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| Delaware                 | 01-05922991                          |
|--------------------------|--------------------------------------|
| (State of Incorporation) | (I.R.S. Employer Identification No.) |

|  Title of Each Class | Name of Each Exchange OnWhich Registered |
|---------------------------|------------------------------------------|
|                      |                                     |
| COMMON STOCK              | OTC                                      |

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

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| Reports of Independent Registered Public Accounting Firm                                            | 2      |
|-----------------------------------------------------------------------------------------------------|--------|
|                                                                                                |   |
| Balance Sheets as of December 31, 2011 and 2010                                                     | 3      |
|                                                                                                |   |
| Statements of Operations for the years ended December 31, 2011 and 2010                             | 4      |
|                                                                                                |   |
| Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2011 and 2010 | 5      |
|                                                                                                |   |
| Statements of Cash Flows for the years ended December 31, 2011 and 2010                             | 6      |
|                                                                                                |   |
| Notes to Financial Statements                                                                       | 7      |

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----

SOLAR3D

|                                                                                                                                |   | December 31, 2011 |        |   | December 31, 2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-------------|--------|-------------------|--------|
|                                                                                                                                |   |              |        |   |              |   |
| ASSETS                                                                                                                              |   |              |        |   |              |   |
|                                                                                                                                |   |              |        |   |              |   |
| CURRENT ASSETS                                                                                                                      |   |              |        |   |              |   |
| Cash and cash equivalents                                                                                                           |   | $                 | -           |   |              | $      | 3,311 |   |
| Prepaid expense                                                                                                                     |   |              | 25,000      |   |              |   | 24,822 |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| TOTAL CURRENT ASSETS                                                                                                                |   |              | 25,000      |   |              |   | 28,133 |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| PROPERTY & EQUIPMENT, at cost                                                                                                   |   |              |        |   |              |   |   |   |
| Machinery & equipment                                                                                                           |   |              | 13,080      |   |              |   | 13,080 |   |
| Computer equipment                                                                                                                  |   |              | 57,795      |   |              |   | 55,717 |   |
| Furniture & fixture                                                                                                             |   |              | 4,670       |   |              |   | 4,670 |   |
|                                                                                                                                |   |              | 75,545      |   |              |   | 73,467 |   |
| Less accumulated depreciation                                                                                                       |   |              | (69,514     | )      |              |   | (67,923 | ) |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| NET PROPERTY AND EQUIPMENT                                                                                                          |   |              | 6,031       |   |              |   | 5,544 |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| OTHER ASSETS                                                                                                                        |   |              |        |   |              |   |   |   |
| Security deposit                                                                                                                    |   |              | 2,975       |   |              |   | 2,975 |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| TOTAL OTHER ASSETS                                                                                                                  |   |              | 2,975       |   |              |   | 2,975 |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
|   TOTAL ASSETS                                                                                                            |   | $                 | 34,006      |   |              | $      | 36,652 |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| LIABILITIES AND SHAREHOLDERS'  DEFICIT                                                                                    |   |              |        |   |              |   |   |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| CURRENT LIABILITIES                                                                                                                 |   |              |        |   |              |   |   |   |
| Bank Overdraft                                                                                                                      |   | $                 | 12,916      |   |              | $      | - |   |
| Accounts payable                                                                                                                    |   |              | 17,349      |   |              |   | 13,444 |   |
| Accrued expenses                                                                                                                    |   |              | -           |   |              |   | 453,232 |   |
| Accrued interest, other                                                                                                             |   |              | -           |   |              |   | 25,025 |   |
| Accrued interest, related parties                                                                                                   |   |              | -           |   |              |   | 107,074 |   |
| Convertible promissory note                                                                                                         |   |              | -           |   |              |   | 65,000 |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| TOTAL CURRENT LIABILITIES                                                                                                           |   |              | 30,265      |   |              |   | 663,775 |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| SHAREHOLDERS'  EQUITY/(DEFICIT)                                                                                           |   |              |        |   |              |   |   |   |
| Common stock, $.001 par value;550,000,000 authorized shares;118,283,724 and 100,689,829 shares issued and outstanding, respectively |   |              | 118,283     |   |              |   | 100,689 |   |
| Additional paid in capital                                                                                                          |   |              | 9,974,861   |   |              |   | 7,815,088 |   |
| Deficit accumulated  during the development stage                                                                         |   |              | (10,089,403 | )      |              |   | (8,542,900 | ) |
|                                                                                                                                |   |              |        |   |              |   |   |   |
| TOTAL SHAREHOLDERS' EQUITY/(DEFICIT)                                                                                                |   |              | 3,741       |   |              |   | (627,123 | ) |
|                                                                                                                                |   |              |        |   |              |   |   |   |
|   TOTAL LIABILITIES AND SHAREHOLDERS'  EQUITY/(DEFICIT)                                                         |   | $                 | 34,006      |   |              | $      | 36,652 |   |

----

SOLAR3D

|                                                                                                                                 |   |              |        |   |              |   |       | From Inception    |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-------------|--------|-------------------|--------|------------|-------------------|--------|
|                                                                                                                                 |   |              |        |   |              |   |       | January 30,2002   |   |
|                                                                                                                                 |   | Year Ended        |        |   |              |   |       | through           |   |
|                                                                                                                                 |   | December 31, 2011 |        |   | December 31, 2010 |   |       | December 31, 2011 |   |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |
| REVENUE                                                                                                                              |   | $                 | -           |   |              | $      | -          |              |   | $ | 1,127,406 |   |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| COST OF SERVICES                                                                                                                     |   |              | -           |   |              |   | -          |              |   |   | 496,177 |   |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| GROSS PROFIT                                                                                                                         |   |              | -           |   |              |   | -          |              |   |   | 631,229 |   |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| OPERATING EXPENSES                                                                                                                   |   |              |        |   |              |   |       |              |   |   |   |   |
| Selling, General and administrative expenses                                                                                         |   |              | 1,363,642   |   |              |   | 571,895    |              |   |   | 6,287,148 |   |
| Research and development                                                                                                             |   |              | 133,196     |   |              |   | 36,042     |              |   |   | 1,609,103 |   |
| Impairment loss                                                                                                                      |   |              | -           |   |              |   | -          |              |   |   | 1,753,502 |   |
| Depreciation and amortization expense                                                                                                |   |              | 1,591       |   |              |   | 500        |              |   |   | 121,838 |   |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| TOTAL OPERATING EXPENSES                                                                                                             |   |              | 1,498,429   |   |              |   | 608,437    |              |   |   | 9,771,591 |   |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| LOSS FROM OPERATIONS                                                                                                                 |   |              | (1,498,429  | )      |              |   | (608,437   | )                 |   |   | (9,140,362 | ) |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| OTHER INCOME/(EXPENSES) BEFORE PROVISION FOR INCOME TAXES                                                                            |   |              |        |   |              |
| Interest income                                                                                                                      |   |              | 66          |   |              |   | -          |              |   |   | 10,321 |   |
| Interest expense                                                                                                                     |   |              | (2,123      | )      |              |   | (8,469     | )                 |   |   | (271,806 | ) |
| Penalties                                                                                                                            |   |              | (29         | )      |              |   | -          |              |   |   | (184 | ) |
| Gain/(loss) on investment                                                                                                            |   |              | -           |   |              |   | -          |              |   |   | (73,121 | ) |
| Loss on settlement of debt                                                                                                           |   |              | (45,988     | )      |              |   | -          |              |   |   | (613,288 | ) |
| Gain/(loss) on sale of asset                                                                                                         |   |              | -           |   |              |   | -          |              |   |   | (963 | ) |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| TOTAL OTHER INCOME/(EXPENSES)                                                                                                        |   |              | (48,074     | )      |              |   | (8,469     | )                 |   |   | (949,041 | ) |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| NET LOSS                                                                                                                             |   | $                 | (1,546,503  | )      |              | $      | (616,906   | )                 |   | $ | (10,089,403 | ) |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| BASIC AND DILUTED LOSS PER SHARE                                                                                                     |   | $                 | (0.01       | )      |              | $      | (0.01      | )                 |   |   |   |   |
|                                                                                                                                 |   |              |        |   |              |   |       |              |   |   |   |   |
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING             BASIC AND DILUTED |   |              | 109,533,761 |   |              |   | 70,364,029 |              |   |   |   |   |

----

SOLAR3D

|                                                                                                                         |   |         |        |   |    |   |    |        |   |   | Accumulated    |   |   |   |        |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|---------|--------|---------|-------------|--------|--------|----------------|--------|--------|--------|-------------|
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   | Deficit During |   |   |   |        |
|                                                                                                                         |   |         |        |   |    |   |    | Additional  |   |   | the            |   |   |   |        |
|                                                                                                                         |   | Common stock |        |   | Paid-in |   |    | Development |   |   |           |   |
|                                                                                                                         |   | Shares       |        |   | Amount  |   |    | Capital     |   |   | Stage          |   |   | Total  |        |
| Balance from original Issuance at January 30, 2002($0.00425 per share) ($7,650 in cash and a patent at fair value of $5,100) |   |         | 3,000,000   |   |    | $      | 3,000   |        |   | $      | 9,750          |   |   | $      | -           |   |   | $ | 12,750 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in February and March 2002(100,000 shares at $1.25 per share in cash)                               |   |         | 100,000     |   |    |   | 100     |        |   |   | 124,900        |   |   |   | -           |   |   |   | 125,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in April 2002(8,000 shares at $1.25 per share in cash)                                              |   |         | 8,000       |   |    |   | 8       |        |   |   | 9,992          |   |   |   | -           |   |   |   | 10,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in April 2002(8,000 shares as finders fees)                                                         |   |         | 8,000       |   |    |   | 8       |        |   |   | (8             | )      |   |   | -           |   |   |   | - |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in May 2002(56,000 shares at $1.25 per share in cash)                                               |   |         | 56,000      |   |    |   | 56      |        |   |   | 69,944         |   |   |   | -           |   |   |   | 70,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in May 2002(8,000 shares as finders fees)                                                           |   |         | 8,000       |   |    |   | 8       |        |   |   | (8             | )      |   |   | -           |   |   |   | - |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in June 2002(20,000 shares at a price of $2.50 per share in cash)                                   |   |         | 20,000      |   |    |   | 20      |        |   |   | 49,980         |   |   |   | -           |   |   |   | 50,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net Loss for the year ended December 31, 2002                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (852,600    | ) |   |   | (852,600 | ) |
| Balance at December 31, 2002                                                                                                 |   |         | 3,200,000   |   |    |   | 3,200   |        |   |   | 264,550        |   |   |   | (852,600    | ) |   |   | (584,850 | ) |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in January 2003(420,916 ata price of $0.3041 per share in cash)                                     |   |         | 420,916     |   |    |   | 421     |        |   |   | 127,579        |   |   |   | -           |   |   |   | 128,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in March 2003(32,884 at a price of $0.3041 per share in cash)                                       |   |         | 32,884      |   |    |   | 33      |        |   |   | 9,967          |   |   |   | -           |   |   |   | 10,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net Loss for the year ended December 31, 2003                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (394,115    | ) |   |   | (394,115 | ) |
| Balance, December 31, 2003                                                                                                   |   |         | 3,653,800   |   |    |   | 3,654   |        |   |   | 402,096        |   |   |   | (1,246,715  | ) |   |   | (840,965 | ) |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in January 2004(1,000 shares valued at $6,250 for services                                          |   |         | 1,000       |   |    |   | 1       |        |   |   | 6,249          |   |   |   | -           |   |   |   | 6,250 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in June 2004(640,000 shares at $0.625 per share in conversion debt)                                 |   |         | 640,000     |   |    |   | 640     |        |   |   | 399,360        |   |   |   | -           |   |   |   | 400,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in June 2004(400,000 shares at $0.625 per share for services)                                       |   |         | 400,000     |   |    |   | 400     |        |   |   | 249,600        |   |   |   | -           |   |   |   | 250,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in Julythrough December 31, 2004 for cash                                                           |   |         | 982,400     |   |    |   | 982     |        |   |   | 613,018        |   |   |   | -           |   |   |   | 614,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net Loss for the year ended December 31, 2004                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (573,454    | ) |   |   | (573,454 | ) |
| Balance at December 31, 2004                                                                                                 |   |         | 5,677,200   |   |    |   | 5,677   |        |   |   | 1,670,323      |   |   |   | (1,820,169  | ) |   |   | (144,169 | ) |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in January 2005(548,800 shares at $0.625 per share for cash)                                        |   |         | 548,800     |   |    |   | 549     |        |   |   | 342,451        |   |   |   | -           |   |   |   | 343,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in March 2005(12,000 shares at $0.50 per share for cash)                                            |   |         | 12,000      |   |    |   | 12      |        |   |   | 29,988         |   |   |   | -           |   |   |   | 30,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of 152,680 warrants for services                                                                                    |   |         | -           |   |    |   | -       |        |   |   | 129,550        |   |   |   | -           |   |   |   | 129,550 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in April 2005(12,000 shares at $2.50 per share for cash)                                            |   |         | 12,000      |   |    |   | 12      |        |   |   | 29,988         |   |   |   | -           |   |   |   | 30,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in May 2005(10,682 shares at fair value for services)                                               |   |         | 10,682      |   |    |   | 10      |        |   |   | 8,058          |   |   |   | -           |   |   |   | 8,068 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in May 2005(58,000 shares at $2.50 per share for cash)                                              |   |         | 58,000      |   |    |   | 58      |        |   |   | 144,942        |   |   |   | -           |   |   |   | 145,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in June 2005(42,000 shares at $2.50 per share for cash)                                             |   |         | 42,000      |   |    |   | 42      |        |   |   | 104,958        |   |   |   | -           |   |   |   | 105,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of 10,400 warrants for services                                                                                     |   |         | -           |   |    |   | -       |        |   |   | 23,400         |   |   |   | -           |   |   |   | 23,400 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net Loss for the year ended December 31, 2005                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (1,068,190  | ) |   |   | (1,068,190 | ) |
| Balance at December 31, 2005                                                                                                 |   |         | 6,360,682   |   |    |   | 6,360   |        |   |   | 2,483,658      |   |   |   | (2,888,359  | ) |   |   | (398,342 | ) |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Common stock warrants exercised in March 2006(12,600 common stock warrants exercised at $0.625)                              |   |         | 12,600      |   |    |   | 13      |        |   |   | 7,862          |   |   |   | -           |   |   |   | 7,875 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Private Placement in 2nd Qtr 2006(16,000 shares at $3.75 per share for cash)                                                 |   |         | 16,000      |   |    |   | 16      |        |   |   | 59,984         |   |   |   | -           |   |   |   | 60,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Stock Compensation Cost                                                                                                      |   |         | -           |   |    |   | -       |        |   |   | 35,008         |   |   |   | -           |   |   |   | 35,008 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Common stock warrants exercised in August 2006(2,000 common stock warrants exercised at $0.625)                              |   |         | 2,000       |   |    |   | 2       |        |   |   | 1,248          |   |   |   | -           |   |   |   | 1,250 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in December 2006  (6,286 shares issued at $1.75 for cash)                                 |   |         | 6,286       |   |    |   | 6       |        |   |   | 10,994         |   |   |   | -           |   |   |   | 11,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
|  Investment in Sense Comm(24,000 common stock issued at $3.00 per share at FMV)                                         |   |         | 24,000      |   |    |   | 24      |        |   |   | 71,976         |   |   |   | -           |   |   |   | 72,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Stock Compensation Cost                                                                                                      |   |         | -           |   |    |   | -       |        |   |   | 4,847          |   |   |   | -           |   |   |   | 4,847 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of 24,800 warrants for services                                                                                     |   |         | -           |   |    |   | -       |        |   |   | 46,861         |   |   |   | -           |   |   |   | 46,861 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net Loss for the year ended December 31, 2006                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (611,967    | ) |   |   | (611,967 | ) |
| Balance at December 31, 2006                                                                                                 |   |         | 6,421,568   |   |    |   | 6,421   |        |   |   | 2,722,438      |   |   |   | (3,500,326  | ) |   |   | (771,468 | ) |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
|  Common stock warrants exercised in January 2007(1,273 common stock warrants exercised for cash at $3.00)               |   |         | 1,273       |   |    |   | 1       |        |   |   | 3,817          |   |   |   | -           |   |   |   | 3,818 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in January 2007(33,143 shares at $1.75 per share for cash)                                     |   |         | 33,143      |   |    |   | 33      |        |   |   | 57,967         |   |   |   | -           |   |   |   | 58,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
|  Issuance of common stock in February 2007(8,000 shares at $1.75 per share for cash)                                    |   |         | 8,000       |   |    |   | 8       |        |   |   | 13,992         |   |   |   | -           |   |   |   | 14,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of 24,000 warrants for services                                                                                     |   |         | -           |   |    |   | -       |        |   |   | 49,487         |   |   |   | -           |   |   |   | 49,487 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
|  Issuance of common stock in April 2007(32,000 shares at $1.75 per share for cash)                                      |   |         | 32,000      |   |    |   | 32      |        |   |   | 55,968         |   |   |   | -           |   |   |   | 56,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in April 2007(1,530 shares at $2.50 per share for services)                                         |   |         | 1,530       |   |    |   | 2       |        |   |   | 3,824          |   |   |   | -           |   |   |   | 3,826 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Exercise of stock options in June 2007(10,000 shares at $0.625 per share for cash)                                           |   |         | 10,000      |   |    |   | 10      |        |   |   | 6,240          |   |   |   | -           |   |   |   | 6,250 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Conversion of note to common stock in June 2007(114,286 shares at $1.75 per share in conversion of debt)                     |   |         | 114,286     |   |    |   | 114     |        |   |   | 199,886        |   |   |   | -           |   |   |   | 200,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in June 2007(16,000 shares at $1.25 per share for cash)                                             |   |         | 16,000      |   |    |   | 16      |        |   |   | 19,984         |   |   |   | -           |   |   |   | 20,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in July 2007  (61,600 shares at $1.25 per share for cash)                                 |   |         | 61,600      |   |    |   | 62      |        |   |   | 76,938         |   |   |   | -           |   |   |   | 77,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in July 2007(120,000 shares at $2.00 per share for purchase of investment)                          |   |         | 120,000     |   |    |   | 120     |        |   |   | 239,880        |   |   |   | -           |   |   |   | 240,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in August 2007(4,000 shares at $1.25 per share for cash)                                            |   |         | 4,000       |   |    |   | 4       |        |   |   | 4,996          |   |   |   | -           |   |   |   | 5,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in September 2007(19,200 shares at $1.25 per share for cash)                                        |   |         | 19,200      |   |    |   | 19      |        |   |   | 23,981         |   |   |   | -           |   |   |   | 24,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of 8,333 warrants for services                                                                                      |   |         | -           |   |    |   | -       |        |   |   | 12,345         |   |   |   | -           |   |   |   | 12,345 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Stock compensation cost                                                                                                      |   |         | -           |   |    |   | -       |        |   |   | 17,092         |   |   |   | -           |   |   |   | 17,092 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in October 2007(40,000 shares at $1.25 per share for cash)                                          |   |         | 40,000      |   |    |   | 40      |        |   |   | 49,960         |   |   |   | -           |   |   |   | 50,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in November 2007(3,425 shares at $1.50 per share for services)                                      |   |         | 3,425       |   |    |   | 3       |        |   |   | 5,133          |   |   |   | -           |   |   |   | 5,136 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in December 2007(345,000 shares at $1.00 per share for license fees)                                |   |         | 345,000     |   |    |   | 345     |        |   |   | 344,655        |   |   |   | -           |   |   |   | 345,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in December 2007(1,515,000 shares at $1.00 per share for purchase of subsidiary)                    |   |         | 1,515,000   |   |    |   | 1,515   |        |   |   | 1,513,485      |   |   |   | -           |   |   |   | 1,515,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net Loss for the year ended December 31, 2007                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (1,025,773  | ) |   |   | (1,025,773 | ) |
| Balance at December 31, 2007                                                                                                 |   |         | 8,746,025   |   |    |   | 8,745   |        |   |   | 5,422,068      |   |   |   | (4,526,099  | ) |   |   | 904,714 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in March 2008  (2,649 shares at $1.25 per share for services)                             |   |         | 2,649       |   |    |   | 3       |        |   |   | 3,308          |   |   |   | -           |   |   |   | 3,311 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in July 2008(14,667 shares at $0.625 per share for services)                                        |   |         | 14,667      |   |    |   | 15      |        |   |   | 9,153          |   |   |   | -           |   |   |   | 9,168 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in September 2008(60,000 shares at $0.175 per share for services)                                   |   |         | 60,000      |   |    |   | 60      |        |   |   | 10,440         |   |   |   | -           |   |   |   | 10,500 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Stock compensation cost                                                                                                      |   |         | -           |   |    |   | -       |        |   |   | 12,831         |   |   |   | -           |   |   |   | 12,831 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in September 2008(14,000 shares at $0.2275 per share for services)                                  |   |         | 14,000      |   |    |   | 14      |        |   |   | 3,171          |   |   |   | -           |   |   |   | 3,185 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Contributed capital by shareholder                                                                                           |   |         | -           |   |    |   | -       |        |   |   | 448,712        |   |   |   | -           |   |   |   | 448,712 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net Loss for the year ended December 31, 2008                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (2,349,831  | ) |   |   | (2,349,831 | ) |
| Balance at December 31, 2008                                                                                                 |   |         | 8,837,341   |   |    |   | 8,837   |        |   |   | 5,909,683      |   |   |   | (6,875,930  | ) |   |   | (957,410 | ) |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in April 2009(1,240,000 shares at $0.1625 per share issued for services)                            |   |         | 1,240,000   |   |    |   | 1,240   |        |   |   | 200,260        |   |   |   | -           |   |   |   | 201,500 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in May 2009(18,648,018 shares at $0.0053625 per share issued for cash)                              |   |         | 18,648,018  |   |    |   | 18,648  |        |   |   | 81,352         |   |   |   | -           |   |   |   | 100,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in May 2009(350,000 shares at $0.1275 per share issued for services)                                |   |         | 350,000     |   |    |   | 350     |        |   |   | 44,275         |   |   |   | -           |   |   |   | 44,625 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in May 2009(380,000 shares at $0.1275 per share issued for conversion of promissory note)           |   |         | 380,000     |   |    |   | 380     |        |   |   | 48,070         |   |   |   | -           |   |   |   | 48,450 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in May 2009(6,940,000 shares at $0.1275 per share issued for conversion of promissory note)         |   |         | 6,940,000   |   |    |   | 6,940   |        |   |   | 877,910        |   |   |   | -           |   |   |   | 884,850 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Contributed capital by shareholder                                                                                           |   |         | -           |   |    |   | -       |        |   |   | 58,827         |   |   |   | -           |   |   |   | 58,827 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net Loss for the year ended December 31, 2009                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (1,050,064  | ) |   |   | (1,050,064 | ) |
| Balance at December 31, 2009                                                                                                 |   |         | 36,395,359  |   |    |   | 36,395  |        |   |   | 7,220,377      |   |   |   | (7,925,994  | ) |   |   | (669,222 | ) |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in February 2010 for cash(16,000,000 shares of common stock issued at $0.0125 per share)            |   |         | 16,000,000  |   |    |   | 16,000  |        |   |   | 184,000        |   |   |   | -           |   |   |   | 200,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in July 2010 for cash(44,444,444 shares of common stock issued at $0.00225 per share)               |   |         | 44,444,444  |   |    |   | 44,444  |        |   |   | 55,556         |   |   |   | -           |   |   |   | 100,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in August 2010 for cash(1,050,000 shares of common stock issued at $0.010476 per share)             |   |         | 1,050,000   |   |    |   | 1,050   |        |   |   | 9,950          |   |   |   | -           |   |   |   | 11,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock in December 2010 for cash(2,800,000 shares of common stock issued at $0.05 per share)               |   |         | 2,800,000   |   |    |   | 2,800   |        |   |   | 137,200        |   |   |   | -           |   |   |   | 140,000 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Rounding shares                                                                                                              |   |         | 22          |   |    |   | -       |        |   |   | -              |   |   |   | -           |   |   |   | - |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Stock compensation cost                                                                                                      |   |         | -           |   |    |   | -       |        |   |   | 208,005        |   |   |   | -           |   |   |   | 208,005 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net loss for the year ended December 31, 2010                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (616,906    | ) |   |   | (616,906 | ) |
| Balance at December 31, 2010                                                                                                 |   |         | 100,689,829 |   |    |   | 100,689 |        |   |   | 7,815,088      |   |   |   | (8,542,900  | ) |   |   | (627,123 | ) |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock for cash and subscription payableprices per share between $0.05 and $0.075                          |   |         | 13,203,338  |   |    |   | 13,203  |        |   |   | 855,297        |   |   |   | -           |   |   |   | 868,500 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock for servicesprice per share $0.15                                                                   |   |         | 650,000     |   |    |   | 650     |        |   |   | 96,850         |   |   |   | -           |   |   |   | 97,500 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Conversion of debt into common stock                                                                                         |   |         | 1,839,500   |   |    |   | 1,840   |        |   |   | 136,123        |   |   |   | -           |   |   |   | 137,963 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Cashless exercise of warrants                                                                                                |   |         | 1,781,927   |   |    |   | 1,782   |        |   |   | (1,782         | )      |   |   | -           |   |   |   | - |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Issuance of common stock for a fee at fair value of $7,148                                                                   |   |         | 119,130     |   |    |   | 119     |        |   |   | 7,029          |   |   |   | -           |   |   |   | 7,148 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Stock compensation cost                                                                                                      |   |         | -           |   |    |   | -       |        |   |   | 499,200        |   |   |   | -           |   |   |   | 499,200 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Contribution of capital from related party sale of subsidiary                                                                |   |         | -           |   |    |   | -       |        |   |   | 560,306        |   |   |   | -           |   |   |   | 560,306 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Common stock subscription payable                                                                                            |   |         | -           |   |    |   | -       |        |   |   | 6,750          |   |   |   | -           |   |   |   | 6,750 |   |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Net loss for the year ended December 31, 2011                                                                                |   |         | -           |   |    |   | -       |        |   |   | -              |   |   |   | (1,546,503  | ) |   |   | (1,546,503 | ) |
|                                                                                                                         |   |         |        |   |    |   |    |        |   |   |           |   |   |   |        |   |   |   |   |   |
| Balance at December 31, 2011                                                                                                 |   |         | 118,283,724 |   |    | $      | 118,283 |        |   | $      | 9,974,861      |   |   | $      | (10,089,403 | ) |   | $ | 3,741 |   |

----

SOLAR3D

|                                                                                                                                   |   |              |       |   |              |   |     | From Inception    |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|-------------------|--------|----------|-------------------|--------|
|                                                                                                                                   |   |              |       |   |              |   |     | January 30, 2002  |   |
|                                                                                                                                   |   | Years Ended       |       |   | through           |   |
|                                                                                                                                   |   | December 31, 2011 |       |   | December 31, 2010 |   |     | December 31, 2011 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                                  |   |              |       |   |              |   |     |              |   |
|     Net loss                                                                                                       |   | $            | (1,546,503 | )      |              | $      | (616,906 | )                 |   | $ | (10,089,403 | ) |
|     Adjustments to reconcile net loss to net cash       used in operating activities |   |              |       |   |              |   |     |              |   |   |   |   |
|     Depreciation and amortization                                                                                  |   |              | 1,591      |   |              |   | 500      |              |   |   | 121,838 |   |
|     Issuance of common shares and warrants for  services                                                 |   |              | 104,648    |   |              |   | -        |              |   |   | 832,361 |   |
|     Issuance of common shares in conversion of debt                                                                |   |              | -          |   |              |   | -        |              |   |   | 400,000 |   |
|     (Gain)/loss on investment                                                                                      |   |              | -          |   |              |   | -        |              |   |   | 73,121 |   |
|     Stock Compensation Cost                                                                                        |   |              | 499,200    |   |              |   | 208,005  |              |   |   | 776,983 |   |
|     Gain on sale of asset                                                                                          |   |              | -          |   |              |   | -        |              |   |   | 963 |   |
|     Impairment loss                                                                                                |   |              | -          |   |              |   | -        |              |   |   | 1,753,502 |   |
|     Loss on settlement of debt                                                                                     |   |              | 45,988     |   |              |   | -        |              |   |   | 613,288 |   |
|    Changes in Assets and Liabilities                                                                                    |   |              |       |   |              |   |     |              |   |   |   |   |
|     (Increase) Decrease in:                                                                                        |   |              |       |   |              |   |     |              |   |   |   |   |
|     Prepaid expenses                                                                                               |   |              | (178       | )      |              |   | (24,822  | )                 |   |   | (25,000 | ) |
|     Deposits and other assets                                                                                      |   |              | -          |   |              |   | -        |              |   |   | 2,025 |   |
|     Increase (Decrease) in:                                                                                        |   |              |       |   |              |   |     |              |   |   |   |   |
|     Accounts payable                                                                                               |   |              | 3,905      |   |              |   | (32,138  | )                 |   |   | 96,849 |   |
|     Accrued expenses                                                                                               |   |              | 1,950      |   |              |   | 57,036   |              |   |   | 587,281 |   |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
| NET CASH USED IN OPERATING ACTIVITIES                                                                                                  |   |              | (889,399   | )      |              |   | (408,325 | )                 |   |   | (4,856,192 | ) |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
| NET CASH FLOWS USED IN INVESTING ACTIVITIES:                                                                                           |   |              |       |   |              |   |     |              |   |
|     Purchase of property and equipment                                                                             |   |              | (2,078     | )      |              |   | (5,366   | )                 |   |   | (81,198 | ) |
|     Sale of asset                                                                                                  |   |              | -          |   |              |   | -        |              |   |   | 3,963 |   |
|     Investment in companies                                                                                        |   |              | -          |   |              |   | -        |              |   |   | (6,121 | ) |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
| NET CASH USED IN INVESTING ACTIVITIES                                                                                                  |   |              | (2,078     | )      |              |   | (5,366   | )                 |   |   | (83,356 | ) |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                                  |   |              |       |   |              |   |     |              |   |   |   |   |
| Proceeds from bank overdraft                                                                                                           |   |              | 12,916     |   |              |   |     |              |   |   | 12,916 |   |
| Proceeds from notes payable related parties                                                                                            |   |              | -          |   |              |   | -        |              |   |   | 1,174,342 |   |
| Proceeds from convertible promissory note                                                                                              |   |              | -          |   |              |   | -        |              |   |   | 129,000 |   |
| Repayment of notes payable related party                                                                                               |   |              | -          |   |              |   | (44,000  | )                 |   |   | (184,000 | ) |
| Contributed capital by shareholder                                                                                                     |   |              | -          |   |              |   | -        |              |   |   | 19,197 |   |
| Proceeds from subsidiary                                                                                                               |   |              | -          |   |              |   | -        |              |   |   | 300,000 |   |
| Proceeds from subscription payable                                                                                                     |   |              | 6,750      |   |              |   | -        |              |   |   | 6,750 |   |
| Proceeds from issuance of common stock                                                                                                 |   |              | 868,500    |   |              |   | 451,000  |              |   |   | 3,473,693 |   |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
| NET CASH PROVIDED BY FINANCING ACTIVITIES                                                                                              |   |              | 888,166    |   |              |   | 407,000  |              |   |   | 4,931,898 |   |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
| NET INCREASE IN CASH                                                                                                                   |   |              | (3,311     | )      |              |   | (6,691   | )                 |   |   | (7,650 | ) |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
| CASH, BEGINNING OF PERIOD                                                                                                              |   |              | 3,311      |   |              |   | 10,002   |              |   |   | 7,650 |   |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
| CASH, END OF PERIOD                                                                                                                    |   | $            | -          |   |              | $      | 3,311    |              |   | $ | - |   |
|                                                                                                                                   |   |              |       |   |              |   |     |              |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                                                                      |   |              |       |   |              |
|    Interest paid                                                                                                        |   | $            | 173        |   |              | $      | -        |              |   | $ | 137,657 |   |
|    Income taxes                                                                                                         |   | $            | -          |   |              | $      | -        |              |   | $ | - |   |

| SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| During the year ended December 31, 2011, the Company sold WDTI its subsidiary, for a secured note receivable of $100,000. The sale included the net book value of the assets and liabilities of  $(560,306). Also, 2,666,668 warrants to purchase shares of common stock were exercised through a cashless conversion for 1,781,927 shares of common stock.; 133,334 shares were issued for a subscription receivable; issued 1,839,500 shares of common stock for convertible debt. Also, the Company issued 650,000 shares for services at a fair value of $97,500. |

----

SOLAR3D

----

| Machinery & equipment | 5 Years   |
|---------------------------|-----------|
| Furniture & fixtures  | 5-7 Years |
| Computer equipment        | 5 Years   |

----

|   | Reclassifications |
|--------|-------------------|

|   | Certain expenses of the year ended December 31, 2010, were reclassified to conform with the expenses in the year ended December 31, 2011. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | Recently Issued Accounting Pronouncements |
|--------|-------------------------------------------|

|   | Management reviewed accounting pronouncements issued during the three months ended December 31, 2011, and no pronouncements were adopted during the period. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company files income tax returns in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2009. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Deferred income taxes have been provided by temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. To the extent allowed by GAAP, we provide valuation allowances against the deferred tax assets for amounts when the realization is uncertain.Included in the balances at December 31, 2011 and 2010, are no tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility.  Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | The Company's policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the periods ended December 31, 2011 and 2010, the Company did not recognize interest and penalties. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       |   | 2011   |     |   | 2010   |   |
|----------------------------|--------|--------|----------|--------|--------|--------|
| Book Income                |   | $      | (665,000 | )      |   | $      | (253,000 | ) |
| Depreciation               |   |   | -        |   |   |   | - |   |
| Other                      |   |   | 1,000    |   |   |   | - |   |
| Stock for Services         |   |   | 42,000   |   |   |   | 83,000 |   |
| Loss on Settlement of Debt |   |   | 18,000   |   |   |   | - |   |
| Stock Compensation Expense |   |   | 200,000  |   |   |   | - |   |
|                       |   |   |     |   |   |   |   |   |
| Valuation Allowance        |   |   | 404,000  |   |   |   | 170,000 |   |
|                       |   |   |     |   |   |   |   |   |
| Income tax expense         |   | $      | -        |   |   | $      | - |   |

|                               |   | 2011   |       |   | 2010   |   |
|------------------------------------|--------|--------|------------|--------|--------|--------|
| Deferred tax assets:               |   |   |       |   |   |   |
|   NOL carryover          |   | $      | 2,383,000  |   |   | $      | 1,812,000 |   |
|   R&D                |   |   | 140,000    |   |   |   | 128,000 |   |
|   Contributions          |   |   | 1,000      |   |   |   | 1,000 |   |
|   Related party accruals |   |   | -          |   |   |   | 224,000 |   |
|                               |   |   |       |   |   |   |   |   |
| Deferred tax liabilities:          |   |   |       |   |   |   |   |   |
|   Depreciation           |   |   | -          |   |   |   | - |   |
|                               |   |   |       |   |   |   |   |   |
| Less valuation allowance           |   |   | (2,524,000 | )      |   |   | (2,165,000 | ) |
|                               |   |   |       |   |   |   |   |   |
| Net deferred tax asset             |   | $      | -          |   |   | $      | - |   |

----

|                                  |   | 2011    |   |
|---------------------------------------|--------|---------|--------|
| Risk free interest rate               |   |    | 2.38   | % |
| Stock volatility factor               |   |    | 229    | % |
| Weighted average expected option life |   | 7 years |   |
| Expected dividend yield               |   | None    |   |

|                                                                        |   | 12/31/2011 |       |   | 12/31/2010 |   |
|-----------------------------------------------------------------------------|--------|------------|------------|--------|------------|--------|
|                                                                        |   |       |       |   | Weighted   |   |   |   |   |   | Weighted |   |
|                                                                        |   | Number     |       |   | average    |   |   | Number |   |   | average |   |
|                                                                        |   | of         |       |   | exercise   |   |   | of |   |   | exercise |   |
|                                                                        |   | Options    |       |   | price      |   |   | Options |   |   | price |   |
| Outstanding, beginning of period                                            |   |       | -          |   |       | $      | - |   |   |   | - |   |   | $ | - |   |
| Granted                                                                     |   |       | 15,000,000 |   |       |   | 0.05 |   |   |   | 15,000,000 |   |   |   | 0.05 |   |
| Exercised                                                                   |   |       | -          |   |       |   | - |   |   |   | - |   |   |   | - |   |
| Expired                                                                     |   |       | -          |   |       |   | - |   |   |   | - |   |   |   | - |   |
| Outstanding, end of period                                                  |   |       | 15,000,000 |   |       | $      | 0.05 |   |   |   | 15,000,000 |   |   | $ | 0.05 |   |
| Exercisable at the end of period                                            |   |       | 7,083,333  |   |       | $      | 0.05 |   |   |   | 2,083,333 |   |   | $ | 0.05 |   |
| Weighted average fair value of  options granted during the period |   |       |       |   |       | $      | - |   |   |   |   |   |   | $ | 0.05 |   |

----

|                                          |   | 12/31/2011 |       |   | 12/31/2010 |   |
|-----------------------------------------------|--------|------------|------------|--------|------------|--------|
|                                          |   |       |       |   | Weighted   |   |   |   |   |   | Weighted |   |
|                                          |   | Number     |       |   | average    |   |   | Number |   |   | average |   |
|                                          |   | of         |       |   | exercise   |   |   | of |   |   | exercise |   |
|                                          |   | Warrants   |       |   | price      |   |   | Warrants |   |   | price |   |
| Outstanding, beginning of period              |   |       | 131,614    |   |       | $      | 0.11 |   |   |   | 173,280 |   |   | $ | 0.11 |   |
| Granted                                       |   |       | 16,900,008 |   |       |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                                     |   |       | (2,666,668 | )      |       |   | - |   |   |   | - |   |   |   | - |   |
| Expired                                       |   |       | (11,614    | )      |       |   | 0.06 |   |   |   | (41,666 | ) |   |   | 0.06 |   |
| Outstanding, end of period                    |   |       | 14,353,340 |   |       | $      | 0.06 |   |   |   | 131,614 |   |   | $ | 0.12 |   |
| Exercisable at the end of period              |   |       | 14,353,340 |   |       | $      | 0.06 |   |   |   | 131,614 |   |   | $ | 0.05 |   |
| Weighted average fair value of                |   |       |       |   |       |   |   |   |   |   |   |   |   |   |   |   |
|   options granted during the period |   |       |       |   |       | $      | 0.00 |   |   |   |   |   |   | $ | 0.00 |   |

|        |   |   |        |   |       |        |   |   | Weighted     |   |
|-------------|--------|--------|-------------|--------|------------|-------------|--------|--------|--------------|--------|
|        |   |   |        |   |       |        |   |   | Average      |   |
|        |   |   |        |   |       |        |   |   | Remaining    |   |
| Exercisable |   |   | Warrants    |   |       | Warrants    |   |   | Contractual  |   |
| Prices      |   |   | Outstanding |   |       | Exercisable |   |   | Life (years) |   |
| $           | 0.12   |   |        |   | 100,000    |        |   |   | 100,000      |   |   |   | - |   |
| $           | 0.12   |   |        |   | 20,000     |        |   |   | 20,000       |   |   |   | 0.02 |   |
| $           | 0.08   |   |        |   | 1,333,334  |        |   |   | 1,333,334    |   |   |   | 4.42 |   |
| $           | 0.08   |   |        |   | 1,000,000  |        |   |   | 1,000,000    |   |   |   | 4.47 |   |
| $           | 0.08   |   |        |   | 1,333,334  |        |   |   | 1,333,334    |   |   |   | 4.54 |   |
| $           | 0.06   |   |        |   | 1,666,666  |        |   |   | 1,666,666    |   |   |   | 4.63 |   |
| $           | 0.06   |   |        |   | 1,000,000  |        |   |   | 1,000,000    |   |   |   | 4.69 |   |
| $           | 0.06   |   |        |   | 833,334    |        |   |   | 833,334      |   |   |   | 4.72 |   |
| $           | 0.06   |   |        |   | 666,668    |        |   |   | 666,668      |   |   |   | 4.75 |   |
| $           | 0.06   |   |        |   | 400,000    |        |   |   | 400,000      |   |   |   | 4.76 |   |
| $           | 0.06   |   |        |   | 833,334    |        |   |   | 833,334      |   |   |   | 4.81 |   |
| $           | 0.06   |   |        |   | 833,334    |        |   |   | 833,334      |   |   |   | 4.82 |   |
| $           | 0.06   |   |        |   | 833,334    |        |   |   | 833,334      |   |   |   | 4.86 |   |
| $           | 0.06   |   |        |   | 833,334    |        |   |   | 833,334      |   |   |   | 4.88 |   |
| $           | 0.06   |   |        |   | 1,000,000  |        |   |   | 1,000,000    |   |   |   | 4.90 |   |
| $           | 0.06   |   |        |   | 1,000,000  |        |   |   | 1,000,000    |   |   |   | 4.94 |   |
| $           | 0.06   |   |        |   | 666,668    |        |   |   | 666,668      |   |   |   | 4.96 |   |
|        |   |   |        |   | 14,353,340 |        |   |   | 14,353,340   |   |   |   |   |   |

----

|   | Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has reported the following events; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | During the month of January 2012, the Company issued 800,000 shares of common stock at a price of $0.05 for cash of $40,000, with warrants attached to purchase 1,600,000 shares of common stock at a price of $0.05 per share. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On February 3, 2012, the Company issued 160,000 shares of common stock at a price of $0.05 per share for cash of $8,000, with warrants attached to purchase 320,000 shares of common stock at a price of $0.05 per share. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On February 13th  and 22nd , 2012, the Company issued 1,385,714 shares of common stock at a price of $0.035 for cash of $48,500,  with warrants attached to purchase 2,771,428 shares of common stock at a price of $0.035 per share. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On February 24, 2012, the Company issued  300,000 shares of common stock at a price of $0.030 per share for cash of $9,000, with warrants attached to purchase 600,000 shares of common stock at a price of $0.03 per share. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On March 7th and 9th , 2012, the Company issued 1,133,334 shares of common stock at a price of $0.03 per share for cash of $34,000, with warrants attached to purchase 2,266,666 shares of common stock at a price of $0.03 per share. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Exhibit No. |   | Description                                               |
|-------------|--------|-----------------------------------------------------------|
| 101.INS     |   | XBRL Instance Document*                                   |
| 101.SCH     |   | XBRL Taxonomy Extension Schema Document*                  |
| 101.CAL     |   | XBRL Taxonomy Extension Calculation Linkbase Document*    |
| 101.DEF     |   | XBRL Taxonomy Extension Definition Linkbase Document*     |
| 101.LAB     |   | XBRL Taxonomy Extension Label Linkbase Document*          |
| 101.PRE     |   | XBRL Taxonomy Extension Presentation Linkbase Document*   |
|        |   |                                                      |
| 31.1        |   | Section 302 Certification of Principal Executive Officer  |
| 31.1        |   | Section 302 Certification of Principal Accounting Officer |
| 32.1        |   | Section 906 Certification of Principal Executive Officer  |
| 32.2        |   | Section 906 Certification of Principal Accounting Officer |

----

|                                                                         | SOLAR3D, INC. |                                                                                                                                  |
|------------------------------------------------------------------------------|---------------|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                                         |          |                                                                                                                                  |   |
| Dated:  January 10, 2013        | By:           | /s/ James B. Nelson                                                                                                              |   |
|                                                                         |          | James B. Nelson                                                                                                                       |   |
|                                                                         |          | Director and Chief Executive Officer (Principal Executive Officer) and Interim Chief Financial Officer (Principal Accounting Officer) |
|                                                                         |          |                                                                                                                                  |   |

----