the milestone or milestones. |
|----------------|-------------------------------------------------------------------------------------------|

| 1.   | Revenue |
|----------------|---------|

| 2.   | Income before income taxes |
|----------------|----------------------------|

| 3.   | Net income |
|----------------|------------|

| 4.   | Earnings per share |
|----------------|--------------------|

| 5.   | The effect of the change for the captions presented. |
|----------------|------------------------------------------------------|

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|                                                  |   | July 14, 2009 |       |
|-------------------------------------------------------|--------|---------------|------------|
| Property & equipment                              |   | $             | 10,631,970 |   |
| Inventory available for sale                          |   |          | 5,150,000  |   |
|      Total assets            |   |          | 15,781,970 |   |
| Liabilities                                           |   |          | 1,868,749  |   |
|      Total acquisition price |   | $             | 3,473,364  |   |

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| Note (1):    | Secured by boiler and 2 centrifuges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Note (2):    | Secured by elevator property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Note (3):    | Secured by main ethanol plant equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Note (4):    | Secured by evaporator                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Note(5):               | Marguerite Heiser entered into 3 separate promissory notes with Liquafaction; $39,600, $30,000 and $4,650. The note for $39,600 was secured by equipment and was due on August 9, 2008. When the principal balance and interest due was not paid as per the initial agreement, Marguerite Heiser enforced the security agreement and the equipment was sold to reduce her total notes payable balance. A verbal agreement with Marguerite Heiser was entered into for $11,000 and is included in the notes payable balance at July 31, 2010. |
| Note (6):         | Secured by Freightliner trailer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

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| ● | Development of a 4 million gallon per year (mmgy) cellulosic ethanol production facility located in an area with a large availability of straw biomass. The project is attractive as the initial cellulosic facility due to the fact that the site for the proposed facility has existing ethanol components and equipment, initial design work for the project has already been completed, and certain permits for ethanol production already exist at the facility. These elements, combined with the goal of engineering and constructing a relatively small commercial scale production facility, provide the potential to complete the project and bring it online in as little as relatively quickly. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Development of a 60 mmgy cellulosic ethanol production facility to be located adjacent to an existing pulping facility. The project will leverage the existing mill assets for the handling of large quantities of wood biomass and the capability to produce pulp cellulose, and will utilize a proprietary technology to convert the cellulose to fermentable sugars. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 31.1  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

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|                   | EVOLUTION RESOURCES, INC.(Registrant) |                                                                                 |
|------------------------|--------------------------------------------|--------------------------------------------------------------------------------------|
| Date: October 19, 2010 | By:                              |  /s/ Dennis G. McLaughlin                                                  |   |
|                   |                                       |  Dennis G. McLaughlin                                                      |   |
|                   |                                       |  President and Chief Executive Officer (Principal Executive Officer)  |   |
|                   |                                       |                                                                                 |   |
|                   |                                       |                                                                                 |   |